Judgment V.V. VAZE, J.:---Summer of 42. The city of Bombay was slowly recovering from the erosion of war economy. Serpentine queues for essential commodities were seen every where The mighty arch of yellow basalt hautily thrusting its frame above the promontory lapped by the waters of Bay of Bombay had witnessed the entry of many an Englishman-administrators, Governors-General, dashing blades or humble quill drivers-coming to India to keep Pax Britannica. That very arch was soon to serve as their exist. DSS Incorporated 2. A group of seven businessmen drawn from various fields like pharmaceuticals, textiles, tea, banking and insurance got together and surveyed the Indian economic scene. They had a vision of a possible co-operation of Indian and foreign entrepreneurs in the field of supply of essential commodities for civilian consumption-something which was very much relegated to the background by the more pressing need to keep the sinews of war flowing. They envisaged a free-flow of goods and merchandise once the sea routes became open; took note of the fact that manufacturers in western countries had at their disposal large departmental chain stores to handle goods direct from the factory to the consumer and managed country-wide distribution system. This group regretted the absence of a similar large-scale departmental store in India and decided to remedy the defect and build up a co-ordinated contract between the producer and consumer. With this object in view, the group incorporated a company "Departmental Service Stores Limited." ("DSS"). 3. The Company could not function in view of the prohibition regarding the issue of shares under Rule 94-A of the Defence of Indian Rules, without the sanction of the Examiner of Capital issues. This sanction was granted on 15th November, 1983 authorising the company to raise capital of the value of Rs. 1,62,000/- under certain conditions. The hurdle of the Defence of India Rule was crossed and capital was raised. Having realised the capital by allotting shares to those who had applied before 17th May, 1943, the company had money but no premises wherein to start the contemplated departmental stores. The Company was all dressed up but had nowhere to go. On 8th September, 1944 the company, acquired the house of Messrs. Dinshaw and Company. Colaba, Causeway, Bombay, from one Behram Rustom Irano, after paying Rs. 47,000/- out of which Rs. The Company was all dressed up but had nowhere to go. On 8th September, 1944 the company, acquired the house of Messrs. Dinshaw and Company. Colaba, Causeway, Bombay, from one Behram Rustom Irano, after paying Rs. 47,000/- out of which Rs. 4,000/- were towards the goodwill and the remainder towards the price of goods, electrical installations type writers etc. A store was started in the premises of Dinshaw and Co. for the 10 months ending 30th June, 1945, DSS made a modest profit of Rs. 6,405-2-11 Ps. 4. The Examiner of Capital Issues permitted the Company to issue further shares of capital of the value of Rs. 8,30,000/-. The signatories to the Memorandum and Articles of Association, the Directors, Managing Agents and their friends agreed to take a bulk of the new issue and remainder as offered for public subscription. Masers. Bagman Traders Ltd. of 41, Bruce Street, Fort, Bombay, were the Managing Agents of the company and Bagayatkar and Manjrekar of Bombay were ex officio Directors nominated by the Managing Agents. The prospectus issued by the company inviting subscription from the public, after taking a note of the possible increase in international trade on account of the opening of free sea routes, announced that the DSS will inaugurate a new era of "shop as you please" under one roof and thereby obviate the necessity of standing in long queues and hunting for different goods and shops situated in far-flung localities. The ambitious prospectus projected a picture of a store where a person can buy all his needs "from a pin to a piano" and that too with home delivery facilities. Twelve Departments were enumerated as being the ones which would be immediately opened in the stores and it was indicated that the DSS would further diversify their activities into thirty more Departments ranging from motor cars, engineering goods, type-writers, jewellery to flowers. By way of a foot-note DSS promised that departments of refreshments, decoration an art gallery will follow after a while. Mechanism of running the stores. 5. By way of a foot-note DSS promised that departments of refreshments, decoration an art gallery will follow after a while. Mechanism of running the stores. 5. Regarding the mechanism of running the stores, the prospectus proclaimed that the DSS shall bring together manufactures under one roof and the concept being of co-operation, a selected group of merchandise dealing in various types of merchandise were to be provided with facilities and accommodation in the store "for the display and sale of their goods, under the supervision and general management of the Company". The promoters felt that this would save the merchants good deal of overhead charges and exorbitant shop rents. 6. The projection of the Directors was that the income to the Company, from the Departments will be "the commission ranging from 2. 1/2% to 15% or more" according to the nature of the commodities sold, and that many leading merchants in various lines had already expressed their willingness to avail themselves of this facility. The promoters announced that the DSS enjoyed the confidence of leading merchants "who had agreed to leave in their control their goods worth thousands of rupees for display and sale on retail and wholesale basis." 7. The permission granted by the Controller for issue of the balance of the originally issued share capital of Rs. 10,00,000/- "created a problem of securing suitable premises at a suitable place, when for love or money even small premises were not available in Bombay". As the report for the year ending 30th June, 1946 suggests, the Directors were "fortunate in securing an ideal structure and land in an ideal locality at Dadar a most central place in Greater Bombay." DSS takes on lease suit premises. 8. At the junction of Dadar Road and Bhawani Shankar Road was located an estate known as Kasturchand Mills. The boiler shed etc. of the mills were located on the south-west portion while the northern area abutting the Dadar Road consisted of a godown and open land. This property was purchased by Pratapsing Karsandas and Ratanbai Gordhands Ashar ("Ashar") and was identified by the DSS Directors as a suitable pace to house their departmental stores. DSS took the godown property on lease from 1st June, 1946 for a term of 10 years at a monthly rent of Rs. 1,000/- with liability to pay excess over Rs. 465-30/- in the municipal taxes. DSS took the godown property on lease from 1st June, 1946 for a term of 10 years at a monthly rent of Rs. 1,000/- with liability to pay excess over Rs. 465-30/- in the municipal taxes. The leases were permitted "to make such alterations, additions and modifications to the existing structure on the demised premises or to demolish the structure at present standing on the demisted premises and to construct a new structure. The Lease Deed had a renewal Clause 6(h) "If the Lessee shall be desirous of taking a renewal of the lease of the demised premises for a further period of 10 years and of such desire shall prior to the expiration of the said term hereby created give to the Lessors three Calendar months previous notice in writing and shall pay the said rent hereby reserved and observed and perform the several covenants herein contained and on the part of the Lessees to be observed and performed upto the expiration of the said term granted the Leasors shall and will upon the request of the Lessees and upon the Lessee executing and diverting to the Lessors a counter part thereof forthwith execute and deliver to the Lessees a renewed Lease of the demisted premises for a further term of 10 years from the said 1st day of June. One Thousand Nine Hundred and Fifty six at the same rent and under and subject to the same covenants, conditions, provisions and agreement as are herein contained but excluding this present covenant as to renewal in such case the Stamp duty and registration charges in respect of the new lease will be paid by the Lessors and Lessees in equal shares and each party will bear and pay their or its own costs than the Stamp duty and registration charges." 9. The parties to the agreement had the benefit of legal advice inasmuch as, both had retained Solicitors, and the conveyancer specially took into consideration the provisions of section 108 of the Transfer to Property Act, dealing with rights and liabilities of lessor and lessee. Sub-clause (g) of Clause 6 provides :--- "The following rules mentioned section 108 of the Transfer of Property Act, 1882 shall not apply to the rights and liabilities under these presents of the Lessors and Lessees respectively viz. Sub-clause (g) of Clause 6 provides :--- "The following rules mentioned section 108 of the Transfer of Property Act, 1882 shall not apply to the rights and liabilities under these presents of the Lessors and Lessees respectively viz. Rules (a) to (h), (i) and (m)." That is to say, Rule (j) of section 108 which confers the right on the lessee to transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property and which enabled the transferee of such interest or part to again transfer it was specifically retained. 10. To put the matter positively, the Lessors under Clause 3(d) covenanted with the Lessees : "to allow lessors to sublet, relet or underlet or part with the possession of the said demisted or any structure thereon to any person provided that such sub-letting, re-letting or under-letting or parting with possession shall in no way affect the Lessees' liabilities under these presents." 11. The concept of assignment, sub-letting or mortgaging the interest in the property was very much in the minds of the contracting parties. The preamble itself describes Pratapsingh Karsondas and Ratanbai Gordhandas as "the Lessors" -which expression-so runs the preamble-shall unless it be repugnant to the context or meaning thereof be deemed to include the said Pratapsingh Karsondas and Ratanabi Gordhabdas their respective heirs executors administrators and assigns and the person or persons for the time being entitled to the reversion expectant upon the determination of the terms hereby granted of and in the land hereditaments and the premises hereby demised. DSS have been called 'the Lessees' and it has been provided that this expression shall unless it be repugnant to the context or meaning thereof include "their successors and permitted assigns". 12. Though the ease was registered on 14th September, 1948, it is clear from the recitals therein that DSS had already taken possession of Ashar's property on 1st June, 1946. The Directors' Report for the period ending 30th June, 1946, after referring to the acquisition of this property, speaks of erection of a new building adjacent to the existing one to accommodate as many as 30 to 33 Departments. They also report that they were lucky in acquiring best quality readymade furniture most suitable for their purpose at a cheap price. 17th October 1946, DSS---an unprofitable venture 13. They also report that they were lucky in acquiring best quality readymade furniture most suitable for their purpose at a cheap price. 17th October 1946, DSS---an unprofitable venture 13. The Directors' Report for the Year ending 30th June, 1947 opens with an apology that the Company had to pass through its teething period and that the idea of Departmental Stores being alien to the Indian mind, some more time has to necessarily pass before that exotic plant could take kindly to Indian soil. The Directors, after high-lighting the fact that institutions like the Departmental Stores can run around if they start business on very large scale in as many lines as possible, proclaimed hat "they decided to share it with the merchants, leaving the responsibility of investments for some Departments to them. They made Agreements wit various merchants trading in different lines, to supply goods in all varieties and kinds to the company and the Company, under Agreement, is selling the same at fair and market rates to the public. The merchants have to provide their own trusted and experienced Salesmen who serve as the Company's employees." 14. DSS redesigned the stores, fitted it with furniture and electric fittings and the merchants-so the report proceeds---"supply the goods to the Company." Having made such arrangements with some merchants, the DSS invited His Excellency Mangaldas Pakvasa, the Governor of C.P. Berar, to inaugurate the Stores with 24 Departments on 17th October, 1946. At that time more than half of these Departments were run by DSS exclusively on their own. DSS wanted to add more Departments. By then the bulk of the share capital was invested in buildings, furniture and fittings and the balance was spread over the purchase of stocks. The Directors lamented that even a working capital of Rs. 10,00,000/- would be found small for a store of that magnitude, and if not all the Departments atleast some of the Departments will have always to be maintained by the company on its own otherwise "the Company's position will be reduced to that of an ordinary landlord, and the Company will not be able to have effective control over the sales and service of the stores and the very idea of departmental business will be nullified." 15. This managerial felt did not pay dividends; the Directors' Report for the Year ending 30th June, 1984 blames the inflationary tendencies of the market for the loss of Rs. 50, 000/- suffered by the DSS. DSS resists letting out of stalls 16. The Report for the Year ending 30th June, 1949 also show a loss of Rs. 24,788/- even though sales had shot up to Rs. 80,000/- in that year. The Directors complained of inflation and put it to the Shareholders that they would either be required to call the balances of the unpaid capital or to obtain fresh capital or to raise funds in any other way that the Directors might deem expedient. They ruefully pointed out that because of paucity of funds, they had to forego ration cloth department which would have fetched a handsome profit of Rs. 50,000/-. The Report also envisages the possibility of renting their shops---"It was not very difficult for the management to flaunt the figures of profit by restoring to the simple expedient of straightaway letting all the stalls on a rental basis with the sole eye for safety and consideration for immediate future only. But it would have meant nothing less than a sacrifice of the very basic conception of the Department Stores permanently. Having denied itself this temptation, the Company is now occupying the position of an axle sending out spokes in different directions and at the same time keeping the entity of the wheel in tact." 17. Reference to 'letting out' in the Report will have to be appreciated in the back-drop of Rent legislation. Statutory control of tenements was resorted to in Bombay by the Bombay Rent Restriction Act, 1939, which followed by the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1944, but the real effective Act was the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which came into force on 12th February, 1948. This Act, for the first time, under section 15, but an embargo on a tenant sub-letting or transferring his interest. 18. By then the structural lay out of Ashars' property had changed. Glazed show window formed the northern front of the stores and the only entrance to the stores could be effectively sealed by a collapsible gate 8'.6" wide. This Act, for the first time, under section 15, but an embargo on a tenant sub-letting or transferring his interest. 18. By then the structural lay out of Ashars' property had changed. Glazed show window formed the northern front of the stores and the only entrance to the stores could be effectively sealed by a collapsible gate 8'.6" wide. The old godown was divided into a number of shops and a mezzanine floor came up supported by R.C.C. Pillars placed 12'.6" apart. The Mezzanine was approachable by three stair cases, which led into a 5' wide passage flanked by a parapet wall. The central portion of the first floor contained what was styled as 'Central Wing Cabine' while those abutting the walls on north and south were called 'Left Wing Cabins' and 'Right Wing Cabins'. A Manager's office was located at the North-East corner of the Mezzanine floor. 19. Though most of the shops on the ground floor were 12'.6" x 10'.10", some in the corners were bigger. A dispensary and a studio were located on either side of the main entrance while a maternity hospital and a photo studio occupied the north-west corner of the first floor. DSS commits default 20. By then the stores consisted of about 40 stalls out of which 15 were run by DSS themselves, the remaining 25 were managed by several merchants. The merchants were bringing in their all kinds of goods to stock, display and sell in the stalls through their own staff. The DSS were charging commission from the merchants as provided for in the agreement, and the sale proceeds of each day were immediately passed on to DSS. At the end of each month DSS were sending statements of account. 21. As Sale-proceeds were daily collected by DSS, they were liable to pay sales-tax on the sales to Sales-tax authorities. But, as is obvious from the Directors' Reports the Company was perpetually in the red. DSS committed default in remitting the collected sales-tax and the Collector of Bombay instituted recovery proceedings. The merchants, who by then had formed a 'DSS Association', wrote to the Collector on 8th January, 1951 (Exh. 31) to refrain from taking action against their stock of goods over which DSS had no claim or interest. The Association Members reiterated the fact that as the sales-tax collections have been passed over to DSS. The merchants, who by then had formed a 'DSS Association', wrote to the Collector on 8th January, 1951 (Exh. 31) to refrain from taking action against their stock of goods over which DSS had no claim or interest. The Association Members reiterated the fact that as the sales-tax collections have been passed over to DSS. The latter is liable for depositing the same with the exchequer. DSS mortagages the property on 13-8-1957. 22. As adumbrated earlier, the Directors of DSS had informed the shareholders that they do not have enough working capital. The letter from the merchants (Exhibit 34) also is a pointer to the fact that DSS could not deposit with the Collector, even the sales tax collected by them from the merchants. Driven to the well, DSS mortgaged the Stores by English Mortgage dated 13-8-1951 to raise a loan of Rs. 55,000/- executed in favour of Dr. Mahasukhlal Jagjivandas Shah, Dhirajlal Jagjivandas Shah and Kantilal Jagjivandas Shah ("Shah Brothers"). It was a term of the deed that in case of default in repayment of the loan, the mortgagees would be entitled to put the property for sale after giving a notice as required by Clause 1 of section 69 of the Transfer of Property Act. 23. This injunction of Rs. 55,000/- did not improve the financial health of DSS, Messrs. Mulla an d Mulla and Craigle Blunt and Caree ("Mulla"), Solicitore for Ashar, received a letter from Messrs. Gandhi and Co. Auctioneers intimating the desire of the mortgagee to put the property for auction. Mulla wrote to Messrs. Choksey and Co. (Choksey'), Solicitors of the mortgagee on 28-4-1953 (Exh. Z-185) pointing out that Shah Brothers who are the legal mortgagees should pay to the paramount landlord Ashar arrears of rent. "With a view to preserve the safeguard their rights as mortgagees" Mulla offered to Choksey that in case the latter were prepared to pay that dues of Ashar, Mulla might try to persuade their clients to waive forfeiture and to allow the auction sale to take place on payment of dues. It appears from this letter that DSS not only defaulted in payment the mortgage debt due to Shah brothers but had also defaulted in making payment of the rent due to the paramount landlord Ashar. DSS hands over possession to Shah Brothers 24. On 25th October, 1953 DSS wrote to Shah Brothers (Exh. It appears from this letter that DSS not only defaulted in payment the mortgage debt due to Shah brothers but had also defaulted in making payment of the rent due to the paramount landlord Ashar. DSS hands over possession to Shah Brothers 24. On 25th October, 1953 DSS wrote to Shah Brothers (Exh. "D") that as desired by the latter, possession of the entire building including furniture fixtures and stock in trade, keys of the strong cupboards and main doors of the building have been handed over to them. DSS requested the mortgagees that the latter should continue to give the merchants, who were selling goods in the stalls, all the facilities to carry on their trade as were being given by DSS. Property auctioned. 25. On 9-12-1953, the premises were put to auction by Messrs. Gandhi and Co. The particulars and conditions of Sale (Exh. Z-177) gave in details the description of the immoveable properties as well as the dimension of each piece of furniture. Condition 16 makes a reference to the letter from Mulla, Solicitors of Ashar, intimating them that the lessors have forfeited the lease but that :--- "The Vendor will pay the arrears of rent of the said leasehold premises to the landlord upto the date of sale and will see that the forfeiture by the landlord in waived." Thus, the prospective bidders were assured that the benefits of the lessee under which DSS were holding the property would accrue to them on purchase. 26. The auction was held and the hammer fell at the bid of Rs. 74,000/- by Messrs. Ramniklal and Co. ("Ramniklal"). A week thereafter on 17-12-1953 Messrs. Gokhale and Kale Co., Solicitors for Ashar, wrote to Messrs. Manohar and Co. Solicitors of DSS, confirming the auction sale. 27. After the auction, Shah Brothers paid Rs. 805-12-0 to Mulla, Solicitors of Ashar, who on 19th/21st December 1953, informed Shah Brothers that in view of this payment in respect of which the forfeiture notice was given, "our clients waive the forfeiture of the said lease. The purchaser and his executors, administrators and assigns at the auction sale will carry out the terms of the lease and pay the rent as adjudicated upon by the Small Causes Court, together with 3% municipal increase xxx". The purchaser and his executors, administrators and assigns at the auction sale will carry out the terms of the lease and pay the rent as adjudicated upon by the Small Causes Court, together with 3% municipal increase xxx". By waiving this forfeiture, the paramount landlord Ashar accepted the auction purchaser as the lessee in conformity with what was given out to the prospective bidders in the conditions of auction. 28. Though the auction had taken place on 9-12-1953, 7 stall-holders, through their advocate Sampat, pointed out to Shah Brothers (Exh. Z-6) that as mortgagees in possession, they have taken possession of the stores. The stall-holders, by their letter held Shah Brothers "absolutely responsible for the safe custody of stocks, articles, things, furniture, galas and cash collections laying at the stalls and consequently also liable and responsible for the loss of the same." The stall-holders complained that Shah Brothers have failed to take even the ordinary precaution to secure the safety of the goods of the stall owners, thus, rendering themselves liable for the consequences". They referred to a theft that had taken place on 27th March, 1954 and gave specific notice that "unless you take all steps and measures to secure the safety of the stalls, you shall be personally held responsible for the loss or damage to the stall-owners' property". Registered Conveyance by Morgtagee in favour of Ramniklal. 29. The next day i.e. on 6-4-1954 Shah Brothers executed a Conveyance of the Stores in favour of Ramniklal whom they described as purchasers, and made it clear that this expression shall "unless it be repugnant to the context or meaning thereof include the partner or partners of the said firm of Ramniklal and Co. and their assigns". In the deed, they traced the history of the transfers affecting the property and recited that "the vendors assign unto the purchasers all the estate, right, title and interest which vendors have in the premises and furniture and fixtures". The deed refers to "the residue now unexpired of the said term of 10 years of the lease together with the benefit of the convenant for the renewal of the said lease and at and under the rent reserved by the said Indenture of Lease". The deed refers to "the residue now unexpired of the said term of 10 years of the lease together with the benefit of the convenant for the renewal of the said lease and at and under the rent reserved by the said Indenture of Lease". As in the conditions of the auction, the Conveyance also contains detailed measurements of the pieces of furniture such as show-cases, wall-cupboards, racks, double faced cupboards, pigeon-hold cupboards, counters with full size drawers, mirros and sundries. 30. DSS, inspite of their failure to pay the else money to Ashar or redeem the mortgage, filed a Suit No. 1055 of 1954 on the Original Side of this Court requiring the mortgagees and the auction purchasers to reconvey the property. A consent decree (Exh. "E") was passed on 10th August, 1959 whereunder it was agreed that the auction purchasers would transfer the property to DSS or their nominee. As Ramniklal refused to execute the conveyance, Notice of Motion was taken out. The Court directed Ramniklal to convey the property to the petitioner (DSS). Laxmi Nominee of DSS 31. Under the consent terms, the dues payable by DSS to the auction purchaser Ramniklal were worked out and an Advocate Kantilal M. Vakil was appointed as the value and not as an arbitrator to evaluate the property like fixtures and furniture. The parties agreed that upon payment being made by the plaintiffs, the auction purchasers shall convey or transfer the property to the plaintiffs and the defendants No. 1 to 3 shall join as a confirming party in the conveyance. It was further agreed that in the event of default, the sale of the property held on 9-12-1953 shall stand confirmed. The valuer Vakil submitted his report and payment was made by M. Laxmi and Co. ("Laxmi"). Laxmi came into picture for the first time as one who paid on behalf of DSS to the defendants as nominees of DSS. On 13-5-1960 (Exh. "G") second consent terms were drawn under which Laxmi agreed to give up their rights and claims upon being reimbursed the amount spent them as against the defendants. The conveyance was to be executed in by favour of Laxmi. If the stipulated payments were not made, the General Body of the share-holders of DSS were to pass a resolution regarding execution of conveyance. 32. The conveyance was to be executed in by favour of Laxmi. If the stipulated payments were not made, the General Body of the share-holders of DSS were to pass a resolution regarding execution of conveyance. 32. Inspite of a resolution being passed by the General Body, a notice of motion was taken to on behalf of DSS. This Court in its Ordinary Original Civil Jurisdiction by its order dated 22-8-1960 (K.K. Desai, J.) ordered that Ramniklal and other defendants as confirming parties do execute in favour of Laxmi a conveyance of the property in the form and engrossment which had already been prepared and approved by the parties. According to Ramniklal and Laxmi, the stall holders handed over possession of the stalls to Laxmi on 25-8-1960 (vide document Ex. 1). How Laxmi entered the fray. 33. As Laxmi entered into the scene for the first time, it would be desirable to refer to Exh. "F" dated 19-1-1960 which was an agreement between Mangala Laxmi Chimanbhai Shah, Sharad C. Shah, Jagdish Chinubhai Shah and Piyush C. Shah. The agreement recites that an oral proposal was made by L.V. Manjrekar, the Managing Director of DSS that if the DSS pays Rs. 1,14,500/- and Rs. 31,912/- to Ramniklal and Shah Brothers and pay the costs of conveyance, Ramniklal were to convey the properties of DSS to Laxmi or their nominees. In case DSS was in a position to pay Rs. 2,32,000/- within one week, Laxmi should re-convey the property to DSS. The agreement further apportions the investment of each of the partners and recites that if the offer of Manjrekar is accepted and hey purchase the departmental stores, they agreed to carry on business of departmental stores in partnership. 34. A circular letter was issued to the stall holders by Ramniklal on 3-9-1960 (Exh. "J") informing them that Laxmi has agreed to abide by the terms of the agreement entered into by the stall-holders with Ramniklal. Each stall-holder confirmed the contents. 35. On 21-11-1960 Ramniklal executed a conveyance in view of the consent terms passed in Suit No. 1055 of 1954 of the suit property in favour of Laxmi as nominees of DSS though DSS did not sign the document as contouring party. The conveyance process was completed at a later date by Exh. 3 and 3-A. Prior litigations 36. 35. On 21-11-1960 Ramniklal executed a conveyance in view of the consent terms passed in Suit No. 1055 of 1954 of the suit property in favour of Laxmi as nominees of DSS though DSS did not sign the document as contouring party. The conveyance process was completed at a later date by Exh. 3 and 3-A. Prior litigations 36. A suit being Suit No. 349 of 1953 was field by DSS against Laxmi in this Court in its Ordinary Original Civil Jurisdiction which came to be dismissed for want of prosecution on 1-9-1969. 37. An ejectment Suit No. RAE 675/8225 of 1965 was filed by Ashar against DSS, Shah Brothers, Ramniklal and Laxmi. Ashar prayed for appointment of Receiver to take possession of the stores which matter is still pending. 38. Another Declaratory Suit No. 97/832/66 was filed in the Small Causes Court at Bombay by one of the stall-holders Murarilal for a prayer that he is the lawful sub-tenant of one of the stalls which is still pending. Similar suits were filed by other stall-holders also in the Small Causes Court, and these are pending. An injunction has been granted against Laxmi form disturbing the possession of the stall-holders in any manner or stopping the stall holders' entry in the premises. 39. R.A.N. Application No. 828/SR of 1966 was filed by Messrs. Soni Watch Co. against Laxmi as well as Ashar claiming that they are lawful sub-tenants of the stall having been put in exclusive possession thereof since May 1952. The applicants complained that the rent of Rs. 210/- per month which was being charged for the stall is excessive and that the Court may fix a sum of Rs. 60/- per month as standard rent. Similar R.A.N. Application have been filed by the other stall-holders and are pending. 40. On 6-9-1960 Ashar wrote to DSS (Exh. Z-173) that the latter have committed breaches of the covenant like repairs, etc. and informing DSS that he determines the lease. Ashar also called upon DSS to vacate the premises at the end of the month. 41. Ashar filed an R.A.E. Suit No. 37/358 of 1968 (Exh. 23) against DSS in the Small Causes Court, Bombay. Ashar alleged that DSS who were liable to pay statutory rent in respect of the stalls fell in arrears and claimed possession of the premises. Ashar also called upon DSS to vacate the premises at the end of the month. 41. Ashar filed an R.A.E. Suit No. 37/358 of 1968 (Exh. 23) against DSS in the Small Causes Court, Bombay. Ashar alleged that DSS who were liable to pay statutory rent in respect of the stalls fell in arrears and claimed possession of the premises. The suit was decreed ex parte and possession of each individual stall was handed over to Ashar by D.W. Cooper, the Bailiff of the Small Causes Court. The Bailiff made an inventory of the property found in each stall and the stall-holders made an endorsement on the inventory to the effect that they have willingly vacated the shop. An attempt was made by one Ganganayak to set aside the ex parte decree. But as the applicant could not deposit the amount directed by the Court, the ex parte decree could not be set aside. As Laxmi claimed to be the assignees of Ramniklal, they took out a notice under Order XXI, Rule 100 of the Code of Civil Procedure, for restoration of possession of the premises. The notice came to be discharged on 26-11-1969 against which Laxmi preferred a revision petition under section 29(3) of the Rent Control Act which was dismissed on 2-4-1982. A Writ Petition No. 780 of 1983 filed against this dismissal which was also dismissed. 42. A Declaratory Suit No. 61/414 of 19791 was filed by Laxmi against Ashar and DSS under Order XXI, Rule 103 Which is pending. Suit No. 869 of 1972 on the Ordinary Original Civil Jurisdiction has been filed in this Court against Ashar, DSS and the stall-holders for a declaration that the decree obtained by Ashar against DSS is a nullity and the suit is pending. Present litigation 43. Short Causes Suit No. 971 of 1966 and other 46 suits were filed by Laxmi against the various stall-holders in the City Civil Court, Bombay, praying for a permanent injunction restraining the stall-holders from making an entry into or upon Lokmanya Departmental Stores. On 11-12-1968 the suits were returned for presentation to the proper Court. 44. On 9-4-1969 Suit No. 2572 of 1969 as well as Suits Nos 2573 and 2601 to 2643 all of 1969 were filed in the City Civil Court at Bombay by Laxmi against the stall-holders. On 11-12-1968 the suits were returned for presentation to the proper Court. 44. On 9-4-1969 Suit No. 2572 of 1969 as well as Suits Nos 2573 and 2601 to 2643 all of 1969 were filed in the City Civil Court at Bombay by Laxmi against the stall-holders. By an order dated 17-3-1970 this Court directed that all the suits be heard together and the City Civil Court by its judgment dated 26-6-1972 decreed the money claims of Laxmi regarding minimum commission, compensation and electricity charges in respect of the stalls. 45. Forty-three out of these 47 defendants have filed the present appeals which have been consolidated, and this judgment will cover and dispose of all these appeals. The arch-stone of the defence of the stall holders is that they are tenants and not licensees and hence the suits are incompetent. Lease or Licence 46. The tests to be applied in order to find out whether a particular document operates as a lease or a licence have been crystalised by the Supreme Court in (Sohanlal Naraindas v. Laxmidas Raghunath)1, 1971 Mh.L.J. 604, at p. 607: "Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operating as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property, is the subject matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a licence. In determining whether the agreement creates a lease or a licence the test of exclusive possession, though not decisive, is of significance. (Mrs. M.N. Clubwala v. Fida Hussain Sahab and others)2, A.I.R. 1965 S.C. 610." 47. During the war and in the post-war period, the freedom of parties to enter into a lease and the licensee's rights to sub-let the premises were seriously curtailed by the various Rent Control Acts. (Mrs. M.N. Clubwala v. Fida Hussain Sahab and others)2, A.I.R. 1965 S.C. 610." 47. During the war and in the post-war period, the freedom of parties to enter into a lease and the licensee's rights to sub-let the premises were seriously curtailed by the various Rent Control Acts. Section 15 of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 ("Rent Act") puts an embargo on the tenant to sub-let, assign or transfer his interest in the premises let out to him. Hence, the first question that arises for determination is whether the parties could "contract out" of the provisions of the regularity legislation pertaining to urban tenancies? Contracting out 48. In (Shell Mex and B.P. Ltd. v. Manchester Garages Ltd.)3, (1971)1 All.C.R. 841 the plaintiffs were the owners of a petrol filing station. They allowed the defendants to go into occupation of the premises by an agreement contained in a document called a licence. By the terms of the agreement, it was expressed to be solely for the purpose of selling the plaintiffs' brands of motor fuel and the defendants had agreed to promote the sale of the plaintiff's products. As differences arose between the parties, the plaintiffs asked the defendant to leave when the agreement expired upon which the latter claimed that the agreement gave them a tenancy and they are entitled to protection of the (U.K.) Landlord and Tenant Act, 1954. The defendants relied heavily on the fact that they were in exclusive possession of the petrol filling station. Lord Denning dismissed this ground : ".............Counsel for the defendants says that the defendants have exclusive possession, and that carries with it a tenancy. That is old law which is now gone. As I have said many times, exclusive possession is no longer decisive. We have to look at the nature of the transaction to see whether it is a personal privilege, not..........." Next the Counsel argued that it would not be permissible for the parties to "get out" of the Landlord and Tenant Act, 1954. Repelling this argument, Lord Denning said (at p. 844) : "It seems to be that when the parties are making arrangements for a filling station, they can agree either on a licence or a tenancy. Repelling this argument, Lord Denning said (at p. 844) : "It seems to be that when the parties are making arrangements for a filling station, they can agree either on a licence or a tenancy. If they agree on a licence, it is easy enough for their agreement to be into writing, in which case the licensee has no protection under the Landlord and Tenant Act, 1954. But, if they agree on a tenancy and so express it, he is protected. I realise that this means that the parties can by agreeing on a licence, get out of the Act; but so be it; it may be no bad thing.........." (emphasis supplied) Sham and Bogus 49. The stall-holders in the present batch appeals have branded the agreements with DSS etc. as 'sham and bogus'. Such an argument was advanced in (Somma v. Hazlehurst and others)4, (1978)2 All.E.R. 1011, where it was urged that in a "Rent Act situation" any permission to occupy the premises exclusively must be a tenancy and not a licence, unless it comes into the category of hotels, hostels, family arrangements or service occupancy of a similar undefined special category. Dismissing the contention, the Court observed (at p. 1020) : "We can see no reason why an ordinary landlord not in any of these special categories should not be able to grant a licence to occupy an ordinary house. If that is what both he and the licensee intend and if they can frame any written agreement in such a way as to demonstrate that it is not really an agreement for a lease masquerading as a licence, we can see no reason in law or justice why they should be prevented from achieving that object. Nor can we see why their common intentions should be categorised as bogus or unreal or as sham merely on the grounds that the Court disapproves of the bargain." The Court approved the observations of Buckley, L.J. In Shell Mex and B.P. Ltd. v. Manchester Garages Ltd. case. Nor can we see why their common intentions should be categorised as bogus or unreal or as sham merely on the grounds that the Court disapproves of the bargain." The Court approved the observations of Buckley, L.J. In Shell Mex and B.P. Ltd. v. Manchester Garages Ltd. case. (supra)--- "and it may be that this is a device which has been adopted by the plaintiffs to avoid possible consequences of the Landlord and Tenant Act, 1954, which would have affected the transaction being one of landlord and tenant, but in my judgment one cannot take that into account in the process of construing such a document to find out what the true nature of the transaction is. One has first to find out what is the true nature of the transaction and then see how the Act operates on the state of affairs, if it bites at all. One should not approach the problem with a tendency to attempt to find a tenancy because unless there is a tenancy the case will escape the effects of the statute." 50. The observations in a New Zealand decision (Donald v. Baldwyn)5, (1953) NZLR 313 at 321, were also approved : "The law will not be hoodwinked by shams: but real and lawful intentions cannot be dismissed as shams merely because they are disliked. It is a sham to say one thing while really intending another; but the Court cannot say that a licence is a sham for the reason that the Court thinks the parties ought to have intended a tenancy." Intention of the DSS 51. "Why so large cost, having so short a lease, Dost thou upon thy finding mansion spend?" So asked Shakespeare in his early Sonnet 146. 52. DSS had taken the suit property from Ashar for a short lease of 10 years from 1-6-1946 to 31-5-1956. It had only one option of renewal for a further period of 10 years. All the same, inspite of dwindling finances, DSS constructed a building worth Rs. 1,51,585/-, furnished the same with furniture and fittings costing Rs. 1,32,768/- and installed electrical fittings worth Rs. 22,841/-. The property purchased by Ashar was an old godown of a mill; will a lessee of Ashar incur a 'large cost' of Rs. 2,00,000/- upon a 'fading godown' if he was only to sublet the same? 53. Exh. 1,51,585/-, furnished the same with furniture and fittings costing Rs. 1,32,768/- and installed electrical fittings worth Rs. 22,841/-. The property purchased by Ashar was an old godown of a mill; will a lessee of Ashar incur a 'large cost' of Rs. 2,00,000/- upon a 'fading godown' if he was only to sublet the same? 53. Exh. Z-196 dated 20-6-1952 is a typical agreement which DSS used to enter into with the merchants. The preamble states that the merchant "Soni Watch Co." is this case, had applied to DSS "to stock, display and sell his goods through DSS" and that the merchant shall sell goods at ruling market rates. DSS shall try to obtain licences and permits, if necessary, in its own name, but DSS will be free to do business in the same or similar articles in the stores. The merchant had agreed to deposit by way of guarantee a sum of Rs. 1000/- for a stall admeasuring about 120 sq.ft. which was to bear interest at 3.50 percent per anuum. The merchant was to be provided by DSS with a stall complete with fittings and furniture, provide his own cash memo, maintain a stock book and submit to the DSS monthly statement of accounts on or before the 5th of the following month. The ownership of the goods was to remain with the merchant. DSS were entitled to receive a minimum "share, remuneration or commission" at the rate of Rs. 135/- per stall or Rs 250/- for two stalls or to "the share, remuneration or commission" at the rate of two per cent on the gross sale proceeds, exclusive of sales tax, whichever is more. The agreement was to remain in force for one year from 13-5-1952, but power was given to the company to terminate the agreement for breach of the terms. Then follows Clause 34 : "The merchant shall have no right to assign the benefit of this agreement. The merchant is not a tenant of the company and on termination of this agreement, he shall have no right to continue in or use of the premises of the company." 54. Then follows Clause 34 : "The merchant shall have no right to assign the benefit of this agreement. The merchant is not a tenant of the company and on termination of this agreement, he shall have no right to continue in or use of the premises of the company." 54. In short, the agreement not only clearly tells the merchant that he is not a tenant of the shall, but obligates him to send a statement of accounts so that DSS could work out whether they are entitled to a commission over and above the minimum agreed upon. 55. On 29-8-1952. some stall-holders wrote to the Collector of Bombay (Exh. Z-157) in connection with the notices dated 26-8-1952 issued by the Collector asking the merchants to pay the dues. The merchants informed the Collector that with the exception of Dr. D.S. Patkar (who is not one of the defendants), "all are charged commission on the gross sale with a certain minimum according to the number of stalls or spaces required by the individual merchants for trading in the department stores." They referred to the fact that prior to 1-5-1952, DSS were providing all facilities, such as service of the boys-delivery of the goods, collection of daily sales, maintenance of stock book and accounts, supervision, electricity and all other incidental expenses for which the merchants were paying higher rate of compensation. As one of the share-holders-the letter proceeds-has filed a winding up petition as DSS have changed their management practices, reduced the amount of deposit and the rate of commission. The merchants expressed fervent hope that the winding up petition will be dismissed, but requested the Collector to see that essential services like watchmen, electricity, etc. are maintained. 56. The earlier letter (Exh. 31) dated 8-1-1951, by which the merchant had asked the Collector of Bombay to hold DSS responsible for the sales tax, had already been discussed. Vide Exhibit 'O' dated 21st October, 1952, DSS told the Collector that except the case of Dr. Patkar, in whose favour they had created tenancy and whose premises are distinctly separate, all other persons who are trading with the DSS are not tenants. DSS charges the merchants certain percentage with a certain fixed minimum on the gross daily sales by way of company's commission. Patkar, in whose favour they had created tenancy and whose premises are distinctly separate, all other persons who are trading with the DSS are not tenants. DSS charges the merchants certain percentage with a certain fixed minimum on the gross daily sales by way of company's commission. The letter goes on to say that the merchants, who attend the sales, "do so more as the salesmen of the Company and not in their capacities as the owner of the goods." None of the merchants have been allowed to put up signboards in his own name. DSS then referred to the case of Mrs. Sarla Shetty who was allowed to conduct a tailoring class on leave and licence basis, but has picked up a quarrel and put up claim for tenancy rights. An attempt was made by DSS to ask Chinubhai whether the stalls can be let out, so that more money could be realised and the debt paid off more quickly (Exhibit "R" dated 30th October, 1953). According to Chinubhai he tried to sell idea to the mortgagees but the mortgagees did not agree and hence the idea was dropped. 57. The intention of the parties can be gathered from the surrounding circumstances, and so far as the present case is concerned, it is not one of a stray occupation by a stranger in a room in a residential house which may give rise to questions as to whether he was only a lodger or a boarder or a paying guest or a tenant. This is a case of no less then 47 people taking stalls and carrying on business for a period of over 22 years. Resultantly the behavioural pattern appearing on a broad canvas stretching over more than two decades has to be observed. It would make for a better appreciation of this pattern if the evidence is grouped under various heads. Possession; 58. Admittedly, Laxmi lost possession as a result of Court Decree on 19th November, 1958 and it has been urged by the stall-holders that the space that was allotted to them was in their exclusive possession, inasmuch as, they had put flap doors and for that purpose certain photographs were produced. The photographs did show an arrangement of a plywood shutter capable of being locked. It was also canvassed that there were rolling shutters to some stalls which would enure for a better locking system. The photographs did show an arrangement of a plywood shutter capable of being locked. It was also canvassed that there were rolling shutters to some stalls which would enure for a better locking system. But P.W. 6 Mahendra, who was commissioned to fix the rolling shutters, had admitted that the shutters were fixed after 1968 and thus the fixation of rolling shutters loses its relevance for the purposes of this appeal which deals with a period prior to 19-11-1968. It is now more or less an established fact that none of the stalls had a locking arrangement, for, the space allotted to each merchant was earmarked on two sides by show cases placed back-to-back forming the walls and waist high-counters placed in the front across which the merchants would attend to the customers formed the third side. Ingress, egress and control. 59. As the plan of the building shows, the stores (with the exception of Stall No. 6 of Nathani who is the appellant in the First Appeal No. 648 of 1972, and Stall No. 7 of Ramjivandas who is the Appellant in First Appeal No. 664 of 1972, to whom I would advert later), was like a fort having a single collapsible steel gate which controlled the ingress and egress. A second wooden gate was also provided inside the collapsible steel age for greater security, the space between the two acting as a passage to the stores flanked by show windows on either sides. While handing over possession to mortgagee Shah Brothers, DSS Vide Exhibit 'D' dated 28th October, 1953, talked of giving the keys of the gates. That is to say once the gate was locked, it was not possible for anyone to enter the stores. 60. Such was the control of the management, that the merchants had to request Ramniklal on 8th July, 1954 (exh. 'Z-61') that 'the stores should be kept open continuously from 9.00 a.m. to 8.00 p.m. without the present break of 12.00 a.m. to 3.00 p.m. in order to improve the sales and remove the inconyenience of finding some shelter between 12.00 a.m. (sic noon) to 3.00 p.m." The management would close the stores at 12.00 noon, ask all the merchants to clear out, lock the gate and allow them entry only at 3.00 p.m. 61. The timings of the stores became the subject matter of discussion amongst the merchants and the management as would be apparent from the perusal of the bunch of letters (Exh. 'Z 61' Colly.). When the management conceded to the request of keeping the stores open non-stop without lunch break, some merchants, on 23-7-1954, wrote to Ramniklal that they should revert to the old timings as they did not get enough business to justify putting in extra work of three hours. Some complained that as the stores caters to office goers hardly any one comes between 12.00 noon to 3.00 p.m. while others felt that a good number of customers coming from far off places such as Virar, Kalyan, would be disappointed to find the stores closed between 12.00 noon and 3.00 p.m. The management had the final say in the matter and they decided on 11th December, 1954 that the old timings should be restored. So complete was the control of Ramniklal over the timings of the stores that on 1st December, 1954 he decided that in view of inauguration of the Stainless Steel Department at the hands of Ashar the paramount landlord, the stores would be opened at 8 a.m. Similarly, Ramnikal closed the stores at 10.00 p.m. on 26-10-1954 and asked all the merchants to bring in their account books for a joint Pooja at 10.30 p.m. Deployment of Staff. 62. If DSS, Ramniklal or Laxmi were only interested in acting as landlords, nothing would have been easier then to open an account in the nearest bank and ask the merchants to credit the monthly rent in that account. There would have been no need to appoint any staff whatsoever not even a bill collector. But right from the beginning DSS maintained an office in the stores and had number of employees such as watchmen, accountants etc. As an exercise in business management, DSS, in the year ending 30th June, 1948, had engaged extra highly qualified and experienced staff of accountants and statisticians so that the contingency of accumulating large portion of dead stock did not occur. Advertisements and Sales Promotion 63. It appears that Chinubhai used to incur, expenditure of about Rs. 5,000/- to Rs. 6,000/- per annum in inserting advertisements of the stores as a whole. (Exh, 'Z-60'), ('Z-60'). Advertisements and Sales Promotion 63. It appears that Chinubhai used to incur, expenditure of about Rs. 5,000/- to Rs. 6,000/- per annum in inserting advertisements of the stores as a whole. (Exh, 'Z-60'), ('Z-60'). Whenever the stall holders desired that their names should be specifically mentioned in the advertisements, Ramniklal used to comply, provided the particular stall-holder bore half the expenses. For instance, Soni Watch Company (vide letter-Exh. 'Z-73') wrote on 11th November, 1955 informing Ramniklal that an expense of Rs. 243-4-0 had been incurred by them in exhibiting cinema slides at 'Chitra', 'Rivoli' and 'Broadway, of Dadar, and claimed reimbursement of half the cost totalling to Rs. 121-10-0. Another stall-holder Gujar and Company also desired to boost up the sale of Samson Dresses. He intended to have an advertisement campaign which would cost him Rs. 60/- requested Ramniklal to contribute his share of Rs. 30/-. Ramniklal was issuing calendars showing the name of the stores, but one Karamshi Monshi, holder of Stall No. 26, decided that 500 calendars should bear his name as well and by a letter (Exh. "Z-70") dated 3rd September, 1956, agreed to bear expense for the same. The Merchants' Association by their Resolution dated 11-1-1957 decided that the Executive Committee of their Association should discuss with the management a successful campaign of advertisement and that the facade of the stores should be given a face lift. The management, vide their letter dated 25th March, 1956 (Exh. 'Z-60') agreed to share 50% of the expenses and invited suggestions and proposals for the construction of the front gate. Gifts to Customers 64. It appears that the management gifted a telephone-looking advice to the customers as a part of their advertising campaigns. Decoration on festival occasion 65. The acknowledged leader of the stall-holders Soni, had admitted that the management used to decorate the stores on festive occasions. Rebate to stall holders 66. In order to promote sales, the management had announced at a 6% rebate on 15th August, 1957 to customers and the same was shared by the management. Next year, the merchants again requested the management on 18-7-1958 (Exh. 'Z-60" (Colly.) that a rebate of 6% should be allowed to the customers and half the burden of 3% should be borne by the management. Concession to stall-holders. Next year, the merchants again requested the management on 18-7-1958 (Exh. 'Z-60" (Colly.) that a rebate of 6% should be allowed to the customers and half the burden of 3% should be borne by the management. Concession to stall-holders. 67 It appears that inspite of advertisement campaigns, and all other steps taken by the management, the sales o the stalls did not pick up appreciably. A circular was issued by Ramniklal (Exh. "Z-63") on 3-12-1954 convening a meeting of the stall-holders with a view to giving rebate in the minimum commission. Ramniklal made it clear that the rebate in the commission will be granted only to those merchants who have no outstanding and who would give an undertaking "to remain in the stores for the next six months." Ultimately, a rebate of 10% was granted but the circulares issued from time to time (Exh. "Z-63" (Colly.)) show that the merchants were in arrears not only in the payment of their minimum commission, but also electric charges. The management also offered a heavy reduction in the minimum commission when the stores were closed for about 10 days during the agitation consequent upon the report of the Store-Re-organisation commission. Sales statements 68. The merchants used to submit sales statements from time to time (Exhs. A-86 to "Z-107") and the recalcitrants amongst them were remained to submit statements. Change of Merchants 69. By a letter (Exh. "Z-64") dated 2nd August, 1956, soni requested permission from Ramniklal to change the merchandise in which they were dealing till that date, but management advised him to stock latest popular records of H.M.V. but did not permit him to deal in watches. Stake or Permission 70. One of the test proposed by Lord Denning M.R. in (Merchant v. Charters)6, (1977)3 AII.E.R. 918 at 922 is---"Was it intended that the occupier should have a state in the room or did he have only permission for himself personally to occupy the room, whether under a contract or not?" Right from the beginning it was the management of the stores which had a stake not only in the various stalls which they had furnished but also in the sales of stall-holders who were given permission to occupy the same. Some of the stall-holders like Paradkar (Exh. Some of the stall-holders like Paradkar (Exh. "Z-74" dated 4th October, 1956) who could not boost their sales, surrendered their share of the stall-holders so that the management could augment their share of the commission on the gross sales figures. It was not the stall holders who had the stake in the stall but the management who had a stake not only in the stalls and the entire building but also in the total sales so that they could claim higher commission. The interest of the stall holders was not assignable and every time a new stall-holder was inducted, e was given a fresh permission by the management. 71. The sapling of a departmental stores nursed under the long shadows of Macy's and Harrod's did not take roots let alone burgeoine in Dadar Soil. The Dadar house wife was accustomed to visit a raw of shop-fronts displaying series when she wanted to buy a saree and was not mentally attuned to visit a coglomeration of shops selling anything from a pin to a piano. (A white collared Dadarite any way preferred to do his Sunday morning riyaz squatting on the floor with his good old harmonium). 72. Most of the stall-holders did not well with the result that the management had to content itself with the minimum commission. But Century Mills, who had a stall, showed better performance and paid the percentage of commission calculated on the basis of sales which was higher than the minimum agreed upon. After their initial period was over, fresh negotiations were started with Century and a fresh permission granted to them under different terms. Want of demur 73. All the licenced agreements with the stall-holders came to an end on 31-12-1965 and the surprising feature of this case is that right from 1946 till this date, not a single assertion was made by the stall-holders that they are tenants. On 1-1-1966, notices of revocation (Exh. "Z0168" (Colly.)) were issued by Laxmi whereafter for the first time on 10-1-1966 the stall holders claimed to be tenants thus filed the first salve in this battle. Within a month, they filed suits on 9-2-1966 (Exh. "Z-201") in the Small Causes Court for obtaining a declaration that they are the tenants. This long acquiescence of the stall-holders lends credence to the case of the plaintiffs that the stall holders were merely licensees. 74. Within a month, they filed suits on 9-2-1966 (Exh. "Z-201") in the Small Causes Court for obtaining a declaration that they are the tenants. This long acquiescence of the stall-holders lends credence to the case of the plaintiffs that the stall holders were merely licensees. 74. The surrounding circumstances marshalled above like want of facility to independently lock the stalls, the inability of the stall-holders to enter into the building of the stores at Will the requirement of having to seek permission of the management to change the hours of business or effect a change of merchandise, non assignability of interest in the stalls, repeated recognition of the agreements to pay a fixed percentage of commission subject to a minimum with DSS, Ramniklal and Laxmi, Ramniklal and Laxmi, the sale promotion compaign lodged by DSS, Ramniklal and Laxmi, the correspondence of the stall-holders with the fiscal authorities reiterating the commission agreements, the deployment of staff like watchmen, accountants, statisticians by the management to monitor the sales, want of a single protest by the stall holders till 10-1-1966, asserting rights of tenancy, submission of sales statements by the still-holder to the management and payment of commission on the turnover higher than the minimum by Century Mills' stalls unequivocally point out that all of them, with the exception of stall No. 6 of Nathani and stall No. 7 of Ramjeevandas were merely licences for reward. 75. The cases of Nathani and Ramjeevandas stand on different footing. It is not the case of Laxmi of their predecessors in interest that they have never given any premises in the stores on rent. Admittedly, Dr. Patkar who runs a maternity home and others were tenants. Though exclusive possession alone and by itself is not the acid test to determination whether the relationship between the parties is that of tenancy or licence, it assumes importance in the cases of Nathani and Ramjeevandas. Both these stalls are facing the road and the stall-holders have not to enter to collapsible gate at all to reach and open their stalls. Surely, these stalls facing the road could not be kept open as was the practice with the stalls inside the main gate. Both these stalls are facing the road and the stall-holders have not to enter to collapsible gate at all to reach and open their stalls. Surely, these stalls facing the road could not be kept open as was the practice with the stalls inside the main gate. The exclusive possession in their case coupled with the fact that there are other persons who are recognised to be the tenants in the building of the stores, is a pointer to the fact that Laxmi have failed to prove that Nathani and Ramjeevanda are mere licensees. Contract estoppel 76. A feeble attempt has been made by the defendants stall-holders to challenge the title of Laxmi to the suit premises and this has been countered by Laxmi pleading that the stall-holders are estopped from doing so. As, neither Ashar, nor DSS, not Shah Brothers, nor Ramniklal are parties to the present proceedings, and as the suits are simple money suits, it is obvious that no final adjudication can be made regarding the question of title of Laxmi to the suit premises in these proceedings. That belongs to this Court on its original side where a title suit is pending. Under the first Lease Exh. "I", dated 5th July, 1948, DSS, the Lessees, had acquired an interest in the premises for a item of 10 years, computed from 1st June, 1946 to 31st May, 1956 with an option of one renewal. This option was exercised both by DSS any by Ramniklal. This position was accepted by Ashar in Exhibits "Z-173" and Z-58". In Exhibit "Z-186" dated 6th September, 1955 Mulla have referred to the letters dated 1st and 2nd August, 1955 by which Ramnikala had purported to exercise option for the renewal of the lease. It is another matter that Mulla pointed out that rent has not been paid regularly at the rate of Rs. 100/- per month. On 6th September, 1960 that is much after the first period of 10 years was over, the Solicitors of Ashar accused DSS of having committed breaches of certain covenants of the lease and purported to terminate the same. 77. On 31st May, 1956 the 20 year period under the original Lease Deed expired. 100/- per month. On 6th September, 1960 that is much after the first period of 10 years was over, the Solicitors of Ashar accused DSS of having committed breaches of certain covenants of the lease and purported to terminate the same. 77. On 31st May, 1956 the 20 year period under the original Lease Deed expired. Admittedly, a registered Conveyance for the second 10 year period was not executed, but the exchange of letters, as respects the renewal, would be admissible under the proviso to section 49 of the Registration Act for a collateral purpose of showing the nature and character of possession of Laxmi. (Satish Chand Makhan and others v. Govardhan Das Byas and others)7, (1984)1 Supreme Court Cases, 369. As Laxmi held over and continued in possession by paying rent, the holding over must be held as a tenancy from month to month. The rent was being received from Ramniklal but the receipts were being given in the name of DSS. 78. The possession of Ramnikal and Laxmi was a juridicial one and Ramniklal and Laxmi being persons in juridical possession of the premises, had entered into a contract of licence permitting the stall-owners to use the premises for display and sale of their goods in return for a commission computed on the basis of an agreed percentage of the gross sales. 79. Even before coming into force of the Indian Evidence Act, 1872, this High Court has been following the principle of tenant estoppel. In (Vasudeo Daji v. Babaji Ranu)8, (1871) VII Bombay High Court Reports, 175, the Court held that a tenant cannot ordinarily dispute the title of his landlord in a suit brought against him for recovery of possession if the existence of a tenancy is established by the fact the tenants's payment of rent to his landlord or otherwise. After the coming into force of the Indian Evidence Act which, in section 116, incorporated the principle of estoppel of tenant-the Privy council, in (Kumar Raj Krishna Prasad Lal and Baraboni Coal Concern Ltd. and others)9, (1937)64 I.A. 311, held that section 116 does not deal with all kinds of estoppel or occasions of estoppel which might arise between the landlord and the tenant. Equitable Estate. 80. Equitable Estate. 80. Though Laxmi had exercised its right of renewal and the paramount landlord Ashar had agreed to grant the request, the conveyance was not registered as was contemplated by the original lease deed. Counsel for the appellants argued that in the absence of a registered deed, the purported renewal for a fresh period of 10 years is ineffective and neither Ramniklal nor Laxmi could act as mesne landlords and induct the appellants into the premises either as tenants or as licensees. As observed earlier, the principle of tenant estoppel is wider than that governed by the ambit of section 116 of the Evidence Act and the absence of a registered lease deed for the renewed period would make no difference as regards the bar of estoppel against the appellants. In (Industrial Properties (Barton Hill) Ltd. v. Associated Electrical Industries Ltd.)10, (1977)1 Q.B. 580 (C.A.)---though the purchase price was paid pursuant to an agreement to sell the freehold of an industrial estate, no conveyance of the property was made in order to save stamp duty and the premises were leased out to A.E.I. The landlord filed a suit claiming damages against A.E.I. for breach of covenant to repair the premises and the lessees who by then had discovered the defect in the title of the landlord, challenged the maintainability of the suit for damages. Holding that the landlords have become equitable owners of the premises, the Court found that the tents are estopped from challenging the landlord's equitable title, and that this rule of estoppel continued to operate after the expiry of the lease unless, after the termination of the lessee's possession a claim was made against him by a title paramount in respect of some part of the period of the lease. When a valid contract of tenancy had been created between the parties, the tenant would be estopped under the contract even though it might be that some other person, for example, the remainder man or a mortgagee might be able to assert some title paramount against the tenant who had been given, as between himself and his landlord, a perfectly valid tenancy. (Stratford v. Svrett)11, 1958(1) C.B. 107. Consequently it is obvious that the stall-holders having been inducted into the premises by Laxmi the equitable owners are estopped from challenging its title. Two minor points. 81. Two minor points remain to be discussed. (Stratford v. Svrett)11, 1958(1) C.B. 107. Consequently it is obvious that the stall-holders having been inducted into the premises by Laxmi the equitable owners are estopped from challenging its title. Two minor points. 81. Two minor points remain to be discussed. The first was regarding the maintainability of the suit for which an argument was advanced that as minors who earlier were admitted to the benefits of partnership of the plaintiff firm have since become partners, a new partnership has been formed while the certificate (Exh. "B") showing the entry in the register of firms deals with the old partnership. The learned trial Judge, after relying on the case of (Bhogilal Laherchand v. Commissioner of Income tax)12, A.I.R. 1936 Bom. 411, has rightly held that the old partnership continued when a minor son attaining majority elects to continue as a partner. Secondly, it was argued that in view of section 15 of the Bombay Rent Act, the plaintiffs could not acquire any right, title and interest in the premises. The learned trial Judge, after taking note of the fact that section 15 operates "subject to any contract to the contrary" has correctly dismissed this objection holding that the initial lease being Exh. 1 itself permitted transfer absolutely or by way of mortgage or sub-lease and also subsequent such transfer. 82. In paragraph 316 of the judgment, the learned Judge of the trial Court has relied on the evidence of Chinubhai as well as Bolkani to show that the rate of compensation claimed by the plaintiffs is reasonable. According to Chinubhai, he was negotiating with Government for leasing out the stores and would have received much more than what he has claimed in the suits which would out to about 50% more than the last agreed minimum monthly rate of commission. Reliance is placed on the evidence of Bolkani (First Appeal No. 678 of 1972) and Nohanlal who are making profit out of their stalls by permitting others on leave and licence basis user thereof. As far as Bolkani is concerned, as against Rs. 170/- minimum commission which he pays to Laxmi, he is receiving Rs. 372/- from one whom he calls his licensee. Similarly Mohanlal is receiving Rs. 170/- from his licensee as against Rs. 40/- which he pays to the management. As far as Bolkani is concerned, as against Rs. 170/- minimum commission which he pays to Laxmi, he is receiving Rs. 372/- from one whom he calls his licensee. Similarly Mohanlal is receiving Rs. 170/- from his licensee as against Rs. 40/- which he pays to the management. Obviously, in these two cases the claim of the plaintiffs for enhanced rate of damages can be said to be justified as no one should be allowed to profit from his own wrong. However, as far as the rest of the stalls are concerned, the entire history of the stores is such that the management had to employ every trick in their bag to boost up the sales. But, in spite of the sales propaganda, some of the stall-holders who felt that the minimum commission is on the onerous side had to quit. Thus, it cannot be said that the rate of damages, for use and occupation after 1-1-1966, could be very much higher than the last minimum commission paid. Consequently, I find that except in the case of Bolkani and Mohanlal, the remaining stall-holders should pay compensation not at enhanced rate, but at the last agreed minimum monthly commission rate. Order 83. As a result of the discussion above, the following order is passed :--- In First Appeal No. 648 of 1972 (Suit No. 2639 of 1969) and First Appeal No. 664 of 1972 (Suit No. 2615 of 1969) in cases of Nathani of Stall No. 6 and Ramjivandas of Stall No. 7, the plaintiffs have failed to prove that they are licensees, and hence, their appeals are allowed. As far as Nathani's case is concerned (i.e. First Appeal No. 648 of 1972) he has two stalls one inside godown having an area of 340 sq. fit. and another outside the gate having an area of 30 sq. ft. the minimum commission being Rs. 250/- for both. Nathani continues to be a licensee for the inner stall admeasuring 340 sq. ft. the rate of minimum compensation would be proportionately get reduced to Rs. 220/- per month. The decretal amount, therefore, will be reduced to Rs. 18.858.03. 84. In so far Ramjuvandas's case i.e. First Appeal No. 664 of 1972 is concerned, the said First Appeal succeed and the decree against him is set aside. ft. the rate of minimum compensation would be proportionately get reduced to Rs. 220/- per month. The decretal amount, therefore, will be reduced to Rs. 18.858.03. 84. In so far Ramjuvandas's case i.e. First Appeal No. 664 of 1972 is concerned, the said First Appeal succeed and the decree against him is set aside. However, as the Appeal are argued together, there will be no order as to costs in his First Appeal as also in his suit. 85. First Appeal No. 678 of 1972 (Suit No. 2612 of 1969) of Bolkani and First Appeal No. 643 of 1972 (Suit No. 2635 of 1969) of Mohanlal , are dismissed with costs. The Appellants to pay the costs of the Respondents in these two suits. 86. Rest of the First Appeals are partly allowed and the decrees passed therein will be modified by taking the basic rate of the last minimum monthly commission agreed as the rate of compensation also from 1-1-1966 to 19-11-1968. 87. As regards First Appeal No. 188 of 1972 (Suit No. 2618 of 1969), the rate of compensation should be taken as at Rs. 423.03 P. being the one appearing from their statements of August 1965. 88. The decrees should be drawn on the basis of the calculations made and agreed upon by the respective Counsel as per the Statement 'A' tendered in Court today. 89. Figures given in Column No. 8 in the agreed Statement 'A' shall be substituted for the decretal amounts. 90. The rest of the provisions in the decrees of the trial Court are confirmed. As far as these Appeals are concerned, the Appellants shall pay the proportionate costs to the respondents. Costs awarded by the trial Court are confirmed. -----