Registration not required for lac cultivation lease; damages for anticipatory breach run from rescission date.
A lease for lac cultivation was treated as an agricultural transaction under the Central Provinces Tenancy Act, 1920, so Section 107 of the Transfer of Property Act did not require a registered instrument; the preliminary documents were evidentiary only, and want of registration was not a bar to the suit. On anticipatory breach, damages were assessed from the date the innocent party elected to rescind, not from the first repudiation, because the plaintiff initially allowed performance to continue and treated the contract as subsisting until the later failure. The later rescission date therefore governed damages.
Issues: (i) Whether the lease for lac cultivation was required to be made by a registered instrument and whether want of registration barred the suit. (ii) From what date damages for breach of the contract were to be assessed.
Issue (i): Whether the lease for lac cultivation was required to be made by a registered instrument and whether want of registration barred the suit.
Analysis: Lac cultivation was treated as an agricultural operation under the Central Provinces Tenancy Act, 1920, so the lease did not attract Section 107 of the Transfer of Property Act. The proclamation did not itself embody the lease, the bids were written offers, and the acceptance showed that a formal stamped agreement was still contemplated. The transaction was not fully reduced into one operative written instrument, and the documents remained evidentiary rather than constitutive of the lease. On that footing, registration was not necessary to sustain the suit.
Conclusion: Want of registration was not a bar to the suit.
Issue (ii): From what date damages for breach of the contract were to be assessed.
Analysis: On an anticipatory breach, damages were held to be assessed from the date on which the innocent party elected to rescind, not merely from the date of the initial repudiation. The plaintiff did not rescind on the first repudiation and instead gave the defendant time to perform, so the contract continued until the later date when the defendant again failed to act and the plaintiff treated the contract as at an end. The second failure was therefore the effective breach for purposes of damages.
Conclusion: Damages were correctly assessed from the later date when the plaintiff elected to rescind.
Final Conclusion: The challenge to maintainability failed, and the assessment of damages from the later rescission date was upheld.
Ratio Decidendi: Where an oral agreement is evidenced only by preliminary written documents and the parties do not intend those documents themselves to be the operative lease instrument, registration is not required; in cases of anticipatory breach, damages are assessed from the date the innocent party elects to rescind.
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