M/S PAUL RUBBER INDUSTRIES PRIVATE LIMITEDversusAMIT CHAND MITRA & ANR.

                  [2023] 14 S.C.R. 28 : 2023 INSC 854



                             CASE DETAILS

      M/S PAUL RUBBER INDUSTRIES PRIVATE LIMITED
                                      v.
                    AMIT CHAND MITRA & ANR.
                      (Civil Appeal No. 6149 of 2023)
                          SEPTEMBER 25, 2023
         [ANIRUDDHA BOSE AND VIKRAM NATH, JJ.]

                              HEADNOTES

      Issue for consideration: To what extent the Court can take cognizance
of a clause, relating to purpose for which a lease is granted, contained in an
unregistered deed of lease for immovable property stipulating its duration
for a period of five years.
     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,
                                        28
    M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                          29
                  CHAND MITRA

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]
30           SUPREME COURT REPORTS                      [2023] 14 S.C.R.



       LIST OF CITATIONS AND OTHER REFERENCES
    Sevoke Properties Ltd. -vs- West Bengal State Electricity Distribution
Company Limited (2020) 11 SCC 782 – distinguished.
      Anthony -vs- K.C. Ittoop & Sons and Others (2000) 6 SCC 394: [2000]
1 Suppl. SCR 645; Shri Janki Devi Bhagat Trust, Agra -vs- Ram Swarup
Jain (Dead) by Lrs. (1995) 5 SCC 314; and Satish Chand Makhan and
Others -vs- Govardhan Das Byas and Others (1984) 1 SCC 369: [1984] 1
SCR 621; G. Mackertich -vs- Steuart and Co. Ltd. (1971) 3 SCC 39; Shivaji
Balaram Haibatti -vs Avinash Maruthi Pawar (2018) 11 SCC 652: [2017] 12
SCR 344; K.B. Saha and Sons Private Limited -vs- Development Consultant
Limited (2008) 8 SCC 564: [2008] 8 SCR 290; Allenbury Engineers Pvt.
Ltd. -vs- Ramkrishna Dalmia and Others (1973) 1 SCC 7: [1973] 2 SCR
257 – relied on.
     Rai Chand Jain -vs- Miss Chandra Kanta Khosla (1991) 1 SCC 422:
[1990] 3 Suppl. SCR 91; Park Street Properties Private Limited -vs- Dipak
Kumar Singh and Another (2016) 9 SCC 268 – referred to.
     Messrs Shree Nursing Timber Works and Messrs. Shree Nursing
Electric Stores -vs- Sm. Amala Bala Dassi [1973 CWN 522 – referred
to.
      OTHER CASE DETAILS INCLUDING IMPUGNED
             ORDER AND APPEARANCES
     CIVIL APPELLATE JURISDICTION : Civil Appeal No.6149 of 2023.
     From the Judgment and Order dated 20.07.2022 of the High Court at
Calcutta in FA No.36 of 2021.
     Appearances:
     Shyam Divan, Sr. Adv., Ms. Anshula Lavaiya, Santosh Kumar, Abhijit
Sarkar, Rupak Ghosh, Dhruv K. Dave, Shakti Kanta Pattanaik, Advs. for
the Appellant.
     Paramjit Singh Patwalia, Nikhil Nayyar, Sr. Advs., Vikram Hegde,
Debmalya Ganguli, Anupam Dasadhikari, Ms. Vandana Tiwari, Ms. Simran
Singh, Chanchal Kumar Ganguli, Advs. for the Respondents.
    M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                           31
                  CHAND MITRA


       JUDGMENT / ORDER OF THE SUPREME COURT

                               JUDGMENT


     ANIRUDDHA BOSE, J.
     Leave granted.
      2. The main point which we have to address in this appeal is as to
what extent the Court can take cognizance of a clause relating to purpose
for which a lease is granted contained in an unregistered deed of lease for
immovable property stipulating its duration for a period of five years. In the
judgment under appeal, opinion of a Division Bench of the Calcutta High
Court is that such deed cannot be received as evidence of any transaction
affecting the property over which the lease is executed. On 27.03.2003, a
document captioned “Tenancy Agreement” was executed by and between
one Sabita Mitra (the landlady, since deceased), now represented before us
by her legal heirs being the two respondents and an incorporated company,
Paul Rubber Industries Private Limited. The latter is the appellant in this
proceeding. In this judgment, we shall refer to the landlady and her legal
representatives as the respondents interchangeably and the appellant Paul
Rubber Industries Pvt. Ltd. shall be described as defendant. The property in
question comprises of approximately 16 cottahs (one cottah is equivalent to
approximately 720 sq. ft.) of land situated at Radha Madhab Dutta Garden
Lane, within the city of Kolkata. The tenure of the agreement, as stipulated
therein was for a period of five years with provision for renewal for further
five years. There is stipulation for further renewal for such period and on
such terms and conditions as might have been agreed upon by the parties.
This is contained in clause 2 of the agreement. But no such renewal was
effected. First five years of the tenancy stood completed on 31.10.2007, and
a letter was sent by the landlady on 07.11.2007 seeking enhancement of
rent. It does not appear that the defendant had paid rent thereafter. It had,
however, raised a plea that such rent used to be collected on behalf of the
landlady on due date, but this was stopped after October 2007. Thereafter,
on 06.03.2008, the landlady served a notice requiring the defendant to vacate
the subject-premises with effect from 31.03.2008. In this letter of 06.03.2008,
32            SUPREME COURT REPORTS                         [2023] 14 S.C.R.


the defendant was addressed as monthly tenant. Default in payment of
monthly rent was highlighted in this letter. It was also specified therein that
the landlady needed the said premises for her own use and occupation and
for business purpose of her family members. This letter is being projected
by the respondents as notice for fifteen days, as per stipulation of Section
106 of the Transfer of Property Act, 1882 (herein after “1882 Act”).
      3. The tenant had not delivered vacant possession as a result of which
the suit, which gives rise to the present appeal, was instituted by the landlady
on 04.09.2008 before the Civil Judge, Senior Division at Sealdah, having
jurisdiction over the suit property. The original plaintiff (i.e. the landlady)
claimed, inter-alia, recovery of possession as also decree for mesne profit.
Various defences were set up by the defendant in its written statement.
One of them was that since it was an agreement for lease under which it
was inducted as a tenant and the same was unregistered, the suit was not
maintainable. Another plea of the defendant was that the subject property
stood vested in the State under the thika tenancy law. This is a special type
of tenancy prevalent in the Kolkata region involving multiple-tier of tenancy
and ownership structure. The defendant claimed to have filed certain returns
before the Thika Controller. This issue was not raised before the High Court
and is not in lis before us also. The defendant in the written statement, denied
expiry of tenancy on 31.01.2007.As regards default in payment of rent, we
have already referred to the defendant’s stand. Altogether, five issues were
framed by the Trial Court. The first two issues framed by the Trial Court
related to maintainability of the suit in the form it was framed and subsistence
of cause of action. These two issues had not been pressed during trial and
the Trial Court found that the suit was maintainable. The other three issues
related to the question as to whether the plaintiff was entitled to the reliefs
claimed or not.
      4. The defendant, in its written statement, referred to the said
agreement of 27.3.2003.In paragraphs 6,8 and 10 of the written statement,
main defence of the defendant was disclosed. Plea was also taken denying
default and vesting of the property in the State under the thika tenancy law.
Before us, arguments have been advanced mainly on legal position of the
unregistered agreement and the consequences thereof. Rest of the written
statement contained broad denial of the plaintiff’s claims. We quote below
the said three paragraphs of the written statement:-
    M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                           33
          CHAND MITRA [ANIRUDDHA BOSE, J.]

     “6. As a matter of fact, the plaintiff by representating herself to be the
     Owner/Landlady of the suit premises inducted the defendant therein
     as a lessee as would be evident from the Agreement dated 27.3.2003.
     The plaintiff has not sought any leave from this Learned Court to
     rely upon the said Agreement neither a copy of which has been filed.
     However this defendant craves leave of this Ld. Court to rely upon
     the said Agreement at the time of hearing.
     The aforesaid Agreement on the face of it was an Agreement of
     Lease not registered under the statute and accordingly the suit is not
     maintainable.
     8. It is denied that the tenancy if at all, expired on 31.01.2007 as the
     defendant was assured of a renewal by the plaintiff and the defendant
     was willing to renew the same which was known to the plaintiff.
     10. The notice of the plaintiff served upon the defendant is defective.
     Admittedly the defendant was a Lessee under the plaintiff on the
     strength of the aforesaid Agreement and on expiry of the initial period
     of five years was subject to a renewal. The plaintiff never denied the
     fact of renewal to the defendant and is therefore put to the strictest
     proof thereof.”
     Main argument before the Trial Court centred around legality of
the notice. The defendant’s case was that the premises was let out for
manufacturing purpose and in terms of Section 106 of the 1882 Act, a clear
six months’ notice was required to be given. The Trial Court on analysis
of evidence found that the suit property was not let out for agricultural or
manufacturing purpose.
     5. The Trial Court held:-
     “I have no hesitation to hold that the tenancy of the defendant was
     month by month governed under the T.P. Act and after expiry of terms of
     the lease, the said tenancy was not extended by the parties with mutual
     consent as per provision of the agreement dated 27.03.03. It is the case
     of the plaintiff that the defendant is also a defaulter and he did not
     pay the rent of the suit premises from October, 2007. Such contention
     of the plaintiff is also admitted by the plaintiff that the rent, municipal
     charges and maintenance charges of the suit premises were not paid by
34           SUPREME COURT REPORTS                          [2023] 14 S.C.R.


     the defendant from October, 2007 but pleaded that the plaintiff never
     sent her representative to the defendant for collection of rent which
     was the usual practice. From Ext. 7 which is the notice issued upon
     the defendant, it appears that a 15 days clear notice was duly served
     upon the defendant by the plaintiff asking him to quit and vacate the
     suit premises on and from 31.03.08. It is further appears from the case
     record hat during the trial, the defendant has filed a return before
     the reasonable office of Thika Controller for determination of right
     title interest under the Thika Tenancy Act along with others which
     was registered as Misc. Case 79 & 80 of 2007. From Ext. 8 filed by
     the plaintiff, it appears that upon hearing the parties, the Ld. Thika
     Controller was pleased to hold that the plaintiff is the recorded owner
     of the suit premises.
        So, from the overall discussion, evidence and materials on record,
     I am of view that the suit premises was let out to the defendant for
     other purposes other than agricultural or manufacturing purposes
     and such tenancy of the defendant deemed to be a lease from month
     to month terminable on the part of either lessor or lessee by 15 days
     notice and after expiry of the term of the lease i.e. on 31.10.07, a clear
     15 days notice was served upon the defendant requesting him to quit
     and vacate the suit premises and hand over the peaceful possession of
     the same to the plaintiff. As such, the plaintiff is entitled to get relief
     as prayed for. Hence, the above issues are also decided in favour of
     the plaintiff.”
                                  (quoted verbatim from the paperbook)
      6. The Trial Court found that the tenancy of the defendant was month
by month governed under the 1882 Act and after the expiry of the lease, the
said tenancy was not renewed by the parties on mutual consent as per the
terms and provisions of the agreement dated 27.03.2003.On the question
of Thika tenancy, the Trial Court recorded that the Thika Controller had
already held that the plaintiff was the owner of the suit premises.
      7. The appeal of the defendant was examined by the Division Bench
of the High Court and on considering a large body of authorities, the High
Court found no reason to interfere with the judgment of the Trial Court. The
appeal was dismissed.It was the view of the High Court that the agreement
     M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                             35
           CHAND MITRA [ANIRUDDHA BOSE, J.]

being unregistered, the same could not be looked into for determining the
rights and liabilities of the parties and for its duration. On the question as to
whether the purpose of the lease was “manufacturing” or not, the High Court
held that it was for the appellant to establish that factor. The appellant not
having adduced any evidence in that regard, the High Court drew adverse
inference on that count and the Trial Court judgment was not interfered
with.
      8. For the purpose of adjudicating the present appeal, we need to look
into the provisions of Sections 105, 106 and 107 of the 1882 Act and the
provisions of Sections 17 and 49 of the Registration Act, 1908 (hereinafter
“1908 Act”). The said provisions of the 1882 Act stipulate:-
     “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.
     [106. Duration of certain leases in absence of written contract or
     local usage.—(1) In the absence of a contract or local law or usage
     to the contrary, a lease of immovable property for agricultural or
     manufacturing purposes shall be deemed to be a lease from year to
     year, terminable, on the part of either lessor or lessee, by six months’
     notice; and a lease of immovable property for any other purpose shall
     be deemed to be a lease from month to month, terminable, on the part
     of either lessor or lessee, by fifteen days’ notice.
     (2) Notwithstanding anything contained in any other law for the time
     being in force, the period mentioned in sub-section (1) shall commence
     from the date of receipt of notice.
     (3) A notice under sub-section (1) shall not be deemed to be invalid
     merely because the period mentioned therein falls short of the period
36          SUPREME COURT REPORTS                         [2023] 14 S.C.R.


     specified under that sub-section, where a suit or proceeding is filed
     after the expiry of the period mentioned in that sub-section.
     (4) Every notice under sub-section (1) must be in writing, signed by
     or on behalf of the person giving it, and either be sent by post to the
     party who is intended to be bound by it or be tendered or delivered
     personally to such party, or to one of his family or servants at his
     residence, or (if such tender or delivery is not practicable) affixed to
     a conspicuous part of the property.]
     107. Leases how made.—A lease of immoveable property from year
     to year, or for any term exceeding one year, or reserving a yearly rent,
     can be made only by a registered instrument.
           [All other leases of immoveable property may be made either by
     a registered instrument or by oral agreement accompanied by delivery
     of possession.
           [Where a lease of immoveable property is made by a registered
     instrument, such instrument or, where there are more instruments
     than one, each such instrument shall be executed by both the lessor
     and the lessee:]
           Provided that the State Government may from time to time, by
     notification in the Official Gazette, direct that leases of immoveable
     property, other than leases from year to year, or for any term exceeding
     one year, or reserving a yearly rent, or any class of such leases, may
     be made by unregistered instrument or by oral agreement without
     delivery of possession.]”
     Sections 17 and 49 of the 1908 Act read:-
     “17. Documents of which registration is compulsory.— (1) The
     following documents shall be registered, if the property to which they
     relate is situate in a district in which, and if they have been executed
     on or after the date on which, Act No. XVI of 1864, or the Indian
     Registration Act, 1866, or the Indian Registration Act, 1871, or the
     Indian Registration Act, 1877, or this Act came or comes into force,
     namely:—
     (a) instruments of gift of immovable property;
M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                           37
      CHAND MITRA [ANIRUDDHA BOSE, J.]

(b) other non-testamentary instruments which purport or operate to
create, declare, assign, limit or extinguish, whether in present or in
future, any right, title or interest, whether vested or contingent, of the
value of one hundred rupees and upwards, to or in immovable property;
(c) non-testamentary instruments which acknowledge the receipt or
payment of any consideration on account of the creation, declaration,
assignment, limitation or extinction of any such right, title or interest;
and
(d) leases of immovable property from year to year, or for any term
exceeding one year, or reserving a yearly rent;
[(e) non-testamentary instruments transferring or assigning any decree
or order of a Court or any award when such decree or order or award
purports or operates to create, declare, assign, limit or extinguish,
whether in present or in future, any right, title or interest, whether
vested or contingent, of the value of one hundred rupees and upwards,
to or in immovable property:]
Provided that the [State Government] may, by order published in the
[Official Gazette], exempt from the operation of this sub-section any
lease executed in any district, or part of a district, the terms granted
by which do not exceed five years and the annual rents reserved by
which do not exceed fifty rupees.
[(1A) The documents containing contracts to transfer for consideration,
any immovable property for the purpose of section 53A of the Transfer
of Property Act, 1882 (4 of 1882) shall be registered if they have been
executed on or after the commencement of the Registration and Other
Related laws (Amendment) Act, 2001 and if such documents are not
registered on or after such commencement, then, they shall have no
effect for the purposes of the said section 53A.]
(2) Nothing in clauses (b) and (c) of sub-section (1) applies to—
(i) any composition deed; or
(ii) any instrument relating to shares in a joint stock Company,
notwithstanding that the assets of such Company consist in whole or
in part of immovable property; or
38           SUPREME COURT REPORTS                          [2023] 14 S.C.R.


     (iii) any debenture issued by any such Company and not creating,
     declaring, assigning, limiting or extinguishing any right, title or
     interest, to or in immovable property except in so far as it entitles the
     holder to the security afforded by a registered instrument whereby the
     Company has mortgaged, conveyed or otherwise transferred the whole
     or part of its immovable property or any interest therein to trustees
     upon trust for the benefit of the holders of such debentures; or
     (iv) any endorsement upon or transfer of any debenture issued by any
     such Company; or
     (v) [any document other than the documents specified in sub-section
     (1A)] not itself creating, declaring, assigning, limiting or extinguishing
     any right, title or interest of the value of one hundred rupees and
     upwards to or in immovable property, but merely creating a right to
     obtain another document which will, when executed, create, declare,
     assign, limit or extinguish any such right, title or interest; or
     (vi) any decree or order of a Court [except a decree or order expressed
     to be made on a compromise and comprising immovable property other
     than that which is the subject-matter of the suit or proceeding]; or
     (vii) any grant of immovable property by [Government]; or
     (viii) any instrument of partition made by a Revenue-Officer; or
     (ix) any order granting a loan or instrument of collateral security
     granted under the Land Improvement Act, 1871, or the Land
     Improvement Loans Act, 1883; or
     (x) any order granting a loan under the Agriculturists, Loans Act,
     1884, or instrument for securing the repayment of a loan made under
     that Act; or
     (xa) any order made under the Charitable Endowments Act, 1890 (6 of
     1890), vesting any property in a Treasurer of Charitable Endowments
     or divesting any such Treasurer of any property; or]
     (xi) any endorsement on a mortgage-deed acknowledging the payment
     of the whole or any part of the mortgage-money, and any other receipt
     for payment of money due under a mortgage when the receipt does
     not purport to extinguish the mortgage; or
    M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                          39
          CHAND MITRA [ANIRUDDHA BOSE, J.]

     (xii) any certificate of sale granted to the purchaser of any property
     sold by public auction by a Civil or Revenue-Officer.
     [Explanation.—A document purporting or operating to effect a
     contract for the sale of immovable property shall not be deemed to
     require or ever to have required registration by reason only of the fact
     that such document contains a recital of the payment of any earnest
     money or of the whole or any part of the purchase money.]
     (3) Authorities to adopt a son, executed after the 1st day of January,
     1872, and not conferred by a will, shall also be registered.”
     ……
     “49. Effect of non-registration of documents required to be
     registered.— No document required by section 17 [or by any provision
     of the Transfer of Property Act, 1882 (4 of 1882)], to be registered
     shall—
           (a) affect any immovable property comprised therein, or
           (b) confer any power to adopt, or
           (c) be received as evidence of any transaction affecting such
           property or conferring such power,
     unless it has been registered:
     [Provided that an unregistered document affecting immovable property
     and required by this Act or the Transfer of Property Act, 1882 (4 of
     1882), to be registered may be received as evidence of a contract in
     a suit for specific performance under Chapter II of the Specific Relief
     Act, 1877 (3 of 1877), or as evidence of any collateral transaction not
     required to be effected by registered instrument.]”
      9. The aforesaid provisions were analysed by this Court in the case
of Anthony -vs- K.C. Ittoop & Sons and Others [(2000) 6 SCC 394],
and this authority was also cited before the High Court.This was a case in
which the respondent was inducted into possession of a premises under a
lease deed for a period of five years, but the deed was not registered. It has
been held in this judgment:-
40          SUPREME COURT REPORTS                        [2023] 14 S.C.R.


     “11. The resultant position is insurmountable that so far as the
     instrument of lease is concerned there is no scope for holding
     that the appellant is a lessee by virtue of the said instrument. The
     Court is disabled from using the instrument as evidence and hence
     it goes out of consideration in this case, hook, line and sinker
     (vide Shantabai v. State of Bombay [AIR 1958 SC 532 : 1959 SCR
     265] , Satish Chand Makhan v. Govardhan Das Byas [(1984) 1 SCC
     369] and Bajaj Auto Ltd. v. Behari Lal Kohli [(1989) 4 SCC 39 : AIR
     1989 SC 1806] .
     12. But the above fi nding does not exhaust the scope of the issue
     whether the appellant is a lessee of the building. A lease of
     immovable property is defined in Section 105 of the TP Act. A
     transfer of a right to enjoy a property in consideration of a price
     paid or promised to be rendered periodically or on specifi ed
     occasions is the basic fabric for a valid lease. The provision says
     that such a transfer can be made expressly or by implication. Once
     there is such a transfer of right to enjoy the property a lease stands
     created. What is mentioned in the three paragraphs of the fi rst part
     of Section 107 of the TP Act are only the different modes of how
     leases are created. The first para has been extracted above and
     it deals with the mode of creating the particular kinds of leases
     mentioned therein. The third para can be read along with the above
     as it contains a condition to be complied with if the parties choose
     to create a lease as per a registered instrument mentioned therein.
     All other leases, if created, necessarily fall within the ambit of the
     second para. Thus, dehors the instrument parties can create a lease
     as envisaged in the second para of Section 107 which reads thus:
     “All other leases of immovable property may be made either by a
     registered instrument or by oral agreement accompanied by delivery
     of possession.”
     13. When lease is a transfer of a right to enjoy the property and such
     transfer can be made expressly or by implication, the mere fact that
     an unregistered instrument came into existence would not stand in
     the way of the court to determine whether there was in fact a lease
     otherwise than through such deed.”
    M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                           41
          CHAND MITRA [ANIRUDDHA BOSE, J.]

      10. The same view was broadly reflected in the cases of Shri Janki
Devi Bhagat Trust, Agra -vs- Ram Swarup Jain (Dead) by Lrs. [(1995)
5 SCC 314] and Satish Chand Makhan and Others-vs- Govardhan Das
Byas and Others [(1984) 1 SCC 369].Section 107 of the 1882 Act which
we have quoted above stipulates that a lease of immovable property from
year to year or for any term exceeding one year can be made only by a
registered instrument. So far as Section 106 of the said statute is concerned,
in which distinction is made between lease of immovable property for
agricultural or manufacturing purpose and lease of immovable property for
any other purpose, the same provides that a lease of immovable property for
agricultural or manufacturing purpose shall be deemed to be a lease from
year-to-year terminable by six months’ notice. In other cases, termination
would require fifteen days’ notice. 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 Section 107, for the said lease agreement to
be admissible, registration of the same would have been necessary. The
deeming provision of sub-section (1) of Section 106 so far the same related
to lease for agriculture or manufacturing purpose would not be applicable
as the deed was not registered. The appellant has argued that the Trial
Court had admitted the lease agreement in evidence, and for determining
the purpose of lease, we can examine the deed. But this argument is flawed.
This provision contemplates lease for manufacturing purpose, in absence
of contract or local law to the contrary, shall be deemed to be year to year
lease. In that case, it would require six months’ notice for termination.
But here, the agreement itself provides a five year duration, and hence
ex-facie becomes a document that requires compulsory registration. That
is the mandate of Section 107 of the 1882 Act and Sections 17 and 49 of
the 1908 Act. The Court cannot admit it in evidence, as per the judgment
in the case of Anthony (supra). A coordinate Bench in the case of Shyam
Narayan Prasad -vs- V. Krishna Prasad and Ors. [(2018) 7 SCC 646] has
re-affirmed this view, referring to Section 49 of the Registration Act. 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. It is not in
dispute in this case that the period between service of notice and institution
42           SUPREME COURT REPORTS                        [2023] 14 S.C.R.


of the suit fell short by four days of completion of six months. In any case,
we do not consider it necessary to address this question as in our opinion,
the requirement to give six months’ notice does not arise in this case. That
point has not been raised before us.

      11. The fault line in the defendant’s case also lies on the point as to
whether the lease was for manufacturing purpose or not, which was examined
by the High Court and decided against the appellant. The defendant tried
to establish from the clause of the lease agreement, statement made in the
plaint as also his evidence before the Trial Court that the lease was for
manufacturing purpose. All these materials no doubt point to the fact that
the lease was given for commercial purpose (as pleaded in the plaint). In
cross-examination, DW-1 had stated that he was doing business of rubber.
In the case of G. Mackertich -vs- Steuart and Co. Ltd. [(1971) 3 SCC 39],
it has been held that burden of proving that the lease was for manufacturing
purpose lies on the party who claims it to be so.In the present appeal, it
would have been for the defendant (appellant before us) to discharge this
burden, as held by the High Court. In the case of Shivaji Balaram Haibatti
-vs- Avinash Maruthi Pawar [(2018) 11 SCC 652] as also in a judgment
of the Calcutta High Court in the case of Messrs Shree Nursing Timber
Works and Messrs. Shree Nursing Electric Stores -vs- Sm. Amala Bala
Dassi [1973 CWN 522], it has been held that on this ground, there must be
pleading supported by evidence to prove that the lease was for manufacturing
purpose.
      12. On behalf of the appellant, however, it was urged, referring to the
provisions of Section 49 of the Registration Act 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. On this
point, judgment of this Court in the case of Sevoke Properties Ltd. -vs-
West Bengal State Electricity Distribution Company Limited [(2020) 11
SCC 782] has been relied upon. In the case of Sevoke Properties (supra)
a coordinate Bench opined that as the agreement for lease in that case was
unregistered, contents of the instrument were inadmissible in evidence.
There was admission in the written statement of respondent in the case of
Sevoke Properties (supra) by the defendants that they were in occupation
under the lease agreement (in controversy in that case) for a period of
     M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                           43
           CHAND MITRA [ANIRUDDHA BOSE, J.]

fifteen years with effect from 1981 and that period of lease had expired
on 24.05.1996.The issue decided in that case was whether the lease stood
determined by efflux of time and once it did, what would be the position
of the lessee? The coordinate Bench found that the position of the lessee
would be that of a tenant at sufferance. In that context, it was held that there
was no necessity to terminate the lease under Section 106 of 1882 Act. That
case was decided on the basis of admission in written statement and has
no application to the facts of the present case. The observation made in the
case of Sevoke Properties (supra) that only purpose for which the lease
can be looked at for assessing nature and character of the possession was
in that context and that judgment proceeded on the basis that the period of
lease had expired on a certain date. This decision 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 Section 49 of the Registration Act 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. This view was taken by this Court in an
earlier decision, in the case of K.B. Saha and Sons Private Limited -vs-
Development Consultant Limited [(2008) 8 SCC 564]. The position of
law on this point has been summarized in paragraph 34 (of the report) in
this judgment:-
     “34*. From the principles laid down in the various decisions of this
     Court and the High Courts, as referred to hereinabove, it is evident
     that:
     1. A document required to be registered, if unregistered is not
     admissible into evidence under Section 49 of the Registration Act.
     2. Such unregistered document can however be used as an evidence
     of collateral purpose as provided in the proviso to Section 49 of the
     Registration Act.
     3. A collateral transaction must be independent of, or divisible from,
     the transaction to effect which the law required registration.
44            SUPREME COURT REPORTS                          [2023] 14 S.C.R.


     4. A collateral transaction must be a transaction not itself required to
     be effected by a registered document, that is, a transaction creating,
     etc. any right, title or interest in immovable property of the value of
     one hundred rupees and upwards.
     5. If a document is inadmissible in evidence for want of registration,
     none of its terms can be admitted in evidence and that to use a document
     for the purpose of proving an important clause would not be using it
     as a collateral purpose.”
      13. In the case of Rai Chand Jain -vs- Miss Chandra Kanta Khosla
[(1991) 1 SCC 422], dispute arose as to whether certain premises were let
out for residential purpose or as to whether there was an oral agreement
of letting out the premises to the tenant, for running a press. It was in that
perspective, it was held in the said case that a lease deed though unregistered,
could be considered for collateral purposes to show the purpose for which
the premises was leased out. Thus, the lease deed was referred to for the
sole purpose to defeat the claim of subsistence of an oral agreement. The
ratio of this authority has been considered in the case of K.B. Saha and
Sons Private Limited (supra) and we follow that ratio. In the case of Satish
Chand Makhan (supra), another coordinate Bench of this Court declined
to accept admissibility of an unregistered lease agreement for determining
duration of the lease (9 years in that case) on the reasoning that terms of lease
would not constitute collateral purpose. It was observed in this judgment
that “nature and character of possession” could constitute collateral purpose
but that was not the point which was directly in lis before this Court. In our
opinion, nature and character of possession contained in a flawed document
(being unregistered) in terms Section 107 of the 1882 Act and Sections 17
and 49 of the 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. In this case, the
nature and character of possession constitutes the primary dispute and hence
the Court is excluded by law from examining the unregistered deed for that
purpose. In respect of the suit out of which this appeal arises, purpose of
lease is the main lis, not a collateral incident.
      14. We, however, need not further dilate on this question. The lease was
for use by the predecessor of the appellants “for the purpose of his business
    M/S PAUL RUBBER INDUSTRIES PVT. LTD. v. AMIT                           45
          CHAND MITRA [ANIRUDDHA BOSE, J.]

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 decision of this Court in Allenbury Engineers Pvt. Ltd.
-vs- Ramkrishna Dalmia and Others [(1973) 1 SCC 7], the expression
‘manufacturing purpose’ as employed in Section 106 of the 1882 Act was
explained to mean:-
     “8…The expression “manufacturing purposes” in Section 106, thus,
     means purposes for making or fabricating articles or materials by
     physical labour, or skill, or by mechanical power, vendible and useful
     as such. Such making or fabricating does not mean merely a change
     in an already existing article or material, but transforming it into a
     different article or material having a distinctive name, character or
     use or fabricating a previously known article by a noval process.”
      15. In Park Street Properties Private Limited -vs- Dipak Kumar
Singh and Another [(2016) 9 SCC 268], which was cited in the case of
Sevoke Properties (supra), it was observed that 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 under Section
106 of the 1882 Act cannot be established by such evidence as in such a
situation, registration of the deed would have been mandatory. The onus
would be on the defendant to establish the fact that manufacturing activity
was being carried on from the demised premises. A mere statement by the
DW-1 to which we have referred earlier 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. 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.
For these reasons, we do not think the High Court erred in law in dismissing
the defendant’s appeal. The present appeal shall stand dismissed on the
same rationale.
46             SUPREME COURT REPORTS                      [2023] 14 S.C.R.


      15. Pending application(s), if any, shall stand disposed of.
      16. There shall be no order as to costs.


Headnotes prepared by:                                        Appeal dismissed.
Divya Pandey