JUDGMENT - S.M. HAJARNAVIS, J.:---This is a petition under Article 227 of the Constitution of India filed by the original respondent challenging the judgment delivered by the Appellate Bench of the Small Causes Court, Bombay affirming the judgment given by the trial Judge holding that the petitioner is not a tenant but a licensee of Room No. 20 in building known as Dhanji Mulji Bhatia Niwas situated at Kalbadevi, Bombay-2. One Haridas Dhanji Mulji, a Halat Bhatia by caste, had executed a deed on 16th August, 1923 by which he created a trust known as "Dhanji Mulji Bhatia Trust". He transferred his building known as "Dhanji Mulji Bhatia Niwas" to the trustees for being used for the purposes of the trust. One of the conditions of this trust is that the trustees shall always permit or allow the trust property, viz. the said Dhanji Mulji Bhatia Niwas to be used and occupied as residence by poor and indigent members of the Bhatia community either free of any payment or subject to the payment by them of such nominal fees and the performance by them of such terms and conditions and rules regulations as the trustees may in their absolute discretion from time to time settle, direct, approve of or think fit to impose. It is also provided in that instrument that the aggregate nominal fees charged to the occupant of the trust premises shall not in any year as far as possible exceed the total amount of ground rent and municipal and other taxes and outgoings, insurance premia and other expenses not being expenses for repairs and for depreciation for maintaining the trust premises. The said deed further provides that the trustees shall have power to allow ground floor or any part thereof to be utilised for any charitable object or objects other than as a residence for the poor and indigent members of Bhatia Community upon the same or similar terms and conditions.
The said deed further provides that the trustees shall have power to allow ground floor or any part thereof to be utilised for any charitable object or objects other than as a residence for the poor and indigent members of Bhatia Community upon the same or similar terms and conditions. It is further provided in the deed that in the event it is found impossible or impracticable to use the trust premises or a major part thereof for the objects mentioned in the deed, then in such circumstances the trustees shall let out the trust premises or such part or parts thereof as they may think fit or expedient and shall out of the income of the trust premises pay all taxes, ground rent and the insurance premium and all other charges and outgoings payable in respect of the trust premises and all the proper costs, charges and expenses of and incidental to the administration and management of the trust premises and subject to the payments aforesaid the trustees shall apply the net income for advancement of education amongst Bhatias. It is further provided under the said deed that the trustees shall pay and defray all the costs and expenses of maintaining, repairing and keeping in good order the trust premises out of the income of dividends and interest of the securities transferred to the trustees. Clause 6 of the trust deed provides : "The trust premises shall be conducted and managed and the interest of the said securities shall be administered in all respects in accordance with the rules, regulations and provisions as the trustees shall from time to time frame.
Clause 6 of the trust deed provides : "The trust premises shall be conducted and managed and the interest of the said securities shall be administered in all respects in accordance with the rules, regulations and provisions as the trustees shall from time to time frame. All such rules and regulations shall not be inconsistent however with the avowed object of these presents or any of the provisions herein contained and shall inter alia provide for (a) the admission of deserving poor and indigent Bhatia and to the benefits conferred and provided by these trusts; (b) the exclusion of undesirable persons therefrom; (c) the requisites or qualifications for admission; (d) the circumstances under which any occupier may be expelled or any person receiving any benefit hereunder shall be excluded; (e) the cases in which persons other than deserving occupiers or persons may be allowed to occupy any part of the trust premises with deserving occupiers or persons; (f) the nominal fees or rents to be paid by each occupier; (g) prescribing the nature and extent and limits of accommodation in each case Provided Always and it shall be an invariable rule that no individual or family shall be allowed to have the benefit of the trust premises for more than ten years save in cases of quiet exceptional need of which the trustees alone shall be the sole judges, or where the poor individual or family is related to the Settler and is otherwise considered by the trustees as deserving of further extension of the period of residence but in no other cases and (h) all other matters touching the due management of the trust premises and the use and occupation thereof." It was the case of the respondents that the trust premises had been given to the poor and indigent Bhatias on terms mentioned in the trust deed. The petitioners father Karsandas Bhanji Ved applied for and got room No. 20 on the 2nd Floor in 1942 as a poor and indigent Bhatia on a monthly licence fee of Rs. 2/-. This Karandas Ved expired in 1946 and the petitioner is now occupying such room after the death of his father on the same terms and conditions, but the fee has been increased from time to time and it is now Rs. 6.50 per month. The respondents gave a notice on 28th July, 1969 revoking the licence fee.
2/-. This Karandas Ved expired in 1946 and the petitioner is now occupying such room after the death of his father on the same terms and conditions, but the fee has been increased from time to time and it is now Rs. 6.50 per month. The respondents gave a notice on 28th July, 1969 revoking the licence fee. By this notice he was also asked to pay Rs. 214.50 being the arrears of licence fees. It was also alleged in that notice that the petitioner was causing nuisance to the neighbouring occupants. The petitioner replied to the notice on 9th August, 1969 denying the respondents claim. He stated that he was not a licensee but was a tenant. It was his case that he was protected under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the "Bombay Rent Act"). He also enclosed a cheque for Rs. 214.50 for the arrears of licence fee. The cheque was returned by the respondents in June, 1970. As the petitioner did not vacate the premises, the respondents filed an Ejectment Application in November, 1971 alleging that the petitioner was a licensee whose licence has been revoked and that he had no right to occupy the room. The petitioner denied the allegations of the respondents. He claimed that he was a tenant and, therefore, was protected under the Bombay Rent Act. A preliminary issue : "Whether the respondent proves that he is tenant of the premises in application within the meaning of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and is therefore, entitled to the protection of that Act?" was framed by the trial Judge. The respondents examined respondent No. 1 and the petitioner also examined himself is support of their case. Parties also filed documents. The learned Judge, after examining the material placed before him, recorded a finding that the petitioner was not a tenant but a licensee. The petitioner thereafter filed an appeal which was heard by the Appellate Bench of the Small Causes Court, Bombay, who affirmed the finding recorded by the trial Judge and dismissed the appeal. It is against this judgment that the present petition has been filed. Mr. shah, the learned Counsel for the petitioner, urged that there is no dispute that the petitioner was in exclusive possessing of the suit premises, viz.
It is against this judgment that the present petition has been filed. Mr. shah, the learned Counsel for the petitioner, urged that there is no dispute that the petitioner was in exclusive possessing of the suit premises, viz. Room No. 20 in the premises known as "Dhanji Mulji Bhatia Niwas" at Kalbadevi, Bombay-2. He, therefore, urged that both the courts below have committed an error in holding that the petitioner was a licensee and not a tenant. He further urged that the courts below have erred in holding that the trustees have no power to grant a lease. The rules have not been properly interpreted by the courts below. He relied on the decision given by Tendulkar, J. in (Ralansay Chapansy others v. Vallabhdas Hirji Vassonji)1, Suit No. 1098 of 1947, decided by Tendulkar, J., Bom.H.C., on 22-9-47. Tendulkar, J. after examining the conditions of that trust came to the conclusion that the rooms in the sanitarium were granted by the trustees on lease and not on licence. Mr. Shah, the learned Counsel for the petitioner, urged that the facts of this case are similar to those of that case and, therefore, both the courts below have committed an error in holding that what was granted by the respondents was a licence and not a lease. It is true that if a party is in exclusive possession of a property belonging to another person then, prima facie, he is considered to be a tenant but circumstances may be established which negative that inference. The law on this point is now well settled by the decision of the Supreme Court in (Kanchanda Rammurty Subudhi v. Gopinath Naik and other)2, A.I.R. 1968 S.C. 919. where it is observed : "(7) Before we approach the question of the construction of the compromise deed, we may refer to two decisions of this Court bearing on the distinction between a lease and a licence and the principles for distinguishing one from the other. This Court observed in K.N. Clubwala v. Fida Hussain saheb, 1964(6) S.C.R 642 "Whether an agreement creates between the parties the relationship of landlord and tenant or merely that of licenser and licensee 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".
This Court observed in K.N. Clubwala v. Fida Hussain saheb, 1964(6) S.C.R 642 "Whether an agreement creates between the parties the relationship of landlord and tenant or merely that of licenser and licensee 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". This Court further observed that exclusive possession is not conclusive evidence of a lease. "If, however, exclusive possession to which a person is entitled under an agreement with a landlord is coupled with an interest in the property, the agreement would be construed not as a mere licence but as a lease. See Associated Hotels of India Ltd. v. R.R. Kapur, 1960(1) S.C.R. 368 at p. 384. (8) In 1960(1) S.C.R. 368 at p. 384, Subba Rao, J., as he then was, summarised the propositions as follows: "The following propositions may, therefore, 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 license; (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." (9) Lord Denning, speaking for the Judicial Committee of the Privy Council in Isack v. Hotel in Paris, 1960-1 All E. R. 348-352 observed : "There are many cases in the books where exclusive possession has been given of premises outside the Rent Restriction acts and yet there has been held to be no tenancy. Instances are Errington v. Errinton and Woods. 1955-1 All E.R. 149 and Cobb v. Lane, 1952-1 All. E.R. 1199 which were referred to during the argument. It is true that in these two case there was no payment or acceptance of rent, but even payment and acceptance of rent-though of great weight---is not decisive of a tenancy where it can be otherwise explained : see Clarke v. Grant, 1949(1) All.E.R. 768.
E.R. 1199 which were referred to during the argument. It is true that in these two case there was no payment or acceptance of rent, but even payment and acceptance of rent-though of great weight---is not decisive of a tenancy where it can be otherwise explained : see Clarke v. Grant, 1949(1) All.E.R. 768. A Lord Greene M.R., said in Booker v. Palmer, 1942(2) All.E.R. 674-677. "There is one golden rule which is of very general application, namely, that the law does not impute intention to enter into legal relationship where the circumstances and the conduct of the parties negative any intention of the kind." What is to be considered is what was the intention of the parties when the party entered into an agreement. In the present case, in order to determine the intention of the parties, we will have also to go bank to the trust deed. By this instrument the settlor has transferred to the trustees the trust property given in the schedule. Clause No. 1 says that the trust premises shall always be known and styled as "Thakur Dhunji Muljee Bhatia Nivas" and Clause No. 2 says that the trust premises and the securities shall be under the management and control of the settlor who shall be the first managing trustee and after his death or retirement under the management and control of the trustees.
The relevant clause is Clause No. 3 which read : " The managing trustee or the trustees shall always permit or allow the trust premises to be used and occupied except as hereinafter provided as residences by poor and indigent members of the Bhatia Community either free of any payment or subject to the payment by them of such nominal fees and the preference by them of such terms and conditions and rules and regulations as the trustees may in their absolute discretion from time to time settle direct approve of or think fit to impose provided that the aggregate nominal fees charged to the occupants of the trust premises shall not in any year as far as possible exceed to the total amount of ground rent and Municipal and other taxes and out-goings insurance premia and other expenses not being expenses for repairs and for depreciation for maintaining the trust premises likely to be spent or incurred or paid by the trustees provide however that the discretion of the Managing Trustees or the Trustees in fixing such fee or fees shall be final provided Also that the trustees shall have power to allow the ground floor or any part thereof to be utilised for any charitable object or objects other than as residence for the poor and indigent members of the Bhatia Community (e.g. as an Hospital or free dispensary either for the members of the Bhatia Community or for Hindus generally) and upon the same or similar terms and conditions as are hereinabove mentioned as to charging of fees Provided Also that in the event of its being found impossible or impracticable to use the trust premises or a major portion thereof for the objects abovementioned then in such circumstances the trustees shall let out the trust premises or such part or parts thereof as they may think fit or expedient and shall out of the income for the income for the trust premises pay all taxes, ground rent (if any) and the insurance premium and all other charges and outgoings payable in respect of the trust premises and all the proper costs charges and expenses of and incidental to the administration and management of the trust premises and subject to the payment aforesaid shall apply the net income for the advancement of education amongst Bhatias either by granting scholarships, prizes or rewards to orphans and poor members of the Bhatias Community or by contributing towards the maintenance of any school or schools, college or colleges or institution wherein Bhatia students receive education or any training or apprenticing poor boys and girls or either of them of the Bhatia Community to some useful trade or occupation." This already shows that the settlor wanted the trustees to permit or allow the trust premises to be occupied by the poor and indigent members of the Bhatia Community as licensees on payment of nominal fees.
There was no intention to grant tenancy rights to the poor and indigent members of the Bhatia Community. This will be clear from the later provisions in the paragraph itself where it is stated : "Provided also that in the event of its being found impossible or impracticable to use the trust premises or a major portion thereof for the objects abovementioned then in such circumstances the trustees shall let out the trust premises or such part or parts thereof as they may think fit or expedient and shall out of the income for the trust premises pay all taxes and ground rent." It is, therefore, clear that it was the intention of the settlor to grant use and occupation of the premises by the poor and indigent members of the Bhatia Community on payment of concessional fees. The very fact that the words used are that they were allowed to use and occupy on payment of fees and not on concessional rent, clearly shows that the intention of the settlor was to grant the poor and indigent members of the Bhatia community licence and not lease in respect of the trust premises. The trustees were authorised to grant leases only in the event of it being found impossible or impracticable to use the trust premises or a major portion there of for the objects mentioned earlier. They had, therefore, no power initially to grant a lease in respect of the suit premises. Mere fact that the petitioner was in exclusive possession of the suit premises will not establish that the petitioner was a tenant of the suit premises. I have already stated the intention of the trustees must be to act in accordance with the trust deed, viz. the granting of the licence for use and occupation of the suit premises. The settlor did not want initially to grant tenancy rights to any of the poor and indigent members of the Bhatia Community. In my opinion, the intention to the parties was, therefore, definitely not to create tenancy. It is true that in Suit No. 1078 of 1947 decided on 22nd September, 1947. Tendulkar, J. held what was granted to the occupants of the sanitorium were leases and not licences. It is true that the facts of that case were practically similar to those of this case.
It is true that in Suit No. 1078 of 1947 decided on 22nd September, 1947. Tendulkar, J. held what was granted to the occupants of the sanitorium were leases and not licences. It is true that the facts of that case were practically similar to those of this case. At that time, the question whether licence or lease was granted was decided only on the basis of exclusive possession. I have already stated that the law on this point has been radically changed and now the exclusive possession has not remained the sole test. It is now well settled that it is the intention of the parties that determines whether it is lease or licence. The decision of Tendulkar, J. is, therefore, of very little assistance. In the subsequent similar case, viz. (Lady Newaibai Ratan Tata and others v. Donabhai Piroisha Machiwala)3, Civil Rev. Appli. No. 337 of 1954, decided by Chagla, C.J. Bom.H.C. on 22-7-54. Chagla, C.J. held that what was granted to the destitute Parsis was a licence and not a lease. In that case the destitute parsis were allowed the use and occupation of the suit premises at nominal charges by the trustees. It was provided that the trustees should charge such fees as would be sufficient to cover the expenses and outgoings. The learned Chief justice in that case examined the trust deed and he found from the deed itself that the trustees had no power to create tenancies but they were granted power only to allow the use and occupation of the suit premises under licence. He, therefore, observed that the trustees could not go beyond the power that was granted to them by the trust deed. In the present case, the trustees have power to give trust premises for use and occupation of the poor and indigent members of the Bhatia community on nominal fees. Therefore, the intention of the trustees was to grant licence only. It was then urged by Mr. Shah, the learned Counsel for the petitioner, that if the trustees have gone beyond the power which was granted to them then the grant will not be invalid. He relied on a decision of this Court in (Mahemed Husain Kasambhai Mansuri v. J.K. Trivadi)4, 54 Bom.L.R. 659. That was a case where a house was let out in breach of section 6 of the Bombay Land Requisition Act, 1948.
He relied on a decision of this Court in (Mahemed Husain Kasambhai Mansuri v. J.K. Trivadi)4, 54 Bom.L.R. 659. That was a case where a house was let out in breach of section 6 of the Bombay Land Requisition Act, 1948. Here in this case, we are not concerned with the validity of the grant but have to find out the intention of the parties. I have already stated that it would be normally the intention of the trustees to act within the powers as granted to the trustees. In this particular case, the rules framed by the trustees for the management of the trust have been produced and reference has been made to those rules by both the courts below. The learned Counsel for the petitioner urged that there is nothing on record to show that these rules were in force when the suit premises were allotted to the father of the petitioner. It is true that the application filed by the petitioners fathers is not on record but the petitioner has himself admitted in his cross-examination that his brother informed him that forms such a Ex. B were sent to him every 2 to 4 years and that he has filled them and that his father might have filled in such form. It is clearly mentioned in the form that the applicant has read the rules and was prepared to abide by them. He stated that he did not know on what terms his father occupied those premises. It is, therefore, not open to the petitioner to say that the rules which were produced at the trial and to which reference has been made by the courts below were not in force when initially the suit premises were allotted to his father. The petitioner had not made any effort to show that some other rules were in force when the property was initially given to his father. The courts below were, therefore, right in taking into consideration the rules for determining the intention of the parties when the petitioners father was initially allowed the use and occupation of the suit premises. Rule No. 1 provides that none else except a Bhatia caste brother shall be permitted to reside in the trust premises.
The courts below were, therefore, right in taking into consideration the rules for determining the intention of the parties when the petitioners father was initially allowed the use and occupation of the suit premises. Rule No. 1 provides that none else except a Bhatia caste brother shall be permitted to reside in the trust premises. Rule No. 2 provides that no person without a family shall be permitted to reside in the trust premises Rule No. 3 lays down that it is in the discretion of the trustee as to who or which family should be permitted to reside in the trust promises and also about the time when the user should be stopped and the premises would be vacated. Rule 11 lays dawn that no family shall keep in the premises any person whose name is not mentioned in the application made by it or permit anyone to sleep therein without the written permission or keep any person in trust premises by taking money or shall bring any sick person or any friend without the written permission. None shall keep any ledger in the trust premises. In my opinion, Rule No. 11 clearly shows that what was granted was not a lease but a licence. The very fact that the occupier could not bring anyone in the premises except the written permission shows the control of the trustees over the suit property even though it was given in exclusive possession of the occupier. Rule No. 13 provides: " If any family keeps closed the premises given for it to use for more than thirty days, it shall be presumed that the family is not in need of the premises and the trustees have power to take possession thereof. If anybody wants to go out for more than thirty days for any important reason he shall have to take permission of the trustees in advance by written application." The fact that they have to take permission for going out for more than 30 days also shows the trustees control over the trust premises. Rule No. 16 provides that the main gate for coming in and going out for this Niwas shall be closed at 10.30 p.m. and opened at 5 a.m. in the morning. This again clearly shows the control of the trustees over the suit property.
Rule No. 16 provides that the main gate for coming in and going out for this Niwas shall be closed at 10.30 p.m. and opened at 5 a.m. in the morning. This again clearly shows the control of the trustees over the suit property. The shutting of entrance and exit between 10.30 p.m. and 5 a.m. is, in my opinion, repugnant to the idea of tenancy. Rule No. 30 provides that as this Niwas is constructed for those who are eligible to take its help, the trustees will make enquiries about such family every year and if during the enquiry the trustees find that any family or families is/are not eligible for giving help, the Trustees will ask them to vacate the Niwas by 30 days written notice. But the trustees have a right to make any family and the persons residing with it to vacate the premises given to it for use without notice and the trustees will not be bound to give any reasons for the same. This rule also shows that the trustees retained control over the use and occupation of the trust property Rule No. 23 provides that the trustees have right to change these rules. The very fact that the trustees had unilateral power of changing the rule shows that what was granted was a licence and not a lease. Rule Nos. 20 and 23 show that one of the ingredients of a lease, namely certainty of time is definitely lacking in this case. The rules, therefore, clearly indicate that what was granted was a licence and not a lease. There is another aspect of this case also. If what was granted was a lease then the grantee cannot be evicted on any grounds except those which are provided by the Rent Act. It would mean that a Bhatia who after the allotment of a room earns a fortune but refuses to vacate to make room for deserving Bhatia cannot be evicted from the suit premises on the ground that he is no more poor Bhatia. Such a construction of the allotment is destructive of the very purpose of the trust. The intention of the parties was, therefore, to grant a licence and not lease. Both the courts below were, therefore, right in holding that what was granted was a licence and not a lease. The petition deserves to be dismissed.
Such a construction of the allotment is destructive of the very purpose of the trust. The intention of the parties was, therefore, to grant a licence and not lease. Both the courts below were, therefore, right in holding that what was granted was a licence and not a lease. The petition deserves to be dismissed. In the result, the petition is dismissed. The rule is discharge but under the circumstances of the case, there will be no order as to costs. -------