Ashok Kumar Sharma v. Jai Kumar Aggarwal

15. In order to properly appreciate the contentions of the parties, it is necessary to see the consent/agreement dated 07.01.1999:- “This consent is made and executed on this 7th day of January, 1999 between Sh. Jai Kumar Aggarwal, S/o Sh. Om Prakash Aggarwal, R/o C-41/A, Hauz Khas, New Delhi- 16 (hereinafter called the First Party). AND Shri Ashok Kumar Sharma, S/o Sh.Hari Chand Sharma, owner/sole proprietor of M/s Electronic House, C- 41/A, Hauz Khas, New Delhi and R/o 10/1065, Govind Puri, Kalkaji, New Delhi (hereinafter called the Second Party). Whereas the First Party is the absolute legal and rightful owner of the property bearing Municipal No.C- 41/A, Hauz Khas, New Delhi measuring approx. 220 sq. yds., consisting of single storey including a garage (hereinafter called the property). And whereas the Second Party is the tenant and in possession of the above said garage for last more than 12 years. And whereas both the parties have mutually agreed to vacate and rebuild the said property on following terms and conditions:-

1. That the Second Party will construct the basement and the structure (i.e. beams pillars, electric conduiting, brick walls, plastered from inside and kuchha flooring) of Ground Floor including two shutters in front and rest of the building whatsoever it may be will be constructed by the First Party.

2. That the Second Party shall be allotted the front portion of basement measuring 28’ X 30’ and the physical possession will be handed over after completion of walls and lantern of First Floor as per plan.

3. That remaining portion of basement will be separated by a pucca wall. The portion allotted to the Second Party shall have a separate and free entrance and/or access to it without any hindrance obstruction or interference of Second Party and/or any person occupying the remaining/difference portion of the property.

4. That the Second party shall bear all the expenses to instruct the basement and Ground Floor and to deal with the Municipal or DDA Authorities.

5. That the house tax + electricity etc. will be beared equally by both the parties i.e. 50% each over hand charges.

6. That the First Party shall give the clear floor after demolition and cleaning of the property.

7. That the construction of the building shall be under the supervision and control of both the parties and both the parties are bound to available any time when and where they are required.

8. That Second Party has the right to apply for water/electric connection for the portion allotted to him in his name after completion of the basement and First Party shall cooperate till the Second Party has his own electric/water connection.

9. That the First Party shall not create or cause any interference, obstruction or hindrance for the natural light and air to the portion of Second Party.

10. That the Second Party shall be liable to pay one fourth part of Municipal taxes or other charges which may be levied or imposed by DDA/MCD.

11. That any dispute on this agreement shall be under the jurisdiction of the New Delhi Courts only.”

16. What is of relevance here is that the appellant/defendant has stated that the consent/agreement dated 07.01.1999 was executed keeping in view the expenses incurred, approximately Rs.15 lakhs, towards the cost of construction of basement and ground floor portion. This proposition does not appear to be correct as a plain reading of the consent makes it very clear that the agreement was only in the nature of permission to the appellant/defendant for constructing basement and structure, details having been stated in the consent/agreement. It was thereafter that the appellant/defendant had to be allotted the front portion of the basement measuring 28 feet x 30 feet. Thus the contention of the appellant/defendant that the consent/agreement was executed in lieu of a particular amount having been spent by the appellant/defendant is incorrect as it was left open in the agreement as to what cost would be borne in the construction of the relevant portion of the property. The agreement is that if certain portion of the property is rebuilt, the ground portion shall be allotted to the appellant/defendant. The consent/agreement cannot be said to be in lieu of the appellant/defendant having been spent Rs.15 lakhs.

17. The respondent/plaintiff in order to establish that the relationship of landlord and tenant existed between the parties, relied upon the termination notice, the income tax returns and the balance sheet for the financial year ending 31st March, 2000 (Ex.PW-1/X-9) as also the written statement filed on his behalf in the suit preferred by the appellant/defendant (amended Suit No.1104/2001). The contention on behalf of the respondent/plaintiff is that a bare reading of the consent/agreement would falsify the claim of the appellant/defendant that the consent/agreement has led to termination of the relationship of landlord and tenant and the appellant/plaintiff has become an owner of the property thereof.

18. The conditions in the consent/agreement are not at all akin to the general covenants of any lease deed. The specific use of the word “allotted” in the covenant while granting permission to him to raise construction in one particular portion of the property as well as the sequel thereof namely allotment of the front portion of the basement of a particular dimension, makes it very clear and obvious that the property was not sold but was only let out. The contention of the respondent/plaintiff has substance because if at all, the parties intended any conveyance of the property by sale, there would not have been use of the word “allot”.

19. In the income tax returns and the balance sheet of the relevant financial year, rent receivable from the appellant/defendant has been shown (Ex.PW-1/X-9).

20. Learned counsel for the respondent/plaintiff has also drawn the attention of this Court to the Indemnity Bond (Ex.DW-4/4), which was filed by the appellant for the purposes of getting electric connection in the suit premises. In the aforesaid Indemnity Bond, it has been submitted that he was not in a position to submit NOC from the owner. However, learned counsel for the appellant, in response to the aforesaid contention submitted that the affidavit along with the indemnity bond clearly spells out that the appellant is the lawful occupant of the house and he had enclosed a copy of the consent/agreement dated 07.01.1999.

21. There cannot be any gainsaying that an agreement does not confer any title of ownership on a party unless it is registered. The consent/agreement (Ex.PW-1/D[1]) does not, therefore, create any right, title or interest in favour of the appellant with respect to the suit property as the suit property is worth more than Rs.100/-, requiring compulsory registration and the document cannot be held to be admissible in the absence of the registration (refer to Section 49 of the Registration Act).

22. The submissions of the learned counsel for the appellant that he is entitled to the protection under Section 53A of the Transfer of Property Act as the agreement dated 07.01.1999 was in return for the expenses incurred by him to the tune of Rs.15 lakhs cannot be accepted as no such averment finds mention in the consent/agreement (Ex.PW-1/D[1]). When the consent/agreement was executed, it was only in the nature of a permission and the quantum of expenses which could have been incurred in the construction, was left completely open. In any view of the matter, the consent/agreement dated 07.01.1999 cannot be treated as an agreement to sell. An agreement to sell an immovable property ought to contain the (i) identity of the property agreed to be sold along with its area; (ii) owner who has agreed to sell; (iii) the purchaser; (iv) the total consideration for which the transfer of the property has been made including the earnest money if at all has been deposited by the purchaser; and (v) the final date for making of payment and conclusion of transaction. None of the aforesaid essential ingredients of a sale can be read in the consent/agreement dated 07.01.1999 except for the status of the parties and their description namely the respondent/plaintiff (first party) being the absolute owner of the property in question and the appellant/defendant being the second party and a tenant for the last 12 years. The First Appellate Court, while dealing with the issue has held as hereunder:-

23. On examination of Ex.PW1/D[1], it is established that it was an agreement between the parties for vacating and rebuilding the said property and cannot be called to be an agreement for sale as it is nowhere specified expressly or impliedly that the parties had agreed for sale or purchase of the said property. The agreement was executed for limited purpose of vacating and rebuilding the said property. Thus 1st and 2nd ingredients are missing. The owner is identified but not the area agreed to be sold as the consent agreement has not been executed for sale.

24. First clause of the Ex.PW1/D[1] specifies the area to be rebuilt and by whom. The same does not amount to sale. The second clause states that second party shall be allotted the front portion of basement measuring 28’x30’and the physical possession will be handed over after completion of walls and lantern of first floor. Thus this clause only entitles the appellant for being given the front portion of basement measuring 28’x30’which was actually given to him by the respondent but the word “allotted” cannot be given the meaning “sold” as observed earlier by this court, more so when observed in the context of the agreement between the parties to have been executed for the purpose of vacating and rebuilding. Since the appellant has specifically been described as tenant and in possession of the garage in the body of the agreement, the second clause specifies as to what portion will be given to him and at what stage. The meaning of the word allotted becomes more clear to mean given and put back in possession as under the consent agreement both the parties had to vacate the property and thus it was decided prior to demolishing and reconstructing the building that which area of the rebuilt property will be occupy as tenant after re-erection of the building.

25. The consent agreement also does not contain rest of the ingredients for holding the Consent Agreement to be an agreement of sale as it does not identify the purchaser. It also does not state the total consideration for which the parties had agreed to complete the transfer of the property. Firstly there is no agreement of sale between the parties. Secondly there is no consideration amount referred in the Consent Agreement. Appellant has submitted that he was required to construct the basement and the structure (i.e. beams, pillars, electrical conduiting, brick walls, plastered from inside and kuchha flooring) of ground floor including two shutters in front at his own expense and that expense was the consideration for the agreement of sale of front portion of the basement to him. However, the expenses of construction of the aforesaid area are to be borne by appellant in the agreement has been denied by respondent. Respondent has also in his cross-examination specifically stated that “It is correct that an agreement was entered into between me and the defendant on 07.01.1999 for reconstruction of the property no.C-41/A, Hauz Khas, New Delhi, after demolishing the old structure. Vol. The said agreement was only for supervision of the construction of the new building.” The respondent had also stated that “It is incorrect that I was in need of money for reconstruction of the building in property C-41/A and therefore I entered into an agreement with the defendant with the condition that he would bear the expenses of constructing basement and ground floor portion and in lieu thereof he would be given the front portion of basement measuring 28 ft. X 30 ft. approximately. I signed Ex.PW1/D[1] in good faith. I was not aware of all the conditions of Ex.PW1/D[1]. I was told by the defendant that he would participate in supervising the construction of the building and other misc. work and that he will co-operate in purchasing the goods.” The respondent was cross-examined at length on all the dates of his cross-examination and he took a consistent stand that appellant was to supervise the construction of building work. Further the bearing of expenses for constructing the basement and ground floor and to deal with Municipal or DDA authorities cannot be said to amount to be the consideration or that the parties had agreed to complete the transfer of the property. It is pertinent to mention here that allotting of the front portion of the basement to the appellant is mentioned in clause 2 of the Consent Agreement whereas the expenses are to be borne by appellant for construction of basement and ground floor is mentioned at clause 4. Had the expenses been the consideration of sale then clause 2 would have itself provided that appellant will bear the expenses for construction of basement and ground floor and in lieu thereof shall be sold the front portion of the basement. Thus 4th ingredient is also missing.

26. Fifth and sixth ingredients are also missing in the Consent agreement as it nowhere quantifies the total earnest money deposit to be made by the appellant with the respondent and the amount deposited at the time of execution of the Consent Agreement and the date by which the balance earnest money deposit would be made.

27. Further there is no mention of the final date for making of payment and conclusion of the transaction. Thus none of the elements for holding the Consent Agreement to be an agreement of sale finds mention in the Consent Agreement and accordingly Consent Agreement is not an agreement of sale and appellant is not entitled to any protection under section 53-A of the Transfer of Property Act.

28. Appellant has submitted that under the consent agreement, he had the right to apply for water/electricity connection for the portion allotted to him in his name after completion of basement. He has filed documents including indemnity bond and affidavit in support of applying for the same. A perusal of indemnity bond dated 28.04.1990 reveals that he had described himself to be the lawful occupant of suit property and has submitted that he is not in a position to submit NOC from owner and also rent receipts. The said submissions in itself reveal that he was not the owner of the suit property and did not claim also the same even on 28.04.1999 i.e. more than three months after execution of consent agreement dated 07.01.1999. It is also observed that in the affidavit dated 28.04.1999, the appellant has again described himself as lawful occupant of suit property and has specifically cut the option owner in the prescribed format of affidavit. This again establishes that he was not the owner of the suit property and did not claim also the same even on 28.04.1999. Respondent has submitted that electricity connection can be obtained either by the owner or the tenant after obtaining NOC from the owner and these documents establish that appellant admits himself to be tenant. I agree with the same.”

23. Learned counsel for the appellant has pointed out that the suit of the appellant was also pending before the same Court and both the suits namely that of the respondent/plaintiff and of the appellant/defendant ought to have been decided together which has not been done.

24. The appellant/plaintiff ought to have brought it to the notice of the Trial Court that his appeal also be consolidated with the appeal of the respondent/plaintiff. From the conduct of the appellant/plaintiff, it appears that he has not taken any interest in prosecution of his suit.

25. Both the courts below have rightly held that Ex.PW.1/D[1] (consent/agreement) is only for the purposes of rebuilding a portion of the property and cannot be construed as an outright sale. The concession for applying for water/electricity connection in the portion allotted to the appellant/defendant to him in his name, appears to be merely an arrangement for facilitating the appellant/defendant from moving into the rebuilt portion of the suit property as a tenant. The Indemnity Bond dated 28.04.1990, and the affidavit referred to above, further establish that the consent/agreement dated 07.01.1999 is not a document of sale.

26. The document Ex.PW1/D[1] (consent/agreement dated 07.01.1999) cannot even be considered as a lease agreement or lease in perpetuity. Section 105 of Transfer of Property Act, 1882 defines lease as follows: “105. Lease defined—A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.” Thus the essential ingredients of a lease viz. (a) there should be a transfer of a right to enjoy an immovable property; (b) such transfer may be for a certain term or in perpetuity; (c) the transfer should be in consideration of a premium or rent and (d) the transfer should be a bilateral transaction, the transferor and the transferee accepting the terms of the transfer, are missing in the consent/agreement dated 07.01.1999 and thus it cannot be even treated as a lease document.

27. In any view of the matter, this Court does not find any good reason to interfere with the findings returned by both the Courts below.

28. No substantial question of law arises in the present second appeal and the same is dismissed.

ASHUTOSH KUMAR, J MAY 05, 2016 k