Sunday, 9 December 2018

Whether incorrect interpretation of leave and licence agreement is binding on licensor?

Mr. Seervai then relied upon Section 55 of the Maharashtra Rent Control Act, 1999, which reads as under:

55. Tenancy agreement to be compulsorily registered.-(1) Notwithstanding anything contained in this Act or any other law for the time being in force, any agreement for leave and licence or letting of any premises, entered into between the landlord and the tenant or the licensee, as the case may be, after the commencement of this Act, shall be in writing and shall be registered under the Registration Act, 1908 (XVI of 1908).

(2) The responsibility of getting such agreement registered shall be on the landlord and in the absence of the written registered agreement, the contention of the tenant about the terms and conditions subject to which a premises have been given to him by the landlord on leave and licence or have been let out to him, shall prevail, unless proved otherwise.
 Secondly, and more important, is the fact that the reliance upon Section 55(2) in the facts of the present case, is entirely misconceived. Under Section 55(2) if the agreement is not registered "the contention of the tenant about the terms and conditions subject to which a premises have been given to him by the landlord on leave and licence or have been let out to him, shall prevail, unless proved otherwise". The term "contention" in Section 55(2) refers to contentions of fact and not of law. Construction of the terms and conditions of a contract are questions of law. A court cannot be bound by an erroneous construction of the contract.
19. In this case, there is no dispute between the parties as to the terms of the agreements. It is not the company's case that any terms other than those contained in the said leave and licence agreement were agreed upon between the parties. In other words, the submission was not based on the existence of an independent term. The first contention raised by Mr. Seervai was based on the construction of admitted terms. I have held this construction to be erroneous. There is nothing in Section 55 which remotely suggests that even an incorrect interpretation of an agreed/admitted term is binding on the licensor.

IN THE HIGH COURT OF BOMBAY

C.P. No. 898 of 2008

Decided On: 12.02.2009

 Corporate Management Council of India P. Ltd. Vs.  Lonza India P. Ltd.


Hon'ble Judges/Coram:
S.J. Vazifdar, J.

Citation: 2009(3) ALLMR 770.
Read full judgment here: Click here

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