Transfer of Property Act, 1882 – ss.106, 107 – Unregistered lease deed for a period of five years – Inadmissibility – Purpose of lease – If for ‘manufacturing purpose’ – Burden to prove – Tenancy of “month to month” character:

Held: The subject agreement had a duration of five years with a provision for renewal for a further period of five years – Hence, under the first part of s.107, for the said lease agreement to be admissible, registration of the same would have been necessary – That is the mandate of s.107 and ss.17 and 49, 1908 Act – The Court cannot admit it in evidence – This is a prohibition for the Court to implement and even if the Trial Court has taken it in evidence, the same cannot confer legitimacy to that document for being taken as evidence at the appellate stage – The parties cannot by implied consent confer upon such document its admissibility – Further, the lease was for use by the predecessor of the appellants “for the purpose of his business and/or factory” – The property was described in the schedule to be estimated 16 cottahs of land “with a factory shed/godown space” – Such description would not be sufficient to establish that the same was for manufacturing purpose – In the absence of a registered instrument, the courts are not precluded from determining the factum of tenancy from other evidence on record as well as the purpose of tenancy – In this case, factum of creation of tenancy has been established – But the purpose of tenancy, so as to attract the six months’ notice period u/s.106 cannot be established by such evidence as in such a situation, registration of the deed would have been mandatory – Burden of proving that the lease was for manufacturing purpose lies on the party who claims it to be so – Onus was on the appellant-defendant to establish that manufacturing activity was being carried on from the demised premises – A mere statement by DW-1 or the purpose of lease as specified in the lease agreement would not be sufficient to demonstrate the purpose of lease to be for manufacturing – This could be proved by explaining what kind of work was being carried on in the factory shed however, in such a situation also, the registration of the deed would have been necessary – In absence of such registration, tenancy would have been of “month to month” character – High Court did not err in dismissing the appellant’s appeal – Lease – Registration Act, 1908 – ss.17, 49. [Paras 10, 11 and 14]

Registration Act, 1908 – ss.17, 49 – Nature and character of possession – “collateral purpose” – Plea of the appellant relying upon Sevoke Properties Ltd. v. West Bengal State Electricity Distribution Company Limited (2020) 11 SCC 782 that for establishing nature and purpose of possession, even an unregistered document could be looked into as that would come within the ambit of collateral purpose:

Held: Sevoke Properties is not an authority for the proposition that nature and character of the possession in an unregistered lease deed could always constitute collateral purpose so that the Court could examine the deed for that reason – The purpose for which lease is granted forms an integral part of the lease deed in this case and this very issue forms one of the main disputes – The expression “collateral purpose” has been employed in proviso to s.49 to imply that content of such a document can be used for purpose other than for which it has been executed or entered into by the parties or for a purpose remote to the main transaction – Nature and character of possession contained in a flawed document (being unregistered) in terms s.107, 1882 Act and ss.17 and 49, Registration Act can form collateral purpose when the “nature and character of possession” is not the main term of the lease and does not constitute the main dispute for adjudication by the Court – Transfer of Property Act, 1882 – s.107. [Para 12]