Meher Chand Mahajan, C. J. - (1.) The appellant were charged under section (1) of the Bombay Rent Restriction Act, 1947, for receiving from Shankar Das Gupta through Mathra Das, accused No. 3, on 23rd November 1850 a sum of Rs. 2,400/- as premium or pugree is respect of the grant of lease of Block No. 15 in a building under construction. The Magistrate found the appellants guilty of the charge and sentenced each of them to two months R. I. and a fine of Rs. 1,200/-. Mathra Das was convicted and sentenced to one day's S. I. and a fine of Rs. 100/-. The fourth accused Roshanlal Kanjilal was acquitted. Mathra Das preferred no appeal against his conviction and sentence. The appellants preferred an appeal to the High Court against their conviction. This was heard by Gajendragadkar and Chainani, JJ., on the 8th of October 1952. It was contended, 'inter alia', that even if it were held that the appellants had accepted the sum of Rs. 2,400/- they could not be said to have committed an offence under section 18(1) of the Act inasmuch as the amount could not in law be held to be premium in respect of the grant of a lease. On this point the learned Judges said as follows: "In the present case the work regarding the building which still remained to be done was so important that both the parties agreed that the complainant should get into possession after the said work was completed. In such a case unless the building is completed the tenant has no right which can be enforced in a court of law. If the landlord finds it impossible for any reason to complete the building, what is the right which an intending tenant can enforce, against him. Therefore, in our opinion, there is considerable force in the contention urged by Mr. Lulla that in the present case even if it be held that the accused had received Rs. 2,400/- in the circumstances to which we have already referred that would not bring them within the mischief of section 18(1) because there has been no grant of a lease at all. There is only an agreement that the landlord would lease to the complainant a particular flat after the building has been fully and properly completed. It does appear that section 18(1) does not bring within its mischief executory agreements of this kinds".
(2.) A contrary view had been expressed in-'Mahadeo Shridhar vs. The State', Criminal Revn. Appln. No. 1178 of 1949 D/- 25-1-1950 (Bom) (A) by another Bench of the High Court on the construction of section 18(1). The matter was therefore referred to the Full Bench. The question framed for the consideration of the Full Bench was in these terms: "If as owners of an incomplete building the appellants accepted Rs. 2,400/- from the complainant in respect of an agreement between them that the appellants were bound to give and the complainant was entitled to take possession of flat No. 15 in the said building as soon as the said building was completed on the agreed rent Rs. 75/- per month, did the acceptance of Rs. 2,400/- by the appellants fall within the mischief of section 18 of Bombay Act LVII of 1947." This question, if answered in the negative by the Full Bench, would have concluded the case.
(3.) The Full Bench answered the question referred in the affirmative. It held that the oral agreement did not constitute a lease but it amounted to an agreement to grant a lease in future, and that the receipt of consideration for an executory agreement was within the mischief of section 18(1) of the Act. The Full Bench expressed its opinion in these terms: "What the Legislature has penalized is the receipt of a premium by the landlord and the Legislature has also required a nexus between the receipt by the landlord of a premium and the grant of a lease of any premises. Therefore a receipt alone by a landlord would not constitute as offence, but that receipt must be connected with the grant of the lease of any premises. Unless that connection is established no offence would be committed. The contention of Mr. Lulla on behalf of the accused is that the receipt of the premium must be simultaneous with the grant of the lease. If the lease comes into existence at a future date, then the receipt of a premium according to him is not 'in respect of' the grant of a lease. Therefore, the key words according to us in this section are 'in respect of'. It is relevant to observe that the Legislature has advisedly not used the expression "for" or "in consideration of" or "as a condition of" the grant of a lease. It has used an expression which has the widest connotation and the expression used is "in respect of". "In respect of" means in its plain meaning "connected with or attributable to", and therefore it is not necessary that there must be a simultaneous receipt by the landlord with the grant of the lease. So long as 'some connection' is established between the grant of the lease and the receipt of the premium by the landlord, the provisions of the section would be satisfied. In our opinion it is impossible to contend that in the present case there was no connection whatever between the landlord receiving the premium and his granting the lease of the premises. It is true that when he received the premium he did not grant a lease. It is true, that all that he did when he received the premium was to enter into a contract with his tenant to grant a lease in future. But the object of the landlord in receiving the premium and the object of the tenant in praying the premium was undoubtedly on the part of the landlord the letting of the premises and on the part of the tenant the securing of the premises. Therefore the object of both the landlord and the tenant was the grant of the lease of the premises concerned and the object was achieved partly and to start with by an oral agreement being arrived at between the landlord and the tenant with regard to the granting of this lease, the lease being completed when delivery of possession of the premises would be given. Therefore, in our opinion, on the facts of this case it is not possible to contend that the payment or the premium received by the landlord was 'unconnected' with the grant of a lease of any premises. The fact that no grant was made at the time when the premium was received the fact that there was merely an agreement to grant a lease, the fact that the lease would come into existence only at a future date, are irrelevant facts so long as the connection between the receiving of the premium and the granting of the lease is established".;