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Anthony v. K.C. Ittoop and Sons

Supreme Court of India, 1 July 2000, 3 judges

An unregistered five-year lease deed cannot create a lease, but a tenant put in possession on monthly rent holds a lease of up to one year under Section 107 TPA and is protected by the Rent Act.

Facts

The owner's family inducted the appellant into possession of a shed under a lease deed of 4 January 1974, meant for five years at a monthly rent of Rs. 140. The deed was not registered. The building later passed by partition to a family member, to whom the appellant paid rent, and she transferred it to the respondent, who sued for eviction. The appellant claimed protection as a tenant under the Kerala Buildings (Lease and Rent Control) Act, 1965. The trial court decreed the suit, holding the lease void for non-registration. After a remand, the District Judge held the appellant a tenant, but the High Court in second appeal held that no tenancy independent of the void lease was proved and decreed possession. A two-Judge Bench noticed conflicting decisions and referred the appeal to a larger Bench.

Questions before the Court

  1. Can a tenant whose lease deed for five years is unregistered claim to be a lessee, and so be protected by the Rent Act?

What the Court held

  • An unregistered instrument for a lease exceeding one year cannot create a lease, because of Section 107 TPA and Sections 17(1)(d) and 49 of the Registration Act. The court cannot use it as evidence of the lease.
  • A lease under Section 105 TPA may be made expressly or by implication. Apart from the deed, a lease may arise under the second paragraph of Section 107 by oral agreement accompanied by delivery of possession.
  • Where the owner admittedly put the occupant in possession and he paid or agreed to pay monthly rent, the relationship is that of lessor and lessee, not a licence. Since it cannot fall in the first paragraph of Section 107, it is presumed to be a lease not exceeding one year.
  • The appellant was a tenant who became a statutory tenant under the Rent Act and could be evicted only through the Rent Control Court. The appeal was allowed and the suit dismissed without prejudice to proceedings under the Rent Act.

Why it matters

Decided by a three-Judge Bench after a reference on conflicting views, the judgment holds that non-registration of a lease deed has only two consequences: no lease exceeding one year is created, and the deed is useless to create the lease. A lease not exceeding one year may still arise from the conduct of the parties, namely delivery of possession and payment of monthly rent, bringing the occupant within rent control protection.

In the Court's words

Copied from the official judgment; each passage links to its page.

“When lease is a transfer of a right to enjoy the property and such transfer can be made expressly or by implication, the mere fact that an unregistered instrument came into existence would not stand in the way of the court to determine whether there was in fact a lease otherwise than through such deed.”
K.T. Thomas, J.Page 4 of the judgment
“That lacuna had affected the validity of the document, but what had happened between the parties in respect of the property became a reality. Non registration of the document had caused only two consequences. One is that no lease exceeding one year was created. Second is that the instrument became useless so far as creation of the lease is concerned. Nonetheless the presumption that a lease not exceeding one year stood created by conduct of parties remains un-rebutted.”
K.T. Thomas, J.Page 5 of the judgment
“Appellant occupied the building as a tenant and he paid rent to the landlord and continued as such. Hence with the coming into force of Rent Act he became a statutory tenant whose eviction can be considered only when an application is moved in that behalf before the Rent Control Court concerned.”
K.T. Thomas, J.Page 6 of the judgment

Provisions interpreted

Case and bench

Parties
Anthony v. KC Ittoop and Sons
Case
Civil Appeal (number not printed in the JUDIS copy)
Decided
1 July 2000
Bench
D.P. Mohapatro, K.T. Thomas, R.C. Lahoti
Opinions
Unanimous. Judgment delivered by K.T. Thomas, J.

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