A. R. DAVE, J. ( 1 ) BEING aggrieved by the dismissal of Civil Suit No. 3114 of 1977 by the judgment delivered by the City Civil Court, Ahmedabad dated 31. 1. 1979, the appellant-original plaintiff has approached this Court by way of this appeal. ( 2 ) THE facts leading to the present appeal in nutshell are as under:2. 1 for the sake of convenience the parties to the litigation have been described as arrayed before the Trial Court. 2. 2 the plaintiff filed a suit praying for a permanent injunction so as to restrain the defendant from using in any manner, the suit property and certain machineries installed therein and for a mandatory order to the effect that the defendant should be directed to take away his lathe machineries lying in the suit premises. The plaintiff also prayed that the licence fee in respect of the premises and electric burning charges which were unpaid by the defendant be paid to the plaintiff and the plaintiff also prayed for mesne profits. The plaintiff also stated in the plaint that he was the owner and in occupation of the suit premises bearing Municipal Census No. 2672/a-survey No. 4133 admeasuring about 21 ft. x 14 ft. situated at Dariapur, Ahmedabad. The plaintiff was using the premises in question as a scooter garage and had permitted the defendant to use a portion of the suit premises for installing and operating his lathe during fixed period of the day. He had entered into an agreement of leave and licence dated 7. 9. 1976 with the defendant. The defendant was not permitted to use the area given to him under the licence round the clock and he was not given exclusive possession of the area of the premises in question. He was permitted to use the area in question to operate his lathe and he was also permitted to use the electric connection of the plaintiff while using the lathe machine installed in the area of the premises in question. It was open to the plaintiff as per the terms of the licence to have possession of the area in question even before the completion of the period of licence on certain conditions. It was open to the plaintiff as per the terms of the licence to have possession of the area in question even before the completion of the period of licence on certain conditions. The plaintiff had cancelled the licence and had given notice to the defendant for handing over vacant possession but as the defendant did not do so, the plaintiff was constrained to file the suit in question. 2. 3 the defendant resisted the suit by filing a written statement, exh. 8 claiming that there was relationship of landlord and tenant between the plaintiff and the defendant and therefore the City Civil Court had no jurisdiction to entertain the suit filed by the plaintiff. Moreover, it was submitted that the agreement with regard to the licence was a bogus one. He denied the relationship of licensor and a licencee between the plaintiff and the defendant. The defendant also filed additional written statement, exh. 11 as the plaintiff had amended the plaint by adding a prayer with regard to the claim of licence fee and electricity burning charges. 2. 4 after considering the pleadings the Trial Court had raised the following issues at exh. 5. 1. WHETHER the defendant is a licencee in respect of the suit premises and the electric service and machinery thereon ?2. WHETHER the plaintiff is entitled to Rs. 691/as claimed ?3. Whether the plaintiff is entitled to mesne profit as claimed ?4. WHETHER this court has no jurisdiction for the money claim ?5. WHETHER the suit is bad for misjoinder of cause of action ?6. Whether the plaintiff is entitled to a decree for perpetual injunction and also for removal of defendants machinery and goods from the suit premises ?7. WHAT order and decree ?issues nos. 1,3,5 and 6 were decided in the negative; whereas issues nos. 2 and 4 were decided in the affirmative and ultimately the suit was dismissed by holding that the relationship between the plaintiff and the defendant was that of the landlord and the tenant and, therefore, the City Civil Court, Ahmedabad had no jurisdiction to entertain the suit. ( 3 ) THE question which is arising in the present appeal is with regard to the determination of relationship between the plaintiff and the defendant. ( 3 ) THE question which is arising in the present appeal is with regard to the determination of relationship between the plaintiff and the defendant. It has been contended by the plaintiff in the suit that the defendant is a licensee ; whereas the defendant has made an effort to show that he is not a licensee and in fact he is a tenant in respect of the suit premises. ( 4 ) FOR the purpose of determining whether the relationship between the plaintiff and the defendant was that of a landlord and a tenant or a licensor or a licencee, one has to look at the agreement whereby the defendant was given a right to use the suit premises. One has also to consider the relevant facts and circumstances to ascertain whether the defendant was a licensee or a tenant. Before ascertaining whether the defendant was a tenant or a licensee one has to look at the legal position. ( 5 ) AS per the provisions of section 52 of the Indian Easements Act, term licence has been defined as under:" Where one person grants to another, or to a definite number of other persons, a right to do or continue to do, in or upon the immoveable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence. "lease has been defined under section 105 of Transfer of Properties Act as under:" A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. " ( 6 ) UPON perusal of the definitions referred to hereinabove, one has to find out in the light of the document executed between the plaintiff and the defendant whether the relationship between the plaintiff and the defendant was that of a landlord and a tenant or a licensor and a licencee. " ( 6 ) UPON perusal of the definitions referred to hereinabove, one has to find out in the light of the document executed between the plaintiff and the defendant whether the relationship between the plaintiff and the defendant was that of a landlord and a tenant or a licensor and a licencee. ( 7 ) THE Supreme Court had an occasion to consider the difference between the two in several cases. In AIR 1959 (SC) 1262 in the case of Associated Hotels of India Ltd. vs. R. N. Kapoor, after discussing the law on the subject it has been observed by the Supreme Court that if a document gives only a right to use the property in a particular way or under certain terms while the property remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, the occupation of the licensee would be unlawful. It does not create in his favour any estate or interest in the property. The Supreme Court has also observed that to ascertain whether a document creates a licence or a lease, the substance of the document must be preferred to the form; the real test is the intention of the parties. It is also to be ascertained whether the parties intended to create a lease or a licence. If the document creates an interest in the property, it is a lease but if by virtue of the document the person is only permitted to use the property of which the legal possession continues with the owner, it is a licence. It has also been observed that if, under the document, a party gets an exclusive possession of the property, prima-facie, the person getting the possession is considered to be a tenant; but the circumstances may also establish that the parties had no intention to create a lease. Thus one has to look at the contents of the document and the surrounding circumstances in order to ascertain whether the relationship between the owner of the property and the person using the property is that of a landlord and a tenant or a licensor and a licensee. Thus one has to look at the contents of the document and the surrounding circumstances in order to ascertain whether the relationship between the owner of the property and the person using the property is that of a landlord and a tenant or a licensor and a licensee. ( 8 ) THE Supreme Court has also considered the same issue in the case of Mrs. M. N. Clubwala and Anr. vs. Fida Hussain Saheb and ors. reported in AIR 1965 SC 610 . It has been held in the said case that if exclusive possession is given to a person under an agreement which is coupled with an interest in the property, the person having right to use the property would not be a licensee but he would be a lessee. It is to be noted that the facts of the said case can be compared with the case on hand for the purpose of determination of the present appeal. In the said case, the appellant owned a market consisting of stalls which were occupied by stall holders. The appellant had been granted a licence to manage the market by the municipal corporation under which the appellant was required to discharge certain duties like cleaning the stalls, disinfecting them and of opening and closing the market at specified time. It was also made clear in the agreement that the stall-holders were not permitted to remain in occupation of the stalls beyond the closing hour and were required to pay certain rent for each day of occupation. A question arose whether the stall holders were lessees of the appellant or mere licensees. The Honourable Supreme Court held that the stall holders were licensees of the appellant because the stall holders were not having exclusive possession of the stalls and no interest was created in favour of the stall holders. In spite of the fact that the agreement entered into between the said parties had referred to payment of rent by the stall holders to the appellant, it was held by the Court that the word rent was used loosely for fee and simply because it was sated that the stall holders had to pay rent to the appellant, the stall holders would not become lessees in respect of the stalls given to them. It may be noted that the stall holders were also permitted to occupy the stalls only on the basis of leave and licence but they were not in exclusive possession of the stalls for ever. ( 9 ) IN the case of B. M. Lall (dead) by his legal representatives vs. M/s Dunlop Rubber Co. (India) Ltd. and anr. , AIR 1968 SC 175 , the Supreme Court, while distinguishing lease from licence, observed that a lease is the 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. If there is an agreement in writing entered into between the parties, it is a question of construction of the agreement having regard to its terms and where its language is ambiguous, having regard to its object and the circumstances under which it was executed, it is to be determined whether the rights of the occupier are those of a lessee or a licensee. The question is not of words but of substance and the label which the parties choose to put upon the transaction, though relevant, is not decisive. The test of exclusive possession is not conclusive, though it is a very important indication in favour of tenancy. ( 10 ) IN AIR 1976 SC 1813 , in the case of Board of Revenue etc. vs. A. M. Ansari etc. , the Supreme Court has given guidelines as to how the lease and licence can be distinguished. It has been observed in the said case that it is the creation of an interest in immovable property or a right to possess it that distinguishes a lease from a licence. A licence does not create an interest in the property to which it relates, while in case of lease, an interest is created. The Supreme Court has also observed that in case of a lease, there is a transfer of a right to enjoy the property. Again, the Supreme Court has observed that one has to look at the substance and essence of the agreement and not only at the form in which the agreement is executed. The Supreme Court has also observed that in case of a lease, there is a transfer of a right to enjoy the property. Again, the Supreme Court has observed that one has to look at the substance and essence of the agreement and not only at the form in which the agreement is executed. ( 11 ) IN the light of the law laid down by the Supreme Court in the cases referred to hereinabove, now one has to examine the facts of the case to ascertain whether in the instant case, the defendant was a tenant or a licensee in respect of the suit premises. ( 12 ) THE agreement of leave and licence dated 7. 9. 1976 is at exh. 39. Relevant portion of the said agreement, which has been reproduced in the judgment, is as under :" (A) the grantee has to place his shaping machine, lathe machine, amree and drill machine at the place where it is shown by the grantor in his premises referred in the document. (B) the agreement is to be effective from 7. 9. 1976. (C) the machineries and the electric power referred earlier is to be used by the grantee as a licensee of the grantor and the grantee has to pay the monthly fee of Rs. 120. 00. (D) there was an earlier agreement of leave and licence from 7. 11. 1973 which had expired on 6. 10. 1974 and despite that the grantee is continued as licensee and at the request of the grantee the grantor has further extended the period for 11 months from 7. 9. 1976. (E) the electric burning charges is to be shared by the grantor and grantee and the municipal taxes are to be borne by the grantor. (F) the grantor is entitled to revoke the licence if the grantee is in arrears of licence fees for a period of three months and on revocation of the licence, the grantee has to stop the use of the space granted to him. Grantor is also entitled to stop the electric power of his service, and if the electric power is stopped, the grantee shall not been titled to take any legal action either in civil or in criminal. (G) there is a passage from the demised premises for going to the place of the grantor. Grantor is also entitled to stop the electric power of his service, and if the electric power is stopped, the grantee shall not been titled to take any legal action either in civil or in criminal. (G) there is a passage from the demised premises for going to the place of the grantor. During the licence period, the grantor and his family members are entitled to come and go. Even during the licence period, the grantor, his family members may come, may sit and may do their work. The grantee shall do his manufacturing business in the space shown by the grantor as referred in clause (1) and the grantor and his family members may do their business in the remaining part. The grantee has no right to use the additional premises. Grantee has to do his business from 8 a. m. to 6 p. m. and the grantor is entitled to close the premises from inside. (H) the grantee is not to close the space wherein the machineries are placed, that is, the grantee is not to do anything of the sort of a partition nor the grantee is to apply his board. No illegal activities are to be done in the premises. For breach of any of the conditions of this agreement the grantor is entitled to revoke the licence before the expiry of the period. (I) on expiry of the period or if the licence is revoked before that, the grantee shall not enter the premises nor shall use the machineries nor the power. On expiry of the licence period or in case of revocation before that the grantee shall remove his goods and if the same are not removed, the grantor shall remove the same and he is entitled to auction the same. (J) the licence is personal and the grantee shall not transfer the same nor he shall assign it. (K) the grantee is not given any right or interest as tenant in the premises used by him. Grantee has only right to use and has no right as tenant. " ( 13 ) IN the abovestated legal position and the agreement entered into between the litigants, one has to see whether the defendant is a lessee or a licensee. ( 14 ) LEARNED advocate Mr. Aspi Kapadia appearing for the appellant has relied upon the following judgments: @@@ 1. AIR 1959 SC 1262 2. " ( 13 ) IN the abovestated legal position and the agreement entered into between the litigants, one has to see whether the defendant is a lessee or a licensee. ( 14 ) LEARNED advocate Mr. Aspi Kapadia appearing for the appellant has relied upon the following judgments: @@@ 1. AIR 1959 SC 1262 2. AIR 1951 (Travancore) 189 3. AIR 1972 (Madras) 372 4. AIR 1969 (Allahabad) 248 5. AIR 1984 (Gujarat) 182 He has submitted that looking to the facts of the case and the law laid down by the Supreme Court in the cases referred to hereinabove and the other judgments delivered by other High Courts, it is crystal clear that the defendant was not a tenant in respect of the suit premises and as he was only a licensee, he cannot have any right as a tenant in the suit premises. Moreover, according to him, as the defendant is not a tenant in respect of the suit premises, the City Civil Court, Ahmedabad had jurisdiction to entertain the suit. ( 15 ) THOUGH the defendant has been served with the notice of this court, nobody had appeared on behalf of the respondent on 18. 8. 2000 and on 25. 8. 2000 when this appeal was called out for hearing. Even today nobody has appeared on behalf of the defendant and therefore, I am constrained to decide the matter in absence of the defendant or his advocate. ( 16 ) LOOKING to the law laid down on the subject and the facts of the case it is very clear that no interest in respect of the property has been created in favour of the defendant by virtue of the leave and licence agreement (exh. 39) dated 7. 9. 1976. It is very clear that the defendant was permitted to use the area where he was doing his business from 8. 00 a. m. to 6. 00 p. m. and thereafter he had no right to enter the suit premises or to use the area permitted to be used by him for his business purpose. The defendant was not put in exclusive possession of the area where he was doing his business and the plaintiff and his family members were using the said area after business hours. The defendant was not put in exclusive possession of the area where he was doing his business and the plaintiff and his family members were using the said area after business hours. It was not open to the defendant to have exclusive possession of the area in respect of which he was permitted to do his business. ( 17 ) IT is now necessary to refer to the relevant clauses incorporated in the said agreement. Clauses f,g,h,j and k are relevant terms of the said agreement. By virtue of clause (g) incorporated in the said agreement, even during the period covered under the licence, the plaintiff and his family members were entitled to pass through the area which was permitted to be used by the defendant. The period during which the defendant was to do his business has been determined by virtue of the said clause. The defendant was permitted to do his business from 8. 00 a. m. to 6 p. m. The plaintiff was permitted to close the premises from inside after 6. 00 p. m. ( 18 ) BY virtue of clause (h), the defendant was not permitted to cover the space where his machinery was installed and he was not permitted to do anything so as to have a partition to separate the area used by him from the rest of the premises. He was also not permitted to put any board or draw any line so as to describe the area which he was permitted to use. ( 19 ) BY virtue of clause (j) it was clarified that the licence was given to the defendant personally and it was not open to him to permit any other person to use the said area. ( 20 ) BY virtue of clause (k), it was clarified that the defendant was not given any right or interest in the premises used by him and it was also clarified that the defendant had no right to use the same as a tenant. . ( 21 ) IN the light of the terms of the agreement referred to hereinabove, it is very clear that the defendant was not put in exclusive possession of the suit premises. Upon perusal of the evidence led before the trial Court, it is clear that son of the plaintiff was doing business of his scooter repairing work and was using the suit premises. Upon perusal of the evidence led before the trial Court, it is clear that son of the plaintiff was doing business of his scooter repairing work and was using the suit premises. Upon perusal of the evidence of Ramchandra Modi (exh. 15), it is clear that the plaintiff and his family members had to pass through the area which was permitted to be used by the defendant. There was only one main door through which the plaintiff and his family members were entering their house and the area which was permitted to be used by the defendant was forming a part of the passage between the main entrance and the place where the plaintiff and his family members were residing. It also appears that after closing the main door, it was not possible for anyone, including the defendant, to enter the suit premises and the suit premises were being closed by the plaintiff at night after 7. 00 p. m. After 7. 00 p. m. i. e. after the business hours, the defendant had to leave the place of his business and he could enter the place or the area earmarked for his use only if the plaintiff opened the door from inside. The above facts could not be controverted by Chandulal Panchal, witness No. 1of the defendant (exh. 38) in his cross-examination. ( 22 ) IT is also clear from the evidence that in the past, the plaintiff had permitted some other persons to use the the suit premises in the manner in which the defendant was using the suit premises. Even those persons, who had used the premises in the past, were leaving the suit premises after their business hours and they too had no right to have an exclusive possession of the suit premises. ( 23 ) FROM the facts of the case stated hereinabove, it is very clear that the defendant was not having exclusive possession of the area which was being used by him during his business hours and as after the business hours the plaintiff and his family members were using the area permitted to be used by the defendant, it is crystal clear that no right or interest had been created in favour of the defendant by virtue of the agreement exh. 39. 39. Moreover, from the surrounding facts and circumstances also it does not appear that the defendant had any right or interest in the area which he was using for the purpose of his business. ( 24 ) FROM the facts of the case stated hereinabove one can come to the conclusion that the defendant was only a licensee and he was not a tenant. In view of the above facts and the legal position narrated hereinabove, the conclusion arrived at by the trial Court cannot be said to be just and proper and, therefore, I hold that the defendant was a licensee and the trial Court materially erred by deciding that the defendant was a tenant. ( 25 ) IT is pertinent to note here that after the suit was dismissed due to the finding arriving at by the Trial Court, the defendant tenant had filed HRP Suit No. 4820 of 1977 in the Court of Small Causes, Court No. 3 Ahmedabad praying that the present plaintiff be restrained from evicting the defendant. During the pendency of the present appeal the said suit has been decided. The said suit has been dismissed on 2. 10. 1981. The suit has been dismissed on the ground that the defendant was not a tenant in respect of the suit property and the certified copy of the judgment delivered in the said suit has been kept on record by learned advocate Mr. Kapadia. It has been submitted that against the dismissal of the said suit the present defendant has filed an appeal and perhaps that appeal has been dismissed for default. Be that as it may, this court, at present, is concerned only with this first appeal and for the reasons stated hereinabove, it cannot be said that the defendant was a tenant in respect of the area which was permitted to be used by him by the plaintiff. ( 26 ) IN the circumstances the appeal is allowed. the judgment and order dated 31. 1. 1979 passed by the City Civil Court, Ahmedbaad in civil Suit No. 3114 of 1977 is quashed and set aside and the suit is decreed. It has been fairly submitted by Mr. ( 26 ) IN the circumstances the appeal is allowed. the judgment and order dated 31. 1. 1979 passed by the City Civil Court, Ahmedbaad in civil Suit No. 3114 of 1977 is quashed and set aside and the suit is decreed. It has been fairly submitted by Mr. Kapadia that at this stage the plaintiff does not press for mesne profits and arrears of rent and electricity consumption charges and, therefore, the defendant is not directed to make any payment with regard to electricity consumption charges and mesne profits. Looking to the facts of the case there shall be no order as to costs. .