Judgement Appeal (No. 96 of 1931) from a decree of the High Court in its appellate jurisdiction (August 4, 1930) reversing an order of that Court in its original jurisdiction (December 23, 1929). 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 16 The appeal arose out of a claim by the respondent in the liquidation of M. E. Moolla Sons, Ld., to rank as a creditor in respect of damages for breach of an alleged contract of July 27, 1921, to purchase immovable property. The trial judge dismissed the claim, holding on the facts that M. E. Moolla. the purchaser named in the contract, had not acted as agent for the Company. Upon appeal that decision was reversed and the proof admitted. The facts appear from the judgment of the Judicial Committee. 1932. Feb. 1, 2, 4, 5. Upjohn K.C. and Ramsay for the appellant liquidator. Having regard to clauses 2 and 4 of the contract ss. 17 and 49 of the Indian Registration Act prevented the document from being admissible in evidence, or indeed operative, in the absence of registration Dayal Singh v. Indar Singh (( 1926) L. R. 53 I. A. 214.); Skinner v. Skinner (( 1929) L. R. 56 I. A. 363.); Sundarachariar v. Narayanna Ayyar (( 1931) L. R. 58 I. A. 68.); Khoo Sain Ban v. Tan Gnat Tean.(( 1929) I. L. R. 7 R. 234.) The amendment of s. 49 by Act XXI. of 1929, s. 10, sub-s. 3 (6), shows that apart from that provision, made after the present claim, registration was required even though the document was used only in proof of the agreement to purchase. This point being one of law the appellant can rely upon it, although it was not put forward in India Connecticut Fire Insurance Co, v. Kavanagh.([ 1892] A. C. 473, 482.) Apart from the above submission, the trial Court was right upon the facts of the case. Dunne K.C. and Pennell for the respondent. The pro ceedings did not affect immovable property. Even if some provisions of the agreement fell within s. 17 of the Registration Act they were wholly collateral. Dunne K.C. and Pennell for the respondent. The pro ceedings did not affect immovable property. Even if some provisions of the agreement fell within s. 17 of the Registration Act they were wholly collateral. That being so the agreement was admissible although "unregistered Vyravan Chetti v. Subramanian Chetti (( 1920) L. R. 47 I. A. 188,); Imperial Bank of India v. Bengal National Bank.(( 1931) L. R. 58 I. A. 323.) The decision in Dayal Singhs case (1), where the suit was for specific performance, should be confined to the precise point decided. The proviso added to s. 49 of the Indian Registration Act by s. 10, sub-s.3 (6), of Act XXI. of 1929 merely gave statutory effect to the view which had been uniformly expressed in India that though an agreement contained provisions which were unenforceable in the absence of registration it was admissible for collateral purposes Ulfatunissa v. Hosain Khan (( 1883) I. L. R. 9 C. 520 (F. B.).); Bengal Banking Corporation v. Mackertich (( 1884) I. L. R. 10 C. 315.); Mugniram v. Gurmukh Roy (( 1899) I. L. R. 26 C. 334.); Vani v. Bani (( 1895) I. L. R. 20 B. 553.); Pulaka v. Thirupalli.(( 1909) I. L. R. 32 M. 410 (F. B.).) Further, the agreement was a document admitted by the parties; that being so the respondent was not called upon to prove it Burjorji v. Muncherji. (( 1880) I. L. R. 5 B. 143.) The facts before the Board raise a presumption that the course of the proceedings excluded the point; if they are insufficient so to determine, the point cannot now be taken for the first time. In any case upon the evidence the judgment appealed from was right on the facts. Upjohn K.C. replied. March 3. The judgment of their Lordships was delivered by LORD TOMLIN. This appeal is concerned with the question whether a creditors proof lodged by the respondent in the liquidation of the Company whose liquidator is the appellant and rejected by the liquidator was properly so rejected. On December 23, 1929, the trial judge on the original side of the High Court of Judicature at Rangoon held that the proof was rightly rejected. On August 4, 1930, this decision was reversed on appeal to the appellate side of the Court. On December 23, 1929, the trial judge on the original side of the High Court of Judicature at Rangoon held that the proof was rightly rejected. On August 4, 1930, this decision was reversed on appeal to the appellate side of the Court. The proof in question was for Rs.63, 219.15.0, damages alleged to have been incurred by the respondent by reason of the failure of the Company to complete the purchase of property agreed to be sold by the respondent by an agreement dated July 27, 1921. 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 17 The only question in issue or debated at the hearing before the trial judge, or on the appeal, was whether the agreement for sale (on the face of which the purchaser was one M. E. Moolla) had been entered into by Moolla on his own account or whether the Company was the undisclosed principal of Moolla in respect of such agreement. The trial judge held that Moolla had entered into the agreement as principal and had afterwards transferred the benefit of it to the Company and that therefore the Company was under no liability to the respondent. The appellate Court held that the Company was the undisclosed principal and was liable to the respondent and that the proof had been wrongly rejected. Against this decision the liquidator appealed to His Majesty in Council and before their Lordships Board raised the contention that the agreement of July 27, 1921, required registration under the Indian Registration Act, that it had not been registered and that as it had not been registered it could not be used for any purpose whatever and ought to be ignored by the Court with the result that any claim for damages based by the respondent upon breach of that agreement must necessarily fail. The questions therefore which arise for their Lordships consideration are (1.) Ought the appellant to be allowed to raise now for the first time before the tribunal of last resort the question as to the registration of the agreement ? (2.) If the question as to registration can now properly be raised (a) did the agreement, which admittedly was not registered, require registration, and (6) if it did require registration, what is the effect of non-registration in regard to the respondents right to claim damages under the agreement? (2.) If the question as to registration can now properly be raised (a) did the agreement, which admittedly was not registered, require registration, and (6) if it did require registration, what is the effect of non-registration in regard to the respondents right to claim damages under the agreement? (3.) If the question as to registration cannot now be properly raised, or if it can be properly raised but upon consideration of the merits of the question, it is held that the non-registration of the agreement does not preclude the respondent from putting forward a claim for damages under the agreement, whether the Company was or was not the undisclosed principal of M. E. Moolla in regard to the agreement? To enable these questions to be considered, it will be convenient to state the facts so far as they are proved or admitted. The Company was formed under the Indian Companies Act, 1913, on January 21, 1921, as a private company. Clause III. (6) of the memorandum of association enabled the Company to acquire by purchase, lease, exchange or otherwise land, buildings, and hereditaments of any tenure or description in Burma. By articles of association 115 and 116 (2.) the directors had power to purchase for the Company any property which the Company was authorized to acquire. At a meeting of the board of directors held on February 1, 1921, Moolla was appointed managing director, with power to manage the business of the Company as he thought fit. He was further authorized to purchase and sell any property (movable or immovable) as he thought best in the interest of the Company. The issued share capital of the Company stood as to about 90 per cent, thereof in the name of Moolla, and as to the remainder in the name of his mother Mariam Bee Bee. The trial judge said " the Company was essentially a one man Company, being for all practical purposes Moolla incorporate/ The Companys office was also Moollas office. The agreement of July 27, 1921, was made between the respondent (described as the vendor) and Moolla (described as the purchaser) and contained no reference to the ompany. Omitting formal parts, the agreement was as follows— 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 18 "1. The agreement of July 27, 1921, was made between the respondent (described as the vendor) and Moolla (described as the purchaser) and contained no reference to the ompany. Omitting formal parts, the agreement was as follows— 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 18 "1. The vendor agrees to sell to the purchaser and the purchaser shall purchase from the vendor the properties described in the schedule herein under written measuring 12-54 more or less at or for the price of Rs. 12,500 per acre. 1. 2. That the purchaser had paid to the vendor Rs. 10,000 as earnest money, the receipt of which the vendor doth hereby acknowledge. 2. 3. That the purchaser agrees to complete the conveyance within three months from July 12, 1921, by paying the balance of the purchase money calculated at the rate aforesaid save and except a sum of Rs. 1, 00,000 which sum is to remain outstanding as in the clause next provided. 3. 4. The vendor agrees to keep the said balance of unpaid purchase money, namely, Rs. 1,00,000, invested with the purchaser for a period not exceeding three to five years as the purchaser may wish on the purchaser paying interest thereon at the rate of eight per cent, per annum payable monthly and the same secured by the equitable mortgage of the premises hereby agreed to be sold, that is, by the purchaser depositing the title deeds of the said premises including the conveyance in his favour with the vendor. 4. 5. That the vendor shall make out a good and clean title to the said premises and produce for inspection the title deeds as soon as required by the purchaser." The schedule contained a description of certain immovable property in Burma belonging to the respondent. The acreage is given as 12-54 acres, and on this basis the total purchase price under the agreement would be Rs. 1, 57,375. Upon the execution of the agreement Rs. 10,000 was paid to the respondent as earnest money. The respondent had no personal contact with Moolla in connection with the negotiation for or the execution of the agreement. She acted by brokers throughout. 1, 57,375. Upon the execution of the agreement Rs. 10,000 was paid to the respondent as earnest money. The respondent had no personal contact with Moolla in connection with the negotiation for or the execution of the agreement. She acted by brokers throughout. On December 31, 1921, the board of directors held a meeting, the minutes of which state that " the following properties were purchased by the managing director during the course of the year on behalf of the Company." A list of twenty-eight properties follows. The second on the list under date July 13, 1921, is the property, the subject of the agreement of July 27, 1921. Of the twenty-eight properties in the list, twenty-five had been bought in the name of the Company, three properties (including the respondents property) had been purchased in Moollas name and admittedly the two properties other than the respondents property had been purchased on the Companys behalf. On March 30, 1923, the purchase being uncompleted, the respondents brother-in-law wrote to Moolla, asking for the balance of the purchase-price, or at least Rs. 15,000. Moolla replied by executing four promissory notes in the respondents favour, for a total of Rs.40,000. On November 20, 1923, the respondent gave to Moolla a receipt for Rs.1000 in respect of interest. Further payments of interest were made up to February, 1927, but the purchase was never completed. Moolla at the trial admitted that Rs. 15,000 in respect of the promissory notes and all interest was paid out of the Companys funds. He alleged that the earnest money was paid by himself but refunded to him by the Company. He stated "that all the Companys books prior to 1924 were destroyed under his instructions, and that he had no books to show that the earnest money came originally out of his own moneys. He alleged that he had purchased the property on his own account 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 19 and had subsequently transferred the benefit of the agreement to the Company. He produced no document to evidence the alleged transfer. On April 6, 1927, a creditors petition was presented to wind up the Company, and an order for winding up was made on June 21, 1927, and one Hormasji was appointed liquidator. He produced no document to evidence the alleged transfer. On April 6, 1927, a creditors petition was presented to wind up the Company, and an order for winding up was made on June 21, 1927, and one Hormasji was appointed liquidator. Between the presentation of the petition and the making of the order on June 18, 1927, the respondent, at the instance of Moolla, filed in opposition to the petition an- affidavit prepared by Moollas clerk. In this affidavit she stated that she was a secured creditor of the Company for Rs.1, 31,137.8.0. This was the sum then calculated to be owing under the agreement of July 27, 1921. Moolla himself was declared insolvent on some date between April and June, 1927. His assets were practically nil. He did not enter the name of the respondent as a creditor in the schedule relating to his own affairs which it was his duty to file in the insolvency proceedings. What subsequently followed is not clear. The record before their Lordships Board contains an affidavit sworn by the liquidator on February 17, 1928, on an application which he made to the Court for directions. This affidavit was treated as his evidence at the trial, and at the trial no oral evidence was given by him. [The affidavit was set out. For the purposes of this report its contents sufficiently appear from the passage in the judgment which follows.] This statement purports to show payments made by the Company in respect of the agreement of July 27, 1921, to a total amount of Rs.66, 409.12.0, including Rs. 10,000 for earnest money paid by the Company on July 27, 1921, and Rs. 15,000 to satisfy one of the promissory notes given by Moolla, paid by the Company on July 7, 1923. The balance of the Rs.66,409.12.0 was made up of interest payments in respect of the period between April 1, 1923, and February, 1927. With regard to the exhibits C and D, reference has already been made to the material minutes of the directors meeting. The only letter of the respondents brother-in-law, N. N. Burjorjee, printed in the record, is one asking for payment of the Rs. 15,000, and carries matters no further Exhibits E and E 1 dealt with the powers of the managing director to purchase immovables, which have never been in dispute. The only letter of the respondents brother-in-law, N. N. Burjorjee, printed in the record, is one asking for payment of the Rs. 15,000, and carries matters no further Exhibits E and E 1 dealt with the powers of the managing director to purchase immovables, which have never been in dispute. It is, however, reasonably clear from the affidavit (1.) that the respondent had put in a proof of claim presumably on the same lines as that contained in her affidavit of June 18, 1927 ; (2.) that for the purpose of minimizing her claim to damages she had offered to take over the property at Rs.4500 per acre ; (3.) that the liquidator had neither admitted nor rejected her claim, but had applied to the Court for directions, putting in the agreement and pointing out that there was a question whether Moolla was principal or agent. The printed extracts from the official diary of the proceedings in the winding up contains the following passage— "February 28, 1928.—Doctor for Mrs. Burjorjee, Munshi for Company. Clark for Chartered Bank. Official Liquidator in person. Let the property mentioned in the application of the official liquidator be sold by public auction after due advertisement, with a reserve price of Rs. 56,000. No orders will be passed on the present application of the official liquidator till after the sale, and his proposal will be sanctioned thereafter if 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 20 Mrs. Burjorjee is still willing to abide by the terms of the arrangement. As regards Mrs. Burjorjees claim against the Company, it will be inquired into by me on March 12, 1928, unless before that date the official liquidator and Mr. Clark for the Company admit the claim. The sale may be held after the inquiry, and, if At the inquiry, I uphold Mrs. Burjorjees claim, she will be given leave to bid at the auction and set off the purchase price against her claim pro tanto." Their Lordships are informed, and both parties are agreed, that the property was in fact sold and the proceeds paid to the respondent. Presumably it was sold under the order referred to in the extract from the diary. It is however, obvious that no title could have been made without the concurrence of the respondent. Presumably it was sold under the order referred to in the extract from the diary. It is however, obvious that no title could have been made without the concurrence of the respondent. An agreement of some kind between the official liquidator and the respondent in relation to the matter seems therefore to have been essential, though the appellant does not admit that there was any such agreement. Having regard to the material before their Lordships Board there may well have been such an agreement upon the lines that, the existence of an agreement for purchase at Rs. 1,57,375 and non-performance of that agreement by the purchaser being admitted, the parties arranged to minimize damages by concurring in a sale of the property and in hanging the proceeds of sale to the respondent, the question whether the Company was the principal in respect of the agreement of sale being the only question left open for the decision of the Court. However this may be, the respondent subsequently amended her proof by giving credit for the purchase money, her claim being thus reduced to Rs.63, 219 a. 15. On July 16, 1929, the official liquidator rejected the claim, giving the following reason "I am not satisfied that the Company was the real contracting party. The contract is, therefore, not binding on and enforceable against the Company." On July 29, 1929, the respondent petitioned to have the decision of the official liquidator reversed. At the hearing of the petition the respondent gave oral evidence. Neither the official liquidator nor Moolla gave oral evidence.. The affidavit of the official liquidator already referred to was treated as his evidence, and a deposition of Moolla, made apparently at some earlier stage in the winding-up proceedings, was treated as his evidence. [The evidence-in-chief of Moolla [and passages from his cross-examination was set out.] Mrs. Burjorjee denied that she had refused to negotiate with the Company, and said in effect that she only knew of the Company in the matter some time after the agreement. The only matter debated before the judge who tried the petition was the question of fact whether the Company was in connection with the purchase the undisclosed principal of Moolla. The learned judge held that Moolla purchased on his own account. The respondent appealed. The question, and the only question, debated before the appellate side was that which had been debated below. The learned judge held that Moolla purchased on his own account. The respondent appealed. The question, and the only question, debated before the appellate side was that which had been debated below. The appellate side reversed the trial judge and held that the Company was the principal in the matter. Subsequently the appellant applied for a review of the judgment on the ground that exhibit B to his affidavit had been erroneous in so far as it showed the earnest money to have been paid out of the Companys funds on July 27, 1921, the books of the Company for 1921 having been destroyed and 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 21 there being, therefore, no evidence of such payment. The application for a review of judgment was rejected. On January 7, 1931, leave to appeal to His Majesty in Council was granted to the, appellant. In his application for such leave, the appellant for the first time raised the question of the non-registration of the agreement in these terms "This Honourable Court has omitted to take note of the fact that the agreement of sale of July 27, 1921, had not been registered and was thereby invalid and inoperative." The same point was raised in his case before their Lordships Board. The first question for consideration, therefore, is ought the applicant to be allowed at this stage to raise for the first time the point of non-registration? In Connecticut Fire Insurance Co. v. Kavanagh ([ 1892] A. C. 473, 480), Lord Watson, in delivering the judgment of their Lordships Board, said as follows "When a question of law is raised for the first time in a Court of last resort upon the construction of a document or upon facts either admitted or proved beyond controversy, it is not only competent but expedient in the interests of justice to entertain the plea. The expediency of adopting that course may be doubted when the plea cannot be disposed of without deciding nice questions of fact in considering which the Court of ultimate review is placed in a much less advantageous position than the Courts below. The expediency of adopting that course may be doubted when the plea cannot be disposed of without deciding nice questions of fact in considering which the Court of ultimate review is placed in a much less advantageous position than the Courts below. But their Lordships have no hesitation in holding that the course ought not in any case to be followed unless the Court is satisfied that the evidence upon which they are asked to decide establishes beyond doubt that the facts if fully investigated would have supported the new plea." Sect. 49 of the Registration Act, which states the results of non-registration is, so far as material, as follows "49. No document required by section 17 to be registered shall— (a) affect any immovable property comprised therein....or (c) be received as evidence of any transaction affecting such property...., unless it has been registered." Their Lordships are satisfied that there is nothing in the section cited when properly construed to compel the Court to take notice of the non-registration of an admitted document, unless at any rate such document must, if treated as effective, be the foundation of a judgment affecting immovable property comprised in such document. Here the agreement has been admitted throughout. Indeed, it was first put in by the appellant. Further, the proceedings do not in any respect affect any immovable property. The immovable property affected by the agreement long since passed out of the picture, and the only claim in these proceedings is a personal one for damages for breach of an admitted contract against an alleged undisclosed principal who denies he was a principal. Their Lordships, therefore, regard themselves as free to consider upon general principles whether the appellant ought to be allowed to raise the point of non-registration. They are satisfied that he ought not to be allowed to do so. It has already been pointed out that the circumstances in which the appellants petition founding these proceedings was launched are by no means clear. The parties are not agreed upon the facts. There are indications of a course of conduct or agreement on the part of the liquidator which would preclude him from raising any point in the proceedings except that as to the respective positions of the Company and Moolla in regard to the agreement of July 27, 1921. The parties are not agreed upon the facts. There are indications of a course of conduct or agreement on the part of the liquidator which would preclude him from raising any point in the proceedings except that as to the respective positions of the Company and Moolla in regard to the agreement of July 27, 1921. In this state of the evidence, it would not in their Lordships judgment be in accordance with the 5 Law. Rep. 59 Ind. App. 161 ( 1931- 1932) M. E. Moolla Sons, Limited V. Burjorjee 22 principles indicated by Lord Watson, in the judgment already cited, to take into consideration at this stage for the first time the point of the non-registration of the document. It becomes therefore unnecessary to consider the second question as to the necessity for registration. There remains the third and last question, one of fact, upon which the Courts below have differed—namely, was the Company the undisclosed principal of Moolla in relation to the agreement of July 27, 1921. Their Lordships are satisfied that the Company was the undisclosed principal of Moolla. All the contemporary documents support this view. There is nothing in Moollas conduct inconsistent with it. There is much in his conduct which, though not necessarily inconsistent with the other view, points strongly in the direction of his having acted as the Companys agent throughout. His own evidence was obscure and contradictory, and he was not seen in the witness box by the trial judge. In their Lordships opinion the learned judges of the appellate side reached a correct conclusion upon the issue of fact. In the result, therefore, the appeal fails and should be dismissed with costs. Their Lordships will humbly advise His Majesty accordingly.