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IN THE HIGH COURT OF JUDICATURE HYDERABAD
D.J. JAAGANNADHA RAJU, J.
M/s. Kothapalli Sreeramulu and Company Jagannapalem – Appellant
Vs.
The Krishna Gurand Khandasari Sugars, Jogannapalem – Respondent
Appeal No. 633 of 1982
Decided On : 24-08-1993
Mr. P.V.R. Sharma, Advocate for the Appellants. Mr. N.V. Suryanarayana Murthy, Advocate for the Respondent
Headnote:
LEASE - Unstamped and unregistered lease deed - Admissibility - Collateral purpose - Oral lease followed by delivery of possession - Memorandum of terms and conditions - Damages for use and occupation - Quantum of damages - Rent stipulated in lease deed - Reasonable basis.
Fact of the Case:
Plaintiff filed a suit for recovery of a sum of Rs. 2,01,293/- with subsequent interest against the defendants. The suit was decreed as prayed for. Aggrieved by the same, the defendants filed an appeal. Cross-objections were filed by the plaintiff regarding the interest which was disallowed partly.
Finding of the Court:
1. Ex.A-3 is not compulsorily registerable. It is not hit by the presumption under Section 106 of the T.P. Act, nor does it come within the first paragraph of Section 107 of the T.P. Act. Ex.A-3 is also a document which is nothing more than a memorandum reduced into writing of the terms and conditions of the oral lease which was completed by delivery of possession of the property. It does not create rights in the present demise in property, because the lease was to have effect from 26-11-1977 and not 17-11-1977. 2. Assuming for a moment that Ex.A.3 is inadmissible in evidence for want of registration, even then it can be looked into for collateral purposes and the amounts payable indicated in it as rent and as the charges for repairs, certainly it can be looked into. 3. The defendants are liable to pay Rs. 46,000/- towards repairs done by the plaintiff and as he did not pay the amount by 15-4-1978, he is also liable to pay with interest at 18% per annum as stipulated in Clause 13. 4. The claim of the defendant on the particular aspect is false and that the plaintiff's claim is perfectly justified and the trial Court rightly decreed the same. 5. The plaintiff-respondent is not entitled to any relief in the cross-objections. His claim for subsequent interest on the entire amount of Rs. 2,01,293/- is also not justified. Interest has necessarily to be paid only on the principal amount.
Issues: 1. Whether Ex.A.-3 dated 17-11-1977 is a document which is compulsorily registerable- 2. Whether Ex.A-3 is admissible in evidence and if it is found not admissible for want of registration, can it be looked into for any purpose in this suit- 3. Whether defendants are liable to pay Rs. 46,000/- towards repairs done by the plaintiff to the sugar mill- 4. Whether rent of Rs. 1,20,000/- is payable as claimed by the plaintiff or only Rs. 50.000/- as pleaded by defendants- 5. Is the plaintiff-respondent entitled to any relief in the cross-objections-
Ratio Decidendi: 1. An unregistered lease deed can be looked into for collateral purposes under Section 49 of the Registration Act. 2. Where the suit itself is based upon an oral agreement of lease followed by delivery of possession and subsequently the terms and conditions are reduced into writing by way of a memorandum, the document is not registerable and hence it can be looked into. 3. The definition of the word 'lease' in the Registration Act does not apply to that word in Section 107 of the T.P. Act. So far as Section 107 of the T.P. Act is concerned only the definition under Section 105 of the T.P. Act applies to it. 4. If an unregistered lease deed is inadmissible in evidence for want of registration, the rent stipulated in it can be taken into consideration as a reasonable basis for awarding damages for use and occupation.
Final Decision: Appeal dismissed with costs. Cross-objections dismissed without costs.
JUDGMENT :
This appeal is filed by the defendants against the judgment and decree dated22nd March, 1982 in O.S.No. 61 of 1979 on the file of the Subordinate Judge, Eluru. The suit filed by the plaintiff for recovery of a sum of Rs. 2,01,293 /- with subsequent interest was decreed as prayed for. Aggrieved by the same, the defendants have filed the appeal.
2. The cross-objections are filed by the plaintiff regarding the interest which was disallowed partly. In the cross-objections, it is claimed that the future interest should have been granted at 18% per annum, which is the agreed rate, and the Court is not justified in granting 6% per annum interest. It is also claimed that the future interest should have been allowed on the amount of Rs. 2,01,293 /- and not merely on Rs. 1,66,000/-. The pleadings have been set out very elaborately in paragraphs 1 to 10 of the trial Court judgment. It would be sufficient, for purposes of this appeal, if the substance of the pleadings is given in a nutshell.
3. The first plaintiff is a partnership-firm represented by its Managing Partner, V. Gopalakrishna. D-1 is a partnership-firm of which D-2 to D.10 are the partners and D-2 is the Managing Partner. On 17-11-1977, D-1 represented by D-2, entered into an agreement of lease with the plaintiff in respect of the Khandasari Sugar Factory of the plaintiff. After the terms were settled, they were reduced into writing into a memorandum of the terms and conditions of the contract of lease. It was prepared on stamp-paper. Plaintiff and the first defendant, as Managing Partners, signed in it. A counter part of the agreement of lease, duly signed by the parties, was delivered to the second defendant. The possession of Khandasari Sugar Factory was delivered immediately after the terms of contract of lease were settled and before the memorandum was executed. The contract is for lease of the Sugar Factory for the cane-crushing season commencing from 26-11-1977 to 30-4-1978. But the lessee is entitled to be in possession of the godowns and molasses storage tanks up to 31-8-1978. The lessee should pay a rent of Rs. 1,20,000/- on or before 31-1-1978 failing which he is liable to pay the rent amount with interest at 18% per annum from 1-2-1978till the date of payment. The lessor shall get all the repairs effected and put the mill in working condition and deliver it to D-2. For the repairs effected, the defendants undertook to pay Rs. 46, 000/-. This amount was to be paid on or before 15-4-1978. The repairs should be completed before 26-11-1977. After possession is delivered, for repairs done during the working of the mill, the lessee alone is responsible. He will have to re-deliver the mill after the expiry of the lease period in good working condition after replacing broken parts. He will have to re-deliver the godowns and the molasses tanks by 31-8-1978. There were certain other minor terms which are not so important as far as the present appeal is concerned. The lessor got all the repairs done and delivered possession of the mill in a perfectly sound and working condition. The defendants worked the sugar factory, produced sugar and realised income, but they did not perform their part of the contract. They neither paid the rent nor did they, pay the amount of Rs. 46, 000 /- payable before 15-4-1978. They did not also deliver the godowns and the molasses storage tanks. When a notice was issued, the defendants raised all sorts of false defences and denied the terms of the contract of lease. A totally new terms were put up as the real terms of the contract between the parties. All the allegations in the reply notice are false. Hence the suit.
4. Eighth defendant remained ex parte. Defendants 1 and 2 filed a written statement, which was adopted by D-3 to D-7 and D-9. D-10 filed a separate written statement. It is the claim of D-10 that there is no valid partnership between him and the other defendants. The first defendant-partnership firm is void under law. He claims
