A term regarding arbitration in a lease deed is not a collateral transaction and cannot be enforced under section 34 of the Arbitration Act, 1940.

Harbans Singh, J.

1. This is a revision filed against an order of the District Judge, Chandigarh, confirming that of the trial Court whereby the suit filed by Om Parkash Chawla, petitioner before me, against the Union of India through the Secretary to Government of India, Ministry of Defence, for recovery of sum of money being the arrears of rent of the house in question given on lease through the Garrison Engineer, Chandigarh, was stayed in view of the provisions of section 34 of the Arbitration Act, 1940 .

2. The facts giving rise to the dispute between the parties may be briefly stated. The petitioner-plaintiff is the owner of house No. 1100 in Sector 19-B, Chandigarh. By an agreement dated 6th of May, 1953, ground floor thereof was given on lease by Om Parkash Chawla to the Garrison Engineer on the basis of monthly tenancy with effect from 30th October 1962. Subsequently a letter was written by the Garrison Engineer agreeing to the enhancement of (he rent from the Original figure of Rs. 85/- to Rs. 135/- per month on the condition that the annual repairs were carried out by the landlord. We are not concerned in this case as to what actually was done in this connection. More than a year thereafter another letter was received by the landlord to the effect that the enhancement of the rent may be treated as cancelled. Consequently a suit was brought by the landlord for the recovery of the rent at the enhanced rate after giving allowance for the rent already paid. One of the objections taken was that under the terms of the lease, all disputes arising out of the same were to be referred to an arbitrator who was to be an officer of the Department. Before the trial Court it was agreed that the document purporting to be the lease deed was inadmissible in evidence not having been registered. Both the Courts below, however, came to the conclusion that so far as the arbitration term in the deed is concerned, that would be a collateral matter for which the document can be looked at, and that term can be enforced. The order of the trial Court staying the suit in terms of section 34 of the Arbitration Act was confirmed by the District Judge, and hence this reversion petition.

3. There can be no manner of doubt that the document in question can be admissible in evidence only if it falls within the last part of the proviso to section 49 of the Indian Registration Act, 1909, which runs as follows :-

"Provided that an unregistered document affecting immoveable property and required by this Act or the Transfer of Property Act, 1882; to be registered may be received ...... .................. as evidence of any collateral transaction not required to be effected by registered instrument."

I have no doubt in my mind that like the period of lease, the rate of rent agreed upon, The terms regarding repairs of the building and the renewal of the lease, the method of settlement of disputes forms an integral part of the lease, and none of the terms of the lease can be treated to be a collateral transaction. On the last hearing when this case came up before me, it was adjourned to enable the learned counsel for the respondent to make a research and to bring before me any case wherein the terms of a lease have been treated to be a collateral transaction. The other purpose for which the case was adjourned was to enable him to find out from the Department if the matter can be amicably settled. The learned counsel has, however, stated that the departmental authorities at Chandigarh find it difficult and are not in a position to enter into any compromise. I have, therefore, heard the learned counsel with regard to the law point.

4 A number of authorities have been cited before me by the learned counsel for the respondent, but none of them is, to my mind, to the point in V. H. Deshpande v. R. D. Deshpande. AIR 1942 Bom. 268, only a general statement was made that a collateral purpose would be any purpose other than the one of creating, declaring, assi