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TMI Blog1967 (2) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... said plots but before it could be completed they demised such rights as they had to the land and the partbuilt property to Messrs. Mehta Estates Ltd. on 4th January, 1951, for a consideration of ₹ 4,05,000. Messrs. Mehta Estates Ltd. spent further moneys towards completion of the construction of the building but when it was almost ready, they demised their rights in the land and the building to Messrs. Modern Flats Ltd., the present assessees. This was on the 9th January, 1951. Messrs. Modern Flats Ltd. completed the building and on or about 29th January, 1951, they in their turn demised portions of the building or as they have been called flats in the building to several persons. A copy of the agreement between Messrs. Modern Flats Ltd. (hereinafter referred to as the company ) and the purchasers of one flat is at annexure D . It is not in dispute that though annexure D is an agreement with particular joint purchasers, namely, three persons called Billimorias , the agreements in respect of all other flatholders were in similar terms. The original agreement between Govindji Lalji and the Governor of Bombay of 2nd June, 1948, was in the form of a licence and in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government specifications and plans with certain details of the building to be erected on the land and its appurtenances. There was a provision for fencing the plot of land and it was stipulated that no work was to be commenced by the licensee until the said plans, elevations and specifications shall have been approved by the Chief Engineer. The licensee was to spend not less than ₹ 3 lakhs in the construction of the building which was to be from new and sound material. While the building was under construction, the executive engineer had the right by clause 3(e) to supervise the construction and give directions from time to time which were to be carried out and in the meanwhile the building was to be kept insured and the Government kept indemnified against any claim for damages which may arise in the course of construction. It was also stipulated that the licensee was to pay all rates, taxes, charges, etc., chargeable against an owner or occupier in respect of the said land and any building or erection thereon. No part of the earth, stone or other materials from the land was to be removed except as may in the opinion of the executive engineer be necessary for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be fulfilled. Clause (f) provided that he was to observed and conform to all bye-laws, rules and regulations of the municipal corporation of the City of Bombay or other body. In clause (p) it was provided that at the expiration or sooner determination of the said term the lessee was to quietly deliver up to the lessor the demised premises and all erections and buildings then standing or being thereon. Then there was a proviso as follows, upon which great reliance was placed on behalf of the assessee: Provided always that the lessee shall be at liberty if he shall have paid the rent then due and in addition thereto a sum equal to the rent for the unexpired period of the said term and all municipal and other taxes, rates and assessments then due and shall have performed and observed the covenants and conditions herein contained prior to the expiration of the said term to remove and appropriate to himself all buildings, erections and structures and materials from the said land but so nevertheless that the lessee shall deliver as aforesaid to the lessor levelled and put in a good order and condition to the satisfaction of the lessor all land from which such buildings, erections or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ₹ 34,500. It was also hoped that on completion of the transaction vacant possession would be delivered to the purchasers of the said premises. After this document was executed by Govindji Lalji and the four partners on 4th January, 1951, Messrs. Mehta Estates Ltd. executed a similar document in favour of the assessee, Messrs. Modern Flats Private Ltd., and Modern Flats (Private) Ltd. demised individual flats in favour of individual flatholders. Now none of these documents are registered and one of the questions that was agitated before us was whether they could at all operate to convey any right, title or interest in favour of Messrs. Mehta Estates Ltd. or Messrs. Modern Flats Private Ltd. Under the provisions of section 9(1) the tax payable under the head Income from property is in respect of the bona fide annual value of the property consisting of buildings or lands by an assessee who is the owner of the property. The principal point urged before the Tribunal was that the assessee was not the owner of the land and the building, but if at all any one could be said to be the owners they were the individual flat owners to whom Modern Flats Private Ltd. had subsequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty Act clearly requires that without a registered document such a property which is tangible immovable property cannot be transferred. Mr. Kolah in this respect also relied upon three cases to show that the same principle would operate even in the matter of considering ownership under the Indian Income-tax Act. They are Commissioner of Income-tax v. Bhurangya Coal Co. [1958] 34 I.T.R. 802 (S.C.), Pal Chowdhury v. Commissioner of Income-tax [1962] 46 I.T.R. 1, 13, and Hall and Anderson (Private) Ltd. v. Commissioner of Income-tax [1963] 47 I.T.R. 790. We are clear, in our opinion, that the right, title and interest in the building which was partly constructed could not be transferred by the two documents. There was some reference in the arguments to the equity of part performance. It was also referred to before the Tribunal, but before the Tribunal only section 53A of the Transfer of Property Act was referred to and so far as that is concerned the Tribunal held that the equity can confer no title. It is only a defensive equity which a person is entitled to invoke in his favour if there is a risk of his losing possession for want of title, but it cannot be the foundation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a is concerned, we are governed by the express provisions of section 53A of the Transfer of Property Act and as has been pointed out by Mulla at page 298 in his 5th edition of the Transfer of Property Act, ...no equitable rule could override the express provisions of this Act or the Registration Act. The enactment of this section has only altered that position by creating the limited right conferred under the section, and it is settled law that no other equitable right can supersede the provisions referring to writing or registration and the learned author has observed It follows, therefore, that there is no scope in India for applying the equity of Walsh v. Lonsdale [1882] 21 Ch. D. 9, except in the limited class of cases where an interest in land can be created without registration, e.g., a lease for less than one year, or a sale for less than ₹ 100 . Therefore, it seems to us that the principle upon which the decision in Lowther's case [1889] 41 Ch. D. 248 was based will not apply to the present case, nor will the passage from Halsbury's Laws of England relied upon by Mr. Joshi. Reference was next made to section 27A of the Specific Relief Act. That section a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparately numbered flat No. 12 on the 2nd floor in the building on the said property for the unexpired residue of the said term of 99 years at or for the price of ₹ 23,000 for the full amount whereof the purchaser is entitled to receive shares of the company. In clause (2) provision is made for the payment of this amount in certain instalments and the amount is referred to as the price of the flat . In clause (14) the purchaser is given the liberty to sell, assign or otherwise deal with his interest in the said property, provided however that the company's interest and rights in the said property created under this agreement are not in any way affected or prejudiced. From these provisions it is clear that the assessee has sold whatever right, title and interest it had to the individual flat owners who are called the purchasers under the document. What is more, the purchaser is given the right in his turn to sell or assign the rights given to him by the document. The proviso does not in any way fetter that right. The proviso is only incorporated in order to safeguard the company's interest which is that the company continues to exist for the purposes of manageme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the flatholders, we can hardly say that the assessee, the Modern Flats Ltd., have any further ownership left in them. It is impossible, in view of the agreement dated 29th January, 1951, and other like agreements which were admittedly entered into with other flatholders, to hold that the assessees were the owners of any part of the building. Such stipulations as are contained in the various clauses of the agreement limiting or curbing the full enjoyment of the property are only limitations which were necessary to ensure the common good of all the flatholders. On this second ground, therefore, we must hold that the assessees, Modern Flats Ltd., were not the owners during the relevant assessment periods. It was urged by Mr. Joshi that the agreements could not transfer any right, title or interest in the immovable property in favour of the purchaser flatholders because they are not registered. If registration is the ground for holding that no transfer took place from Modern Flats Ltd. to those flatholders, then it seems to us that on that very ground Modern Flats Ltd. could never have become the owners of the property by the transactions between Varjivandas Co. and Mehta Estates ..... X X X X Extracts X X X X X X X X Extracts X X X X
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