Whether court can treat conducting agreement as a leave and license agreement if the word rent is used in said agreement?

 In line with the law laid down, it is clear that the contract mandated continuation of the business in the name of ‘Karandikar Brothers’ by paying royalties of Rs. 90 per month. Once the parties have accepted the recitals and the contract, the respondent could not have adduced contrary extrinsic parole evidence, unless he portrayed ambiguity in the language. It may not be out of context to  note that the extension of the contract was on same conditions. {Para 16}

17. On consideration of the matter, the High Court erred in

appreciating the ambit of Section 95, which led to consideration of

evidence which only indicates breach rather than ambiguity in the

language of contract. The evidence also points that the license was

created for continuation of existing business, rather than

license/lease of shop premises. If the meaning provided by the High Court is accepted, then it would amount to Courts substituting the bargain by the parties. The counsel for respondent has emphasized much on the receipt of payment, which mentions the term ‘rent received’. However, in line with the clear unambiguous language of the contract, such evidence cannot be considered in the eyes of law.

REPORTABLE

 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 10827 of 2010

Mangala Waman Karandikar (D) TR. LRS. Vs  Prakash Damodar Ranade 

N.V. RAMANA, CJI

Dated:  MAY 07, 2021

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Whether to constitute a licence, license fee should be in monetary terms?

The Apex Court reversing the concurrent judgments, observed thus:

10. It is however not possible to accept that services in lieu of the right of occupation would amount to receipt of rent under the Rent Act to create sub tenancy .This frustrates and defeats the purpose of the rent Act. Take for instance a case where a person renders services to the landlord in lieu of rent but this will completely erode the provisions of Rent Act and defeat the claims for services. Work performed by subtenants and the wages paid by doing certain kind of services may be in lieu of rent as in the case of agricultural tenancies. But in urban area in civilized times that cannot be so. The Rent Act, 1956 cannot be fitted into a position where the services can be rendered in exchange of the right of occupation.

12. The structure of the Rent Act in the instant case, as indicated above would also indicate that. We hold therefore that second ingredient, viz. rent agreed, was not there. And as such on the case pleaded and proved there could not have been any sub tenancy.

It can clearly be seen that the Apex Court in clear terms has held that insofar as tenancy in urban area is concerned, for creating sub tenancy, an agreed rent is an essential ingredient.

 If the words used in Sub-Section 4(A) of Section 5 are given its plain and simple meaning, the words used 'licence fee or charge' in my view will have to be given a meaning that the said license fee or charge has to be in the monetary terms. 

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 6215 of 2008

Decided On: 04.05.2011

 Shashikant G. Mehta Vs.  Soonoo Minoo Khajotia and Ors.

Hon'ble Judges/Coram:

B.R. Gavai, J.

Citation: 2011(4) MHLJ 247

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What are necessary conditions for getting deemed tenancy as bombay rent Act?

In that view of the matter, only questions that falls for consideration is as to whether the payment of corporation taxes and electricity charges would be covered by the term "license fee or charge" under Sub-Section 4 A of Section 5 of the said Act. Undisputedly, for bringing a license under the ambit of licensee as defined under Section Sub-Section 4(A) of Section 5 of the said Act, a person who is in occupation of the premises has to be so under a subsisting agreement for a license given for a license fee or charge. Only in that event, the licensee who is in occupation of the premises on 1st February, 1973 would be deemed to have become tenant for the purposes of the said Act.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 6215 of 2008

Decided On: 04.05.2011

Shashikant G. Mehta Vs. Soonoo Minoo Khajotia and Ors.

Hon'ble Judges/Coram:

B.R. Gavai, J.

Citation: 2011(4) MHLJ 247

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Whether tenant of bombay port trust is entitled to get protection of rent law?

As stated above, in the present case, since beginning, the subject premises are owned by the local authority and, therefore, excluded from the application of the Rent Control Act, that is the distinguishing factor in the present case from this Judgment of Dr. Preeti Bhatt Vs. Central Bank of India (Supra).

43. Thus, the position, which emerges from the above discussion, is that, the law laid down by the Hon'ble Apex Court in the case of Suhas H. Pophale Vs. Oriental Issuance Co. Ltd. (Supra), was in the particular facts and circumstances of the case, namely, the Appellant being 'tenant' of the private landlord and, therefore, enjoying protection under the Rent Control Act. The status of being a 'tenant' of the Public Company was thrust upon him. Hence, it was held that, such protection, which the Appellant was enjoying under the Rent Control Act, cannot be taken by the Public Premises Eviction Act, after it came into effect.

44. As against it, in the facts of the present case, the Respondent was, since beginning, the 'tenant' of the public premises belonging to the local authority, like Port Trusts, which were excluded from the coverage of the Rent Control Act and hence, not enjoyed protection under the Rent Act. Therefore, Respondent cannot get benefit of the Judgment of the Hon'ble Apex Court in the case of Suhas H. Pophale Vs. Oriental Insurance Co. Ltd. (Supra).

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 5678 of 2015

Decided On: 03.05.2018

 The Board of Trustee of the Port of Mumbai Vs. New India Assurance Co. Ltd.

Hon'ble Judges/Coram:

Dr. Shalini Phansalkar Joshi, J.

Citation: 2018(5) MHLJ 754

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Whether licensee will become tenant if his license was not subsisting on the date when S 15A Bombay rent Act came in to force?

 Defendants 2 and 3 came to the suit flat by virtue of Ex. 20-1 dt. 9-10-1967. Under Ex. P-7 the licence granted to defendant 1 stood terminated as from the last day of June 1966. Of course, defendant 1 did not comply with the demand to vacate and deliver possession of the flat. Would continuance in occupation authorise defendant 1 to create a sub-licence and would the beneficiary of the said sub-licence get the benefit of section 15-A of the Rent Act ? Ex. 2-D-1 was for a period of 11 months as from 9-10-1967, with the licensee having an option to renew it for a further eleven months period. Thus the extended period would end in about September 1969. There was no further extension. The argument is that defendants 2 and 3 continued in occupation and defendant 1 accepted the compensation. This would therefore make the license a subsisting one on the day section 15-A came into the statute book by virtue of Mah. Act XVII of 1973. It is not possible to accept this contention. Section 15-A conferred protection upon a specified class of licensees. As section 5(4-A) makes clear the expression 'licensee' referred to is "a person in occupation under a subsisting agreement for a licence". Now on 1-2-1973 neither defendant 1 nor defendant 2 and 3 could be said to be in occupation as licensees whose licence was subsisting. Defendant 1's licence had been expressly determined and the licence in favour of defendant 2 ended by efflux of time. Licence is a matter of agreement and cannot be left to inferences. This is all the more so when Ex. 2-D-1 specifies a period of 22 months as the termination point, and, as reckoned from 9-10-1967. If there had been a renewal it would have been in writing. Reliance is placed upon Sanwarmal Kejriwal v. Vishwa Co-operative Housing Society Ltd. and others, Civil Appeal No. 1369 of 1990 decided by the Supreme Court on 8-3-1990: 1990(1) B.C.R. (S.C.)796. Far from that decision supporting the contention of defendants 2/3, it reaffirmed the view taken in earlier decisions that a person not in occupation of the premises under a subsisting licence as on 1-2-1973, could not invoke the protection of section 15-A of the Rent Act. Quoted with approval in the other case relied upon by defendants 2/3 i.e. A.V.R. and Co. and others v. Fairfield Co-operative Housing Society Ltd. 1989(1) B.C.R. 325 : 1989 M.R.C.J. 103 : is this passage from D.H. Maniar v. Waman Laxman Kudav, MANU/SC/0350/1976 : [1977]1SCR403

"In order to get the advantage of section 15-A of the Bombay Rent Act, the occupant must be in occupation of the premises as a licensee as defined in section 5(4-A) on February 1, 1973. If he be such a licensee the non-obstante clause of section 15-A(1) gives him the status and protection of a tenant in spite of there being anything to the contrary in any other law or in any contract ......... But if he is not a licensee under a subsisting agreement on February 1, 1973, then he does not get the advantage of the amended provision of the Bombay Rent Act."

10-A. To sum up, the plea that defendant 1 was a tenant of the society is not true on facts and is barred by res judicata on the competing claims of defendant 1 and Sadashiv vis-a-vis title as tenant members, the matter has to be found in favour of the latter-again on facts and by virtue of an earlier decision. Lastly, and on the same basis, is the finding that defendant 1 was inducted into the flat as a licensee by Sadashiv and was therefore estopped from questioning his licensor's title. The claim to protection under section 15-A of the Rent Act is not available to defendants 1 to 3. In fact defendant 1 does not make that claim in the proper sense of the concept for he has set up an adverse title to his licensor. A licensee recognises the superior title of his licensor and where the claim set up by him conflicts with the licensor's title, he is not a licensee or entitled to the benefit of section 15-A. I emphasise this for defendants 2/3 have pleaded that defendant 1 was or had represented himself to be a tenant that it was on this representation that they had entered into the licence transaction with him. In Ex. 2-D-1 there is an averment about defendant 1 being a tenant. This of course has to be construed as a reference to his claiming to be a tenant-member from the society and not a tenant of Sadashiv. I deduce this from the contents of Ex. P-8 which is defendant 1's reply to plaintiff's quit notice Ex. P-7. In Ex. P 8 appears the assertion that defendant 1 is a yearly tenant of the society. It is doubtful if a licence created by a sub licensor setting up a title hostile to the head tenant, even though in force on 1-2-1973, can get the protection of section 15-A. But it is not necessary to go further into the matter for on the facts proved no licence subsisted on 1-2-1973 in favour of either set of defendants. And that suffices to find the issues against defendants.

IN THE HIGH COURT OF BOMBAY

Suit No. 595 of 1976

Decided On: 16.04.1990

 Narayan Sadashiv Bhalerao Vs.  Navnitdas Narayandas Barshikar and Ors.

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Whether licensee can challenge title of licensor?

 Lastly, and on the same basis, is the finding that defendant 1 was inducted into the flat as a licensee by Sadashiv and was therefore estopped from questioning his licensor's title. The claim to protection under section 15-A of the Rent Act is not available to defendants 1 to 3. In fact defendant 1 does not make that claim in the proper sense of the concept for he has set up an adverse title to his licensor. A licensee recognises the superior title of his licensor and where the claim set up by him conflicts with the licensor's title, he is not a licensee or entitled to the benefit of section 15-A.

IN THE HIGH COURT OF BOMBAY

Suit No. 595 of 1976

Decided On: 16.04.1990

 Narayan Sadashiv Bhalerao Vs.  Navnitdas Narayandas Barshikar and Ors.

Hon'ble Judges/Coram:

S.M. Daud, J.

Citation: 1990(2) BomCR 483

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Whether licensee is entitled to get protection of Rent Act if licence is granted for conduct of business?

 Under the Bombay Rent Act, the definition of the word 'licensee' specifically excludes the 'conducting business'. This exclusion, if taken note of, whatever may be the reason for occupying the premises in question, but if it is based on the foundation of conducting business, I am of the view that the occupant or such person is not entitled for the protection as available under the Bombay Rent Act, either as a licensee or sub-tenant. The exclusion of the word 'conducting business' makes the provision amply clear.

7. The long and exclusive possession is the basic foundation to claim the protection of lease or licence. But if the possession of the premises has a foundation of the conducting business, it is difficult to accept that in each and every case, the intention was to create licence or lease. The agreement, as referred above, made the conditions very clear which were well within the knowledge of the parties. The parties, having once accepted these terms and conditions, cannot turn around to say later on that the intention was to create lease.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 5495 of 1988

Decided On: 10.08.2005

 Rasiklal Kumbha Gala, Vs. Manilal Ravji

Hon'ble Judges/Coram:

Anoop V. Mohta, J.
Citation: 2006(1) BomCR 425

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