RATTANTRYA DHARI JAIN Vs. S AVTAR SINGH

JUDGEMENT

(1.) The appellants in this Regular Second Appeal are the sons of Shri Raghbar Dial Jain. The appellant's father had let out a portion of Rattantrya Bhavan, which is a house situated in Model Basti, Jhansi-Ki-Rani Road, Delhi, to Avtar Singh, Respondent No. 1, at Rs. 80.00 per month and Deep Chand Jain, Respondent No. 2, had agreed to guarantee the regular payment of rent by the said Avtar Singh. It appears that there was some litigation between the appellants and their father which resulted in a compromise decree being passed on 4th May, I960, to the effect that the appellants' father was a Benamidar and the appellants were the real owners entitled to collect the arrears of rent from the tenants of Rattantrya Bhavan. The suit which is the subject-matter of the present appeal is for the recovery of Rs. 2,880.00 which is the rent said to be due from Avtar Singh for the period 1st June, 1958 to 31st May, 1961, at the rate of Rs. 80.00 per month. In the trial court, it was held that the plaintiffs, who are the present appellants, were entitled to a decree for the amount in suit against Avtar Singh, defendant No. 1. As regards defendant No. 2, Deep Chand Jain, it was held that there was no privity of contract between the parties as the plaintiffs were not parties to the rent- note and the surety agreement contained in the rent-note could not be availed of by the plaintiffs against defendant No. 2. Accordingly, the suit against defendant No. 2 was dismissed by the trial court.

(2.) An appeal was taken by the plaintiffs to the Additional District Judge, Delhi, who came to the conclusion that the decision of the trial court holding that there was no privity of contract between the plaintiffs and defendant No. 2 was not correct as the previous litigation between the father and the plaintiffs established that the father was the trustee of the sons and therefore, the plaintiffs being the beneficiaries under the contract were entitled to enforce the contract. It was also held that the fact that the plaintiffs did not inform defendant No. 2 of the default of defendant No. 1, did not make any difference to the liability of defendant No. 2 as surety, and this failure did not absolve defendant No. 2 from being liable on his contract. The lower appellate court, however, came to the conclusion that the rent-note relating to the lease which also contained the guarantee by the defendent No. 2, now respondent No. 2, was a document that required registration and as it was not registered, it was ineffective and hence the defendant No. 2 was not liable on the guarantee. In the circumstances, the appeal which was directed against defendant No. 2 alone failed. The plaintiffs have now come to this Court in second appeal, and urged that the judgment of Additional District Judge should be reversed on the ground that the lease, i.e., the rent-note. Exhibit P-2, did not require registration. Mr. Ravinder Sethi has made three submissions with regard to the document in question. He has submitted firstly, that there was no present demise by the rent-note which is a mere memorandum relating to a lease which had already been entered into; secondly, that it was not a lease for a term exceeding one year and hence, did not require registration, and thirdly, that qua the contract of defendant No. 2, it was a mere agreement as a surety and did not require registration and this portion of the document could be separated from the rest of the rent-note. Mr. Kulwant Raj Gupta, on the other hand, for respondent No. 2, urges that the document is a present demise and if it is not, the surety offered by the defendant No. 1 is without consideration. He also urges that the lease is for a period exceeding one year and hence the decision of the Additional District Judge on this aspect of the case is correct and, lastly he urges that the contract of surety is not available to the plaintiffs in the circumstances of the present case, particularly in view of the fact that the amount in suit relates to a period which is much longer than one year. His argument being that if the document is held to be nonregisterable it is only so because the lease is for a term less than one year and his client's liability cannot exceed this term and continue for a period of three years as claimed in the present suit.

(3.) An interesting question as to whether the rent-note requires registration arises in the present case. The rent-note was executed by Avtar Singh in favour of the father of the plaintiffs. The relevant clauses of the said rent-note are clauses 8, 12 and 13. Clause 8 is as follows :