UNION OF INDIA (UOI) v. C. L. ADHIKARI — 1972 DIGILAW 76 (ORI)

JUDGMENT : G.K. Misra, C.J. - The disputed house belongs to the Petitioners. Opposite party pary No. 1 was an employee under the Petitioners, and, at the relevant time, was the special permanent-way-inspector occupying the disputed house situated in Parlakimedi railway colony. 2. The case of the Petitioners is that opposite party No. 1 was transferred from Parlakimedi to Talodih (Nagpur Division) with effect from 14-05-1959. Under the rules he ought to have vacated the railway quarter from the date of transfer, but he occupied it till 12.8.1966. A notice (Annexure-1) dated 18.5.1966 to vacate the quarter, u/s 4(1) of the Public Premisses (Eviction of unauthorised occupants) Act, 1958, (32 of 1958) (hereinafter referred to as 'the Act'), was issued to opposite party No. 1. After he showed cause (Annexure-2), an order of eviction was passed on 22nd June, 1966. The premises were vacated on 12.8.1966. Opposite party No. 1, in annexure-2, was called upon to show cause why u/s 7(2) of the Act, damages to the tune of Rs. 9208.80 paise should not be realised from him for unauthorised occupation of the house from 14.5.1959 till 22-6.1966. A second notice (Annexure-3) to the same effect was also issued on 25-6-1966. Opposite party No. 1 showed cause by annexure-5 dated 1.8.1966. By annexure-6 dated 9.11.1966, the Estate Officer (opposite party No. 2) directed that rent at the market rate, which is Rs. 108.00 per month, should be realised from opposite party No. 1 from 12-7-1962 till 12-8-1966. Petitioners did not file any appeal challenging the correctness of the finding in annexure-6. Opposite party No. 1 carried an appeal to the District Judge u/s 9 of the Act. The learned District Judge held that opposite party No. 1 was not in unauthorised 'occupation until 18.5.1966 when the notice (Annexure-1) u/s 4(2) of the Act was served. He allowed damages from 18-5-1966 to 12-8-66 at the rate of Rs. 108.00 per month. For the period prior to 18.5.1966 he directed normal rent to be paid at the rate of Rs. 36/- per month. The appeal was allowed in part. This writ application has been filed under Articles 226 and 227 of the Constitution for quashing the Appellate order dated 23-1-1969 (Annexure-7). 3. 108.00 per month. For the period prior to 18.5.1966 he directed normal rent to be paid at the rate of Rs. 36/- per month. The appeal was allowed in part. This writ application has been filed under Articles 226 and 227 of the Constitution for quashing the Appellate order dated 23-1-1969 (Annexure-7). 3. The Petitioners contend that the Appellate judgment (Annexure-7) is erroneous on the face of it, and damages at the market rate from 12.7.1962 till 12-8-1 1966 for Rs, 5292.00 should be allowed. Mr. Rath, on the other hand, contends that opposite party No. 1 was not at all in unauthorised occupation of the premises, and if at all, he is liable to pay damages from 9-1-1964, the date of transfer, till 12-8-1936 when the premises were vacated. 4. The following questions arise for consideration in this writ application: (i) Whether opposite party No. 1 was in unauthorised occupation of the premises under the rules and under the general law; (ii) If be for what period damages are payable. (iii) What should be the rate of damages? 5. Section 2(1)(e) of the Act defines "unauthorised occupation" as follows: (e) 'unauthorised occupation', in relation to any public premises, means the occupation by any person of the public premises without authority for such occupation, and includes the continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever. In the light of this definition, it is necessary to examine whether opposite party No. 1 occupied the house at Parlakimedi after his transfer to Nagpur Division without any authority for such occupation. 6. In the prefatory note to the Indian Railway Establishment Manual (Second Edition), the manner of indexing a reference has been noted thus: For convenience of indexing and of reference, paragraphs have been numbered according to a four figure 'code' in which the last two figures give the number of the paragraph and the remaining figure or figures, the 'number of the chapter. Thus, paragraph 201 is paragraph 1 of Chapter II of this Manual and 3909 is paragraph 9 of Chapter XXXIX. The relevant paragraphs are 1701, 1732 and 1733 in Chapter XVII which deals with recovery of rent. Those paragraphs are extracted hereunder: 1701. Thus, paragraph 201 is paragraph 1 of Chapter II of this Manual and 3909 is paragraph 9 of Chapter XXXIX. The relevant paragraphs are 1701, 1732 and 1733 in Chapter XVII which deals with recovery of rent. Those paragraphs are extracted hereunder: 1701. When staff quarters may be provided While residential quarters fop railway servants may be provided by Railways where conditions are such that private enterprise does not adequately meet the demand for housing the railway servants or where it is necessary for special reasons to provide quarters for certain railway servants near to their work, no railway servant has any right to be provided with quarters. 1732. The General Manager may, on his personal orders permit railway servants who are transferred to another railway or office in the interest of administration, to retain their quarters on the parent railway for a period not exceeding two I months. Individual cases should be considered on merits. The rent during the period should be recovered in terms of paragraph 1713 (a). 1733. The General Manager or the Senior Deputy General Manager to whom the power may be delegated by the General Manager, may, on the merits of individual oases and on his personal orders, grant permission to the railway servants, transferred permanently from one station to another on the same railway, to retain railway residences at the old station for a period not exceeding two months. The conditions laid down in paragraph 1727 above will also apply in such cases. The General Managers may delegate to the Divisional Superintendents powers to permit retention of railway quarters by non-gazetted rail way servants upto one month at their old headquarters on their permanent transfer to another station within their own jurisdiction subject to other conditions laid down in paragraph 1727 above. From an analysis of the aforesaid three paragraphs the following conclusions emerge: (i) A railway servant has no right to be provided with quarter; (ii) where quarters are provided to them, they are liable to vacate the quarters on their transfer, unless permission is obtained from competent authorities referred to in paragraphs 1732 and 1733 for retention of the quarters despite the transfer, and such retention would, in no case, exceed a period of two months. 7. 7. Opposite party No. 1 has not produced any permission to show that he was allowed to occupy the quarter even for a period of two months from the date of transfer. Under the rules of the Railways, he was liable to vacate the quarter from the date of transfer. In his deposition (Annexure-5) before the Estate Officer opposite party No. 1 admits that a railway staff has to vacate the quarter when he is transferred. His statement runs as follows: The opposite party admits when a railway staff is transferred from one place to the other distant place under different authority, he is to vacate the railway quarter as per rules but in his case he could not do the same as he fell sick when he came to take his family after three months from joining at Talodhi Road in 1964. 8. The learned District judge acted contrary to law in holding that opposite party No 1 was liable to pay damages for unauthorised occupation with effect from 18.5.1963 when the notice, Annexure-1, u/s 4(2) of the Act was despatched. After the order of transfer was issued, opposite party No. 1 had no further right to continue in occupation of the house, and his occupation thereafter was 'unauthorised' within the meaning of the definition of 'unauthorised occupation' in Section 2(1)(e) of the Act. The same conclusion would be reached even without reference to the relevant rules under the Indian Railway Establishment Manual. A Government or a Railway Servant is not a tenant, but is a license. 'License' has been defined in Section 52 of the Indian Easement Act, 1882 (5 of 1882). It runs thus: Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful and such right does not amount to an easement or an interest in the property, the right is called a license. In Mrs. M.N. Clubwala and Another Vs. Fida Hussain Saheb and Others, the distinction between lease and license has been indicated in the following terms: Whether an agreement creates between the parties the relationship of landlord and tenant, or merely that of licensor and license, the decisive consideration is the intention of the parties. In Mrs. M.N. Clubwala and Another Vs. Fida Hussain Saheb and Others, the distinction between lease and license has been indicated in the following terms: Whether an agreement creates between the parties the relationship of landlord and tenant, or merely that of licensor and license, the decisive consideration is the intention of the parties. This intention has to be ascertained on a consideration of all the relevant provisions in the agreement. In the absence, however, of a formal document, the intention of the parties must be inferred from the circumstances and conduct of the parties. Similarly, where the terms of the document are not clear the surrounding circumstances and the conduct of the parties have to be borne in mind for ascertaining the real relationship between the parties. The fact that the premises are in exclusive possession of a person would not make him a lessee. The same view as also taken in Murray, Bull and Company Ltd. v. Murray 1952 (2) All E.L.R. 1199. In Netherland Steam Navigation Co. Ltd. Vs. The Commissioner of Income Tax, West Bengal, their Lordships observed thus: Under the aforesaid section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a license. The legal possession, therefore, continues to be with the owner of the property, but the license is permitted to make use of the premises for a particular purpose. But for the permission his occupation would be unlawful. It does not create in his favour any estate or interest in the property. There is, therefore, clear distinction between the two concepts. The dividing line is clear, though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises it would conclusively establish that he was a lessee. But there was a change, and the recent trend of judicial opinion is reflected in Errington v. Errinton 1952 (1) All. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises it would conclusively establish that he was a lessee. But there was a change, and the recent trend of judicial opinion is reflected in Errington v. Errinton 1952 (1) All. E.R. 149 wherein Lord Denning reviewing the case law on the subject summarises the result of his discussion at page 155 thus: The result of all these oases if that although a person who is let into exclusive possession is, 'prima facie' to be considered to be a tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. The following passage from Lord Denning's observations in Cobb v. Lane 1952 1 All. E.R. 1199 as also approved by the Supreme Court: The question in all these oases is one of intention. Did the circumstances and the conduct of the parties show that an that was intended was that the occupier should have a personal privilege with no interest in the land?. 9. Applying the aforesaid tests, there is no escape from the conclusion that opposite party No. 1 was a mere license. When a Government servant or a railway servant is allowed to occupy a particular quarter, during the period of his employment at a particular station, No. 1 interest in the land is accrued in his favour. The intention is that a servant would remain in occupation of the quarter so long as he is in employment at a particular station. In all these cases, the servant is permitted to make use of the property of which the legal position continues with the owner who would be either the Government or the Railways. Clearly, the occupation of the disputed quarter by opposite party No. 1 was by way of a license and not a lease. 10. Section 62 of the Indian Easements Act, 1882, prescribes conditions when a license is deemed to be revoked. Clauses (c) and (g) are relevant. They run thus: 62 A license is deemed to be revoked: (c) Where it has been granted for a limited period, or...(g) where the license is granted to the licensee as holding a particular office, employment or character and such office, employment or character, ceases to exist. Clauses (c) and (g) are relevant. They run thus: 62 A license is deemed to be revoked: (c) Where it has been granted for a limited period, or...(g) where the license is granted to the licensee as holding a particular office, employment or character and such office, employment or character, ceases to exist. Under both these clauses opposite party No. 1's occupation of the quarter ceased with the order of his transfer. Under Clause (c) the quarter was allotted to him for a limited period during which he was posted at parlakimidi to function as a special permanent-way-inspector. Clause (g) also, in terms, applies as opposite party No. 1 was holding a particular office, or employment and such employment ceased exist the moment he was transferred. Thus, under the general law also opposite party No. 1 is a license, and the license shall be deemed to have been revoked the moment he was transferred from the place of his employment to another place. On either view, opposite party No. 1 was in unauthorised occupation of the premises from the date of his transfer. 11. The next question for consideration is as to when opposite party No. 1 was in fact transferred. The onus is on the Petitioners to establish the date of his transfer. It is remarkable that the relevant documents were not produced by them. But in paragraph 1 of the writ application it is admitted that the transfer order was finally given effect to in 1964., The relevant lines may be quoted: The opposite party No. 1 was ordered to be transferred with effect from 14.5.1959, but due to his illness, the transfer order was not given effect to, and finally in 1964, opposite party No. 1 was transferred to Talodih road station in Nagpur Division of the South Eastern Railway. In view of this admission in the writ application itself, the Petitioners should not have taken the stand that opposite party No. 1 had been transferred earlier than January, 1964. In the affidavit filed by opposite party No. 1 on 23.3.1972, it is asserted that he was transferred with effect from 9.1.1961. Annexure A/1, B/1, C/1 and D/1 support the assertion of opposite party No. 1 that he was transferred on 9th January 1064. Annexure C/1 dated 9th January, 1964 is addressed to opposite party No. 1 at Parlakimedi. In the affidavit filed by opposite party No. 1 on 23.3.1972, it is asserted that he was transferred with effect from 9.1.1961. Annexure A/1, B/1, C/1 and D/1 support the assertion of opposite party No. 1 that he was transferred on 9th January 1064. Annexure C/1 dated 9th January, 1964 is addressed to opposite party No. 1 at Parlakimedi. It says: You have been posted as Section P.W. 1. Talodhi Road under Nainpur District Vice Sri N.H. Naidu. Please proceed at once to take over charge of the section. Two passes required by you may be taken from the office of D.P.O. Waltair. A copy of this posting order is enclosed. It is, thus, clear that the final order of transfer was dated 9th January, 1964. Opposite party No. 1 was, therefore, in unauthorised occupation of the premises from 9-1-1964 till 12-2-1966. Until 9-1-1964 opposite party No. 1 is liable to pay the normal rent at Rs. 36/- per month. 12. The next question for consideration is at what rate the damages should be paid. Section 7(2) and (3) of the Act are relevant. For convenience, they may be extracted: S. 7(2) Where any person is, or has at any time been, in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments as may be specified in the order. (3) No order under Sub-section (1) or Sub-section (2) shall be made against any person until after the issue of a notice in writing to the person calling upon him to show cause within such time as may be specified in the notice why such order should not be made, and until his objections, if any, and any evidence he may produce is support of the same, have been considered by the estate officer. As would appear from Sub-section (2) the estate officer would assess the damages having regard to such principles of assessment of damages as may be prescribed. Rule 7 of the Public Premises (Eviction of unauthorised Occupants) Rulers 1958, provides for assessment of damages. That rule runs thus: 7. Assesment of damages. As would appear from Sub-section (2) the estate officer would assess the damages having regard to such principles of assessment of damages as may be prescribed. Rule 7 of the Public Premises (Eviction of unauthorised Occupants) Rulers 1958, provides for assessment of damages. That rule runs thus: 7. Assesment of damages. In assessing damages for unauthorised use and occupation of any public premises, the estate officer shall take into consideration the following matters, namely: (a) the purpose and the period for which the public premises were in unauthorised occupation; (b) the nature, size and standard of the accommodation available in such premises; (c) the rent that would have been realised if the premises had been let on rent for the period of unauthorised occupation to a private person; (d) any damage done to the premises during the period of unauthorised occupation; (e) any other matter relevant for the purpose of assessing the damages. One of the factors to be taken into consideration is the rent that would have been realised if the premises had been Jet on rent for the period of unauthorised occupation to a private person. It is not disputed that the Public Works Department of the Railways have determined Rs, 108.00 as the monthly rent payable if the house would have been let out to a private person. Mr. Rath, therefore, ultimately did not dispute the rate of damages per month as accepted by both the estate officer and the learned District Judge. 13. To sum up: Opposite party No. 1 is liable to pay damages at the rate of Rs. 108.00 per month from 9.1.1964 till 12.8.1966. On calculation he is to pay damages for thirty-one months and three days, and the total amount comes to Rs. 3358.80 paise. The opposite party No. 1 is liable to pay normal rent at the rate of Rs. 36.00 per month prior to 9-1-1964. 14. In the result, the impugned order Annexure-7, is quashed. A writ of certiorari be issued accordingly. The writ application is allowed as indicated above. In the circumstances, the parties to bear their own costs. K.B. Panda, J. 15. I agree.