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TMI Blog1994 (2) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... ars lease at specified rates. 3.Pursuant to the advertisement, the respondent offered to secure the plot. It made an offer along with the letter dated December 15, 1970 in respect of Plot No. 46, Block No. V, Backbay Reclamation Estate, measuring 2500 square metres. The respondent also filed a questionnaire as required to be filled in accordance with the advertisement in which it was clearly mentioned that the offer was as promoter. 4.On January 1, 1971, the Collector of Bombay informed the respondent that the State Government had accepted the tender for lease of the plot at the rate of ₹ 2225 per sq. metre. The respondent was also called upon to make payment of security deposit of ₹ 75,000. This was complied with. A guarantee bond was also furnished for a sum of ₹ 3,04,000. A cheque of ₹ 300 was deposited towards the cost of preparation of agreement. In the letter dated February 23, 1971, it was stated, drawing the attention to the answer in the questionnaire that the respondent was acting as a promoter and the lease might be granted in favour of cooperative society. 5.Thus, it was made clear that the company will be acting as the promoter and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be applied provided the company is registered on a date later to the date of original allotment. Otherwise the date on which request for execution of lease in the name of such company etc. is made or the date on which the transfer has taken place. (d) Legal expenses i.e. expenses on preparation of the agreement to lease which may be done away with plus expenses on preparation of the lease deed which might have been entered into which the original allottee as the case may be. (e) Registration charges with reference to (d) above. 8.The respondent, thereafter addressed several communications informing the Collector that the assumption that the company was transferring the leasehold interest in favour of the cooperative housing society is entirely misconceived. It was pointed out that right from the inception, it has been clearly held out that the lease is to be executed in favour of the cooperative society formed by the purchasers of the flats. The Collector specifically agreed to this course. It was further stated that at the time of offer itself, it was disclosed that the company was a promoter or builder and the lease was never to be executed in its favour. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to execute the lease in favour of Navrang Basant Cooperative Housing Society Ltd. 12. It is under these circumstances, the present appeal by special leave came to be preferred. 13. Shri S.K. Dholakia, learned counsel for the State of Maharashtra should urge that an offer was invited on November 30, 1970. In Part II of that offer, memo of terms and conditions for lease of Block V, Backbay Reclamation was enclosed. Condition No. 7 specifically stated that the use of he building will be for private residence only. Condition No. 13 stipulated at the licensee will be put in possession of the plot on his executing the agreement to lease. More than this, under Condition No. 15, the licensee was debarred either directly or indirectly from transferring, assigning or encumbering or part with interest under or the benefit of the agreement to lease of any part thereof in any manner without the previous consent of the Government in writing. It further stipulated that the Government will be free to refuse to such consent or grant it in its absolute discretion. Equally, condition No. 16 stated that the lessee will not assign or part with possession of the demised premises or any par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, title and interest in Plot No. 101 to the Basant Cooperative Housing Society. Therefore, bypassing all these, to merely go by the terms and conditions of a licence and to contend that what was granted was a lease and nothing further remained excepting the execution of a formal lease deed is not correct. When the tender of the respondent was accepted, it was nothing more than an agreement to lease. It is open to the respondent s society to assign the benefit under that agreement. If really what was agreed to between the appellant State and the respondent is nothing more than an agreement to lease it does not require registration. The benefit of it can be assigned in favour of the cooperative society to which the Collector gave his consent and permitted the transfer. Now to contend that it was an agreement of lease and therefore, liable to stamp duty ignores the important fact that throughout the respondent acted only as promoters with the knowledge and consent of the appellant. Besides, clause 15, on which reliance is placed now, was never enforced. 15. A brief analysis of the facts may be made before we go to the legal aspect. 16. On November 30, 1970, a notice was issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanied this offer, it was stated as under : The company proposes to sell the flats in the said proposed building on ownership basis and the purchasers of such flats will form a cooperative society or an incorporated body to whom the property and the rights of the company will be transferred. 18. On January 1, 197 1, the Collector wrote to the respondent as under The Government has been pleased to accept your tender for the lease of the above plot at the rate of ₹ 2225 per sq. metre. 19. On February 23, 1971, the respondent requested the Collector to above the Government for the issue of necessary orders for the lease of plot. it was specifically stated in that letter as under : We would also like to inform you that at the time of making the offer for the above plot, in the accompanying questionnaire form, we have stated that the company proposes to construct the building on the above plot and to sell the flats on ownership basis and the flat purchasers shall form into a cooperative society or an incorporated body to which the rights of the company including the rights for the lease of the above plot will be transferred. As such, the company will be acting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of Basant Cooperative Housing Society Ltd. and that the society is being registered shortly. On that basis, it was requested to grant permission to transfer the rights, title and interest of the respondent in favour of Basant Cooperative Housing Society. The building was completed some time in 1974 and Bombay Municipal Corporation granted occupation certificate by a letter dated July 30, 1974. On August 8, 1977, the Basant Cooperative Housing society Ltd. came into being. On December 13, 1977, the following letter as addressed to the respondent : No. SB/CC3/LND-2832 (101) Collector s Office, Survey Branch, Old Custom House, Fort, Bombay. Dated : 13.12.1977. To The Secretary, M/s Atur India Pvt. Ltd., 31 1, Mirabelle, 33 A, New Marine Lines, Bombay-20. Sub : Lease of Plot No. 101, Block V B.B.R. to M/s Atur India P. Ltd., Sir, Please refer to your letter No. AI/1 10/7-72/582 dated 21st June, 1972. Govt. has sanctioned your request to transfer the rights, title and interest in the Plot No. 101 from Block V, Backbay Reclamation to the Basant Cooperative Housing Society Ltd. Yours faithfully, Sd/- F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... English law. Woodfall in Law of Landlord and Tenant,Vol. 1, 28th Edn., 1978 at page 127 states as under: A contract for a lease is an agreement enforceable in law whereby one party agrees to grant and another to take a lease. The expressions contract for lease and agreement for lease is to be preferred as being more definite, agreement frequently means one of many stipulations in a contract. A contract for a lease is to be distinguished from a lease, because a lease is actually a conveyance of an estate in land, whereas a contract for a lease is merely an agreement that such a conveyance shall be entered into at a future date. (emphasis supplied) In contradistinction to this, in the case of a lease, there must be words of demise. On this Woodfall states at page 184 as under: The usual words by which a lease is made are demise and let ; but any words which amount to a grant are sufficient to make a lease. Whatever words are sufficient to explain the intent of the parties, that the one shall divest himself of the possession and the other come into it, for any determinate time, whether they run in the form of a licence, covenant or agreement, are sufficient, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated. 26. A useful reference may be made to Green v. Bowes-Lyon (1960) 1 All ER301:(1960)1 WLR 176. This ruling clearly brings out the distinction between an agreement to lease and a lease. At pp. 304-05, it is held by Pearson, J. as under: The defendant s contention is that the instrument dated March 19, 1958, that is the instrument called a reversionary lease, is in truth an agreement between the landlord and the tenant for the grant to the tenant of a future tenancy of the holding on terms and from a date specified in the agreement within the meaning of Section 28. If that is right then the defendant s sub-lease from the plaintiff was the current tenancy referred to in Section 28, and it continued only until April 5, 1959, and no longer, and was not, therefore, a tenancy to which Part 2 of the Act applied. So it was not continued indefinitely under Section 24. Then on that basis it is said that the agreement binds the interest of the plaintiff under para 3(1) of Schedule 6 to the Act of 1954, and that para 4 of that schedule gives the plaintiff a right to compensation. The question in the end is a very simple one : is the instrument of March 19, 1958, a reversio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecutory instrument binding the parties, the one, to grant, and the other, to accept a lease in the future. As to such an executory agreement the law in England differs from that in India. An agreement to lease not creating a present demise is not a lease and requires neither writing nor registration. As to an executory agreement to lease, it was at one time supposed that an intending lessee, who had taken possession under an agreement to lease capable of specific performance, was in the same position as if the lease had been executed and registered. These cases have, however, been rendered obsolete by the decisions of the Privy Council that the equity in Walsh v. Lonsdale does not apply in India. 28.If it is merely an agreement to lease as to whether it requires registration has come up for discussion of this Court in Tiruvenibai v. Lilabai 1959 Supp 2 SCR 107: AIR 1959 SC 620. At page 111 it was held as under: Before dealing with these points, we must first consider what the expression an agreement to lease means under Section 2(7) of the Indian Registration Act, hereinafter referred to as the Act. Section 2(7), provides that a lease includes a counterpart, Kabuliyat, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e context where it occurs and in the statute in which it is found, must relate to some document that creates a present and immediate interest in the land . Ever since this decision was pronounced by the Privy Council the expression agreement to lease has been consistently construed by all the Indian High Courts as an agreement which creates an immediate and a present demise in the property covered by it. 29.Examining in the light of above, we hold that the notice of the appellant dated November 30, 1970, the offer of the respondent dated December 15, 1970 and the acceptance of the Collector of the tender of respondent for lease dated January 1, 1971 would merely constitute an agreement to lease. Clause 13 clearly contemplates that the licensee will be put in possession of plot on his executing the agreement to lease. Therefore, it is clear that by the respondent accepting the offer on December 15, 1970, the relationship of lessor and lessee between the appellant and the respondent had not come to be established. Further as pointed out earlier there was no actual demise on the date of the accepting of tender. Therefore, it is only an agreement to lease. It will not fall under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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