TMI Blog1975 (12) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of a building thereon on the terms and conditions which, it is agreed between the parties before us, are those recorded in the letter dated 5th May, 1949, a copy of which is annexure " A " to the statement of the case. Under sub-clause (a) of clause (2) set out in the said letter dated 5th May, 1949, the prospective lessees, D. C. Gandhi and H. K. Rohra, were granted a licence to enter the land for the purpose of constructing a building thereon. Under sub-clause (e) of the same clause, the buildings to be built on the said land were to be insured by the licensees, and under sub-clause (f) thereof it was provided that even during the construction the same would be kept insured. Sub-clause (k) of that clause conferred on the assessee-company the right to enter the plot in order to see the progress of the construction work thereon. Sub-clause (1) of that clause is somewhat material for the purpose of this reference and the relevant portion of it is in the following terms : " If the licensee shall commit a default in carrying out the terms herein and of the formal agreement to be entered into, you will have the right to terminate the licence and re-enter upon and resume possessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein is that the lessee had satisfied the lessor that she had contributed Rs. 9,375 towards the construction of the structures standing on the land, and that it was in consideration of that contribution that she had been allowed by the said D. C. Gandhi and H. K. Rohra to occupy her portion of the said building. It was further stated in another recital therein that for the purpose of the provisions of the Income-tax Act, during the term of the demise, the lessee was to be deemed to be the owner of the demised premises, and she agreed to pay the income-tax payable by her in respect of the premises occupied by her on the footing of their rateable value. Under the said lease the lessee was to pay his or her proportionate part of the ground rent payable to the assessee-company, together with a nominal rent of Rs. 50 per month for the flat, and service charges at the rate of Rs. 3 per month for the same. Sub-clause (1) of clause (2) of the said lease provided that the lessee was not to assign, re-let, sub-let or part with possession of the demised premises without the written permission of the lessor. The Income-tax Officer sought to assess the assessee-company in respect of the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vest in the assessee-company on the termination of the licence ; (2) there was a presumption that the licensor is the owner of the building even during the continuance of the licence ; and (3) that none other than the assessee-company could be the owner of the building which had been put up on the land. At the very commencement of the hearing on the next day, Mr. Joshi, however, stated to the court that he did not press the second contention mentioned above, with the result that it is not necessary for me to deal with the same. Two questions really arise for our determination, and they are : (1) who was initially the owner of each of the flats and collectively of the whole building ; and (2) if the assessee-company was not initially the owner thereof, has the legal title subsequently become vested in the assessee-company. As far as the first of those questions is concerned, in my opinion, there can be no doubt that the assessee-company was at all times the owner of the land, but at the same time that initially it was not the owner of any of the flats, or collectively, of the building which had been put up on the said land. This would appear to be the undisputed position, once th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By virtue of an express clause in a registered lease providing for what is to happen on its termination ; (c) By operation of law ; (d) By adverse possession for the statutory period ; and (e) By inheritance or bequest, followed by a grant of probate or letters of administration. It is nobody's case that the assessee-company has acquired title to the building in either of the last two ways and the same must, therefore, be omitted from consideration. It will be convenient to consider together the first two of the modes mentioned above by which title to immovable property can be acquired, as it will involve consideration of some documentary evidence. The documentary evidence which has been referred to for that purpose in the course of the argument consists of the original licence granted by the assessee-company to D. C. Gandhi and H. K. Rohra, the terms of which are recorded in the letter dated 5th May, 1949 ; the consent decree dated 7th March, 1957, in Suit No. 1245 of 1953, as between the assessee-company on the one hand and the said D. C. Gandhi and H. K. Rohra on the other ; and the lease executed between the assessee-company and each of the occupants of the flats. Deali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The same infirmities, which attach to the licence discussed in the preceding paragraph, also apply to this consent decree. The consent decree is also admittedly not registered. The subject-matter of the suit was the termination of the licence in respect of the land, and unless the consent decree passed therein was registered, it could not operate to convey title to the building which, by that time, was standing thereon in view of the provisions of section 17(1)(b) read with section 17(2)(vi) of the Indian Registration Act, 1908. Apart from that, a perusal of the terms of the said consent decree leaves no room for doubt that it only directs the said Gandhi and the said Rohra to hand over possession of the land, together with the building standing thereon, to the assessee-company and does not even purport to convey to the assessee-company the title to the said building. As I have observed in regard to sub-clause (1) referred to in the preceding paragraph, it might be that the possession of the building would, in course of time, ripen into a title by prescription but that is not the case before us. The said consent decree cannot also, therefore, be of any assistance to Mr. Joshi in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guments on this point Mr. Joshi cited the decision of the Calcutta High Court in the cases of Ballygunge Bank Ltd. v. Commissioner of Income-tax [1946] 14 ITR 409 (Cal) and Sri Ganesh Properties Ltd. v. Commissioner of Income-tax [1962] 44 ITR 606 (Cal) as well as the decision of the Supreme Court in Dhairyawan's case AIR 1958 SC 789 already cited above in another context. In each of those cases. however, there was an express clause in the leases providing that the structures constructed were to be the absolute property of the lessor (see clause 14, at page 412, clause 11(4) at page 610, and clause 5 in para. 8, respectively). None of the said decisions can, therefore, be of any assistance to Mr. Joshi in the present case. I hold that there is, in the present case, no registered document, nor is the consent decree registered, nor is there any express clause in the registered lease, as a result of which the assessee-company could be held to have become, the owner of the building constructed on thier land. Mr. Joshi, however, contended that the assessee-company should, in any event, be held to have become the owner of the building by operation of law having regard, particularly to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese words---See AIR 1972 SC 1727, 1730 : " The lessee had the right under section 108(h) of the Transfer of Property Act to remove the constructions while he was in possession." It is pertinent to note that at that stage the further statement that, if the lessee does not do so, the lessor thereby becomes the owner of the constructions does not occur in the judgment of the Supreme Court. In any event, it does not state when the lessor would become the owner of the fixtures which the lessee fails to remove before giving up possession. That the lessor would by lapse of the statutory period ultimately become the owner thereof cannot be questioned, as already stated above. Both on the ground that the said statement does not appear to be a statement of the law by the Supreme Court, as well as on the ground that it does not lay down when the lessor would become the owner of fixtures which the lessee has failed to remove before giving up possession, this decision cannot be of any help to Mr. Joshi in the present case. In the case of Khimjee Thakarsee v. Pioneer Fibre Co. Ltd. AIR 1941 Bom 337, Blackwell J., sitting as a single judge, has stated that if the defendants in that case cho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which deals with the licensee's rights, on revocation, does not contain a provision similar to section 108(h) of the Transfer of Property Act. On the contrary, it indicates that the lessee has the right to remove any goods which he has been allowed to place on the property, but does not prescribe any time limit within which he is required to do so. The second reason for rejecting Mr. Joshi's contention in regard to section 108(h) of the Transfer of Property Act is that, in any event, it cannot apply to a case like the present one in which it has not been proved by the revenue that the licensee had itself any title to the building which it constructed on the assessee-company's land. What appears to have happened is that the Jai Bharat Construction Corporation, of which the original licensees were partners, were merely builders who built on the land of one, with moneys of others on whose behalf they constructed the building, and it is hard to conceive of any right on the part of the Jai Bharat Construction Corporation to remove the building on a principle analogous to section 108(h) of the Transfer of Property Act, even if any such principle was applicable to the same. That would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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