P L D 1969 Karachi 474 (PLP)

(a) Registration Act (XVI of 1908), Ss. 17(2) & 49‑Agree ment or lease‑Not liable to compulsory registration‑Admissible in evidence in support of transaction‑Registration Act strikes only at documents and not at transactions. Kumar Gokul Chandra Law v. Haji Muhammad Din A I R 1938 Cal. 136 rel. (b) Registration Act (XVI of 1908), Ss. 49 & 17 (1) (d) [as amended by Registration (Amendment) Ordinance (XLV of 1962)] Document compulsorily registrable but not registered‑Saved from being inadmissible in evidence due to elimination of sub‑cl. (c) of S. 49

‑Question of admissibility or otherwise of documents in evidence‑Mere matter of procedure‑To be governed by law pre vailing for time being. A rule of evidence is to be regarded merely as being in the nature of procedure. Pending proceedings would be governed by the amended section 49 of the Registration Act and a document would be saved from inadmissibility owing to elimination of sub‑clause (c) from that section. The question of the admissibility or otherwise of a docu ment is indeed nothing more than a mere matter of procedure, and must be governed by the law obtaining in this behalf for the time being, there being no vested right in procedure. Clauses (a) and (b) of the unamended section 49 of the Registration Act may indeed be regarded as being in the nature of substantive provisions but no such sanctity is attached to clause (c) thereof which merely laid down that no document required by section 17 or by provision of the Transfer of Property Act, 1882, to be registered shall be received as evidence of any transaction affect ing such property or conferring such power, unless it had been registered. As in the amended section 49 this clause does not find any place, it is clear that the prohibition contained therein is no longer operative. Halsbury's Laws of England, 3rd Edn., para. 647; Ganda Mal v. Uttam Chand and others A I R 1933 Lah. 1038; Manilal Maganlal v. Bai Champa A I R 1940 Born. 193; Tukaram v. Atma ram A I R 1939 Born. 31; Kanjee and Mooljee Bros. v. Shanmugan Pillai A I R 1932 Mad. 734; Zahir Ahmad v. Seth Sugnichand and another P L D 1965 Kar. 195; Anwar Sultana and others v. Pakistan Co‑operative Housing Society Ltd. P L D 1964 Kar. 116; Moosa and others v. Muhammad Yakoob and others P L D 1966 Kar. 376 and The State v. Maulvi Muhammad Jamil and others P L D 1965 S C 681 rel. (c) Transfer of Property Act (IV of 1882), S. 53‑A and Registration Act (XVI of 1908), S. 49(c), proviso‑Protection under S. 53‑A. Transfer of Property Act available to transferee both as plaintiff as well as defendant in suit by or against him to shield his title to property‑Lessee in possession‑Lease deed unregistered

Lessee, held, entitled to use unregistered lease as shield to prevent transferor from enforcing any right except those arising under such lease. Inayat Ullah v. Shah Muhammad and others P L D 1961 Lah. 372 and Evaz Ali v. Mst. Firdaos Jehan and others A I R 1944 Oudh 212 rel. Term "Committee"‑Can be used even for an individual‑Companies Act (VII of 1913), Table A, Sched. I, Reg.

91. Stroud's Judicial Dictionary, 3rd Edn., p. 534 ref. Contract with company‑Doctrine of "indoor management"‑Meaning. Broadly and briefly stated, the doctrine of "indoor manage ment" is to the effect that persons contracting with a Company and dealing in good faith may assume that acts within its constitution and powers have been properly and duly performed and are not bound to inquire whether acts of internal manage ment have been regularly done. The lessor acting upon the correspondence received from the Secretary of the Society, who used to supervise all affairs of the Society, entered into an agreement of lease on the terms settled after lengthy correspondence. It was subsequently contended on behalf of the Society that the Secretary was not authorised to enter into any contract without approval by the Managing Com mittee of the Society and as such the lease in favour of the lessee was not valid and authorised: Held, the lessee was not a member of the Society and was accordingly entitled to act on the communications regularly received by him from the Secretary of the Society, as the Secretary was clearly entitled, under bye‑law of the Society, to enter into correspondence on behalf of the Society. The lessee was not required to inquire as to whether in fact the Society had approved the terms which were being offered to him in writing by the Honorary Secretary of the Society. Assuming, however, that either there was no delegation of the necessary powers in favour of the Secretary or that the delegation was not valid on account of its inconsistency with any rule or bye law of the Society, then the transaction appears to be saved by what is known as the doctrine of "indoor management. Halsbury's Laws of England, 3rd Edn., p. 430; K. M. Ghosh on Indian Company Law, 9th Edn., p. 55; Debra Dun Mussorle Electric Tramway Co. Ltd. and another v. Jagmandar Das and others A I R 1932 All. 141; British Thomson Houston Company Limited v. Federated European Bank Limited (1932) 2 K B 176 and P. V. Demodara Reddi and another v. Indian National Agencies Ltd. A I R 1946 Mad. 35 rel. Kredit Bank Cassel G. M. B. H. v. Schenkers Ltd. and others 1927 All E L R 421 and South London Greyhound Racecourses Ltd. v. Wake 1930 All E L R 496 ref. JUDGMENT ANWARUL HAQ, J.‑--This judgment will dispose of Appeals Nos. 16 and 17 of 1964, brought under Clause 10 of the Letters Patent of this Court, to call in question a consolidated judgment delivered by our learned brother Qadeeruddin Ahmad, J. on the 12th of December 1963 on the original side in two cross‑suits between the parties bearing Nos. 612 and 1246 of 1955. The dispute concerns a plot of land measuring about 13,000 Sq. Yds., described as Amenity Plot No. 2, situate in Block No. 2 of the Pakistan Employees Co‑operative Housing Society, Karachi, (hereinafter referred to as the Society). The allottee, namely, Altaf Hussain deceased, alleged in his suit bearing No. 612 (instituted on the 7th of July 1955) that, after some correspon dence between him and the then Secretary of the Society, the plot was leased out to him on the 16th of July 1953 by means of letter (Exh. 41) from the Secretary of the Society. The lease was to be for a period of thirty years, after the expiry of which a new agreement would have to be negotiated. For the first two years no rent was to be paid and thereafter it was to be charged at the following rates: (a) From the 3rd to the 5th year. Rs. 150 per acre per annum. (b) From the 6th to the 10th year. Rs. 180 per acre per annum. (c) From the 11th to the 30th year. Rs. 200 per acre per annum. The Society undertook, by this letter, to provide a water pipeline to Altaf Hussain for developing the land as a nursery for green plants, and it was stipulated that the plants would be supplied to the Society for its public amenities such as roadside trees and public parks etc., at a concessional rate of 20 % below the scheduled prices of the nursery, and finally that on ceremonial occasions decorative plants would be supplied free of cost. Altaf Hussain asserted that he took possession of the land in pursuance to this letter and developed it at an estimated cost of Rs. 40,000 and started the nursery thereon after procuring plants worth thousands of rupees from within and outside Pakistan. However, in January 1955 he came to know that the Society was contemplating to cancel the allotment in his favour and to dispossess him. He also learnt that the Society was threatening to cut off water supply to his nursery. In view of these apprehensions and threats he came to Court praying for a permanent injunction to restrain the Society from interfering in any manner with his possession and the water supply. Altaf Hussain died during the pendency of this Suit and his legal representatives were brought on the record, and have been throughout referred to as the plaintiffs by the learned Single Judge. They will be similarly described in the present judgment as well.

2. As a counter‑blast the Society instituted its suit bearing No. 1246 on the 2nd of December 1955 for the recovery of possession of the plot and of Rs. 5,000 as damages up to the date of the suit for use and occupation, and claimed a further sum of Rs. 541 per month until the date of delivery of possession. The Society alleged that it came to know of the plaintiff's illegal possession of the plot in dispute from a letter addressed to the president of the Society on the 31st of August 1954 by the Registrar of Cooperative Societies, Karachi, and on inquiry it was learnt that the plaintiff was claiming possession on the basis of certain letters obtained by him in collusion with Mr. Imam, at one time Honorary Secretary of the Society. The Society went on to assert that Mr. Imam was never authorised to enter into any contract, nor had he any authority to give possession of the said plot to Altaf Hussain. It was also alleged that the then Secretary never placed the matter of the lease or allotment of this plot before the Managing Committee of the Society, and that on the 16th of October 1954 the Managing Committee formally repudiated the action of Mr. Imam in handing over this plot to Altaf Hussain. The Society was compelled to come to Court because Altaf Hussain had refused to vacate the plot in spite of repeated requests from the Society.

3. Both the suits were consolidated for hearing, and the large number of issues framed therein were condensed as follows by the learned trial Judge:‑ (1) Whether the plot was allotted, or agreed to be leased out, or leased out to Altaf Hussain by or on behalf of the P. E. C. H. Society? (2) If issue No. 1 is decided in favour of Altaf Hussain, then whether the allotment or the agreement to lease out, or the lease is. (a) Legally valid; (b) invalid owing to fraud as alleged in paragraph 6 of the written statement of the P. E. C. H. Society? (3) If issue No. 2 is decided in favour of the P. E. C. H. Society, then whether the Society is entitled to the damages and mesne profits claimed by it? (4) What is the effect of non‑payment of water charges on the prayer of injunction with respect to the supply of water? (5) Whether the Secretary of the P. E. C. H. Society had ostensible authority and the Managing Committee acquiesced in the exercise of it? If so, what is its effect?

4. At the trial, besides a large number of document produced by the parties, the plaintiffs relied upon the oral evidence of Aftab Hussain (P. W. 1), (who is a son of the deceased Altaf Hussain), and of Muhammad Mustafa Khan (P. W. 2), who was then the Executive Officer of the Society and was concerned with matters relating to delivery of possession of the plots allotted or leased out by the Society. On behalf of the Society only one witness was produced, namely, Muhammad Ehsanul Haq Khairi, who was the Honorary Secretary of the Society at the time of the recording of evidence.

5. The learned Single Judge has held that although Exh. 41 is not registered as required by section 17 of the Registration Act, yet it was admissible in evidence either as an agreement of lease or as a document showing the nature of the plaintiff's possession under section 53‑A of the Transfer of Property Act. The learned Judge has expressed the view that an agreement of lease was made between the parties and that it was neither without consideration nor was it invalidated on account of the various technical objections taken in this behalf by the Society. The learned Judge has gone on to hold that Mr. Imam, the then Secretary of the Society, had been entrusted with wide powers by the Society and accordingly the agreement must be deemed to have been made on behalf of the Society. After an elaborate discussion of the doctrine of "indoor management" the learned Judge has concluded that the lease was not ultra wires of the Society and the action of the then Secretary must be regarded as binding on the Society.

6. The learned Judge has negatived the assertion of the Society that the lease was brought about as a result of any fraud or collusion on the part of the then Secretary Mr. Imam, and has concluded his judgment by holding that the Society was not entitled to recover any damages for use and occupation but was merely entitled to the rent as agreed between the parties. As a result these findings, the learned Single Judge has dismissed Suit No. 1246 filed by the Society, and has decreed the plaintiffs' Suit No. 612, subject to the rights and liabilities of the parties as landlord and tenant. In view of the fact that the plaintiffs had been in occupation of the premises for nearly ten years without paying any rent and water charges, the learned Judge has left the parties to bear their own costs in both the suits.

7. Mr. Haider Ali, the learned counsel appearing for the appellant Society, has challenged almost all the findings recorded by the learned Single Judge. He has contended:‑ (1) That Exh. 41, being a lease of immovable property for thirty years, is not admissible in evidence for want of registration; (2) that, in any casa, the contract of lease was invalid for the reasons that: (a) the Secretary was not empowered to enter into this contract. (b) even the Society itself was not competent to lease out this plot for a commercial purpose, in view of condition No. 2 of the licence granted to the Society by the Central Government as it was a plot reserved or earmarked for public amenities for the residents of the Society, (c) no allotment or lease could be made in favour of a non‑member like Altaf Hussain deceased, as the Society was created solely for the object of providing accommodation to its members, (d) the Society itself being a licencee from the Central Government could only grant a licence and not a lease, (e) the agreement was without consideration, (f) it was vitiated on account of fraud and collusion as outlined in paragraph 6 of the written statement of the Society in reply to the plaintiff's suit, and (g) the agreement was not made in the prescribed form and manner, nor was possession delivered in accordance with the Society's procedure; and (3) that the learned Judge has erred in thinking that the Society was not entitled to damages for use and occupation.

8. In order to appreciate the appellant's contention regarding the admissibility of documentary evidence relied upon by the plaintiffs it would be useful to refer briefly to the correspondence which passed between the plaintiffs and the Secretary of the Society before possession of the plot was taken by Altaf Hussain. By Resolution No. 6‑B passed by the Managing Committee of the Society on the 14th of January 1950 (Exh. 67) draft advertisement for the leasing out of two plots for the establishment of nurseries was considered and approved. This advertisement appeared in the Daily newspaper "Dawn" on two successive days, namely, the 24th and the 25th of January 1950(Exhs. 83 and 84). In these advertisements the intention of the Society to create a lease was clearly expressed and announced. It appears that satisfactory offers were received only for the plot situated in Block No. 6 and accordingly that lease was sanctioned by the Managing Committee by its Resolution dated the 30th of April 1951 (Exh. 73). By a letter issued by the Joint Secretary of the Society on the 24th of May 1951 (Exh. 69) formal terms of the lease were conveyed for that plot. It appears that as the Society did not succeed in leasing out the plot situated in Block No. 2 by open public advertisement, the matter was taken up by the then Secretary Mr. S. Imam through private negotiations with Altaf Hussain who was the father of a member of the Managing Committee, namely, Mr. Aftab Hussain (P. W. 1). Altaf Hussain deceased addressed a letter (Exh. 71) to the Honorary Secretary of the Society on the 10th of September 1952 stating that he was prepared to render all possible assistance to the Society in organising a public garden and a nursery if the Society agreed to give him reasonable terms for working the programme. Altaf Hussain then outlined the terms which would be acceptable to him. The Secretary of the Society replied to this letter on the 1st of February 1953 by means of Exh. 39 intimating that the Society hail agreed to lease out a plot of land measuring approximately 8,667 Sq. Yards to Altaf Hussain on the terms and conditions mentioned in the letter. Exh. 39 was then superseded by Exh. 40 dated the 11/13th of July 1953 stating that the Society had re‑considered the matter and desired that Altaf Hussain should take the entire plot measuring 13,000 Sq. Yds. on lease and not only a portion thereof. The terms and conditions were repeated in the body of this letter. Altaf Hussain thereupon wrote letter (Exh. 72) on the same date, namely, the 13th of July 1953, intimating his willingness to take the plot on the terms and conditions proposed by the Society in Exh.

40. After receiving Altaf Hussain's consent the Honorary Secretary of the Society then issued Exh. 41 on the 16th of July 1953 stating that the Society had agreed to lease out to Altaf Hussain the said plot of land measuring 13,000 Sq. Yds. on the terms and conditions mentioned in the letter.

9. From the facts and correspondence just mentioned no doubt is left in our mind that the document (Exh. 41) dated the 16th of July 1953 is in the nature of an agreement to lease out the plot in dispute, but is not a lease deed itself. On this view of the matter, it appears that Exh. 41 was not liable to compulsory registration as required by section 17 of the Registration Act and, being exempt under subsection (2) of that section, it would not be A inadmissible in evidence under section 49 of the same Act. I was rightly observed in Kumar Gokul Chandra Law v. Haji Muhammad Din (A I R 1938 Cal. 136) that the Registration Act strikes only a documents and not at transactions.

10. Assuming, however, that Exh. 41 is a document of lease requiring compulsory registration under section 17(1) (d) of the Registration Act, the question still remains whether it is rendered inadmissible in evidence by section 49 of that Act for any purpose whatsoever.

11. Section 49 of the Registration Act, as it stood before its amendment by Ordinance No. 45 of 1962 promulgated on the 7th of June 1962, was in the following terms:‑ "No document required by section 17 or by any provision of the Transfer of Property Act, 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, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter 11 of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of section 53‑A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument."

12. After its amendment by the Registration (Amendment) Ordinance, 1962 the section now reads as under:‑‑ "No document required to be registered under this Act or under any earlier law providing for or relating to registration of documents shall‑ (a) operate to create, declare, assign limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property, or (b) confer any power to adopt, unless it has been registered."

13. The first question that arises for consideration is whether the matter of admissibility of Exh. 41 is governed by the amended or unamended section

49. As already stated, the document Exh. 41 was written on the 16th of July 1953 and the suit was instituted on the 7th of July 1955. Section 49 was amended during the pendency of the suit, and if, therefore, the admissibility of the document is only a procedural matter, then it would be governed by the amended section which does not contain clause (c) and the proviso to the original section.

14. While discussing the question of retrospective applica tion of statutes, paragraph 647 of Halsbury's Laws of England (Third Edition) states that "the presumption against retrospection does not apply to legislation concerned merely with matters of procedure or of evidence; on the contrary, provisions of that nature are to be construed as retrospective unless there is a clear indication that such was not the intention of Parliament". From these observations it would appear that a rule of evidence is to be regarded merely as being in the nature of procedure. In Ganda Mal v. Uttam Chand and others (A I R 1933 Lah. 1038) the precise question which we are discussing here arose with regard to the same section, namely, section 49 of the Registration Act, and it was held by Dalip Singh, J. that "the law is really one of procedure and the admissibility of a document in the suit is governed by the law as it exists when the suit is brought". The contention before his Lordship was that the law prevailing at the time the document was executed should be applied, but that argument was repelled and the amendment then made in section 49 was applied to a pending action. A similar view was adopted in Mandal Maganlal v. Bai Champa (A I R 1940 Bom. 193) and it was added that the proviso to section 49 was necessarily retrospective, being a rule of evidence as it did not create or defeat substantive rights. In taking this view the learned Judges of the Division Bench followed an earlier decision of their own Court cited as Tukaram v. Atmaram (A I R 1939 Bom. 31) and dissented from a judgment of the Madras High Court cited as Kanjee and Mooljee Bros. v. Shanmugan Pillai (A I R 1932 Mad. 734), Again in Zahir Ahmad v. Seth Sugnichand and another (P L D 1965, Kar. 195) a Divi sion Bench of this Court comprising A. S. Farooqi and H. T. Raymond, JJ. approved the view taken by our learned brother Qadeeruddin Ahmad, J. in the Judgment under appeal before us reported as P L D 1964 Kar. 116 to the effect that pending proceedings would be governed by the amended section 49 of the Registration Act and a document would be saved from inadmissi bility owing to elimination of sub‑clause (c) from that section.) The same view was reiterated by another Division Bench or this Court in Moosa and others v. Muhammad Yaqoob and others (P L D 1966 Kar. 376). Finally, in The State v. Maulvi Muhammad Jamil and others (P L D 1965 S C 681) while dealing with certain amendments carried out in sections 256 and 257 of the Code of Criminal Procedure, their Lordships treated the question of the further cross‑examination of a witness in a criminal trial as being merely a procedural matter, and observed that the right to recall witnesses already examined before charge really matured into a vested right only when a charge was framed, adding that the new law should, therefore, be enforced even in a pending case and the accused should not be held entitled as of right to recall witnesses already examined before the charge.

15. In the light of the authorities mentioned above, as well as on general principles, it is clear that the question of the admissibility or otherwise of a document is indeed nothing more than a mere matter of procedure, and must be governed by the law obtaining in this behalf for the time being, there being no vested right in procedure. Clauses (a) and (b) of the unamended section 49 of the Registration Act may indeed be regarded as being in the nature of substantive provisions but no such sanctity is attached to clause (c) thereof which merely laid down that j no document required by section 17 or by provision of the Transfer of Property Act, 1882, to be registered shall be received as evidence of any transaction affecting such property or confer ring "Such power, unless it had been registered. As in the amended section 49 this clause does not find any place, it is clear that the prohibition contained therein is no longer operative, with the necessary consequence that the document Exh. 41 would become admissible in evidence although it is not registered as required by section 107 of the Transfer of Property Act. In view of the law as obtaining at present, this document would not operate to create any right, but it would certainly be available to prove the nature of the plaintiff's possession.

16. It appears to us that even if the matter was governed by the unamended section 49 of the Registration Act, the document in question would have been admissible under the proviso to that section as evidence of part performance of the lease under t section 53‑A of the Transfer of Property Act. It was submitted on behalf of the Society that the. protection of section 53‑A of the Transfer of Property Act is available only when the transferee is defending an action brought against him by The transferor and not otherwise, but this view stands negatived by the judgment of a Division Bench of this Court in Inayat Ullah v. Shah Muhammad and others (P L D 1961 Lah. 372). It would be instructive to reproduce here the following observations of the learned Judges:‑ "According to section 53‑A, Transfer of Property Act; 1882, a person who has made a transfer of some property by means of an unregistered deed, when under the law the transfer should have been made by means of a registered deed, is debarred from enforcing any right in respect of the property if the transferee has in part performance of the contract taken possession of it. It would be rather anamolous if the position of a transferee in a suit i.e. whether he has come to Court as a plaintiff or as a defendant, should determine whether he should be accorded recognition of his rights, and if he were a plaintiff he should fail but if he raised precisely the same plea if he were a defendant he should succeed. When a transferee by means of a document which has not been registered, though under the law that document was compulsorily registerable, comes to Court as a plaintiff and bases his claim on part performance of the contract of transfer, he is using the part performance of the contract as a shield and not as a sword as his object is only to defend his own title and not to attack the title of anyone else. Section 53‑A debars a transferor from enforcing any right against a transferee in possession, but does not prevent a transferee from seeking relief, which must, in its very nature, be by way of defence. Suit for specific performance by a transferee of property in the absence of a registered deed of sale is, therefore, competent." These observations are singularly applicable to the case before us, for here the transferee is not merely a plaintiff in one case, but is also the defendant in the other suit brought against him by the Society, and in that suit, in any case, he could rely upon the unregistered document Exh. 41.

17. The same view was taken in Evaz Ali v. Mst. Firdous Jehan and others (A I R 1944 Oudh 212) and it was observed that, "Section 53‑A cannot be used as a weapon of attack. It confers upon the transferee the privilege of invoking the doctrine embodied therein only as a shield against any invasion of his rights by the transferor or persons claiming under him. The words of the section not warrant a conclusion that plaintiff as such is necessarily debarred from the benefit of the rule. Where by the nature of the case, as disclosed by the pleadings or otherwise, it is apparent that the transferee comes to Court to defend his possession against, the invasion of it by the transferor, he is entitled to invoke the aid of the equitable doctrine therein embodied. Since the object of the suit under Order XXI, rule 103, Civil Procedure Code, is to protect possession, and the capacity in which the plaintiff comes to Court is in reality one of defence, the plaintiff can tae advantage of section 53‑A. The mere position of a party in the heading of a suit would not determine whether he is or is not entitled to benefits of the section."

18. It was contended on behalf of the Society that even if the document in question. be admitted in evidence for the purposes of section 53‑A of the Transfer of Property Act, no benefit could accrue to the plaintiffs on that account for the reason that possession had not been obtained in accordance with the prescribed procedure and the plaintiff had not performed their part of the contract. The learned Single Judge has, in our view, rightly repelled both these objections. Basing himself on the evidence of Aftab Hussain (P. W. 1) and Muhammad Mustafa Khan (P. W. 2), the learned Judge has held that the possession, was delivered to the lessee under the directions of the witness Muhammad Mustafa Khan who was then the Executive Officer of the Society, and these directions were issued by him because Exh. 41 was presented to him by the lessee with the request that arrangements for giving possession might be made. The learned Judge has further pointed out that even according to the evidence of the present Secretary of the Society, namely, Muhammad Ahsanul Haq Khairi (D. W. 1), no procedure hid in fact been prescribed for delivering possession, nor was there any bye‑law of the Society on this point. It was admitted on behalf of the Society that the plaintiffs were in possession from July 1953, and this was apparent from the fact that the Society had claimed water charges vide Exh. 66 from the 16th of July 1953. From these facts and circumstances, it is clearly established that the lessee Altaf Hussain had indeed come into possession of the plot under the agreement Exh. 41.

19. Regarding the objection that the plaintiffs had neither performed nor were willing to perform their part of the contract, it appears that the Society was basing itself on the non-payment of water charges and the rent of the plot by the lessee Altaf Hussain. After referring to the relevant evidence the learned Judge in Chambers has expressed the view that the late Altaf Hussain did make efforts to clear these dues, but the payment was not accepted as the lease bad become the subject of dispute among the members of the Society as early as 1954. We do not think it necessary to dilate on this aspect of the case as the point stands amply established by the evidence of Aftab Hussain (P. W. 1) and was not adequately contradicted by Mr. Khairi (D. W. 1). The learned counsel appearing for the Society has not seriously challenged the conclusion reached by the learned Single Judge in this behalf.

20. For the foregoing reasons, it is clear that, in the first plate, the document Exh. 41 is an agreement to lease and did not, therefore, require registration; and that, in the second place, even if it is regarded as a lease requiring registration, it would be admissible under the amended section 49 of the Registration Act. In the alternative, it could be used under the proviso to the unamended section 49 so as to enable the F plaintiffs to defend their title in the property in terms of section 53‑A of the Transfer of Property Act and to debar the Society from enforcing any right against them, except a right arising under the contract of lease. It stands established on the record that the plaintiffs' predecessor Altaf Hussain acquired possession of the plot under this contract.

21. We may now proceed to examine the several contentions raised on behalf of the Society to challenge the validity of the contract. The first question requiring examination in this behalf is whether the Society itself was competent to lease put this plot. The argument of the learned counsel for the Society is three‑fold: (a) that the Society itself being a licencee from the Central Government, it could only grant a licence and not a lease; (b) that, in any case, the plot in question having been reserved or earmarked for a public amenity for the residents of the Society, it could not be leased out for a commercial purpose, namely, the running of a nursery for profit; and (c) that the Society having been created solely for the object of providing accommodation to its members, the plot could not be leased out to a non‑member like Altaf Hussain deceased.

22. It appears that the, licence granted by the then Governor‑General of Pakistan to the Society was not placed on the record, but at the hearing of the appeal a reference was made to clause 6‑A of the licence to show that the Society could lease out the plots under its charge. It was common ground between the parties that there were usually three stages in which the plots were dealt with by the Society, namely, an allotment, followed by a sub‑licence, and a lease. It seems, therefore, that under the terms of its licence the Society was competent to lease out the plot in dispute. That this is what precisely the Society intended to do is clear from the advertise ments which were inserted by the Society in the Daily Newspaper "Dawn" on two successive dates, namely, the 24th and the 25th of January 1950, in pursuance to its Resolution No. 6‑B dated the 14th January 1950. In these advertisements applica tions were invited for leases of two plots of land, about three, acres each, situate in Block Nos. 2 and 6 of the Society. While objecting to the continued possession, of the plaintiffs the Society had alleged that they had not paid the rent due to the Society. All these circumstances go to show that although the Society was a licensee from the Government in respect of the land placed under its control, yet in its own turn it had the authority, and was in practice using that authority, to grant leases to its members and others. The lease in question cannot, therefore, he held to be ultra vires of the powers of the Society.

23. As regards the objection that the plot being an amenity plot it could not be leased out for a commercial purpose, suffice it to say that by its Resolution dated the 10th of July 1951 (Exh. 15) the Society had decided that no premium should be demanded for the nursery as it was in the nature of a public amenity, and a recommendation to this effect vas made to the Works Division of the Society. Apart from this Resolution of the Society by which. it is bound, it is clear that the provision of a nursery for green plants is indeed in .the nature of a public amenity for any building , estate, and a nursery would not lose that character simply by virtue of the fact that its leasing out fetches some rent for the Society, or that the person running the nursery is able to make some profit in the bargain. There was thus no contravention of any of the conditions of the Society's licence or of its bye‑laws in leasing out the plot in dispute for a nursery, as it continued to be in the nature of a public amenity. It may be stated that by an earlier Resolution dated the 14th of January 1950 the Society had resolved to have two nurseries, one in Block No. 2 and the other in Block No. 6, and, therefore, the Society cannot now be permitted to turn round and repudiate these Resolutions, which were passed much earlier than, the creation of the disputed lease.

24. Coming to the last leg of the argument regarding the powers of the society, it is true that the late Altaf Hussain was not a Central Government employee but was only the father of one such employee, namely, Aftab Hussain (P. W. 1), and ordinarily he would not be entitled to the allotment of lease of a plot under the Society. However, there does not appear to be any specific bye‑law of the Society preventing an allotment or lease in favour of a non‑member. Bye‑law 7 deals with eligibility for membership, but it does not deal with the question of allotments. Mr. Khairi, the Honorary Secretary of the Society, admitted that non‑members had obtained allotments of plots, and that commercial plots had been sold to such persons by public auction. It was also submitted that Condition No. 2 of the Society's licence referred to residential plots. The public advertisements to which we have referred clearly showed the intention of the Society to grant leases in favour of non‑members. Finally, eve find that in a. report submitted by an Enquiry Committee set up by the Society to investigate into the alleged irregularities committed by the then Secretary Mr. Imam and others, it is stated that the Registrar. Co‑operative Societies, had decided that non‑Government servants could not be treated as members of the Society, but would be regarded as allottees, and the Managing Committee was competent to revise the rate of development charges recoverable from these persons copy of this report has been placed on the record as Exh. 11 (on page 211 of the file). It is dated the 5th of October 1954 and clearly shows that out only had other allotments and leases been made in favour of non‑Government servants, but that the Registrar, Co‑operative Societies, who was the officer supervising the affairs of the Society, had accepted such allotments or leases and had allowed them to continue on certain terms. In the face of these facts it can hardly be said that the Society was not competent to grant the lease in favour of a person who was not an employee of the Central Government. He may not have been eligible to become a member of the Society, but there `was nothing in law, or in the practice of the society, to prevent him from acquiring the lease in question.

25. Having found that it was within the powers of the 'Society to grant the lease in dispute, we now take up the question whether the then Secretary of the Society, namely, lair. Imam, acted in excess of the powers delegated to him by the Society. The contention on behalf of the Society is that all allotments/leases had to be approved by the Managing Committee of the society and the Secretary as such bad no powers whatsoever to enter into any contracts. It is submitted that the allotment/lease in dispute was never approved by the Managing Committee and it was a unilateral act of the then Secretary, by which the Society was snot at all bound.

26. The Society is registered under the Bombay Co‑operative Societies Act VII of 1925 as applicable to the then Karachi Federal B Area. It has framed bye‑laws for regulating its business and the g powers of its officers. Bye‑law 50 deals with the office of the Secretary and, among other things, it is laid down that he shall carry on the correspondence of the Society, it is also prescribed S, that the Secretary shall in all things act in the discharge of his duties under the direction and control of the Committee. The bye‑law does not specifically confer any power on the Secretary to F enter into contracts on behalf of the Society: This subject is dealt with in Bye‑laws 53 and

54. Clause (h) of bye‑law 54 specifically authorises the Committee "to enter into all contracts for the Society and settle the terms thereof". Bye‑law 58 empowers the Committee to delegate any of its powers to one or more sub‑committees of its own members who have to act, in exercising those powers, under the instructions and regulations given to them by the Committee. From these bye‑laws it does appear that the Secretary as such does not enjoy any powers to enter into contracts or leases on behalf of the Society, but is the officer who is empowered to enter into correspondence on behalf of the Society.

27. However, it is contended on behalf of the plaintiffs that the particular Secretary concerned, namely, Mr. Imam, had been given wide powers to manage the affairs of the Society. By a Resolution passed by the Managing Committee on the 1st of June 1952 (Exh. 16) it was resolved as under:‑ "The Chairman proposed that Mr. Imam be elected as a member of the Managing Committee to fill the existing vacancy so as to bring the total membership to

20. This was agreed to. He further proposed that Mr. Imam be appointed Honorary Secretary of the Society with a conveyance allowance of Rs. 200 per month to help him in the discharge of his duties. The proposal was approved. Lastly the Chairman proposed that the Honorary Secretary should, in addition to the duties mentioned in Rule 60, be entrusted with the responsibility for supervision of all development works and management of the affairs of the Society under the general control and guidance of the Managing Committee. The proposal was approved."

28. It will be seen that the Resolution is in very wide terms indeed, and it appears that it was so interpreted, by Mr. Imam and he did exercise all the powers of the Managing Committee for carrying on the business of the Society. That he did so is very much evidenced by another Resolution passed by the Managing Committee of the Society on the 10th of Septem ber 1953 (Exh. 17). It would be instructive to reproduce here the terms of this Resolution dealing with the resignation of the Honorary Secretary and appointment of his successor:‑ "The resignation tendered by the Honorary Secretary was considered by the Managing Committee along side their resolution dated 1‑6‑1952 by which Mr. Imam was appointed Honorary Secretary. The Managing Committee while appreci ating the services rendered by the Honorary Secretary to the Society considered that it was neither legal nor advisable to invest him or any functionary of the Society with `absolute powers'. The Managing Committee, therefore, authorises the Chairman to inform the Honorary Secretary that he might reconsider his resignation subject to the following:‑ The Honorary Secretary without the previous approval of the Managing Committee:‑ (a) shall not make allotments of plots or grant extension of the existing areas in favour of the allottees, (b) shall not enrol new members, (c) shall not change the lay‑out plan sanctioned by the Government, (d) shall not interfere with the execution of the development schemes approved by the Managing Committee, (e) shall not pass any order orally or in writing in contra vention of the rules, bye‑laws or decisions of the Managing Committee, (f) shall exercise financial powers only as hereafter defined by the Managing Committee, (g) shall not enter into any agreement or contract unless so authorised under the rules or bye‑laws, and (h) shall generally be subject to the guidance of the Chair man . . . . . ".

29. During the course of a lengthy statement the existing Secretary of the Society, namely, Mr. Khaid (D. W. 1), gave the impression that although Mr. Imam had not been given the powers of making allotments and entering into contracts etc., yet he did exercise those powers, as during the relevant period not a single allotment appears to have been put up to the Manag ing Committee for approval. With regard to commercial plots it was specifically admitted by Mr. Khairi that Mr. Imam was exercising all the powers in practice. By two Resolutions passed on the 7th of August 1952 and on the 18th of August 1954 all allotments made by the Secretary were approved, but the allotment in favour of Altaf Hussain deceased was revoked by a Resolution passed on the 16th of November 1954. It thus appears that the allotment/lease in dispute was the only transaction to which objection was taken by the Committee.

30. From the resolution‑and the other actions of the Manag ing Committee as outlined in the preceding paragraphs, it is clear that the then Honorary Secretary was given very wide powers by the Managing Committee to supervise and manage the affairs of the Society, and these powers included the allotment and leasing out of residential as well as commercial plots to members and non‑members alike. Although the powers of the Secretary are specified in Bye‑law 60 of the Society, yet delegation of the powers of the Managing Committee permissible under Bye‑law. 58, which lays down that "the Committee may delegate any of the powers hereby given to it to one or more sub‑committees of its own members . . . . " This bye‑law then lays down that "the Meetings and proceedings of such sub‑committees consisting of two or more members shall be governed by the procedure herein contained for regulating the meetings and proceedings of the Committee so far as the same are applicable thereto . . . . ." As we read the rule, it is capable of being interpreted to mean that the delegation can be to a sub‑committee which may consist of one member alone. The reference in the second part of this bye‑law to the procedure to be observed at the meetings and proceedings of the sub‑committees consisting of two. or more members does not appear to us to control the opening part of this bye‑law, as thought by the learned Judge in Chambers when he expressed the view that a sub‑committee could consist of only two or more members. 7 his limitation as to the membership has reference only to the conduct of the proceedings of the sub committees, and does not mean that the sub‑committee must in every case consist of two or more members. If it does consist of two or more members then the proceedings would be conducted on the same lines as those of the Managing Committee itself. 7 hat the term Committee can be used even for an individual is clear from the observations appearing on page 534 of Stroud' Judicial Dictionary (Third Edition). While defining the term Committee it is stated, inter alia, that the term means an individual, or body to which others have committed or delegated a particular duty, or who have taken on themselves to perform it, in the expectation of their act being confirmed by the body they profess to represent or act for. A similar position emerges from Regulation No. 91 contained ins Table A of the 1st Schedule to the Companies Act, 1913, which lays down that "the Directors may delegate any of their powers to Committees consisting of such member or members of their body as they think fit; and any committee so "formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on them by the directors". It will be seen, therefore, that the Managing Committee and the Society could delegate all or any of its powers, under its Bye‑law 58, to a one‑man Committee consist ing of its Honorary Secretary. It appears that this was indeed done by the Managing Committee by its resolution dated the 1st of June 1952 which was, however, subsequently rescinded by the Managing Committee on the 10th of September 1953. In these circumstances, we are of the view that the lease granted by the then Honorary Secretary to Altaf Hussain was not only within the powers of the Society but also within the powers of the Secretary himself as delegated to him by the Managing Committee at the relevant time.

31. Assuming, however, that either there was no delegation of the necessary powers in favour of Mr. Imam, or that the delegation was not valid on account of its inconsistency with any rule or bye‑law of the Society, then the transaction appears to be saved by what is known as the doctrine of "indoor manage ment". Broadly and briefly stated, this doctrine is to the effect that persons contracting with a company and dealing in good faith may assume that acts within its constitution and powers to have been properly and duly performed and are not bound to inquire whether acts of internal management have been regularly one. We have already held that it was within the competence of the Society to grant the lease in question for an amenity plot. The late Altaf Hussain was not a member of the Society and was accordingly entitled to act on the communications regularly received by him from the Secretary of the Society, as the Secretary was clearly entitled, under Bye‑law 613, to enter into correspondence on behalf of the Society. Altaf Hussain was not required to inquire as to whether in fact the Society had approved the terms which were being offered to him in writing by the Honorary Secretary of the Society. It will be recalled that considerable' correspondence had passed between Altaf Hussain and the Honorary Secretary of the Society before the final document Exh. 41 was issued embodying the terms of the lease. These letters are on the file as Exhs. 39, 40, 71 and 72.

32. The doctrine to which we have just referred is succinctly stated on p. 430 of Halsbury's laws of England (Third Ed.), and in amplification thereof it is stated on page 431 that "a company which has appointed a manager of its business is bound by contracts made by him in the usual course of the business, although sufficient powers have not in fact been delegated to him". The same position has been summed up on page 55 of his book on Indian Company law (Ninth Ed.) by K. M. Gosh by stating that: "People dealing with a company are fixed with notice of any limitations of the powers of the company contained in the statute under which it is incorporated or in the memorandum of articles of association but if it is shown that a particular act was ostensibly authorised by them, persons dealing with the company are not concerned to see that the company has put itself into a position to exercise its powers properly. Outside parties are not concerned with the internal management of the company. They are not concerned to see that there was a proper quorum of directors present, or that persons who are apparently directors had in fact been validly appointed, "those are matters of internal management".

33. In Dehra Dun Mussorie Electric Tramway Co. Ltd. and another v. Jagmandar Dass and others (A I R 1832 All. 141) a Division Bench observed that: "a company is liable for all the acts done by its directors even though unauthorized by it, provided such acts are within the apparent authority of the directors and not ultra vires of the company. Persons dealing bona fide with a managing director are entitled to assume that he has all such powers as he purports to exercise if they are such powers which, according to the constitution of the Company, a managing director can have." A similar view finds mention in British Thomson Houston Company Ltd. v. Federated European Bank Ltd. (1932 (2) K B 176), as well as in P. V. Demadra Reddi and another v. Indian National Agencies Ltd. (A I R 1946 Mad. 35).

34. However, the learned counsel for the Society drew our attention to two English cases to show that there were certain exceptions to the rule of "indoor management", as stated in the various authorities and books noticed by us in the preceding paragraphs. In Kredit Bank Cassel G. M. B. H. v. Schenkers Ltd. and others (1927 All E L R 421) it was observed that: "where a company has an article empowering the directors to delegate their authority, anybody dealing with the company without notice of what has actually happened is entitled to say that the article is of itself notice and that such a person must be presumed to have notice of the existence of the article, and a stranger dealing with a company has a right to assume as against the company that all matters of internal manage ment have been duly complied with. But that doctrine only applies to irregularities and not where a document to which it is sought to be applied is a forgery. Accordingly where the manager of the local branch of a company without authority express or ostensible, drew for his own purposes bills in the name of the company in circumstances which amounted to forgery of the bills, which were dishonoured by the acceptors, the company was not estopped by the above doctrine from repudiating liability on the bills, and holders who had discounted the bills were not entitled to recover from the company. In the second case, namely, South London Greyhound Racecourses Ltd. v. Wake (1930 All E L R 496), it was held that: "the seal of the plaintiff‑company having been affixed to the certificate without the authority of the company, the certificate was a forgery and the company was not estopped from denying its validity." It will be seen that both the cases relied upon by the learned counsel for the Society in fact confirm the doctrine of "indoor management", and only point out that the benefit of this doctrine cannot extend to cases of forgery and fraud.

35. This brings us to a consideration of the allegation made on behalf of the society that the transaction is tainted with fraud committed by the then Honorary Secretary on the Society and its Managing Committee. The particulars of the fraud as set out in paragraph 6 of the written statement of the Society, ace to the effect that it was false to allege that the case of Altaf Hussain was at an time considered or reconsidered by the society, that the land in dispute had been ear‑marked as an amenity plot, that Mr. Imam kept the whole matter a secret from the Chairman and the Managing Committee of the Society and he wrote letters to the plaintiff to create evidence in his own favour, and ha did not follow the pro cedure as adopted in the case of Green Nursery for which tenders had been invited. Lastly, it is alleged that the terms offered to Altaf Hussain were not beneficial to the Society.

36. Even a plain reading of these allegations is enough to show that they are merely in the nature of procedural irregularities and do not in any manner show the commission of any fraud by the Honorary Secretary. It was admitted by Mr. Khairi, the Secretary of the Society, during the proceedings of the suit, that the letters written to the late Altaf Hussain hid emanated from the office of the Secretary of the Society, and there could thus be no question of any secrecy about this matter. In fact the whole question of the establishment of nurseries for the area of the Society was considered by the Managing. Committee in 1951, as already stated, when the two leases were advertised. In a notice (Exh. 70) recorded on the 20th of February 1951 Mr. G. A. Madni a member of the Managing Committee, had observed that "the establishment of a nursery would be a good thing for the Society, 'in that it would encourage the members to consider it worth‑while to start construction of houses. With the establishment of a Nursery not only would there be pleasant greenery but also the market value of the land around would go up." Mr. Madni was dealing with the leasing out of the land to the other Nursery under the name and Style of Green Nursery, and proposed that the rant payable by the Nursery should be as follows: (a) First year .No rent. (b) 2nd and 3rd years Rs. 200 per acre. (c) 4th and 5th year .. Rs. 300 per acre. He suggested that on the expiry of the period of five years a new agreement should be negotiated between the parties and that water should be supplied by the Society on a no profit no loss basis. The proposals made by Mr. Madni were acted upon by the Society, as already mentioned by us in paragraph 8 above. Now, in the present case, we find that the terms offered by Mr. Imam to the deceased Altaf Hussain are comparable to the terms which had been approved by the Managing Committee for the other Nursery. From the negotiations which took place between the Honorary Secretary and Altaf Hussain, as evidenced by the correspondence which passed between them, it is clear that the Society was not finding it easy to lease out the Nursery in dispute, and this fact had necessitated negotiations between the Society and the lessee. In these circumstances it is difficult to hold that there was any fraud or secrecy on the part of the Honorary Secretary in leasing out this plot to Altaf Hussain, or that the terms offered to Altaf Hussain were not beneficial to the Society. The mere fact that Mr. Imam acted in this matter without obtaining specific instructions from the Managing Committee would not amount to fraud, although it may amount to an irregularity in the light of the internal procedure of the Society. We have already stated that the intention of‑ the Society to set up two Nurseries had been clearly and publicly advertised in the press, and Mr. Imam only followed up the matter by finalizing the lease in favour of Altaf Hussain.

37. It was next contended on behalf of the Society that the contract was without consideration. The main emphasis in this behalf was on the fact that the late Altaf Hussain had not been called upon to pay premium, as was usual in the case of commercial plots. We consider that this conten tion has been rightly repelled by the learned Single Judge by stating that the terms embodied in Exhs. 40 and 41 clearly show that the lessee was to pay rent at a specified rate for different periods of the lease, and he was also to supply plants to the Society at a concessional rate, and on ceremonial occasions he had to supply decorative plants free of charge. In the presence of all these terms it would hardly be said that the contract was without consideration. On the question of the payment of premium no evidence was led to show that even for amenity plots the society had been charging premium under any bye‑law or established practice. The absence of premium would not, therefore, make the transaction void for want of consideration.

38. The last contention with regard to the validity of the contract was that it had not been made in the prescribed form and manner, nor had possession been delivered in accordance with the Society's procedure. The present Secretary of the Society admitted in cross‑examination that although forms of sub‑leases and sub‑licences had been prescribed by the Society in respect of commercial plots, yet no separate form had been prescribed for the amenity plots. He added that for the Green Nursery form was specially prescribed by the Managing Committee. but no general form was prescribed for the Nurseries. From these admissions of Mr. Khairi it is clear that there is hardly any force in the contention that the prescribed form and procedure were not observed while granting the present lease. As regards the question of possession, we have dealt with this matter elsewhere and have pointed oat that the possession was delivered to Altaf Hussain by an officer of the Society in pursuance to the lease in dispute.

39. Our conclusions on the different aspects of the case may now be summarised. The setting up of two Nurseries in Blocks 2 and 6 of the area of the Society as a part of the amenities to be offered to the members, was approved by the Managing Committee of the Society by a resolution passed on the 14th of January 1950, and the matter was accordingly advertised in the Press on the 24th and 25th of January 1950. The leasing out of one of the plots on certain terms was approved by the Managing Committee on the 30th of April 1951, but the question of leasing out of the other plot, namely, the one now in dispute, could not be finalised at that time, with the result that the matter fell to be dealt with by the then Honorary Secretary Mr. Imam. This particular Secretary was given extensive powers to manage the affairs of the Society by a resolution passed by the Managing Committee on the 1st of June 1952, and these powers were subsequently withdrawn by another resolution dated the 10th of September 1953. The lease in dispute was negotiated by Mr. Imam, during the period he enjoyed these wide powers as a delegate of the Managing Committee of the Society. In these circumstances, the contract entered into by the Honorary Secretary with the late Altaf Hussain, the predecessor of the plaintiffs, was intra vires of the powers conferred on him; and even otherwise it would be binding on the Society as an act of internal management, for it was within the competence of the Society to enter into this lease for the purpose of providing an amenity for its members. The lessee was not required to enquire whether the necessary powers had indeed been delegated to the Honorary Secretary by the Managing Committee. He was entitled to act on the communications addressed to him by the Honorary Secretary who was the officer, authorised under the bye‑laws of the Society, to enter into correspondence with outsiders on behalf of the Society. The terms of the lease are comparable to the lease granted to the other Nursery functioning under the name and style of Green Nursery, and thus there was no question of fraud or want of consideration.

40. In view of these facts, it is clear that either an agreement to lease, or a contract of lease came into existence‑ between the parties. The agreement by itself was not required to be registered but the lease was so required. The want of regis tration of the lease does not make it altogether inadmissible in evidence in view of the provisions contained in the amended section 49 of the Registration Act, which would have retro spective application in a procedural matter involving a rule of evidence. Even otherwise clause (c) and the proviso to the unamended section 49 would permit the use of the unregistered document for the purpose of section 53‑A of the Transfer of Property Act. It is established that possession was delivered to the plaintiff Altaf Hussain under the lease in question, and in these circumstances, it is immaterial in whether Altaf Hussain comes to Court as a plaintiff or is merely defending an action as a defendant in the suit, for in both cases he would be entitled to use the unregistered lease as a shield to prevent the transferor from enforcing any rights except those arising under the lease.

41. In this view of the matter, no occasion arose for the Society, to sue for the recovery of the possession of the plot and of damages on the allegation that Altaf Hussain was a trespasser in unauthorised possession of the property. The plaintiff's, suit was, therefore, rightly decreed and that of the Society dismissed by the learned Judge in Chambers. Both the appeals filed by the Society accordingly fail and are hereby dismissed with costs. A. E. Appeal dismissed.