Prakash Sao v. Bihar State Road Transport Corporation
1980-11-12
NAGENDRA PRASAD SINGH
body1980
DigiLaw.ai
Judgment 1. The plaintiff is the appellant in this second appeal. The suit in question had been filed on behalf of the plaintiff for a declaration that he was a lessee of the defendant Bihar State Road Transport Corporation (hereinafter referred to as the "said Corporation") and as such he cannot be evicted from the premises which had been let out to him. It is the case of the plaintiff that the said corporation owned and possessed survey plot No. 666 of village Sherghati and it was let out to the plaintiff to run a refreshment room on a monthly rental of Rs. 60.00. The said premises was leased on basis of an agreement allowing the plaintiff to run the refreshment room for a period of one year from 1.01.1959. 2. According to defendant Corporation the plaintiff was not a lessee but a licensee and after expiry of the period, aforesaid he can be asked to vacate the premises in question. 3. The learned Munsif on a consideration of the document aforesaid and other facts and circumstances came to the conclusion that the plaintiff was a licensee and as such he can be directed to vacate the premises after the expiry of the period of license. On that finding the suit was dismissed. The appeal filed on behalf of the plaintiff was also dismissed by the learned Additional District Judge holding that the plaintiff was a licensee. 4. Learned counsel appearing for the appellant has raised the same point before this Court and has urged that on proper construction of the agreement (Ext. A/5) it should be held that the plaintiff was a lessee of the premises in question and he can be evicted only in accordance with law. 5. On many occasions when a person is granted the right to enjoy an immovable property belonging to another, question arises as to whether such person is a licensee or a lessee. However, there is a marked distinction between a lease and a licence. Lease has been defined in Sec. 105 of the Transfer of Property Act, as a transfer of the right to enjoy an immovable property made for a certain time expressed or implied in consideration for a price paid or promised.
However, there is a marked distinction between a lease and a licence. Lease has been defined in Sec. 105 of the Transfer of Property Act, as a transfer of the right to enjoy an immovable property made for a certain time expressed or implied in consideration for a price paid or promised. Whereas licence has been defined under Sec.52 of the Indian Easements Act as a grant to another person "the 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 easement or an interest in the property". In either case the person concerned is in possession of the property but the question which is to be ascertained is as to whether an interest in the land has been created in his favour. If an interest in the land has been created then he is a lessee otherwise he is just a licensee. For ascertaining this aspect of the matter the document has to be examined and construed. In the case of Associated Hotels of India Ltd. V/s. R.N. Kapoor, AIR 1959 SC 1262 , it was observed. "If 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 licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee 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." In that very case it was pointed out that whether a document creates a licence or lease, the substance of the document must be preferred to the form. It should be ascertained as to what was the real intention of the parties, whether they intended to create a lease or a licence. Again in the case of Mrs. M.N. Clubwala V/s. Fida Hussain ( AIR 1965 SC 610 ) the same view was expressed.
It should be ascertained as to what was the real intention of the parties, whether they intended to create a lease or a licence. Again in the case of Mrs. M.N. Clubwala V/s. Fida Hussain ( AIR 1965 SC 610 ) the same view was expressed. In the case of Qudrat Ullah V/s. Municipal Board, Bareilly ( AIR 1974 SC 396 ) it was observed: "There is no simple litmus test to distinguish a lease so defined in Sec. 105, Transfer of Property Act from a licence as defined in Sec. 52 Easements Act, but the character of the transaction turns on the operative intent of the parties. To put it pithily, if an interest in immovable property, entitling the transferors to enjoyment, is created, it is a lease: if permission to use land without right to exclusive possession is alone granted, a licence is the legal result." 6. The agreement in question is titled as the "Deed of licence for running refreshment rooms". The parties are described as licensor and licensee. It is true that mere description of the deed or its title is not decisive regarding the nature of the deed, that has to be ascertained after taking into consideration the different clauses of the documents. From bare reference to the some of the terms and conditions of the deed it appears that the plaintiff had to supply meals and refreshment at the refreshment room to passengers travelling by the buses of the licensor which was to be approved by the licensor or by his authorised representative. Then another term is that the plaintiff had to keep and maintain necessary equipment, cupboards, drawers and show cases with prior approval of the licensor or its authorised representatives. It is also provided that only such servants or agents had to be employed by the licensee who were approved from time to time by the licensor or its authorised representative. The licensee had agreed to dismiss any employee if such employee was considered to be undesirable by the licensor or its representative. He had further agreed to allow the authorised representatives of the licensor to enter into the refreshment room at all reasonable times and to examine the condition in which the refreshment room was being run.
The licensee had agreed to dismiss any employee if such employee was considered to be undesirable by the licensor or its representative. He had further agreed to allow the authorised representatives of the licensor to enter into the refreshment room at all reasonable times and to examine the condition in which the refreshment room was being run. He could not affect any change or alteration in the refreshment room premises without the previous permission in writing of the licensor or its authorised representatives. Clause (e) of paragraph 4 of the agreement is as follows: "Every person employed by the licensee in exercise of the licence shall during the term of these presents be under the control of the licensor and shall obey or perform all reasonable directions of the licensor or his authorised representative and shall be liable in case of impropriety or misconduct to immediate removal from the licensors premises, but such persons employed by the licensee shall be deemed to be the servants or agents of the licensor." One of the clauses of the agreement provides that the licensor was at liberty to terminate the said deed by serving 24 hours notice on the licensee and "in the event of licensees failing to do so the licensor or his authorised representative shall be entitled to remove all such belongings and effects of the licensee from the refreshment room premises without in any way being liable for any loss or damage whatsoever thereto." Clause 5 of that agreement was as follows: "Nothing herein contained shall be construed as conferring upon the licensee any right, title or interest in or to the premises and the property of the licensor." 7. Reading the aforesaid terms it cannot be disputed that the licensor had allowed the licensee (the plaintiff) to run the refreshment room in question under its control. The licenser had not only say in the matter as to how the licensee shall run the business but had an authority to inspect and check the manner in which the refreshment room was being run by the licensee. The licensor had the authority to remove the employees of the licensee. In such a situation can it be said that by the document interest in the premises had been created in favour of the plaintiff so as to make him a lessee instead of a licensee.
The licensor had the authority to remove the employees of the licensee. In such a situation can it be said that by the document interest in the premises had been created in favour of the plaintiff so as to make him a lessee instead of a licensee. Learned counsel appearing on behalf of the licensee laid great stress on the following expression used in the document "that the licensee shall hold the same from 1st day of January, 1959, for a term of one year" which according to him is consistent only with creation of an interest in the premises. He further pointed out that one of the clauses of the agreement requires either party to give a three months notice before the said licence is terminated. I have already pointed out that another clause of that very agreement enables the licensor to terminate the deed by serving a 24 hours notice on the licensee. In my opinion, the clause requiring giving of three months notice in writing by either party will not make the document a deed of lease and the plaintiff a lessee. The intention of the parties are clear from the different clauses of the agreement that no interest in the land was being created. I am of the view that the courts below have rightly construed the document in question as a deed of licence and has rejected the claim of the plaintiff that he was a lessee of the premises. 8. On behalf of the appellant the learned counsel urged that even if the plaintiff was held to be a licensee, as the defendants have accepted rent month to month, he should be held to be a month to month tenant. It is difficult to accept this argument as well. When the plaintiff was inducted on the premises as a licensee he shall continue to be a licensee. Merely by payment of rent after the expiry of the period of one year he will not become a lessee. As it was pointed out by the Supreme Court in the case of Dr.
When the plaintiff was inducted on the premises as a licensee he shall continue to be a licensee. Merely by payment of rent after the expiry of the period of one year he will not become a lessee. As it was pointed out by the Supreme Court in the case of Dr. H.S. Rikhy V/s. New Delhi Municipal Committee, AIR 1962 SC 554 that merely mentioning rent in the receipts granted by the Municipality in that case to the occupiers of the shops in the market will not conclusively establish a relationship of landlord and tenant or creation of an interest in the shops in question. In the agreement the plaintiff was required to make payment which has been described as "Licence payment for the purpose of the said licence". If in the receipts granted to the plaintiff the amount has been described as rent, the plaintiff will not become a lessee of the premises so as to attract the provisions of Sec. 106 of the Transfer of Property Act. 9. In the end I may point out that before the Corporation could take any action for evicting the appellant, this present suit was filed by the appellant in the year 1965 and on basis of the orders of injunction he has continued in possession thereof for the last 15 years. The suit appears to be an attempt to forestall any action of eviction against the plaintiff, otherwise there does not appear to be any real cause of action for institution of the suit. 10. In the result the appeal fails and it is dismissed but in the circumstances of the case there shall be no order as to costs.