1973 (12) TMI 97 - HC - Indian Laws

Appeal dismissed, market dues rights upheld, lease valid, renewal invalid, deposit awarded.

The appeal was dismissed, affirming the trial court's decree. The court held that the right to collect market dues is immovable property, the lease to Ram ... Right to collect market dues as immovable property - requirement of registration for leases exceeding one year under the Transfer of Property Act - lease distinguished from licence - effect of non-registration and absence of delivery of possession on unregistered lease - revocation of a registered lease by unilateral act - constructive notice of antecedent unregistered instruments - application of Section 69(2) of the Partnership Act to suits by a single contracting partnerRight to collect market dues as immovable property - requirement of registration for leases exceeding one year under the Transfer of Property Act - Nature of the right to collect market dues and its capacity to be the subject of a lease - HELD THAT: - The Court held that the right to collect market dues in respect of a market held on a specified piece of land is a benefit arising out of land and therefore falls within the notion of immovable property. Accordingly such a right can be transferred by way of lease. Applying the authorities cited and the definition of immovable property as including benefits to arise out of land, the transaction in favour of the plaintiff by a registered deed creating the right from 1-10-1958 constituted a lease of immovable property and not an incorporeal or purely revocable licence. [Paras 5]The right to collect market dues is immovable property and may be validly leased; the registered instrument in favour of the plaintiff created a lease.Lease distinguished from licence - revocation of a registered lease by unilateral act - Whether the document executed in favour of the plaintiff was a lease (not a licence) and whether the lessor could revoke it unilaterally - HELD THAT: - The instrument executed by the Raja and the plaintiff was bilateral, provided for payment as consideration and conferred exclusive possession of the right to collect market dues on the transferee during the term. Applying the tests in the cited authorities, these features satisfy the essentials of a lease. Because it was a registered lease intended to take effect from 1-10-1958, the Raja could not unilaterally revoke it by a subsequent document; the purported cancellation dated 18-7-1958 was ineffective to divest the lessee. [Paras 6]Ext.1 is a lease (not a licence) and could not be unilaterally revoked by the lessor.Effect of non-registration and absence of delivery of possession on unregistered lease - constructive notice of antecedent unregistered instruments - Validity of the appellant's alleged extension of her theka and its effect as against the plaintiff's registered lease - HELD THAT: - The trial court's finding that the documents relied upon by the appellant to show renewal were fabricated is upheld on the evidence; circumstantial facts (including non-production of the counterfoil) support ante-dating. Even assuming those documents were genuine, a lease for a year must be by registered instrument or oral agreement with delivery of possession. No registered renewal was produced and there was no prior delivery of possession for the fresh period before 1-10-1958. Consequently no constructive notice of any antecedent unregistered lease could be imputed to the plaintiff and the appellant acquired no right as against the plaintiff after 30-9-1958. [Paras 7, 8]The appellant's alleged renewal is either fabricated or, if genuine, unregistered and ineffective against the plaintiff's registered lease; she had no right to possession from 1-10-1958.Application of Section 69(2) of the Partnership Act to suits by a single contracting partner - Whether the suit was barred by Section 69(2) of the Partnership Act for non-registration of partnership - HELD THAT: - The plaint and evidence show that at the time the plaintiff obtained the lease from the Raja he acted in his individual capacity; the admission of two other persons as partners occurred subsequently for a portionate interest. The contract with the Raja does not appear on its face to have been made on behalf of a firm, and the rule that a partner may sue alone on a contract made with himself if he acted as principal applies. Therefore Section 69(2) has no application to bar this suit. [Paras 8]Section 69(2) of the Partnership Act does not bar the plaintiff's suit; the plaintiff could sue alone.Possession and holding over - revocation of a registered lease by unilateral act - Entitlement to interim receipts/realised dues and final disposition of the money deposited by the Receiver - HELD THAT: - A Receiver had realised market dues and deposited them in court. As the Court affirms the plaintiff's title under the registered lease which could not be revoked, the monetary proceeds realised in respect of the period falling to the plaintiff's lease are payable to him in lieu of possession. The trial court's decree directing payment of the deposited money to the plaintiff is therefore correct. [Paras 2, 10]The money realised by the Receiver shall be paid to the plaintiff in accordance with the trial court's decree.Final Conclusion: The trial court's decree in favour of the plaintiff is affirmed. The lease in favour of the plaintiff is valid and unrevocable by the lessor's unilateral act; the appellant had no subsisting lease as against the plaintiff for the period from 1-10-1958; Section 69(2) of the Partnership Act is inapplicable; the money deposited by the Receiver shall be disposed of in accordance with the decree. The appeal is dismissed with costs. Issues Involved:1. Nature of the right to collect market dues (immovable property or not).2. Validity of the lease granted to Ram Das.3. Alleged renewal of the lease in favor of the defendant-appellant.4. Applicability of Section 69(2) of the Indian Partnership Act.5. Entitlement to money deposited in court.Detailed Analysis:1. Nature of the Right to Collect Market Dues:The primary issue was whether the right to collect market dues constitutes immovable property. The court referenced Section 3 of the General Clauses Act, which includes 'benefits to arise out of land' in the definition of immovable property. The court concluded that the right to collect market dues is a benefit arising out of the land and thus is immovable property. This view was supported by precedents such as Sikandar v. Bahadur and Ram Jiawan v. Hanuman Pd., which held that such rights are immovable property and can be transferred by lease.2. Validity of the Lease Granted to Ram Das:The court examined the lease deed dated February 20, 1958, which was a registered document executed by both the Raja and Ram Das. It satisfied all the essential ingredients of a lease as defined in Section 105 of the Transfer of Property Act. The court held that the transaction was a lease and not a licence, as it provided exclusive possession to Ram Das. Therefore, the unilateral revocation by the Raja on July 18, 1958, was invalid.3. Alleged Renewal of the Lease in Favor of the Defendant-Appellant:The defendant-appellant claimed that her lease was renewed in December 1957. However, the court found the documents supporting this claim to be fabricated and ante-dated. Even assuming the documents were genuine, the court noted that no registered instrument was executed to renew the lease, as required by Section 107 of the Transfer of Property Act. Consequently, the alleged renewal did not create a valid lease, and the defendant-appellant had no legal basis to remain in possession after September 30, 1958.4. Applicability of Section 69(2) of the Indian Partnership Act:The defendant-appellant argued that the suit was barred by Section 69(2) of the Indian Partnership Act due to the non-registration of the partnership. The court found that at the time of the lease agreement with the Raja, Ram Das acted in his individual capacity and not as part of any partnership. Therefore, Section 69(2) did not apply, and Ram Das was entitled to enforce the contract and seek a decree in his favor.5. Entitlement to Money Deposited in Court:The court upheld the trial court's decree that the money deposited by the Receiver, collected from the market dues during the pendency of the suit, should be paid to Ram Das. Since the property was converted into money under interim court orders, Ram Das was entitled to this money in lieu of the property.Conclusion:The appeal was dismissed, and the decree of the trial court was affirmed. The court ruled that the right to collect market dues is immovable property, the lease in favor of Ram Das was valid, the alleged renewal of the defendant-appellant's lease was invalid, Section 69(2) of the Partnership Act did not bar the suit, and Ram Das was entitled to the money deposited in court. The stay order was discharged, and costs were awarded to the contesting respondent.