Wednesday, 6 April 2016

When licensee can not claim that he is tenant?

 The aforesaid terms and conditions show that
possession was to remain with the plaintiff. Though there
is the evidence showing that the keys were kept with the
defendant, only due to this circumstance inference cannot
be drawn that it was transaction of lease. Further there is
evidence to show that for getting loan no objection
certificate was obtained from the plaintiff by the
defendant and on that document also the word “licence”
was used. There is also evidence to show that when there
was litigation between plaintiff and one Ziyauddin about
other shop, the present defendant had filed affidavit in

support of the present plaintiff and he had described
himself as licencee. This document, affidavit, was
confronted to the defendant in the present proceeding.
The defendant has not denied his signature appearing on
the licence document and also the aforesaid record. In
view of such documents, burden was heavy on the
defendant to prove that he has better right than the right
of licencee. From the aforesaid record and the previous
admissions given by the defendant in other proceeding,
inference is easy that there was the intention to create
transaction of leave and licence and not of lease. Thus,
on this point also, both the Courts have not committed
any error. The aforesaid material is considered by both the
Courts below.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
Second Appeal No.699 of 2012

 Rasheed Khan s/o Kareemkhan,

Versus
 Mohd. Ayyub S/o. Kashim @ Babu
Seth,

 CORAM: T.V. NALAWADE, J.

 DATE : 6th MAY 2014
Citation2016(1)ALLMR260

1) The appeal is filed against the judgment and
decree of Regular Civil Appeal No.49 of 2011 which was
pending in the Court of the District Judge-1, Nanded.
Regular Civil Suit No.499 of 1994 was filed by respondent
for possession against the present appellant and the suit
was decided in favour of the present respondent. The
First Appellate Court has confirmed this decision. The
decree of possession is given and the present appellant is
directed to pay damages for use of the premises. Both the
sides are heard.

2) The plaintiff is owner of house Municipal No.
3-2-160 situated at Station Road Nanded. It is the case of
the plaintiff that suit premises, the space admeasuring 23
x 14 ft which includes ‘Chabutara’ of this property was
given to defendant for its use as licensee. It is contended
that the document was made in that regard and after
expiry of the period of licence new documents of leave and
licence were prepared. Plaintiff was getting Rs.1101/-
per month for the use and the first agreement was for the
period of 11 months.
3) It is contended that the period given in the last
agreement expired on 31-5-1994 and so after that the
defendant is using the suit premises illegally. It is
contended that the plaintiff had asked the defendant to
withdraw from the premises but the defendant refused to
do so. The suit was filed for relief of possession and also
damages in respect of the suit premises.
4) The defendant filed written statement. He denied
that there was relationship as licensor and licensee. He
contended that there was lease agreement. It is contended
that only to avoid dispute and as the plaintiff was

demanding increase in the rent, agreements were made. It
is contended that plaintiff exploited the situation and
obtained signatures of the defendant on some documents.
It is contended that he offered rent even in July 1994 but
the plaintiff refused to accept the same. It is contended
that the plaintiff was demanding exorbitant increase in
monthly rent and when the defendant refused to give such
rent, plaintiff filed the suit. The defendant filed counter
claim by claiming that he had given Rs.20,000/- by way
of deposit, premium. Dispute was also raised by the
defendant on the points like area in his possession. He
contended that Civil Court had no jurisdiction.
5) In view of the defence taken by the present
appellant, initially the Court of the Civil Judge, Junior
Division, had returned the plaint. There is no Small Cause
Court in Nanded and so jurisdiction was with the Civil
Court (Civil Judge, Junior Division). After return of the
plaint, the Civil Judge Senior Division, who had power to
make assignment of the work, assigned the case to the
Civil Judge, Junior Division, and the matter came to be
decided.

6) Issues were framed on the basis of aforesaid
pleadings. The trial Court held that there was relationship
of licensor and licensee and no lease was created. The
trial Court further held that possession of the defendant
from 1-6-1994 was illegal. Point of jurisdiction was also
answered in affirmative and the Court held that plaintiff is
entitled to get damages as the possession is not returned
after termination of licence. Decree of possession is also
given. These finding are confirmed by the First Appellate
Court.
7) By order dated 10-4-2013 this Court admitted
the appeal and following substantial questions of law are
framed.
(i) Whether the suit could have been
proceeded with after direction for return of
plaint by Civil Judge, Junior Division on the
order of the Civil Judge, Senior Division in the
facts and circumstances of the present case ?
(ii) Whether the Courts below have committed
patent error in holding that relationship of

licensor and licencee existed between the
parties?
(iii) Whether the appellate Court has committed
error in enhancing the quantum of
compensation?
8) So far as the first substantial question of law is
concerned, it can be seen that there was virtually no force
in the defence taken by the defendant about jurisdiction of
Civil Court. Admittedly at Nanded no Small Cause Court
was established. Civil Courts were dealing with the
matters of the present nature. On this point learned
counsel for the respondent placed reliance on a case
reported as 1965 Mh.L.J. 913 (Raje Vyankatrao v.
Sitalprasad) and a copy of judgment in Civil Appeal No.
5787 of 2002) Laxmidas Morarji v. Miss Behrose Darab
Madan) delivered by the Apex Court. In the first case,
after considering provisions of Section 9 of the Civil
Procedure Code this Court laid down that if Special Court,
Tribunal is not constituted under the Special Act, the
provisions for referring matters before such special Court
or Tribunal become ineffective and the aggrieved person

has right to proceed in ordinary civil Court. There cannot
be any dispute over this proposition. This Court finds no
force at all in the submission made on the first point. On
this point learned counsel for the appellant placed
reliance on the case reported as 2002 (2) Bom. C.R. 98
(Qari Mohammed Zakir Hussain v. Municipal Corporation
of Greater Mumbai). This Court has considered the
provisions of Order 7 Rules 10 and 10-A of the Code of
Civil Procedure and recourse to be followed by the
plaintiff is discussed. There cannot be any dispute about
the observations made. Facts of this case were altogether
different. There was power to the Civil Judge, Senior
Division, to make allotment and correct the mistake. Even
the same Court could have corrected it. There was no
question of return of the plaint.
9) So far as the second point is concerned, learned
counsel for the appellant placed reliance on the case
reported as AIR 1959 SC 1262 (Associated Hotels of India
Ltd. v. R.N. Kapoor). In this case the Apex Court has
observed that it is duty of the Court to ascertain real
nature of relationship. Whether it is a lease or licence

needs to be ascertained from the substance of agreement
and not from the form. Otherwise clever drafting can
camouflage the real intention of the parties. The Apex
Court has made following observations :-
“The following propositions may be taken as
well established : (1) to ascertain whether a
document creates a licence or lease the
substance of the document must be preferred
to the form; (2) the real test is the intention of
the parties whether they intended to create a
lease or a licence; (3) if the document creates
an interest in the property, it is a lease; but, if it
only permits another to make use of the
property, of which the legal possession
continues with the owner, it is a licence, and (4)
if under the document a party gets exclusive
possession of the property, prima facie, he is
considered to be a tenant; but circumstances
may be established which negative the
intention to create a lease.”
10) This Court has carefully gone through the facts
of the reported case. The terms and conditions are quoted
in the aforesaid case. Terms of the agreement show that
right was given to the licensee to hand over possession to

third party if he wanted to close business prior to expiry of
the term. In that case licensor was entitled to get monthly
charges at the rate of Rs.800/-. In view of terms and
conditions of the agreement the Apex Court held that
there was lease and not the licence. In view of the facts of
other case, in the case reported as 2001 (Supp) Bom CR
692 (Sardar Pruthisingh v. Kanchanlal Purshottamdas
Desai), this Court had held that the agreement was of
lease.
11) The learned counsel for the respondent has
placed reliance on some reported cases like (1) 2002 (4)
ALL MR 524 (Peter Alex D’souza v. Prithi Paul Singh), (2)
1996 (1) Civil LJ 392 (Jagannatha v. Sridhara Murthy)
(Karnataka High Court); (3) 2010 SCCR 84 (The New Bus
Stand Shop Owners Association v. Corporation of
Kozhikode); and, (4) AIR 2007 Gujarat 18 (Gajriben v.
Knatilal).
12) In the case of Jagannatha (cited supra), the
Karnataka High Court has discussed the provisions of
Section 52 of the Easements Act 1882 and it is observed

that when defendant claims that he is not licensee and he
has better title, burden is on him to prove such case.
13) In the case of The New Bus Sand Shop Owners
Association (cited supra) the Apex Court held that use of
terms like ‘lease’, ‘licence’, ‘rent’, etc. by themselves are
not conclusive and the conduct and intention of the
parties before and after creation of relationship is relevant
to find out the intention. In the case of Peter Alex (cited
supra) this Court has laid down that mere exclusive
possession of premises cannot amount to lease.
14) It cannot be disputed that, for ascertaining the
intention of the parties under one document a decision on
a construction of the terms of another document cannot
ordinarily afford any guidance unless the terms are
exactly similar to each other. Reliance can be placed on a
case reported as AIR 1963 SC 1906 (Bhoju Mandal v.
Debnath Bhagat). In the case of Associated Hotels of India
Ltd. (cited supra) there were many terms and conditions
giving indication of intention that the property was given
by way of lease though the title was of leave and licence.

The premises was given for use and occupying it for
carrying on a particular business and the period was fixed
of one year. At the first instance, the period was of one
year only but there was possibility of extension of period
of licence at the option of the licensor provided that the
licencee had applied for extension about three months
prior to the expiry of one year period. There was also a
term enabling the licencee to transfer the licence to any
person if before expiry of the period the licencee wanted
to close the business. In that case for the remaining
period the charges which were to be paid by the new
person were fixed and the licence was to be transferred
with the consent and approval of the licensor. In view of
these terms and conditions the Apex Court held that it was
in fact lease document. The provisions of section 108 of
the Transfer of Property Act in respect of lease and
section 52 of the Indian Easements Act were considered
by the Apex Court.
15) In the present case, relevant conditions of the
document are as under :--

“1. That the grant is for a period of 11
(eleven) months, ending on February, 1986 for
the personal use and occupation of premises
which is the part of 3-2-110 to 112 situated at
Station Road, Nanded, admeasuring 14’ x 18’
and Chabutra is about 5’ x 14’ ft bounded on
East : another premises of Licensor being No.( )
West-Chabutra about 5’x14’ thereafter Govt.
Drain and C.C. Road leading to Rly. Station
Road, North-Licensor’s personal land and his
personal gate and South : Shop No.3-2-113 of
Shri. Md. Osman.
2. That the licencee shall pay licence fee Rs.
1101/- (Rupees One Thousand one hundred and
one only) per month in advance on or before 1st
day to 3rd day of every Calender month in lieu of
the use and occupation of the above said
premises.
3. That the licence shall be revoked and
ineffective after the expiry of above said period,
but it shall be renewable on such further terms
and conditions as would be agreeable by both
the parties i.e. Licensor and licencee.
4. During the period of Grant the actual
possession of the premises shall be vested with

the licensor and only the right of use and
occupation is granted.
5. If the licencee wants to surrender the
right of use and occupation of the said premises
granted under the licence, he may do so giving
a prior notice of 15 days to the grantor or
licensor.
10. The grant of licencee is made with free
consent after negotiations in between both the
parties. The terms of the Grant are agreeable
to the licencee.”
16) The aforesaid terms and conditions show that
possession was to remain with the plaintiff. Though there
is the evidence showing that the keys were kept with the
defendant, only due to this circumstance inference cannot
be drawn that it was transaction of lease. Further there is
evidence to show that for getting loan no objection
certificate was obtained from the plaintiff by the
defendant and on that document also the word “licence”
was used. There is also evidence to show that when there
was litigation between plaintiff and one Ziyauddin about
other shop, the present defendant had filed affidavit in

support of the present plaintiff and he had described
himself as licencee. This document, affidavit, was
confronted to the defendant in the present proceeding.
The defendant has not denied his signature appearing on
the licence document and also the aforesaid record. In
view of such documents, burden was heavy on the
defendant to prove that he has better right than the right
of licencee. From the aforesaid record and the previous
admissions given by the defendant in other proceeding,
inference is easy that there was the intention to create
transaction of leave and licence and not of lease. Thus,
on this point also, both the Courts have not committed
any error. The aforesaid material is considered by both the
Courts below.
17) On the last point it can be said that in view of
the location where the property is situated and in view of
the period for which the damages are given, both the
Courts have not committed any error. The First Appellate
Court has not committed any error in holding that the
plaintiff is entitled to get damages for the period from July
1994 till the date of decision of the suit i.e. till 21-3-2011

which was not granted by the trial Court. There was no
reason for refusing the damages in respect of that period
and there is possibility that due to over sight no damages
were granted for that period. Considering the agreed rate
mentioned in the document, the business for which the
defendant was using the premises and its location, the
amount fixed is not on higher side. It is finding of fact and
no interference is possible on this point also. There is no
need to discuss the other evidence as there is no
possibility of inference.
18) The appeal stands dismissed.
19) The learned counsel for the appellant requested
for stay to the judgment and decree. If the appellant
deposits rupees one lakh before 9th June 2014 there shall
be stay to the decree up to that date. If after depositing
the amount, the appellant wants time, there is liberty for
moving the Court. If the amount is not deposited before
9
th June 2014 the stay shall stand vacated automatically.
 Sd/-
 (T.V. NALAWADE, J.)

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