( 1 ) THE order of the Rent Controller, shimoga City, Shimoga, rejecting the application for fixation of fair rent filed under S. 14 of the Karnataka rent Cotrol Act, 1961 (hereinafter referred as the Rent Act), by the national Textile Corporation Ltd. , is challenged in this revision petition filed under S. 50 of the Rent Act. ( 2 ) THE petitioner's case is as follows: the National Textile Corporation ltd , the petitioner is a Government of India undertaking. It has its office at New Delhi and Divisional Office at bangalore. The petitioner was on the look out for a suitable premises for opening a showroom in textiles at shimoga. Sri Malathesha Enterprises the first respondent. a proprietary concern at Shimoga, owned the premises known as 'sharada building. ' The first respondent offered the ground floor of this building measuring 20 x 80' to the petitioner on a rent of Rs. 3,100 per month. The petitioner agreed to take the ground floor at Rs. 3100 per month. The parties agreed that the period of lease should be for a period of five years. The lease deed was signed by the first respondent and sent to the petitioner for being signed by someone duly authorised in this behalf. The first respondent received a sum of Rs. 9300 by cheque on 29-3-1977 being three months rent in advance and put the petitioner in possession of the ground floor on 1-10-1977. According to the petitioner, the first respondent -had agreed to remove three partition walls in the ground floor to convert the entire ground floor into a big hall; but removed only one partition wall and the petitioner could therefore make use of only 600 square feet out of the total area of 1,600 Sq. feet taken can lease. The petitioner therefore complained that because of reduction of the floor area by nearly 1/3rd and the other relevant circumstances, the rent agreed to be paid was excessive and did not sign the lease deed but filed the petition for fixation of fair rent before the Rent Controller. ( 3 ) THE first respondent in his objections has stated that he had not agreed to remove the three partition walls as alleged by the petitioner and it is not possible to remove the walls without damaging the building. ( 3 ) THE first respondent in his objections has stated that he had not agreed to remove the three partition walls as alleged by the petitioner and it is not possible to remove the walls without damaging the building. It is also stated that the petitioner even before the execution of the lease deed, occupied he premises as it wanted to open a showroom immediately and there being no lease deed, there is no relationship of landlord and tenant between the parties. The 1st respondent therefore contended that the petition before the rent Controller for fixation of fair rent was not maintainable. ( 4 ) THE first respondent did not deny that the premises was offered for lease to the petitioner and the petitioner agreed to pay the rent at Rs. 3,100 p. m. It is also not denied that the lease was agreed to be for a period of five years. It is admitted that the first respondent has received Rs. 9300 by cheque on 29-9-1977 being three months rent in advance and only then put the petitioner in possession of the premises on 1-10-1977. ( 5 ) THE Rent Controller recorded a f nding that after protracted correspondence, the petitioner agreed to pay a rent of Rs. 3100 per month and the first respondent accepted the offer of the petitioner and the petitioner had also paid an advance of Rs. 9300 being three months rent in advance before occupation and then occupied the premises on 1-10-1977. He however held that as the petitioner did not execute the lease deed and had not made his position secure as a tenant by paying monthly rent, he was unable to recognise the petitioner as a tenant. He has also relied on the evidence of PWs. 1 and 2 which is to effect that the terms of the lease are only binding after the lease deed is signed by the Zonal Manager, it was only at the correspondence stage and the lease had not come into existence. ( 6 ) SRI Sundaraswamy, the learned counsel for the petitioner contended that the correspondence between the parties namely, the letter Ext. P-4 dated 7-9-1977 agreeing to pay a rent of Rs. 3100 per month, the reply of the petitioner dated 12-9-1977 Ex. ( 6 ) SRI Sundaraswamy, the learned counsel for the petitioner contended that the correspondence between the parties namely, the letter Ext. P-4 dated 7-9-1977 agreeing to pay a rent of Rs. 3100 per month, the reply of the petitioner dated 12-9-1977 Ex. P. 6, the payment of three months rent in advance to the first respondent by cheque on 29-9- 1977 and his client being inducted into possession on 1-10-1977 as also the notice got issued by the first respondent through the counsel on 7-1-1978 Ext. P-9 wherein it is admitted that the petitioner was in possession of the premises as a tenant on a rent of Rs. 3100 per month from 1-10-1977 and called upon to pay the arrears of rent, clearly establish that there was a concluded lease and the relationship between the parties is that of a landlord and tenant. He further contended that even if the lease for a period of five years is void as the same is not evidenced by a registered document even then his client would be a tenant at will as he was let into possession by the first respondent himself and therefore it is not open to the first respondent to contend that there is no relationship of landlord and tenant between the parties. ( 7 ) SRI T. S. Ramachandra, the learned counsel for the first respondent maintained that there was no concluded lease between the parties and it was only at the stage of correspondence and that it was so is admitted by PWs. 1 and 2 examined on behalf of the petitioner and therefore there is no relationship of landlord and tenant between the parties. He further maintained that a lease of the ground floor for a period of five years not being under a registered deed as required under S. 107 of the Transfer of property Act, is void and therefore there is no relationship of landlord and tenant between the parties. ( 8 ) ADMITTEDLY, in this case there is no lease deed evidencing the lease. The lease is for a period of five years on a monthly rent of Rs. 3100 per month. ( 8 ) ADMITTEDLY, in this case there is no lease deed evidencing the lease. The lease is for a period of five years on a monthly rent of Rs. 3100 per month. In anticipation of execution of the lease deed, the petitioner was le|t into possession by the first respondent on 1-10-1977 and before he was so put in possession, the first respondent received a sum of Rs 9300 being three months rent in advance. No lease however was executed but in the notice dated 7-1-77 got issued by the first respondent he recognised the petitioner as his tenant in occupation on a rent of Rs. 3100 per month and called upon the petitioner to pay the arrears of rent. ( 9 ) S. 107 of the Transfer of Property act reads:"107. A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of. immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession". Therefore there is a statutory prohibition for creating a lease of immoveable property for a period of five years by virtue of S. 107 of the Transfer of property Act. The lease of the ground floor for a period of 5 years otherwise than by a registered instrument is hit by Sec. 107 of the T. P. Act and is therefore void as contended by Sri ramachandra. Sri Sundaraswamy also does not dispute that in the absence of a registered document no lease of immovable property could be created for 5 years. But he maintained that even when The lease for 5 years is void because of the statutory prohibition under Sec. 107 of the T. P. Act, the relationship between the parties is that of a landlord and tenant. ( 10 ) THE nature and effect of such an entry into possession with the consent of the owner is stated in Hill and Redman's Law of Landlord and tenant (15th Edn.) in para 10 at page 35 as follows:" Like other tenancies, a tenancy at will arises by contract binding both lessor and lessee and the contract may be express or implied. In the case of an express tenancy at will a rent may be reserved. In the case of an express tenancy at will a rent may be reserved. In the case of an implied tenancy at will the acceptance of rent would generally make the tenant a tenant from year to year in the absence of any stipulation to the contrary. A tenancy at will is implied when a person is in possession by the consent of the owner and his possession is not that of servant or agent, and is enjoyed by virtue of any freehold estate or of any tenancy for a certain term. It is implied accordingly in a case of mere permissive occupation without payment of rent, and of this nature is the occupation by a dissenting minister of a house vested in trustees. It is also implied upon a mere general letting, unless there are circumstances showing an intention that the tenancy shall be from year to year, as where a yearly rent or a rent measured by reference to an aliquot part of a year is agreed to be paid. Similarly, a person who enters on land with the consent of the owner under a contract which does not immediately give him a definite interest in the land enters as tenant at will, for example, a purchaser who enters into possession of land pending the completion of the purchase, or an intending lessee who enters during negotiation for a lease, or under a lease which should be, but is not, under seal " ( 11 ) IN Woodfall on Landlord and tenant. (27th Edn.) Vol. I in para 672 at page 281, it is stated as follows: -''672. Entry under void lease. If a man enters under a void lease, he is a tenant at will under the terms of the lease in all other respects except the duration of time; and when he pays or agrees to pay any of the rent therein expressed to be reserved he becomes a tenant from year to yea upon the terms of the void lease, so far as they are applicable to and not in consistent with a yearly tenancy. " ( 12 ) IN Mulla's Transfer of Property act, 6th Edn. at page 681 it is stated as follows:-"consequence of non-registration.- a lease is void if unregistered where registration is compulsory under this section. " ( 12 ) IN Mulla's Transfer of Property act, 6th Edn. at page 681 it is stated as follows:-"consequence of non-registration.- a lease is void if unregistered where registration is compulsory under this section. But if the tenant is in possession under an unregistered lease and the landlord recognises his right by acceptance of rent, there is a presumption of a lease under S. 106 and a notice to quit before eviction is necessary. But though the unregistered lease is void as a lease, the person in possession under such a document may put it in evidence to project his possession under S. 53a. " ( 13 ) WHERE the tenants take possession under a document which clearly purports to be a lease for a term of 20 years but not duly stamped and registered, the tenants are only held to be tenants at will in Ramachandra Agarwala v. Syameswari Dasya AIR 1925 Cal. 1171. ( 14 ) IN Jhalku Singh v. Chandrika Singh air 1961 Raj. 17. it is held that-"a person entering upon land with the permission of the landlord under a void lease acquires the right of a tenant-at-will. If rent is paid, the lease becomes, in accordance with S 106 of the Transfer of Property Act, a yearly or a monthly lease according to the purpose for which it is taken" ( 15 ) IN Chimanlal Dalchand v. Maharajadhiraj of Kishangarh (3), a similar question came up for consideration. In chimanlal Dalchand's case (3) defendants 1 to 3 took a lease of a cinema house from the plaintiff for a period of five years on a rent of Rs. 2500 a month. After running the cinema for some time, on 7-8-1948, these defendants handed over the premises to defendants 4 and 5 for running the cinema in question; and when in April 19-19, there was a fire in the cinema, defendants 4 and 5 abandoned the cinema house and the plaintiff took possession of the premises. It was no disputed that a sum of Rs. 15,000 was paid in advance by the defendants to the plaintiff at the time of lease by way of rent for a period of six months. The plaintiff filed a suit for recovering rent from 1-11-1948 to 16-4-1949 against all the defendants. It was no disputed that a sum of Rs. 15,000 was paid in advance by the defendants to the plaintiff at the time of lease by way of rent for a period of six months. The plaintiff filed a suit for recovering rent from 1-11-1948 to 16-4-1949 against all the defendants. The defendants did not deny that they entered into possession of the cinema house in question by virtue of the lease; but they contended that as the lease had not been registered, therefore, the lease being for a term of years exceeding one year, the document was inadmissible in evidence. They therefore contended that there was no relationship of landlord and tenant between the parties the Rajasthan High Court held:" Here admittedly these defendants had been let into occupation of the premises by the plaintiff and there was both privity of estate and privity of contract between them. There is also the other admitted fact that they advanced Rs. 15,000 by way of rent to the plaintiff for a period of six months. Thus a valid tenancy can be easily inferred in these circumstances even if the lease deed was inadmissible for want of registration. " ( 16 ) IN Chinmanlal Dalchand's case AIR 1961 Pat. 350 . the Rajasthan High Court relied on ramkumar Das v. Jagdish Chandra AIR 1952 SC. 23 . The Supreme Court in Ramkumar Das's case (4) held that where the defendant remained in possession of the land belonging to the plaintiff with the permission of the receiver, who represented the plaintiff's estate and paid rent to the latter a tenancy could be fairly presumed. ( 17 ) IT is therefore well settled that when a person is left into possession of an immovable property not as a servant or agent etc. under a lease deed purporting to create a lease from year to year or to any term exceeding one year or reserving yearly rent but the document is not registered, though the lease, is void because of the statutory prohibition, under S. 107 of the T. P. Act, of creating such a lease except by a registered document, the tenant becomes a tenant at will, and if the rent is paid, the lease becomes a monthly or yearly lease depending on the purpose for which the lease is taken. ( 18 ) IT was however maintained by sri Ramachandra that in this case there is no lease deed at all and therefore it is impermissible for him to enforce any rights against his client and therefore there is no relationship of landlord and tenant between them and relied on G. H. C. Ariff v. Jadunath Majumdar AIR 1931 PC 79. . In that case a verbal agreement was made between the appellant and respondent for the grant to the respondent by the appellant of a permanent lease of a small parcel of land at a total rent of rs 80 per month. In anticipation of the execution of the lease the respondent was let into possession in June 1913 and shortly thereafter he erected certain structures on the land with the knowledge and approval of the appellant. At some time in 1914 the parties seem to have agreed that the lease should be a lease for five years, renewable at the end of every period of five years. No lease was ever executed; but in October 1922 the appellant served upon the respondent a notice to quit, asserting ithat he was a monthly tenant; and requiring the premises to be vacated by the 1st November 1922. This not being done the suit was instituted in the month of April 1923. The structures were erected not in any mistaken belief by the respondent of his rights in regard' to the land, but in assertion of rights which he correctly believed to be his; not by reason of any encouragement or abstention on the part of the appellant but by reason of the agreement which he was then entitled to enforce against the appellant. The court held:"that the respondent having allowed his right to enforce his contract to become barred can only resist the appellant's claim to possession by seeking to establish a title, the acquisition of which is forbidden by the statute he being a lessee. Therefore the appellant was entitled to succeed there being neither any equitable estoppel nor did the doctrine of part performance apply to the case. Therefore the appellant was entitled to succeed there being neither any equitable estoppel nor did the doctrine of part performance apply to the case. " ( 19 ) IN Ariff's case (3) the Court recognised the relationship between the appellant and respondent as landlord and tenant and the lease as a monthly lease and granted relief to the appellant on that basis; but negatived the right of the respondent to resist the claim of the appellant for possession, as he had allowed his right to enforce his contract to become barred by time. This decision does not support the contention of Sri Ramachandra that there is no relationship of landlord and tenant between the parties in this case. ( 20 ) THE nature and effect of possession under an oral agreement is stated in mulla's Transfer of Property Act, 6th edn. at page 68c as follows:"oral agreement accompanied by delivery of possession.-If possession is given an oral lease for a year is vaild. An oral agreement of lease accompanied by delivery of possession, if for more than one year is valid, by delivery of possession, for the first year, and thereafter the lessee continuing in possession with the assent of the lessor becomes a tenant by holding over under Sec. 116 of this act. Such a lease being created by operation of law is binding even though the provisions of Sec. 107 have not been complied with" ( 21 ) IT therefore follows that even when a verbal agreement is made for he grant of a lease of immovable property for more than one year and in anticipation of execution of a lease 'leed, the lessee is let into possession by the lessor, but no lease deed is executed, notwithstanding that the verbal lease is void because of the statutory prohibition under Sec. 107 of the Transfer of Property Act the nature and effect of such a possession is only that of a lessee. ( 22 ) IT is established in this case that here was an oral agreement to grant the lease for a period of five years on a rent of Rs. 3100 per month and in anticipation of execution of a lease deed, the petitioner was put into possession by the first respondent. The petitioner is also recognised as being in possession as a tenant on a rent of Rs. 3100 per month and in anticipation of execution of a lease deed, the petitioner was put into possession by the first respondent. The petitioner is also recognised as being in possession as a tenant on a rent of Rs. 3100 by the first respondent in the notice. There is therefore privity of estate and privity of contract between the parties and a valid lease can be inferred and the petitioner becomes a tenant at will. A tenant at will is nonetheless a tenant. The admissions of PWs. 1 and 2 in their evidence that the lease had not come into existence because of the non- execution of the lease deed will not affect the legal position that the petitioner is a tenant ( 23 ) WHETHER by receiving the three months rent in advance the first respondent has recognised the petitioner as a tenant from month to month or whether the oral agreement of lease for a period of 5 years accompanied by delivery of possession is valid for the first year is not necessary to be considered in this case and I therefore express no opinion on this question. ( 24 ) SRI Ramachandra next urged that an application under S. 14 of the Rent act can only be filed by a landlord or tenant in respect of a building leased by the Rent Controller under Part II of the Rent Act, and the application filed by the petitioner is not maintainable. Elaborating this contention he urged that the premises in question was not leased to the petitioner by the rent Controller under Part II of the rent Act, but the lease is by agreement of parties, and such a lease is prohibited by the Rent Act and therefore void. He therefore urged that the petitioner who is in possession under a lease prohibited in law cannot maintain a petition for fixation of fair rent. Section 14 of the Rent Act reads: "15. He therefore urged that the petitioner who is in possession under a lease prohibited in law cannot maintain a petition for fixation of fair rent. Section 14 of the Rent Act reads: "15. Fixation of Fair Rent, etc.- (1) The landlord or tenant of any building, other than a building in respect of which the fair rent has been fixed either before or after the coming into operation of this Act, may make an application to the controller for fixing the fair rent of the building, - (a) xx xx xx (b) xx xx xx " this section enables the landlord or tenant of any building, other than a building in respect of which a fair rent has been fixed, to make an application to the Controller for fixing the fair rent of the building. The only class or category of buildings excluded or in respect of which application for fixation of fair rent cannot be filed, are only those in respect of which fair rent is already fixed. If the intention of the legislature was as contended by Sri. Ramachandra, to exclude buildings not leased by the controller under Part II of the Rent act, it would have specifically expressed itself. The intention of the legislature as expressed from the words used in s. 14 is to exclude only buildings in respect of which fair rent is already fixed and not any other class or category of buildings. ( 25 ) THE first respondent is a person who has already received the advance rent and is entitled to receive rent in respect of the premises leased to the petitioner who is liable to pay the rent of the premises to the first zespondent and has already paid three months rent in advance. The first respondent and the petitioner come within the definition of the words "landlord" and 'tenant' and the premises in question comes within the definition of the word "building" as defined in sub-clause (h), (r) and (a) of S. 3 of the Rent Act. There is therefore no prohibition for the petitioner to maintain an application for fixation of fair rent under section 14 of the Rent Act. It is not necessary for me to decide in this case whether or not the occupation of the premises by the petitioner is in contravention of the Rent Act. There is therefore no prohibition for the petitioner to maintain an application for fixation of fair rent under section 14 of the Rent Act. It is not necessary for me to decide in this case whether or not the occupation of the premises by the petitioner is in contravention of the Rent Act. ( 26 ) I therefore hold that there exists the relationship of landlord and tenant between the first respondent and the petitioner and the Controller has jurisdiction to entertain the application filed under Sec. 14 of the Rent Act for fixation of fair rent of the building. ( 27 ) THE Controller it is evident has failed to apply the principles to ascertain the nature and effect of possession under a void lease. The order therefore is illegal and cannot be sustained. The order is liable to be set aside and ordered accordingly. No costs. --- *** --- .