Unregistered lease deed treated as contract to lease, allowing specific performance where possession was delivered in part performance.

An unregistered document creating a lease of the right to collect rents was treated as relating to immovable property, because benefits arising out of land fall within that category, and the instrument embodied the lease terms executed by both parties. As an unregistered lease deed, it could not operate as a completed legal lease, but it was enforceable as a contract to lease where possession had been delivered in part performance. Applying specific performance principles, the court accepted that the plaintiff could recover the agreed rent under the contract despite non-registration, and the suit succeeded on that basis.

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Issues: (i) Whether the unregistered document evidencing the lease was a compulsorily registrable lease deed or could be treated only as a contract to lease, and whether the transaction fell within the scope of a lease of immovable property. (ii) Whether, despite non-registration, the plaintiff was entitled to a decree for the rent agreed to be paid under the document on the basis of specific performance and part performance.

Issue (i): Whether the unregistered document evidencing the lease was a compulsorily registrable lease deed or could be treated only as a contract to lease, and whether the transaction fell within the scope of a lease of immovable property.

Analysis: A lease of the right to collect rents was treated as a lease of immovable property because immovable property includes benefits arising out of land. The definition in the General Clauses Act was applied to the Transfer of Property Act and the Specific Relief Act. The document in question embodied the terms of the lease and was executed by both parties, so it was not merely a memorandum of a prior oral arrangement. Being an unregistered lease deed, it could not itself be received as evidence to prove the lease as a completed legal relationship.

Conclusion: The document was compulsorily registrable and could not operate as an effective registered lease, but the subject matter was a lease of immovable property.

Issue (ii): Whether, despite non-registration, the plaintiff was entitled to a decree for the rent agreed to be paid under the document on the basis of specific performance and part performance.

Analysis: An unregistered document intended to create a lease, but failing for want of registration, was treated as a contract to lease. Section 27A of the Specific Relief Act was applied to enforce the contractual obligation where the lessor had delivered possession in part performance. The earlier finding that possession had been delivered pursuant to the written document was sufficient to support that conclusion. The court rejected the contention that the suit could not be treated as one for specific performance merely because the lease itself was invalid in form.

Conclusion: The plaintiff was entitled to a decree for the agreed amount by way of specific performance of the contract.

Final Conclusion: The suit was decreed on the footing that the invalidly registered lease operated as an enforceable contract to lease, and the plaintiff succeeded, though without costs.

Ratio Decidendi: Where a document intended to create a lease fails for want of registration, but possession has been delivered in pursuance of it, the document may be enforced as a contract to lease through specific performance, and the right to collect rents is a lease of immovable property.

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