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PATNA HIGH COURT
K.Ahmad and S.C.Misra JJ.
Brijnandan Singh
Versus
Jamuna Prasad Sahu
Appeal from Original Decree No. 205 of 1948 ;
Decided On : JANUARY 14, 1958
SPECIFIC PERFORMANCE - CONTRACT - AGREEMENT TO GRANT LEASE IN FUTURE - TRANSFER OF PROPERTY ACT, 1882, SEC. 5 - LEASE - TRANSFER OF INTEREST IN IMMOVABLE PROPERTY - REGISTRATION ACT, 1908, SEC. 17 - COMPULSORY REGISTRATION - LEASE FOR TERM EXCEEDING ONE YEAR - LAND REFORMS ACT, 1950, SECS. 4, 6 - VESTING OF ESTATE IN STATE - EXEMPTION OF CERTAIN INTERESTS - SETTLEMENT OF ZIRAT AND BAKASHT LANDS WITH OUTGOING PROPRIETOR - CONSTRUCTION - INCUMBRANCE - MEANING - FRUSTRATION OF CONTRACT - IMPOSSIBILITY OF PERFORMANCE - SPECIFIC RELIEF ACT, 1877, SEC. 15 - OPTION TO ENFORCE CONTRACT WITH MODIFICATION.
Fact of the Case:
Plaintiffs and defendant No. 1 entered into an agreement for the perpetual lease of eight annas interest in certain zirat and bakasht lands. The agreement was registered but the final document of lease was not executed within the stipulated period of two months. Plaintiffs paid a part of the nazarana money to the rehandars and took back the rehan documents. Defendant No. 1 refused to execute the lease and receive the balance of the nazarana money. Plaintiffs filed a suit for specific performance of the contract and for damages.
Finding of the Court:
1. The agreement between the parties constituted an agreement to grant lease in future and not an out and out lease. 2. The transfer of interest in the immovable property by way of lease for a term exceeding one year is required to be registered under Section 17 of the Registration Act, 1908. 3. On the publication of the notification under Section 3 of the Bihar Land Reforms Act, 1950, the estate of the proprietor vested in the State of Bihar free from all incumbrances, except the interests of raiyats or under-raiyats. 4. The settlement of zirat and bakasht lands with the outgoing proprietor under Section 6 of the Land Reforms Act is a statutory settlement and does not create a new title. 5. The word "incumbrance" in Section 4 of the Land Reforms Act refers to the interests which vest in the Government and not to those which do not vest in the Government. 6. The phrase "khas possession" in Section 6 of the Land Reforms Act means the possession of the proprietor or tenure-holder without the intervention of any tenant. 7. The vesting of the estate in the State of Bihar did not make it impossible for the outgoing proprietor to fulfil the contract with regard to the bakasht and zirat lands. 8. The plaintiffs are entitled to a decree for specific performance of the contract with the modification that they will have to pay rent as assessed by the State of Bihar.
Issues: 1. Whether the agreement between the parties constituted an out and out lease or an agreement to grant lease in future? 2. Whether the transfer of interest in the immovable property by way of lease for a term exceeding one year is required to be registered under Section 17 of the Registration Act, 1908? 3. Whether on the publication of the notification under Section 3 of the Bihar Land Reforms Act, 1950, the estate of the proprietor vested in the State of Bihar free from all incumbrances, except the interests of raiyats or under-raiyats? 4. Whether the settlement of zirat and bakasht lands with the outgoing proprietor under Section 6 of the Land Reforms Act is a statutory settlement and does not create a new title? 5. Whether the word "incumbrance" in Section 4 of the Land Reforms Act refers to the interests which vest in the Government and not to those which do not vest in the Government? 6. Whether the phrase "khas possession" in Section 6 of the Land Reforms Act means the possession of the proprietor or tenure-holder without the intervention of any tenant? 7. Whether the vesting of the estate in the State of Bihar made it impossible for the outgoing proprietor to fulfil the contract with regard to the bakasht and zirat lands? 8. Whether the plaintiffs are entitled to a decree for specific performance of the contract?
Ratio Decidendi: 1. An agreement to grant lease in future cannot constitute lease under the Transfer of Property Act, 1882. 2. A transfer of interest in immovable property by way of lease for a term exceeding one year is required to be registered under Section 17 of the Registration Act, 1908. 3. On the publication of the notification under Section 3 of the Bihar Land Reforms Act, 1950, the estate of the proprietor vests in the State of Bihar free from all incumbrances, except the interests of raiyats or under-raiyats. 4. The settlement of zirat and bakasht lands with the outgoing proprietor under Section 6 of the Land Reforms Act is a statutory settlement and does not create a new title. 5. The word "incumbrance" in Section 4 of the Land Reforms Act refers to the interests which vest in the Government and not to those which do not vest in the Government. 6. The phrase "khas possession" in Section 6 of the Land Reforms Act means the possession of the proprietor or tenure-holder without the intervention of any tenant. 7. The vesting of the estate in the State of Bihar did not make it impossible for the outgoing proprietor to fulfil the contract with regard to the bakasht and zirat lands. 8. The plaintiffs are entitled to a decree for specific performance of the contract with the modification that they will have to pay rent as assessed by the State of Bihar.
Final Decision: Appeal dismissed with costs.
K.Ahmad, J.
1. The matter in controversy in this case is the specific performance of a contract, as covered by; the registered document dated 15-6-1943. Thereunder defendant No. 1 the proprietor of the eight annas interest in touzi No. 744/34 had agreed to give in perpetual lease his half share in 32 bighas of Zirat and bakasht lands of that tauzi lying inkhata No. 618 to two persons (1) Jamuna Prasad . Sahu (Plaintiff No. 1) and (2) jagarnath Prasad Sahu (originally defendant No. 2 and subsequently transposed to the category of plaintiff No, 2) on terms as stated thereunder.
Two of those terms were that that the Settlees in return would pay rent for it at a fixed rate of Re. 1 /- per bigha and nazanina at the rate of Rs. 1162-8-0 per bigha. It seems that at that time the defendant appellant was hard-pressed for money, as he had to make payment of a mortgage decree, which was then under execution against him on behalf of two persons (1) Ramji Singh and (2) Ragho Singh; and it has for that that he had decided to part with some of his bakasht and zirat lands.
But at that time those zirat and bakasht lands were in the possession of his rehandars and one of the terms agreed upon with them was that the land given in rehan could be redeemed only in the month of Jeth, that means always just before the commencement of the next agricultural year. It was, however, unfortunate that the agreement for lease could be completed only at or about 27th of Jeth 1350 Fasli, when the month of Jeth was practically closing.
So there was hardly time enough for the parties to complete then entire transaction including the payment of the nazarana amount within that short period of a few days that had still t6 expire, id the month of Jeth. And the danger was that if payments were not made to the rehandars within those three days then on the one hand they would not agree to give up their possession for the next one year and on the other the settlees in that case would not be willing to stand by the agreement unless they got immediate possession from the next succeeding agricultural year.
Therefore, in order to obviate that contingency, the parties to the agreement arranged that the transaction should be completed in two stages; firstly by the execution of an agreement, as was done under the aforesaid registered deed, dated 15-6-1943, and then by the execution of a final document of lease within a period of two months from that date on the payment of the entire nazarana money. Thus, they thought that they would get about two months time sufficient to complete the entire transaction and in the meantime under the first document authority was given to the lessee to pay up the rehan money to the rehandars and in return for it to take possession of those lands from them. Further, according to the averments made in the plaint, this was also agreed upon : "(1) That if defendant No. 1 does not execute the patta within two months, the plaintiff and the defendants 2nd party shall be competent to realise the entire amount paid by them together with interest at the rate of Re. 1/- per cent., per mensem from the person and property of defendant No. 1.
(2) That in case the patta is not executed the plaintiff and the defendant 2nd party shall be competent to get the patta, executed by seeking relief in court and besides this to realise Rs. 1,600 as compensation from the persons and properties of defendant No. 1."
2. The case of the plaintiffs is that pursuant to the aforesaid agreement, a sum of Rs. 5,138-8-0 was paid to some of the rehandars in part satisfaction of the defendants share of debt. Yet in spite of repeated demands, the defendant appellant has been all along unwilling to receive the balance of the nazarana money and to execute the final document of lease, as agreed upon and hence the suit giving rise to this appeal.
3. Originally there were two suits, one by each of the two plaintiffs. Title Suit No. 72 of 1946 was on .behalf of plaintiff No. 1 Jamu
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