Friday, 19 February 2021

Is it mandatory to register a tenancy agreement for less than 11 months under Maharashtra's rent control Act?

 According to the petitioner, since the registration of an agreement of the nature with which this Court is concerned in the present case, is required to be registered under the Registration Act, all the provisions of the Registration Act, including Sections 17 and 18 thereof would squarely apply. Since the period for which possession of suit shop was given to the respondent under the said agreement was only 11 months and clearly less than one year, such an agreement was not compulsorily registrable under Section 17 of the Registration Act and that the registration of such an agreement was only optional under Section 18 thereof.

12. A perusal of the above quoted Section 55 of the said Act would show that it opens with a non-obstante clause, which provides that notwithstanding anything contained in the said Act  or any other law for the time being in force, any agreement between the landlord and tenant after commencement of the said Act has to be in writing and shall be registered under the Registration Act, 1908. The manner in which the non- obstante clause is framed, the registration of such an agreement in writing is mandatory and it is required to be registered under the Registration Act. The non - obstante clause is followed by the words "any other law for the time being in force". These words would take into their sweep the Registration Act also, since it was in force when the aforesaid Act came into being. Therefore, notwithstanding the fact that an agreement between the landlord and tenant for a period less than one year would not be compulsorily registrable under Sections 17 and 18 of the Registration Act, yet, such an agreement for less than one year shall have to be registered under the Registration Act. Any other interpretation of such a non - obstante clause in Section 55(1) of the said Act would amount to adding words into the same like "any other law for the time being in force except requirements of Section 17 r/w 18 of the Registration Act". Such adding of words cannot be resorted to, when a plain reading of the said provision, particularly the non - obstante clause shows that every agreement between the landlord and tenant after commencement of the aforesaid Act shall be in writing and must be registered.

13. The emphasis placed on words "shall be registered under the Registration Act, 1908", placed by the learned counsel for the petitioner to contend that the registration of such an agreement for a period less than one year was optional under Section 18 of the Registration Act, cannot be accepted.

Bombay High Court
Anwar Noormohammed Pirani vs Santosh Gajanan Naskulwar on 3 December, 2019
Bench: Manish Pitale
 Writ Petition No. 5650 of 2018
Citation: 2020(6) MHLJ 257

By this writ petition, the petitioner has challenged judgment and order dated 23/02/2018, passed by the Court of Additional Sessions Court, Kelapur (Appellate Court), whereby appeal filed by the respondent has been allowed and the decree of possession granted in favour of the petitioner by the Court of Joint Civil Judge (Junior Division), Kelapur (Pandharkawada) (Trial Court), has been set aside.

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2. The petitioner (landlord) filed suit for possession and recovery of rent in respect of a shop, claiming the said to be admeasuring 395 sq.ft. given on rent to the respondent from 11/06/2008 for 11 months, up to 10/05/2009. It was claimed by the petitioner that the said agreement was in writing, executed on 02/09/2008 for the aforesaid period and it was attested before the Notary on 19/09/2008. As per the said agreement, the aforesaid shop admeasuring 395 sq.ft. was given on rent for the aforesaid period of 11 months to the respondent for an agreed rent of Rs.3900/- per month. The petitioner claimed in the suit that from November, 2008, the respondent failed to pay agreed rent, as a result of which the agreement had come to an end and thereupon, the respondent was illegally in possession of the suit shop. As per the petitioner, on 27/07/2009, a notice was issued to the respondent stating that he had defaulted in the payment of rent from November, 2008 and further that he was illegally in possession of the suit shop beyond the agreed period of 11 months. On this basis, possession was sought from the respondent. As the respondent did not send any reply to the said notice on 23/09/2009, the petitioner filed the aforesaid suit.

3. On 31/12/2009, the respondent filed written statement in the aforesaid suit, denying the execution of the agreement. While denying the claims made on behalf of the petitioner in the suit, it was specifically stated in the written statement that there were actually two shop blocks, one admeasuring 200 sq. ft. and other admeasuring 195 sq. ft. It was claimed that the respondent was put in possession by the petitioner in the shop admeasuring 200 sq. ft. from January, 2006 for a monthly rent of Rs.2000/- and a deposit of Rs.50,000/- was 3 wp5650.18.odt also made by the respondent. Thereafter, in 2008, the respondent was put in possession of the other shop block admeasuring 195 sq.ft. at the monthly rent of Rs.1500/- for which a deposit of Rs.30,000/- was made. It was also claimed that there was an oral agreement regarding such tenancy for a period of 10 years. It was also submitted that there was no default in payment of rent on behalf of the respondent and, therefore, there was no cause of action to file the present suit.

4. The parties led evidence in support of their respective claims as per their pleadings. Upon taking into consideration the pleading, evidence and material on record, the Trial Court decreed the suit in favour of the petitioner. It was held that the agreement was proved by the petitioner and since the respondent had continued in illegal possession of the said suit shop beyond the period of 11 months, a decree for possession was passed in favour of the petitioner.

5. Aggrieved by the judgment and decree passed by the Trial Court, the appellant filed appeal before the Appellate Court, inter-alia, contending that since the agreement said to have been attested before the Notary on 19/09/2008, was not a registered document, it could not have been looked into by the Trial Court. It was submitted that such an agreement was mandatorily required to be registered under Section 55(1) of the Maharashtra Rent Control Act, 1999. The requirement for getting such rent agreement registered was the responsibility of the petitioner / landlord as per Section 55(2) of the said Act. Since it was not registered, as per Section 55(2) of the said Act, the contention of 4 wp5650.18.odt the respondent (tenant) about terms and conditions of the tenancy would prevail. Apart from this, it was pointed out that the oral evidence of the petitioner, particularly, admissions given in the cross - examination demonstrated that the decree passed by the Trial Court was unsustainable.

6. By the impugned judgment and order dated 23/02/2018, the Appellate Court allowed the appeal, holding that the said agreement could not be relied upon by the petitioner as it was not registered. It was also found that the terms of tenancy as proved by the respondent, demonstrated that there were two shops in stead of one and further that the petitioner had failed to place on record material to show as to in respect of which shop the respondent was in arrears. It was held that since the terms of the agreement of 11 months could not be accepted in the absence of registration of the agreement, the whole basis of the suit for possession filed by the petitioner was taken away and the decree was unsustainable. Accordingly, the appeal was allowed and the decree was set aside.

7. Mr. S.V. Sohoni, Advocate along with Mr. Masood Sharif, Advocate, appearing for the petitioner submitted that the Appellate Court committed a grave error in holding that the aforesaid agreement was mandatorily required to be registered under Section 55 of the said Act, because it was an agreement only for a period of 11 months. It was submitted that under Section 17 read with 18 of the Registration Act, 1908, it was clear that registration of such an agreement was not mandatory, but, it was optional and, therefore, non-registration of the same could 5 wp5650.18.odt not have been a ground for the Appellate Court to have held that the agreement could not be relied upon. It was further submitted that the agreement was duly proved by the petitioner by examining one of the attesting witnesses. On this basis, it was submitted that the Trial Court had correctly decreed the suit by relying upon the agreement in question. It was further submitted that apart from arrears of rent, the petitioner had also claimed possession of the said shop on the basis of bonafide need, which was granted by the Trial Court and wrongly rejected by the Appellate Court. On this basis, it was submitted that the impugned order passed by the Appellate Court deserved to be set aside and decree granted by the Trial Court ought to be restored in the interest of justice.

8. On the other hand, Mr. J.M. Gandhi, Advocate appearing for the respondent submitted that a proper reading of Section 55(1) of the aforesaid Act would show that even an agreement for period of less than one year was not exempted from the requirement of registration. It was submitted that non- obstante clause with which Section 55(1) starts, demonstrates that the exemption available under Section 18 of the Registration Act, could not be relied upon by the petitioner. On this basis, it was submitted that the Appellate Court correctly ignored the aforesaid agreement and the pleadings and evidence led on behalf of the respondent was correctly believed to hold that no case for grant of decree of possession was made out by the petitioner. It was submitted that even otherwise, a perusal of the oral and documentary evidence on record demonstrates that the agreement could not be believed, because it was denied by the respondent and no steps had been taken by the petitioner to prove the said 6 wp5650.18.odt agreement. The evidence of the attesting witness was not helpful because crucial admissions were given in the cross-examination thereby rendering the evidence of the said witness unworthy of consideration. It was further submitted that the terms of the tenancy created as per oral agreement stated by the respondent were correctly relied upon by the Appellate Court under section 55(2) of the said Act and, therefore, the judgment and order passed by the Appellate Court deserved to be confirmed by dismissal of the writ petition.

9. Heard learned counsel for rival parties and perused the material on record. The aforesaid agreement said to have been executed on 02/09/2008 and attested before the Notary on 19/09/2008, pertaining to period 11/6/2008 to 10/5/2009, is the document which forms the basis for claims made by the petitioner in the present case. Admittedly, the said document is not registered. It pertains to the period of 11 months. The question that arises for consideration is, as to whether an agreement pertaining to a period for less than one year, like the aforesaid agreement in the present case is mandatorily required to be registered under the Registration Act, as per Section 55(1) of the Rent Act. It also needs to be considered whether the registration of such a document pertaining to a period of less than one year is optional under Section 18 of the Registration Act, as claimed by the petitioner.

10. In order to decide the said question it would be appropriate to refer to Section 55 of the aforesaid Act, which reads as under :

7 wp5650.18.odt "Tenancy agreement to be compulsorily registered (1) Notwithstanding anything contained in this Act or any other law for the time being in force, any agreement for leave and licence or letting of any premises, entered into between the landlord and the tenant or the licensee, as the case may be, after the commencement of this Act, shall be in writing and shall be registered under the Registration Act, 1908. (2) The responsibility of getting such agreement registered shall be on the landlord and in the absence of the written registered agreement, the contention of the tenant about the terms and conditions subject to which a premises have been given to him by the landlord on leave and licence or have been let to him, shall prevail, unless proved otherwise.

(3) Any landlord who contravenes the provisions of this section shall, on conviction, be punished with imprisonment which may extend to three months or with fine not exceeding rupees five thousand or with both."

11. According to the petitioner, since the registration of an agreement of the nature with which this Court is concerned in the present case, is required to be registered under the Registration Act, all the provisions of the Registration Act, including Sections 17 and 18 thereof would squarely apply. Since the period for which possession of suit shop was given to the respondent under the said agreement was only 11 months and clearly less than one year, such an agreement was not compulsorily registrable under Section 17 of the Registration Act and that the registration of such an agreement was only optional under Section 18 thereof.

12. A perusal of the above quoted Section 55 of the said Act would show that it opens with a non-obstante clause, which provides that notwithstanding anything contained in the said Act 8 wp5650.18.odt or any other law for the time being in force, any agreement between the landlord and tenant after commencement of the said Act has to be in writing and shall be registered under the Registration Act, 1908. The manner in which the non- obstante clause is framed, the registration of such an agreement in writing is mandatory and it is required to be registered under the Registration Act. The non - obstante clause is followed by the words "any other law for the time being in force". These words would take into their sweep the Registration Act also, since it was in force when the aforesaid Act came into being. Therefore, notwithstanding the fact that an agreement between the landlord and tenant for a period less than one year would not be compulsorily registrable under Sections 17 and 18 of the Registration Act, yet, such an agreement for less than one year shall have to be registered under the Registration Act. Any other interpretation of such a non - obstante clause in Section 55(1) of the said Act would amount to adding words into the same like "any other law for the time being in force except requirements of Section 17 r/w 18 of the Registration Act". Such adding of words cannot be resorted to, when a plain reading of the said provision, particularly the non - obstante clause shows that every agreement between the landlord and tenant after commencement of the aforesaid Act shall be in writing and must be registered.

13. The emphasis placed on words "shall be registered under the Registration Act, 1908", placed by the learned counsel for the petitioner to contend that the registration of such an agreement for a period less than one year was optional under Section 18 of the Registration Act, cannot be accepted. The contention that reference to the Registration Act, 1908 and 9 wp5650.18.odt requirement that registration shall be under the said Act will get its full meaning only if registration of such agreement is done in terms of Registration Act, cannot also be accepted because a proper interpretation and meaning of Section 55 of the aforesaid Act would show that the registration of every such agreement between landlord and tenant after commencement of the said Act, would be as per the procedure prescribed under the Registration Act.

14. In other words, the Registration Act would apply as per Section 55 of the said Act, in so far as the procedural aspect of the registration of such an agreement is concerned, including the office of the Registrar where such agreements would be registered and other such specific requirements on the procedural side reflected in various provisions of the Registration Act. The mandatory requirement of registration of such an agreement clearly applies in full force, notwithstanding the option of not registering an agreement pertaining to period less than one year under Section 18 of the Registration Act. The penal provision and consequences under Section 55(3) of the said Act, upon the landlord for contravening the Section, are also crucial. These consequences indicate that notwithstanding any law in force exempting registration of such agreement executed for a period of less than one year, the landlord has to get such an agreement registered.

15. Thus, the Appellate Court cannot be said to have committed any error in holding that the Trial Court could not have looked into and relied upon the aforesaid agreement on which emphasis was placed by the petitioner. Once, this 10 wp5650.18.odt conclusion is reached, it becomes clear that the very basis of the decree passed by the Trial Court in favour of the petitioner cannot be sustained. In this context, Section 55(2) of the said Act assumes significance, because when the said agreement could not be relied upon, the contentions of the respondent as the tenant regarding the terms and conditions subject to which the suit property had been given to him by the petitioner, were to prevail, unless proved otherwise.

16. In the present case, the respondent stated in the written statement that he was inducted into one of the two shops in the year 2006, admeasuring 200 sq. ft. and thereafter he was inducted also into the other shop admeasuring 195 sq. ft. in the year 2008. It was stated that oral agreement was entered into between the parties for payment of rent of Rs.2000/- per month for the shop admeasuring 200 sq. ft. and Rs.1500/- per month for the shop admeasuring 195 sq. ft. It was further stated by the respondent that the parties agreed for a period of such tenancy to be 10 years. Applying Sections 55(1) and 55(2) of the aforesaid Act to the facts of the present case, the contention of the respondent in respect of the aforesaid tenancy prevailed and, therefore, the Appellate Court was justified in setting aside the decree passed by the Trial Court.

17. Even otherwise, assuming for the sake of testing arguments of the petitioner that, the agreement could be relied upon, the Trial Court failed to properly appreciate and analyze the pleadings and evidence led by the rival parties. A perusal of the written statement shows that the said agreement was absolutely 11 wp5650.18.odt denied by the respondent. The signatures on the agreement were denied. It was, therefore, necessary for the petitioner to have proved the said agreement to the hilt, even if it could have been looked into by the Courts. A perusal of the agreement shows that signature of the respondent is found only on the last page. Although, the stamp paper is said to have been purchased by the respondent, his signature is not found on each and every page of the agreement. Further, the said agreement purportedly pertained to the period 11/06/2008 to 10/05/2009, yet it was stated to have been executed on 02/09/2008 and attested before Notary on 19/09/2008. Thus, the said document on a bare reading shows that it was not even executed in the presence of the Notary. The evidence of the one of the witnesses to the said agreement, who was examined on behalf of the petitioner, although in chief examination supported the agreement, but, in cross - examination gave crucial admissions demonstrating that the agreement could not be said to have been executed in his presence.

18. In this situation, it was necessary for the petitioner to have examined the Notary, but no such effort was made by the petitioner. In the face of denial of the signature by the respondent, it was necessary for the petitioner to have taken logical steps to bring on record evidence to prove the signature of the respondent, but, no such efforts were made.

19. It is also crucial that in his cross - examination, the petitioner gave vital admissions. It was admitted by the petitioner that the respondent was inducted in the shop admeasuring 200 sq. ft. in the year 2006, for monthly rent of Rs.2000/-. It was 12 wp5650.18.odt further admitted that the respondent was inducted into the other shop admeasuring 195 sq. ft. in the year 2008. These admissions clearly indicate that the statements made in the aforesaid purported agreement executed on 02/09/2008, that there was only one shop admeasuring 395 sq. ft. in which the respondent was inducted on 11/06/2008, were completely in variance and in contradiction of the aforesaid admissions given in the cross - examination by the petitioner. This not only discredited the said agreement, but, it discredited the whole case put up by the petitioner before the Trial Court. These aspects were completely ignored by the Trial Court, while granting decree in favour of the petitioner.

20. On the other hand, the Appellate Court appreciated evidence and material on record in the correct perspective. On the question as to whether the grounds, on the basis of which the petitioner sought a decree of possession, were made out or not, the material on record needs to be perused. It is an admitted position that in the notice dated 27/07/2009, issued by the petitioner, no reference was made to any bonafide need and it was only claimed that the respondent had defaulted in payment of rent from November, 2008. It was also claimed that since the agreement was only up to 10/05/2009, the respondent had illegally continued in possession of the shop and, therefore, the respondent ought to have handed over the possession as per the agreement after 10/5/2009. It was further pleaded that the suit shop was required for bonafide reasons as the petitioner was in urgent need of money to repay certain loans.

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21. As noted above, since the agreement could not have been relied upon in the absence of registration there was no question of the possession of the respondent being rendered illegal upon expiry of the period of 11 months. As regards default in the payment of rent, the said ground stood washed out in the face of admission given by the petitioner in cross-examination that the respondent had paid rent regularly. Apart from this, the Appellate Court was justified in accepting the terms of tenancy as claimed by the respondent (tenant) in terms of Section 55(2) of the said Act and holding that since the petitioner had failed to prove as to in respect of which of the two shops the respondent was in arrears, it could not be said that the ground for eviction of the respondent was made out for default in payment of rent. As regards bonafide need, a perusal of the plaint would show only one sentence regarding the same in the form of need to repay the loans. There was no documentary or other evidence placed on record by the petitioner to show the outstanding loan and the necessity for disposing of the shop blocks for repayment of loan.

22. In this context, the respondent had also moved an application under Section XLI Rule 27 of the Code of Civil Procedure before the Appellate Court to bring on record the fact that even during pendency of the suit, the petitioner had sold other properties belonging to him. In response to the said application, the fact of certain other properties being sold during pendency of the suit was admitted by the petitioner. All this material was taken into consideration by the Appellate Court while holding in favour of respondent. On the contrary, a perusal of the judgment and decree of the Trial Court would show that none of these factors were adverted to, when the decree of 14 wp5650.18.odt possession was passed against the respondent in a casual manner.

23. In the light of the facts and circumstances of the present case, in the face of the material on record, it becomes evident that the judgments relied upon by the petitioner pertaining to compulsory registration of documents and exemption under Section 18 of the Registration Act, are not relevant for the present case. The judgment on which the learned counsel for the petitioner placed reliance i.e. Corporation of Madras and another Vs. M. Parthasarathy and Others (2018) 9 SCC 445, in the context of opportunity to the petitioner to lead evidence in the context of the material sought to be brought on record by the respondent under Order XLI Rule 27 of the Code of Civil Procedure, it is found that said judgment is not applicable because the petitioner did not deny the fact regarding selling of property during pendency of the suit. In the face of the admissions given in the reply to the said application, the petitioner could not claim that he was deprived of an opportunity to lead evidence. In this context, the learned counsel for the respondent was justified in contending that the Appellate Court correctly decided the aspect of bonafide need against the petitioner.

24. In view of the above, it is found that the decree of possession passed in favour of the petitioner by the Trial Court, was passed in a casual manner, without properly appreciating the pleadings, evidence and material on record. The Appellate Court, on the other hand, not only appreciated the contentions regarding mandatory requirement of registration under Section 55(1) of the said Act, but, it also appreciated the evidence and material on 15 wp5650.18.odt record in the correct perspective to set aside the decree passed by the Trial Court. Since no error can be attributed to the findings rendered by the Appellate Court in the impugned judgment and order, this Court finds that no case is made out by the petitioner in his favour in the present writ petition.

25. Accordingly, the writ petition is dismissed and the impugned judgment and order passed by the Appellate Court is confirmed.


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