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1986 DIGILAW 35 (KER)

PALGHAT MUNICIPALITY v. NARAYANAN NAIR

1986-01-21

PAREED PILLAY, T.KOCHU THOMMEN

body1986
Judgment :- 1. The plaintiff in a suit for recovery of money is the appellant. The plaintiff which is the Palghat Municipal Council instituted the suit for recovery of Rs. 8,485.32 together with interest alleged to be due from the defendant towards fees payable by him in respect of a right farmed out to him to collect halting fee from taxis and autorikshaws parked in the halting places or stands constructed by the municipality. This right was sold in terms of S.309 of the Kerala Municipalities Act, 1960 which we shall presently set out. 2. The plaintiff contended that at an auction conducted on 26-12-1973 for the sale of that right, the highest bidder was the defendant and the sale was concluded in his favour for a total sum of Rs. 19,255/-as evidenced by Ext. A3. This amount was payable at various stages. A deposit of a sum of Rs. 3,851/-was payable in advance subject to that being adjusted towards the last instalment. The balance amount was payable in monthly instalments of Rs. 1,283.67 each. The defendant paid, in addition to the deposit, a sum of Rs. 6,918 68 in seven instalments, but defaulted payment of the other instalments. A suit was therefore instituted for Rs. 10,146.88 inclusive of interest. The plaintiff further contended that the sale of the right at the auction was subsequently evidenced by a document styled as a lease. 3. The defendant in his written statement reiterated what he had stated in answer to his suit notice to the effect that the contract between the parties had become frustrated on account of the failure of the defendant to realise the profits which he had been led by the municipality to believe would be possible to make in exercise of his right under the contract. He further stated in his written statement that the document relied on by the plaintiff which is styled as a lease for a term exceeding one year was not a valid document for the reason that it was not registered. 4. The court below came to a preliminary finding by its order dated 21-10-1978 as regards the admissibility of the document dated 16-3-1974. 4. The court below came to a preliminary finding by its order dated 21-10-1978 as regards the admissibility of the document dated 16-3-1974. The court said: "It is true that the purpose of the transaction was not to grant a regular lease of the land, but to make over the right to collect the Municipal dues" (emphasis supplied) The court nevertheless came to the conclusion that certain recitals in the document showed that the transaction was a lease for a term of 15 months. Having come to that conclusion the court held that, being unregistered, the document was invalid and could nor, therefore, be admitted in evidence. Having come to that preliminary finding the court at the end of the trial found that, although the defendant was not justified in saying that the contract between the parties had frustrated, nevertheless, the plaintiff, in the absence of a registered lease deed, failed to establish the claim. Although there was an alternative claim (inserted by amendment in Para.8A of of the plaint) for damages for use and occupation of the premises, that claim was also disallowed for the reason that the plaintiff failed to prove that the suit amount was due from the defendant. 5. S.309 of the Kerala Municipalities Act reads: "309. Provision of public cart stand, etc:- (1) The municipal council may subject to the provisions of sub-section (4), construct or provide public landing places, halting places and cart stands and may levy fees for the use of the same. (2) The council may (a) place the collection of any such fees under the management of such person as may appear to it to be proper; or (b) farm out the collection of any such fees for any period not exceeding three years at a time and on such terms and conditions as it may think fit. (3) A statement in English and a language of the locality of the fees fixed by the council for the use of such place shall be put up in a conspicuous part thereof. Explanation:- A cart stand shall, for the purposes of this Act, include a stand for vehicles (including motor vehicles as defined in the Motor Vehicles Act, 1939) and animals. Explanation:- A cart stand shall, for the purposes of this Act, include a stand for vehicles (including motor vehicles as defined in the Motor Vehicles Act, 1939) and animals. (4) The power to construct or provide stands for motor vehicles under sub-section (1) may be exercised notwithstanding anything to the contrary contained in the Motor Vehicles Act, 1939 but shall be subject to any direction issued by the Government from time to time." The only power which the plaintiff has, in terms of the Section, is to farm out the use of public landing places, halting places and cart stands and collect fees for such use. This Section does not postulate any lease, but only licence. 6. The distinction between lease and licence was considered by the Supreme Court in B.M. Lall v. Dunlop Rubber Co., A.I.R. 1968 S.C.175. The Court said that a lease is a transfer of a right to enjoy the premises whereas a licence is a privilege to do something on the premises which otherwise would be unlawful. What was, or what was capable of being, granted under S.309 was not a right to enjoy the premises, but only a privilege or a licence to do something on the premises. No interest in the land was, or could have been, created or transferred in terms of S.309. That Section must, therefore, be understood as strictly confined in its scope to a licence, and not applicable to a lease. The municipality has no power to exceed the bounds of that Section. There is no case that the municipality exceeded such limit. In the circumstances the evidence in this case must be appreciated strictly with reference to the power which is capable of being exercised by the municipality under S.309. 7. Ext. A3 leaves no doubt. It clearly states that, as a result of the auction concluded in favour of the defendant, a sum of Rs. 19,255/- became payable by the defendant. The mode of payment of that amount is clearly stated in the plaint and that has not been questioned by the defendant in his written statement. All that the defendant has questioned is the right of the municipality to claim the amount and not the details of the claim mentioned by the municipality. 8. Ext. Al is a suit notice issued by the plaintiff in which the claim of the plaintiff has been clearly stated. All that the defendant has questioned is the right of the municipality to claim the amount and not the details of the claim mentioned by the municipality. 8. Ext. Al is a suit notice issued by the plaintiff in which the claim of the plaintiff has been clearly stated. In Ext. A2 there is no denial of the details of the amount alleged to be due from the defendant. The sole case pleaded by the defendant is that the contract has become frustrated by reason of the defendant's failure to realise the benefits promised and held out to him by the municipality. There is no evidence whatever to support the contention regarding frustration. Exts. A4 and A5 are petitions filed by the defendant. They show that he clearly admitted liability, but requested for time to pay the amount demanded. 9. It is true that the so called lease executed on 16-3-1974 has not been proved as a document. The agreement dated 16-3-1974 was executed long after the commencement of the period of contract. The defendant had been admittedly exercising his right under the contract as from 1-1-1974 and the period of the contract was to expire on 31-3-1975. The document of 16-3-1974 did not, therefore, create any right. The learned judge found that the document, though styled as a lease and despite the recitals to that effect, indicated that the intention of the parties was not to create a lease, but to grant a licence. However, the learned judge on account of the recitals came to the opposite conclusion. We should have thought that the agreement should have been construed with reference to the intention which was clear. It was clear firstly because S.309 did not permit anything more than a licence. Secondly the terms of the agreement, as observed by the learned judge, indicated that the parties intended the transaction to be a licence and not a lease. However, that agreement is not in evidence and, therefore, neither party can rely upon it. As far as the suit claim is concerned, the evidence on record, particularly, Exts. Al to A5 and the oral testimony conclusively prove the plaint allegations. In the circumstances, we set aside the judgment under appeal. The suit is decreed in the above terms. The appeal is allowed accordingly with costs of the plaintiff here and in the court below. Allowed. Al to A5 and the oral testimony conclusively prove the plaint allegations. In the circumstances, we set aside the judgment under appeal. The suit is decreed in the above terms. The appeal is allowed accordingly with costs of the plaintiff here and in the court below. Allowed. The learned counsel for the respondent makes an oral application under Art.134A of the Constitution of India for leave to appeal to the Supreme Court. In our view, the case does not involve any substantial question of law of general importance which needs to be decided by the Supreme Court. The leave sought is accordingly refused. Leave refused.