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1997 DIGILAW 562 (KAR)

BASAPPA v. GANGADHAR GANAPAYYA SHETTY

1997-09-17

H.N.TILHARI

body1997
H. N. TILHARI, J. ( 1 ) I have heard Sri i. g. gachchinamath, counsel for the appellant and Sri t. s. amar kumar, counsel for the respondent. ( 2 ) THIS second appeal under Section 100 of the Civil Procedure Code, arises from the judgment and decree dated 15-11-1991, delivered by the principal civil judge, hubli, in regular appeal No. 85 of 1983, dismissing the defendant's legal representatives first appeal from the judgment and decree dated 13-7-1983, passed by 1st additional munsiff, hubli, in regular suit in o. s. no. 596 of 1981, affirming the judgment and decree of the trial court, decreeing the plaintiff-respondent's suit for mandatory injunction for delivery of possession and for recovery of the sums as licence fee. 2-a. The facts of the case in nutshell are that the plaintiff- respondent filed the suit giving rise to the second appeal for the grant of mandatory injunction directing the defendant to vacate the suit premises and for recovery of a sum of Rs. 913-15, being licence fee for the period from 6-10-1976 to 6-12-1981, together with costs. The plaintiff-respondent alleged in the plaint with respect to the property in suit (more specifically described in the plaint of the suit, measurements and location of which has been mentioned in the plaint) belonged to the plaintiff-respondent. Plaintiffs further case has been that the plaintiff-respondent had given shop in dispute to the defendant-appellant for use and occupation and for carrying the job or profession of a cobbler, dealing with leather articles on the conditions indicated in document of lease and licence for a sum of Rs. 10-50 per month, as licence fee vide the agreement of deed dated 7-11-1975. The plaintiffs case has been that, thereafter, the expiry of the period of leave and licence, the defendant was bound to vacate the suit premises. The plaintiffs case is that the licence was granted for a period of 11 months. That as the defendant-appellant did not vacate and handover the shop to the plaintiff-respondent, a legal notice was issued on 3-6-1981, requiring the defendant to pay off the licence fee as well as to hand over the vacant possession. According to plaintiffs case, defendant-appellant did not comply with the same and on one pretext or other, did not vacate or hand over the possession and did not pay the licence fees from 6-10-1976. According to plaintiffs case, defendant-appellant did not comply with the same and on one pretext or other, did not vacate or hand over the possession and did not pay the licence fees from 6-10-1976. The plaintiff averred that the defendant-appellant had no right, title or interest over the property. The plaintiffs case is that the suit property is part and parcel of the building and shop of the plaintiff, where the plaintiff had been running a book depot and the same was required by the plaintiff. ( 3 ) THE plaintiff alleged that as such in the above circumstances, he had been compelled to file this suit, suit giving rise to this appeal as mentioned above. ( 4 ) THE plaintiffs case in the nutshell, has been that the defendant had been a licensee and was making use of the shop on the basis of the leave and licence agreement or document. ( 5 ) THE defendant-appellant denied the plaintiffs case. He asserted that he had been carrying on the business in the suit property for the last 18 to 20 years and that he had acquired the shop as a tenant or as a lessee agreeing to pay rent of Rs. 10-50 paise per month. The defendant denied that he executed a deed of leave and licence for 11 months on 7-11-1975. Defendant's case has been that he kept a small shop of repairing the shoes and chappals. Defendant denied that defendant was in arrears of licence fee etc. , or the rent etc. , and he had asserted that he had made payment upto 1-2-1981, by way of rent. Defendant asserted himself to be the lawful tenant of the suit property and further pleaded that as the defendant-appellant was the tenant of the premises in question, he was protected under the Karnataka Rent Control Act, 1961. ( 6 ) ON the basis of the pleadings of the parties, the trial court on 23-11-1982, framed the following issues: 1. Does plaintiff prove that he is licensor and the defendant is licensee of the suit property? 2. Does defendant prove that he is tenant of the suit property? 3. Does defendant prove that the present suit is not maintainable as per Provisions of Rent Control Act? 4. Does defendant prove that this court has no jurisdiction to try this suit? 5. 2. Does defendant prove that he is tenant of the suit property? 3. Does defendant prove that the present suit is not maintainable as per Provisions of Rent Control Act? 4. Does defendant prove that this court has no jurisdiction to try this suit? 5. Does plaintiff prove that the court fee paid on plaint is sufficient? 6. Does plaintiff prove that he has revoked licence properly? ( 7 ) DOES plaintiff prove that he is entitled for mandatory injunction as prayed for? ( 8 ) DOES plaintiff prove that he is entitled for amount of licence fees as claimed? ( 9 ) DOES defendant prove that the plaintiffs claim re-garding amount of rent is time barred? ( 10 ) WHAT decree or order?7. On the basis of the material on record, the learned munsiff held that it is proved that plaintiff has been the licensor and the defendant had been the licensee of the property in suit and that the defendant had failed to prove that he was a tenant of the suit property. 'the trial court further held that as it has not been established that the defendant has been the tenant of the suit premises, the Provisions of Rent Control Act will not come into play and suit cannot be said to be not maintainable in civil court. It held the suit to be maintainable and answered issue No. 4, holding that the court had jurisdiction to try the suit. It further found that the plaintiff had validly revoked the licence and was entitled to the relief of mandatory injunction as well as a decree of money, namely, the arrears of licence fee and held that the claim for 3 years from 6-12-1978 to 6-12-1981, is within time. The trial court as such, on the basis of the above findings, decreed the plaintiffs suit for decree for injunction directing the defendant to vacate the suit premises by taking out the belongings within a reasonable period of one month as well as decreed the claim for arrears of rent licence fee for the period from 6-12-1978 onwards. It dismissed the claim of the plaintiff for arrears of licence fee for the period prior to 6-12-1978. 8. Having felt aggrieved from the trial court's decree, the defendant-appellant preferred the first appeal as mentioned earlier, namely, regular appeal No. 85 of 1983. It dismissed the claim of the plaintiff for arrears of licence fee for the period prior to 6-12-1978. 8. Having felt aggrieved from the trial court's decree, the defendant-appellant preferred the first appeal as mentioned earlier, namely, regular appeal No. 85 of 1983. The lower appellate court considered the question whether deceased-appellant was occupying the suit premises as a tenant or as a licensee and on a consideration of the material on record, it came to the conclusion and held that trial court rightly concluded that the defendant has been occupying or making use of the suit property as a mere licensee and that the licence had been lawfully revoked by the plaintiff. Thus, confirmed the finding of the trial court and dismissed the defendant's appeal with costs. 9. Having felt aggrieved from the judgement and decree passed by the courts below, the defendant-appellant has come up in second appeal before this court. That as mentioned earlier, this appeal had been dismissed for non-prosecution and on la. Iii, the application for restoration, this court allowed the application for restoration, and called upon the counsels for the appellant as well as respondents 1 and 2, to argue and proceed on with the matter. 10. On behalf of the appellant, Sri i. g. gachchinamath, learned counsel for the appellant contended that the courts below committed substantial error of law by holding that the relationship between the parties was that of a licensor and licensee or in other words, holding the defendant-appellant to be the licensee and the plaintiff-respondent to be the licensor as well as in holding that plaintiff was entitled to decree. Sri gachchinamath, contended that the transaction between the parties exhibited by ex. P-4, on record has been a contract of lease and not a licence and as such, the appellant has been the tenant in occupation of the premises in question. Sri gachchinamath, further contended that construction of this deed ex. P-4, is a question of law of substantial nature, as it is a document which is the basis of the claim in the suit and the question of construction of document of title or a document forming the basis of the claim in the suit is a question of law of substantial and not a question of mere appreciation of evidence. He further contended that on the construction of the document, it appears that it is a deed of lease or a contract of lease and not a licence and so, appellant be held to be a tenant in occupation of the premises. He contended that a unilateral deed or document may be a licence, but here, it is a bilateral document and it has to be read as a deed of lease and not a licence. He further advanced the argument to the effect that defendant-appellant being the tenant in the premises, the suit was not maintainable in the civil court, in view of Provisions of Karnataka rent control Act, 1961, as it applied to hubli area. The learned counsel contended that therefore, that decree passed by the civil court was without jurisdiction. ( 11 ) THESE contentions of the learned counsel for the appellant have been contested by Sri t. s. amar kumar, counsel for the respondents. Sri t. s. amar kumar, very fairly submitted that if this court comes to the finding that the position and status of defendant-appellant has been that of a tenant, it is then and then only there will be need to consider tenancy question and then, it may be said that suit was not maintainable in the civil court, in view of Provisions of Karnataka Rent Control Act, 1961, as it extended to areas of hubli. Sri amar kumar, submitted that when a transaction is accepted by a document and is entered into the form of a document, it is a document that will determine and that can be deemed to be a material to indicate the intention of the parties and nature of the transaction whether it is lease or licence and no oral evidence is admissible or need to be looked into. Sri kumar, further very fairly pointed out that ordinarily, the finding on the question of fact i. e. , whether the status of the defendant is that of a tenant or not, it is a question of fact, but no doubt, here, it involves a question of interpretation of document which formed the basis of the claim in the suit, so that finding is challenged. Sri kumar, submitted that as such appeal involves a substantial question of law. Sri kumar, submitted that as such appeal involves a substantial question of law. He contended that the real test to determine the nature of the transaction is the test of intention of the parties and that has to be construed on the basis of the consideration and interpretation of documents. By two courts below it has been concurrently held that the nature of a transaction is that of a lessee, he contended that a perusal of the document will per se reveal that it is a licence and not the lease. ( 12 ) HAVING applied my mind to the respective contentions made before me by the learned counsels for the parties, the first and the foremcst question to be considered in the second appeal is: one relating to the status of defendant-appellant and that is on the basis of construction of the document ex. P-4, whether appellant is a licencee or that of a tenant? ( 13 ) IT is one of the trite principle of law under Section 100, c. p. c. , that the interpretation of a document of title or a document which forms the basis of the claim in the suit is a question of law of substantial nature. It may be clarified here that it is not the question of interpretation of every document involves question of law. Interpretation or construction of a document, other than the documents of title or documents which form the basis of the claim in the suit or basis of defence, cannot be taken to involve substantial question of law and nor of question of law, it only relates to the realm of appreciation of evidence but where the interpretation of a document of title or interpretation of a document which forms the basis of the claim in the suit or which forms the basis of defence in the suit or which forms the defence in the suit, the interpretation thereof raises substantial question of law for the purposes of Second Appeal Midnapur Zamindari Company v Umacharan Mandal, Nedunuri Kameswaramma v Sampati Subba Rao and Bhusawal Borough Municipality v Amalgamated Electricity Company Limited. ( 14 ) WHETHER ex. P-4 is an agreement of lease or it is a licence. Certain basic principles have been laid down by their lordships of Supreme Court and law has developed. ( 14 ) WHETHER ex. P-4 is an agreement of lease or it is a licence. Certain basic principles have been laid down by their lordships of Supreme Court and law has developed. I may make it clear that question of interpretation of document primarily arises, in such cases, where the document is a bilateral document, as if there is a document which is unilateral document, then it is well-settled principle of law that it cannot be a lease, as lease is a contract entered into between two parties exhibited by the documents signed by both the parties, but if the deed is only a unilateral document, then it may be a case of a licence only. ( 15 ) AT this juncture, I may make a reference to a division bench decision of the Allahabad High Court in the case of Dau Dayal v Brij Mohan. In para 6, the division bench of the Allahabad High Court observes:"no doubt, a lease of an immoveable property from year to year or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument. All other leases of immoveable property may be made either: (a) by a registered instrument or (b) by an oral agreement accompanied by delivery of possession. A lease under the Transfer Of Property Act must be executed both by the lessor and the lessee. There is a proviso to Section 107, Transfer Of Property Act, under which the provincial government may direct by a notification that leases of immovable property other than leases from year to year or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by an unregistered instrument or by an oral agreement without delivery of possession. The proviso, however, does not apply to the present case and may be omitted from consideration. Now the qabuliyat, in the present case, is a document executed by the lessee alone. It is therefore, not a lease within the meaning of the Transfer Of Property Act. It, therefore, follows that the qabuliyat in the present case failed to create a lease, whether for a term exceeding one year or even for a lesser term". Now the qabuliyat, in the present case, is a document executed by the lessee alone. It is therefore, not a lease within the meaning of the Transfer Of Property Act. It, therefore, follows that the qabuliyat in the present case failed to create a lease, whether for a term exceeding one year or even for a lesser term". ( 16 ) IN paragraph 5, their lordships further observed, the qabuliat certainly exhibited a contract between the parties to pay certain amount in lieu of occupation, and it was not a lease, it was a licence. An agreement to allow another person and to pay compensation for use and occupation is not prohibited by the law because interest in immovable property is created in his favour. ( 17 ) IN the present case, if document would have been signed by one party only, it could have well be said that the deed cannot be termed to be a lease, as lease is a contract executed by both parties and signed by both the parties. In the present case, no doubt, as submitted by the learned counsel for the appellant, the document ex. P-4, is admittedly signed by both the parties to the deed. A unilateral document not signed by the two parties, but by one of the parties, may no doubt be termed as a licence and not lease, but the converse is not true. That is if there is a bilateral document signed by both the parties, it cannot be said that it is always a lease, it may amount to be a lease or may amount to be a licence. What is the nature of such a document, in order to determine, we have to look to the intention of the parties, as is exhibited from the entire tenor of the document, its terms and conditions. Mere use of a specific word describing the document, may not itself be conclusive to determine its nature. ( 18 ) WHAT are the yardsticks then, to determine the question of lease has been a subject-matter of consideration by their lordships of Supreme Court in very many cases. Mere use of a specific word describing the document, may not itself be conclusive to determine its nature. ( 18 ) WHAT are the yardsticks then, to determine the question of lease has been a subject-matter of consideration by their lordships of Supreme Court in very many cases. ( 19 ) IN the case of Associated Hotels of India Limited v R. N. Kapoor, their lordships of the Supreme Court had been pleased to lay down the law as after having quoted Section 52 of the easement Act, their lordships observed at page 1269, as under:"under the aforesaid Section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be 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. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is Reflected in Errington v Errington, Wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at page 155: "the result of all these cases is that, although a person who is let into exclusive possession is, 'prima facie', to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy". The court of Appeal Again in Cobb v Lane, considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document. At page 1201, somervell, l. j. , stated: ". . . . . . . . . . the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties". At page 1201, somervell, l. j. , stated: ". . . . . . . . . . the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties". denning, l. j. said much to the same effect at page 1202: "the question in all these cases is one of intention: did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land?" the following propositions may, therefore, be taken as well-established: (1) to ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties whether they intended to create a lease or a licence; (3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document a party gets exclusive possession of the property, 'prima facie', he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease". their lordships further observed; dealing with the lease: it puts him in exclusive possession of them, untrammelled by the control and free from the directions of the appellants. ( 20 ) IN the case of Qudrat Ullah v Municipal Board, bareilly ,in paragraph 7, their lordships observed as under: re is no simple litmus test to distinguish a lease as detined in Section 105, Transfer Of Property Act from a license as defined in Section 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. Marginal variations to this broad statement are possible and exs. 1 and 4 fall in the grey area of unclear recitals. The law on the point has been stated by this court in the associated hotels' case, supra. Marginal variations to this broad statement are possible and exs. 1 and 4 fall in the grey area of unclear recitals. The law on the point has been stated by this court in the associated hotels' case, supra. In halsbury's laws of england, volume 23, the distinctive flavour, the deceptive labels and the crucial consideration is a lease versus license situation have been stated and excerpts therefrom may serve as guidelines, (see pages 427, 428 and 429)"1022. Principles for determining whether agreement creates lease or licence. in determining whether an agreement creates between the parties the whether an agreement creates between the parties the relationship of landlord and tenant or merely that of licensor and licensee the decisive consideration is the intention of the parties. The parties to an agreement cannot, however, turn a lease into a licence merely by stating that the document is to be deemed a licence or describing it as such; the relationship of the parties is determined by law on a consideration of all relevant Provisions of the agreement nor will the employment of words appropriate to a lease prevent the agreement from conferring a licence only if from the whole document it appears that it was intended merely to confer a licence. In the absence of any formal document the intention of the parties must be inferred from the circumstances and the conduct of the parties". a licence is normally created where a person is granted the right to use premises without becoming entitled to exclusive possession thereof, or the circumstances and conduct of the parties show that all that was intended was that the grantee should be granted a personal privilege with no interest in the land. If the agreement is merely for the use of the property in a certain way and on certain terms while the property remains in the possession and control of the owner, the agreement will operate as a licence, even though agreement may employ words appropriate to a lease", (see at page 399) ( 21 ) THE principles to the same effect has been laid down in the case of Khalil Ahmed Bashir Ahmed v Tufelhussein Samasbhai Sarangpurwala, and in the case of Vayallakath Muhammodkutty v Illikkal Moosakutty, wherein, their lordships followed the case of Capt B. V D'souza v Antonio Fausto Fernandes. ( 22 ) THUS, primary consideration is the intention of the parties when they entered into the transaction exhibited by document and the nature of transaction is determinable and as well as intention to be derived from tenor of document, its terms and conditions and not by description of a party being given as a licensee or a lesee therein, nor simply describing a party as licensee or licence into lease. To determine the real nature of the transaction, one has to derive the intention of the parties from the entire tenor of the document. If there is a deed of agreement signed by both the parties and there is a universal document, in that case, there will be no question of construction of that document, because a contract of lease should be signed by both the parties. ( 23 ) KEEPING this in view, I proceed to examine the documentin question. ( 24 ) IN the present case, the document, no doubt, describesit self as a licence and the parties as licensor and licensee, but this description by itself is not conclusive to determine that it is a lease or licence. Under this document ex. P-4, it has been provided that the defendant has taken the property therein as a licensee or on leave or licence on the conditions enumerated therein. It has been mentioned that defendant came into possession thereof as licensee and the defendant-appellant had to pay a sum of Rs. 10/- per month as the licence fee. ( 25 ) THE deed further provides that the appellant had to remain in possession and use of the property for a period of 11 months and the possession has been delivered on the date, the deed was entered into. It further provides that the first party, the defendant-appellant shall not make use of the property for the purpose, other than the purpose of carrying on motchi vivhar. ( 26 ) THE restriction on the nature of user by the defendant-appellant has been specified by the clause which provides that it shall be for the purposes of motchi vivhar or the job of a business cobbler, and that material deed is in kannada which has been translated by the counsel, as, that, it shall not be used for any other purpose, the minor repairs shall be carried on by the first party, that is, the appellant. ( 27 ) THE deed provides that the minor repairs can be carried on by the defendant and the defendant will keep the premises clean. That the defendant is not to be the tenant and shall not make any alterations therein. ( 28 ) AS mentioned earlier, that mere user of the description in the deed as licence or lease is not determinated, nor is exclusive user, we have to look to these entire terms, apart from the lease, document as lease and licence and description of parties as licensor and the licensees, it has been provided very specifically that the defendant will only use it for specific job or business, namely, the motchi vivhar or the job of a cobbler and for no other purpose. This clause per se indicates that, no right has been conferred, nor has been intended to be conferred on the defendant-appellant. He was permitted to make use of the premises for a specific purpose and no other purpose. This can only be termed as grant of permission to make use of the shop for a particular purpose, otherwise, it could be urged to have been a case of lease, on possession having been delivered with no restriction on its user have been placed. ( 29 ) WHEN I so observe, I find support from the following observations of their lordships of the supreme court in associated hotels' case, supra, at page 1270, their lordships observed, while dealing with the lease: "it puts him in exclusive possession of them, untrammelled by the control and free from the directions of the appellants". ( 30 ) THEIR lordships further observed at page 1271 of the same decision: "what is more, under the document the tenant is not even bound to carry on the business of a hair-dresser". ( 31 ) IN that case, their lordships held the document to be the lease and the respondent therein with exclusive possession untrammelled by the control and free from the directions of the appellants, it did not confine him or bound him to carry on the only business of hair-dresser, he was free to change the business, he was free to make use it for any other purpose. ( 32 ) IN the present case, the defendant-appellant's right to use the premises has been made subject to the directions and conditions in the deed, namely, it can be used only for the purpose of carrying on the motchi business and he has been specifically directed, he shall not use the premises for any other purpose. Therefore, it comes out that he has not been given untrammelled right of user and occupation of the premises. Here, it is controlled by the directions that it shall not be used for any purpose other than, the cobbler's business. ( 33 ) IT has been provided that the defendant will make minor repairs, but, so far as major repairs or alterations are concerned, he has been debarred from making them. The period for user has also been limited to 11 months. ( 34 ) NO doubt, a lease for 11 months is also permissible and it may not be required to be registered, but here description of the document, description of the parties and the restrictive clause contained therein show that the first party shall remain in user and possession as the licensee of the property and not as tenant. These descriptions coupled with the restrictive clause specifying the user, also the nature of the user of the shop for specific purpose only, clearly reveal the intention of the parties that there was no interest conferred on defendant-appellant, it was only a licence or permission granted to him to make use of the premises for the purpose of a particular business, that is, cobbler's job and for a limited period. ( 35 ) TAKING these entire circumstances, the tenor of the document, it appears, that intention of the parties was only to grant licence and parties understood it that they were entering into the agreement of leave and licence and not a lease. ( 36 ) IT should not be taken that I have interpreted only on the description, but really, on a look to the terms of the document, including the restrictive clause confining and limiting the user of shop to specific purpose only, along with the description of the parties therein in my view it is in nature of a licence and the defendant-appellant has been a licensee. ( 37 ) THUS considered in my opinion, the learned courts below have rightly concluded on the basis of interpretation of exhibit p-4, that the defendant-appellant had been a licensee and not a tenant. Karnataka Rent Control Act applies in case of tenants as described therein, it does not apply to the grant of licence for a specific period. In this view of the matter, as the status of the appellant has been that of a licensee, the suit could not be said to be barred or to be not maintainable. The courts below rightly held that the suit was maintainable and in decreeing the plaintiff-respondent's claim for direction to the defendant-appellant to hand over the vacant possession as well as for payment of arrears of licence fee for the period from december, 1978 onwards. ( 38 ) THUS considered, this second appeal is devoid of merits and deserves to be dismissed and is hereby dismissed. Parties to bear their own costs. --- *** --- .