The petitioner, as its name suggests, is a company doing business in cotton, as part of its activity. It advanced fairly large amount to M/s. Kandimalla Raghavaiah and Company, Chilakaluripet. Since the borrower did not discharge its obligation, the petitioner filed O.S.No.299 of 1988 in the Court of Principal Sub-Ordinate Judge, Guntur, for recovery of a sum of Rs.23,59,196/-, with future interest. A compromise was arrived at between the parties. In terms thereof, a decree was passed on 05.02.1990.

The terms of compromise were to the effect that the borrower i.e. the defendant in the suit, shall lease out the premises and machinery mentioned in the schedule, in favour of the petitioner herein for a period of 21½ years, at an annual rent of Rs.1,00,000/-. It was also mentioned that the lease can be extended at the request of the petitioner for a further period of 10 years with an increase of the rent by 15%. Other conditions, pertaining to breach of contract, were also incorporated.

The petitioner presented the lease deed, dated 30.12.1989, for registration before the Sub-Registrar, Chilakaluripet, soon after the execution. Stamp duty of Rs.15,000/-was paid treating the d