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Judgment
Victor Murray Coutts Trotter, C.J.—In this case the plaintiffs are the owners of an Agraharam village in the sense that they own both the
melvaram and the kudivaram rights. In the year 1909 there was a grant of the kudivaram right to the 1st and 2nd defendants and in consideration
for that they promised to pay a rent and they also promised to pay what is described as nazarana to the landlords and that may be roughly
described as a premium for the granting of the kudivaram which no doubt was in perpetuity. They gave a promissory note for the amount and the
question is whether the debt--because it undoubtedly was a debt was a mere personal debt affecting the makers of the promissory note or whether
it is a charge on the land. In the view that we take of this case the further question, which arose at the trial, viz., whether the 3rd and 4th defendants
were bona fide purchasers for value without notice, does not arise. It is no doubt true that there is a direct decision in England Shepheard v.
Beetham (1877) 6 Ch D 597, a decision of Malins, V.C., which treats a premium as creating a lien upon the leasehold premises. Whether that
decision is correct or not we are not concerned to enquire although it does seem certainly an astounding result. But, in our opinion, in India the
matter is entirely regulated by statute. There is a fundamental distinction under the Transfer of Property Act between a transfer of Immovable
property and a transfer of the right to the enjoyment of Immovable property ; and a lease is defined by Section 105 of the Transfer of Property Act
as a transfer of a right to enjoy Immovable property made for a certain time, express or implied, or in perpetuity in consideration of the price paid
or promised or of money, etc. It is perfectly clear, therefore, that the Transfer of Property Act regards a lease in perpetuity as merely a transfer of
the right to enjoy property. Does it or does it not create a charge upon the land? The answer is that the only charge, valid in Indian Law, on landed
property, is to be found in the section of the Act which creates such a charge and Section 55 is obviously confined to cases which deal not merely
with the transfer of the mere right of enjoyment but with the transfer of the property itself, for, for any other lien or charge, the Act makes no
provision at all. In our opinion we are bound to hold that we cannot but regard the Act as intended to be exhaustive and that we are not at liberty
to follow English common law rules. On this ground we think the appeal fails and! must be dismissed with costs. The Second Appeals (Nos. 623
of 1921, 624 of 1921 and 625 of 1921) will follow and are also dismissed with costs.
Krishnan, J.
The question that arises for our decision in this case is, whether, when the owner of a land grants a perpetual lease of it in consideration of rent
to be paid, as well as a premium, he has got a charge on the leasehold right he has so created for the premium so payable.
The promissory note in this case as executed for such a premium and it is now sought in appeal before us to be enforced not against the makers
of the note nor against the persons who took the lease but against certain third parties who have now become transferees or assignees of the lease
right. Against them the amount of the note could be claimed if at all, only if there is a charge created in favour of the landlords on the property in
their hands.
The English law is apparently that such a lien does exist but it is not necessary to consider that position here, for, we are concerned only with the
Indian Law on the point. The appellant has to show us how he gets the charge. The document by which the lease was created gives him no charge
whatever for the amount. Therefore the charge must be rested by him, upon the general law of this country. Now so far as it appears the only lien
that is recognised in the Transfer of Property Act in this country is a lien in favour of the vendor. That being so, a strenuous effort was made by the
appellant''s vakil to persuade us that the grant of a lease like this really amounted to a sale or transfer of a fractional right in the property for a price,
namely, the premium payable for the grant and he argued that as vendors of that right the plaintiffs have a charge on the leasehold estate which has
been given to defts. 1 and 2. It is impossible to accept this view for the Transfer of Property Act makes a very clear distinction between a sale and
a lease. This is a transaction that falls clearly within the definition of a lease in the Transfer of Property Act, Section 105. I do not see how then it
could be brought under the definition of a sale. The payment of premium is only one of the incidents of the lease just as payment of rent is. It is
certainly not a price paid for the transfer of Immovable property as defined in Section 54 of the Transfer of Property Act. It is impossible, it seems
to me, to hold that the relationship between the plaintiffs and defendants 1 and 2 was anything but that of a lessor and a lessee. Apart from the
Transfer of Property Act it has not been shown that there is any common law in India on which the right of lien claimed could be founded. It is true
that in one of the decisions brought to our notice, viz., Kandaswami Pillai v. Ramaswami Mannadi ILR (1918) M 203, there is an observation by
the then learned Chief Justice that a lien like that which exists in England may be claimed here. But that observation cannot be treated as authority
as it is only an obiter dictum of the learned Judge, When that case came on appeal before three other learned Judges of this Court those learned
Judges held that the principles of equity in England could not be introduced into India for purposes of creating rights of parties like the one in
question. The view of the Chief Justice cannot be treated as of weight after the expression of opinion by the appellate Judges. There is no other
decision which has been brought to our notice where such a lien has been recognised in India.
I am, therefore, entirely in agreement with the learned Chief Justice in holding that whatever the position may be in England, we are not justified
in introducing new conceptions of charges in India which are not supported by our Statute Law. When the Estates Land Act was passed the
Legislature had to consider what kind of charges should be given to the landholder on a leasehold estate. That was the only instance in which the
Legislature dealt with a lien of the kind claimed and there we find that the lien was not allowed, see Section 25 of the Estates Land Act. It seems
quite clear that such a lien as is now set up cannot be supported. In the result, the appeal and all the second appeals must be dismissed with costs.