Sri G Gajaraj vs. Sri K R Gopal Krishana

Held

The High Court allowed the appeal, setting aside the impugned judgment and decree of the trial court. The Court found that the trial court had erred in dismissing the suit based on the premise that Section 106 of the Transfer of Property Act, 1882, mandated registration for leases of manufacturing premises for more than one year. The Court clarified that Section 106 begins with 'in the absence of contract or usage to the contrary,' and in this case, the lease agreement (Ex.P.1) explicitly stated a duration of 11 months, which is less than one year. This specific condition constituted a 'contract to the contrary,' making the registration of the lease agreement not mandatory. The Court held that the trial court's failure to notice this crucial aspect led to a perverse conclusion. The Court also noted that the plaintiff had presented evidence, including the lease agreement (Ex.P.1) and notices (Exs.P.2 to P.5) regarding rent arrears of Rs. 1,55,450/- after adjustment from the security deposit, which remained unchallenged due to the respondent's ex parte status. Consequently, the suit was decreed with costs.

Facts

The appellant, Sri G. Gajraj, proprietor of M/s. Saradamma Jewellary Works, filed a suit (O.S. No. 3890/2021) against the respondent, Sri K.R. Gopal Krishna, proprietor of M/s. Samagra Electric Private Limited, seeking recovery of possession of leased premises and arrears of rent. The leased premises were described as bearing Sy.no.143, site no.15 to 20, first floor, MEC layout, Main road, Rajagopal Nagar, Laggere, Bengaluru, measuring 7200 sq. ft. The appellant claimed arrears of rent amounting to Rs. 1,55,450/- as of the suit filing date. The respondent failed to appear before the trial court, was placed ex parte, and the suit was dismissed by the X Addl. City Civil and Sessions Judge, Bangalore, via judgment and decree dated 12.01.2022. The appellant, as plaintiff, is challenging this dismissal in the present appeal.

Key Issues

1. Whether the findings of the trial court on points no.1 to 5 are sustainable in law, specifically concerning the admissibility and effect of the unregistered lease agreement (Ex.P.1)? The appellant argued that the lease agreement (Ex.P.1) was for a period of 11 months, which is less than one year, and therefore, registration was not mandatory. The appellant contended that the trial court erred by relying on Section 106 of the Transfer of Property Act, 1882, which it interpreted as mandating registration for leases of manufacturing premises for more than one year, and thus wrongly held the unregistered agreement inadmissible even for collateral purposes. The appellant asserted that the terms of the agreement clearly stipulated a duration of less than one year, constituting a contract to the contrary as contemplated by Section 106 of the TP Act. The appellant also submitted that the respondent failed to pay rent from August 2020, utilized the premises for only three months, and remained unrepresented despite notices. The respondent, who was served, did not file a written statement or cross-examine the plaintiff's witness (PW.1), and remained unrepresented before the trial court and the High Court. The revenue or State did not present any arguments as they were not a party to the proceedings.