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2002 Supreme(AP) 1264
Andhra Pradesh High Court
Judges : BILAL NAZKI, G.ROHINI
Kothapalli Sreeramulu and Co., Jogannapalem - Appellant
Versus
Krishna Gur and Khandasari Sugar, Jogannapalem - Respondent
A.S.No. 633 of 1982
Decided On : 11-05-02
Advocates Appeared :
Mr. P.V.R. Sharma, Mr. N.V. Suryanarayana Murthy
Headnote:Transfer of Property Act - Section 107 Para I ; Registration Act, 1908 - Sections 17(1)(d), 18(c) and 49 - Lease Deed - Requirement of Registration - where there is an oral lease of immoveable property for a term not exceeding possession and subsequently the terms agreed between the parties are reduced to writing, such a memorandum of post transaction of oral lease not fall within the scope of section 17 of Registration Act, hence same is not compulsorily registrable.
Held : The provisions of the Transfer of Property Act, 1882 and the registration Act, 1908 are supplemental to each other regarding the transactions affecting immovable property. Under section 17 (l) (d) of the Registration Act, registration of the lease deed is compulsory only in respect of lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. Section 18 (c) of the Registration Act makes it further clear that registration of the document of leases of immovable property for any term not exceeding one year and leases exempted under Section 17 is only optional. Under Section 107 of the Transfer of Property Act whereas, para-1 requires that a lease of immoveable property from year to year or for any term exceeding one year or reserving a yearly rent can be made only by a registered instrument, para-2 of section 107 states that all other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Thus, in respect of leases of immoveable property for any term not exceeding one year the parties are at liberty to effect the same either by way of a registered instrument or by oral agreement accompanied by delivery of possession. In other words, though the term of the lease does not exceed one year, the parties may opt for executing an instrument in which event it requires compulsory registration.
Then the question is where the lease for a term not exceeding one year was effected by oral agreement accompanied by delivery of possession and subsequently, the terms of lease settled between the parties are reduced to writing, whether such document requires registration. In our considered opinion, either the provisions of the Transfer of Property Act, 1882 or the provisions of the registration Act, 1908 do not require either expressly or by necessary implication registration of such document. On a combined reading of Sections 17 and 18 of the Registration Act and Section 107 of the transfer of Property Act, the only inference that can be drawn is that the legislature intended compulsory registration of only the leases of immoveable property for a term exceeding one year, or where the parties themselves opt for making a lease even for a term less than one year by way of an instrument. But, where there is an oral lease of immoveable property for a term not exceeding one year accompanied by delivery of possession and subsequently the terms agreed between the parties are reduced to writing, such a memorandum of past transaction of oral lease does not fall within the scope of Section 17 of the registration Act, 1908, and therefore, the same is not compulsorily registrable.
( 1 ) THIS Letters Patent Appeal is preferred against the Judgment dated 24-8-1993 in a. S. No. 633 of 1982, whereunder the learned single Judge affirmed the judgment and decree dated 22-3-1982 in O. S. No. 61 of 1979 on the file of the Court of the Subordinate judge, Eluru.
( 2 ) THE defendants are the appellants. The respondent/plaintiff filed O. S. No. 61 of 1979 seeking a decree against the defendants 2 to 6 and 8 to 10 personally and against the estate of the 1st defendant for recovery of a sum of Rs. 2,01,293 with subsequent interest and also for certain other consequential reliefs. The said suit was decreed as prayed for granting future interest at 6% p. a. on principal amount from the date of suit till realisation. Aggrieved by the same, the defendants filed A. S. No. 633 of 1982. Regarding future interest, which was disallowed partly by the trial Court, the plaintiff filed Cross-objections. A learned single Judge dismissed both the appeal as well as the Cross-objections. Hence the letters Patent Appeal by the defendants.
( 3 ) THE parties shall be referred to, herein after, as the plaintiff and the defendants for the sake of convenience.
( 4 ) THE case of the plaintiff as per the plaint averments is as follows: the plaintiff is a partnership firm owning the plaint schedule Khandasari sugar Factory. The defendant No. l is a partnership firm, of which the defendants 2 to 10 are the partners, the 2nd defendant being the Managing Partner. The 1st defendant, represented by the 2nd defendant entered into an agreement of lease dated 17-11-1977 with the plaintiff in respect of Khandasari Sugar Factory of the plaintiff. After the terms were settled between the parties, they were reduced into writing and the said contract of lease dated 17-11-1977 (marked as Ex. A-3), was signed by the partners of the plaintiff and the 2nd defendant representing the 1st defendant-firm. The possession of the Khadasari Sugar factory was delivered to the defendants on 17-1-1977 itself even before the memorandum of lease was executed. The contract is for lease of the sugarcane factory for the cane crushing season commencing from 26-11-1977 to 30-4-1978. However, the lessee is entitled to be in possession of the godowns and molasses storage tanks up to 31-8-1978. The lessee shall pay a rent of rs. 1,20,000/- on or before 31-1-1978 failing which he is liable to pay interest at 18% per annum from 1-2-1978 till the date of payment. The lessees shall redeliver the factory after the expiry of the lease period in good working condition after replacing the broken parts. It was agreed that the lessor shall get all the repairs effected and deliver the factory in working condition to the 2nd defendant. For the repairs effected the defendants undertook to pay Rs. 46,000/- on or before 15-4-1978. The repairs should be completed before 26-11-1977. After the delivery of possession the lessee alone is responsible for the repairs done during the working of the factory. As agreed between the parties, the plaintiff got all the repairs done and delivered possession of the mill in perfect working condition to the defendants. It is alleged that the defendants having used the sugar factory and having realised income failed to pay the agreed rent nor did they pay the amount of Rs. 46,000/- payable towards the repairs efected by the plaintiff. The defendants also failed to deliver the godown and molasses storage tanks. When the plaintiff issued Ex. B-7 notice dated 23-8-1978, the defendants gave Ex. A-2 reply dated 1-9-1978 raising several objections and denying the terms of Ex. A-3 contract of lease. They have set up totally new terms. In the circumstances, the plaintiff filed the suit seeking the aforesaid reliefs.
( 5 ) THE defendants 1 and 2 filed a written statement, which was adopted by defendants 3 to 7 and 9. Defendant No. 10 filed a separate written statement. Defendant No. 8 remained ex parte.
( 6 ) THE plea raised in the written statement filed by
