NDLI: Ramnath Agrawal & Ors. Vs. Food Corporation of India & Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Agreement when not a lease Transfer of Property Act 1872
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Transfer of Property Act, 1882 (4 of 1882)
Case(s) Referred	Referred Case 0 Referred Case 1
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Transfer of Property Act, 1872 – s.105 – Agreement when not a lease – In 1976, Food Corporation of India (‘FCI’) invited offers for construction of godowns on the lands of interested parties and subsequently taking over possession of the godowns on lease – Appellants’ offer accepted – Agreement dated 16.12.1976 entered between the parties – Appellants had to construct six godowns, to be taken over by FCI on rent – Appellants informed FCI that the construction of godowns was complete and the possession be taken over – Competent officer of FCI on inspection recommended taking over the possession of only four out of six godowns and pointed out defects in respect of remaining two – Appellants sought damages from FCI on account of non-realization of rent towards the remaining two godowns – Demand not complied with – Appellants filed suit for damages – Decreed – High Court allowed appeal filed by FCI – Held: For an agreement to be considered as a lease and not as an agreement to lease it is important that there must be an actual demise of property on the date of the agreement – Agreement dated 16.12.1976 was not a lease but simply an agreement giving rise to contractual obligations – Terms and conditions clearly demonstrate that the execution of the lease deed was contingent upon the construction of godowns being completed and the same being approved by issuance of completion certificate by the Competent Authority of FCI – Appellants did not dispute the facts that the officers of FCI refused to take over the possession of the two godowns in view of the defects pointed out by them and the said defects were never rectified – As per Clause 6 of the agreement, in case of defects, the findings of the officers of FCI were to be final and there was no obligation to take such structure on lease – High Court rightly discarded the evidence of PW-1, 2 & 5 (who issued certificates in respect of completion and fitness of the godowns) as neither the inspection was carried out by an independent agency in presence of the representatives of the appellants and respondents nor the same was in accordance with the specifications laid down by FCI in the agreement – Therefore, no rent was payable in respect of the two disputed godowns as they were not completed as per FCI’s specifications and the possession thereof were not taken over by FCI at the time of filing of the suit by the appellants – No reason to take a view different from the one taken by the High Court.
Judge	Hon'ble Mr. Justice Krishna Murari
Neutral Citation	2020 INSC 395
Petitioner	Ramnath Agrawal & Ors.
Respondent	Food Corporation Of India & Ors.
SCR	[2020] 4 S.C.R. 552
Judgement Date	2020-05-13
Case Number	1305

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Ramnath Agrawal & Ors. Vs. Food Corporation of India & Ors.

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Ramnath Agrawal & Ors. Vs. Food Corporation of India & Ors.

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