M/S. Hardat Rai Parshotam Dass v. M/S. Roop Lal & Sons

7. The Trial Court after completion of the pleadings, framed the issues and after recording the evidence, vide its judgment and decree dated 11.12.2015, decreed the civil suit directing the appellants/defendants to hand over the peaceful and vacant possession of the shop in question along with damages/mesne profits. Paragraph no.13 of the relief granted to the respondents/plaintiffs reads as under:- "13.

ISSUE No.9. RELIEF. In view of the findings given on issues no.l to 8, documents placed on record, pleadings of the parties and evidence led by the parties, the plaintiffs have proved their case on the scale of preponderance of probabilities. Accordingly, the suit of the plaintiffs is decreed in their favour and - 5 against the defendants and following reliefs are awarded to the plaintiffs:-

1. A decree of possession in favour of plaintiffs, and against the defendants thereby directing the defendants to hand over the peaceful and vacant possession of the shop bearing No.518A, Fasil Road, Lahori Gate, Delhi as shown in the red colour in the site plan, to the plaintiffs within 30 days.

2. A decree of damages/mesne profits in favour of plaintiffs and against the defendant thereby directing the defendants to pay increased license fees @ 10% from 01/07/2003 and accordingly the license fees will keep on increasing @ 10% every 3 years thereafter also. Further, the plaintiffs are directed to calculate the mesne profits from 01/07/2003 till 30/11/2015 and to pay the court fees upon the same as per the rules. The amount paid by the defendants to the plaintiff during the proceedings of the case will bededucted from the above mesne profits.

3. A decree of permanent injunction in favour of plaintiffs and against the defendants thereby restraining the defendants, their family members, agents, workers, etc. from delivering the possession of the shop bearing No.518A, Fasil Road, Lahori Gate, Delhi as shown in the red colour in the site plan, to anyone else except the plaintiffs.

4. Costs of the suit Further, the plaintiffs are directed to calculate the mesne profits from 01/07/2003 till 30/11/2015 and to pay the court fees upon the same as per the rules. Thereafter, decree sheet be prepared accordingly. File be consigned to record room after completing the necessary formalities."

8. The aforesaid judgment and decree came to be challenged by the appellants/defendants before the Court of Additional District Judge. The learned first Appellate Court vide its impugned judgment dismissed the appeal, holding that the relationship between the parties was that of a licensor and a licensee. The plea of appellants/defendants that the possession of the appellants/defendants was by virtue of the lease agreement, was rejected and therefore, the appellants/defendants preferred the instant appeal under Section 100 of the Code of Civil Procedure, 1908 (hereinafter referred to as “CPC”). - 6 -

9. Learned counsel appearing on behalf of the appellants/defendants primarily argued that the appellants/defendants were inducted in the suit shop by virtue of the lease deed and the relation of the parties was essentially of landlord and tenant, therefore, the bar under Section 19 of the Slums (Improvement and Clearance) Act, 1956 (hereinafter referred as “Act”) was attracted, requiring requisite and mandatory permission from the competent authority before the eviction of the occupant qua the premises which is located in the slum area falling within the ambit of the provisions of the the Act. He submits that if the evidence of PW-1 Mr. Rakesh Kumar and PW-3 Ms. Sushila Kumar is construed in the right perspective, the same would clearly establish that even as per respondents‟/plaintiffs‟ witnesses, the appellants/defendants had full control over the shop in question, therefore, the occupation of the appellants/defendants clearly fell within the definition of the tenancy.

10. Learned counsel for the appellants/defendants takes this Court through Clauses 4, 11 and 12 of the license deed and then draws the attention of the Court to paragraph no.4 of the written statement. He then contends that, notwithstanding, the fact that the actual physical possession of the shop shall always remain with the licensor, the appellants/defendants being the licensee agreed to be entitled to close and open the premises under the lock and key of the licensor. He, then, contends that surrounding circumstances need to be weighed while interpreting an agreement as a lease or license. According to him, even if the parties chose to refer to the transaction as a license, still the agreement can be termed as a lease depending upon the real intention of the parties. In order to substantiate his submission, learned counsel - 7 for the appellants/defendants places reliance on the decision in the case of Captain B.V. D' souza v. Antonio Fausto Fernandes[1].

11. Learned counsel also submits that there is a complete nonapplication of mind by the first Appellate Court to the material available on record, which adversely affects the substantial rights of the appellants/defendants requiring admission of the instant appeal. He further submits that the findings of fact are based on wrong interpretation; therefore, this Court should examine the entire relevant evidence on record.

12. In order to substantiate the aforesaid submission, learned counsel places reliance on a decision of the Supreme Court in the case of Rattan Dev v. Pasam Devi[2], Kulwant Kaur & Ors. v. Gurdial Singh Mann (Dead) by Lrs. & Ors.3, Dilbagrai Punjabi v. Sharad Chandra[4], Hero Vinoth (Minor) v. Seshammal[5], Hafazat Hussain v. Abdul Majeed & Ors[6] and State of Rajasthan and Others v. Shiv Dayal and Another[7].

13. Learned counsel appearing on behalf of the respondents/plaintiffs vehemently opposes the aforesaid submissions and submits that there is no question of law involved in the instant second appeal much less a substantial question of law. According to him, the present is a case of concurrent findings of fact and there is hardly any scope to interfere under Section 100 of the CPC. Learned counsel then contends that fundamental facts of execution of the license deed and payment of license fee are not disputed.

- 8 - According to him, the alleged contradictions pointed out by the appellants/defendants are of no significance in view of the written license agreement placed on record. To substantiate the aforesaid submission, reliance is placed on Sections 91 and 92 of the Indian Evidence Act, 1872. It is then contended that the bar under the Act would not attract and the Courts below have rightly negated the case of the appellants/defendants.

14. In order to substantiate his submissions, learned counsel places reliance on decisions in the cases of Sharex Acting Through Vinod Kumar Chadha v. Sudershan Suri[8], Tulsi Dass Ahuja (Since Deceased) Through his Lrs &Anr. v. Chattar Singh (Since Deceased) Through His Lrs & Anr[9], Giri Raj (Since Deceased) Through Lrs. v. Deepak Gupta & Ors.10 and Narayanan Rajendran and Another v. Lekshmy Sarojini and Others11.

15. I have considered the submissions made by learned counsel for the parties and perused the record.

16. The first and foremost issue which requires to be adjudicated is whether the deed in question dated 01.07.1998 is a license deed or lease deed. As to whether the bar stipulated under Section 19 of the Act would attract will ultimately depend upon the determination of the aforesaid question.

17. Before taking a voyage of the findings rendered by the Courts below, at this juncture, it is pertinent to refer to the observations of the Supreme Court in the case of Associated Hotels of Indian Ltd. v. R.N.

- 9 - Kapoor12, wherein, the Court has considered the distinction between lease and license. One of the key distinctions as noted by the Supreme Court is 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 license. Furthermore, it was also held that 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 negate the intention to create a lease. The relevant extracts of the said decision read as under:- “That 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 license;

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 license; 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.”

18. Furthermore in the case of C.M. Beena v. P.N.Ramchandra Rao13, the Supreme Court has held as under:- "Only a right to use the property in a particular way or under certain terms given to the occupant while the owner retains the control or possession over the premises results in a license being created; for the owner retains legal possession while all that the licensee gets is a permission to use the premises for a particular purpose of in a particular manner and but for the permission so given the occupation would have been unlawful."

19. At this juncture, it is pertinent to have a brief sojourn and refer to the recitals of the deed dated 01.07.1998 which is the focal point of 1959 AIR 1262.

- 10 the entire controversy canvassed before this Court. The heading of the said document is "Deed of License". It further starts with the following recital that "THIS LICENSE DEED IS EXECUTED at Delhi on the…." The terms used in the deed are also “licensor” and “licensee”.

20. Furthermore, Clause 2 of the deed states that the licensee shall commence the use and occupation of the shop in question from 01.07.1998 for a period of five years till 30.06.2003. Clause 5 of the deed further states that by virtue of this agreement, the licensee shall not acquire any right, title or interest in the premises other than that of the licensee and Clause 10 therein states that the premises shall not be used by the licensee or his agents for any other purposes. At the end of the deed, Clause 15 therein further stipulates that the licensee shall hand over the peaceful and vacant possession of the premises after the expiry of the term.

21. Thus, on the foundation of the judicial precedents as cited above and the parameters stated therein, when the recitals of the deed are perused, analysed and examined in light of their simple and ordinary meaning, it dispels the room for any doubts or aspersions that the intention of the parties was always to enter into a license deed as opposed to a lease deed. The very usage of the terms “license”, “licensee” and “licensor” umpteen number of times in the deed coupled with the real intention of the parties, clearly and unequivocally establish that the said deed is a license. The Court cannot lose sight of the fact that the deed unequivocally specifies the term of license, the permissible use of the premises, non-conveyance of any right, title or interest as well as the stipulation to hand over the premises after the expiry of the term. These are indicators of a license and not a lease. - 11 -

22. At this fulcrum, it is pertinent to refer to Clause 4 of the lease deed, which has been extensively stressed upon by the appellants/defendants. The said clause reads as under:- "That the actual physical possession of the shop shall always remain with the licensor who shall be responsible for its maintenance upkeep and daily cleaning etc. during open and allow the licenses and all the persons coming to him ingress and agrees. At the close of business hours and the licensor shall close the premises. The space shall always remain under lock and key of the licensor."

23. This Clause unequivocally states that the actual physical possession of the shop shall always remain with the licensor who shall be responsible for its maintenance, upkeep and daily cleaning etc. and allow the licensee and all the persons coming to him ingress and egress. At the close of business hours, the licensor shall close the premises. The space shall always remain under lock and key of the licensor.

24. It is on the basis of the said recital that the space shall always remain under the lock and key of the licensor, an argument has been advanced that since the exclusive possession of the premises rested with the appellants/defendants, therefore the relationship was of the landlord and tenant. Furthermore, while drawing sustenance from Clauses 11, 12 and 15 of the deed, it is argued that the reading of the entire document would establish that the present agreement was a lease agreement.

25. The argument that since the exclusive possession of the premises rested with the appellants/defendants, the deed could be coloured as a lease deed, also does not hold feet in light of catena of judgements rendered by the Courts. - 12 -

26. The Supreme Court in the case of Rajbir Kaur v.

- 13 -

27. Furthermore, in the case of Chandu Lal v. Municipal Corpn. of Delhi15, as well, this Court has held that the exclusive possession ipso facto prima facie does not mean that there exists tenancy. The relevant extract of the said case reads as under:-

28. Moreover, the Supreme Court in the case of Delta International Ltd. v. Shyam Sundar Ganeriwalla and Another16, has also held that the mere fact of exclusive possession of the premises by itself does make a deed a lease deed, rather, the intention of the documents as evidenced from the recitals of the deed needs to be kept in mind to ascertain whether the deed is of lease or license. The relevant extracts of the said judgment read as under:- “(1) To find out whether the document creates a lease or a licence the real test is to find out “the intention of the parties”;

- 14 keeping in mind that in cases where exclusive possession is given, the line between a lease and a licence is very thin. (2) The intention of the parties is to be gathered from the document itself. Mainly, the intention is to be gathered from the meaning and the words used in the document except where it is alleged and proved that the document is a camouflage. If the terms of the document evidencing the agreement between the parties are not clear, the surrounding circumstances and the conduct of the parties have also to be borne in mind for ascertaining the real relationship between the parties. (3) In the absence of a written document and when somebody is in exclusive possession with no special evidence how he got in, the intention is to be gathered from the other evidence which may be available on record, and in such cases exclusive possession of the property would be the most relevant circumstance to arrive at the conclusion that the intention of the parties was to create a lease. (4) If the dispute arises between the very parties to the written instrument, the intention is to be gathered from the document read as a whole. But in cases where the landlord alleges that the tenant has sub-let the premises and where the tenant in support of his own defence sets up the plea of a mere licensee and relies upon a deed entered into, inter se, between himself and the alleged licensee, the landlord who is not a party to the deed is not bound by what emanates from the construction of the deed; the tenant and the sub-tenant may jointly set up the plea of a licence against the landlord which is a camouflage; in such cases, the mask is to be removed or the veil is to be lifted and the true intention behind a facade of a self-serving conveniently drafted instrument is to be gathered from all the relevant circumstances. Same would be the position where the owner of the premises and the person in need of the premises executes a deed labelling it as a licence deed to avoid the operation of rent legislation. (5) Prima facie, in the absence of a sufficient title or interest to carve out or to create a similar tenancy by the sitting tenant in favour of a third person, the person in possession to whom the possession is handed over cannot claim that the sub-tenancy was created in his favour; because a person having no right cannot confer any title of tenancy or sub-tenancy. A tenant protected under statutory provisions with regard to occupation of the premises having no right to sub-let or transfer the premises, cannot confer any better title. But, this question is not required to be finally determined in this matter.” - 15 -

29. Thus, whether the entire castle of the deed will ultimately bear the plaque of a „lease‟ or „license‟, rests on the foundation of the real intention of the parties. Therefore, it is palpably clear that the litmus test for determination of any deed as lease or license rests on the anvil of the real intention of the parties. As explained above, the mere facet of exclusive possession by itself does not garner support in favour of the deed being termed as a lease, when the real intention of the parties reflects it as a license.

30. More importantly, PW-1 and PW-3 whose testimonies are being relied upon by learned counsel appearing for the appellants/defendants, if construed in the right perspective, the same would indicate the following salient aspects:i) the defendants had been in the possession of the property since 01.07.1998. ii) the deed bears the signatures of the defendants iii) the defendants were only licensees and not tenants.

31. Therefore, on the conspectus of the rectials of license deed dated 01.07.1998 and evidence of PW-1 and PW-3, it is thus seen that the appellants/defendants, from the very inception, understood the document to be of the nature of the license and the appellants/defendants are acting upon the terms thereto, without raising any objection, with respect to recitals made therein, which unequivocally state the document to be of a license, and without seeking for any declaration to that effect.

32. The Court is not oblivious to the fact that the licensee, on one pretext or the other, would always intend to be in occupation of the property in question. The plea of the document being in the nature of - 16 lease was raised only at the stage when the respondents/plaintiffs instituted the civil suit. The same appears to have been done with an intention to attract the provisions of Section 19 of the Slums (Improvement and Clearance) Act, 1964 so as to debar the respondents/plaintiffs from instituting the suit for recovery of possession.

33. Furthermore, the rigors of Section 100 CPC are more stringent when the second appeal is filed assailing the concurrent findings of the Courts below. In Bholaram v. Ameerchand17, the second Appellate Court set aside the impugned judgment on the ground that the findings are perverse and disregard to the material available on record. However, the Supreme Court while setting aside the said judgment held that even if we accept the rationale of the High Court, at best, it could be termed as an error in findings of fact but that itself would not entitle the High Court to interfere in the absence of a clear error of law.

34. In the Thiagarajan v. Sri Venugopalaswamy B. Koil18, the Supreme Court observed that where the findings of the fact by the lower Appellate Court are based on evidence, the second appellate court cannot ouster such finding and substitute it with its own finding on reappreciation of evidence merely on the ground that another view was possible. The Supreme Court further observed that it is the obligation of the Courts of law to further the clear intendment of the legislature and not frustrate it by excluding the same.

35. Interference in the concurrent findings of the fact is permitted but only in exceptional circumstances. As a second appeal is not the third trial on facts and the first Appellate Court is the final arbiter of

- 17 facts, this interference by the second Appellate Court is rarity rather than regularity. In Jai Singh v. Shakuntala 19, the Supreme Court held that it is permissible to interfere even on questions of fact but it has to be done only in exceptional circumstances. The Court observed as under:-

36. In P. Chandrasekharan v. S. Kanakarajan 20, the Supreme Court laid down the exposition of law that the interference in the second appeal is permissible only when the findings are based on a misreading of evidence or are so perverse that no person of ordinary prudence could take the said view. Moreso, the Court must be conscious that intervention is permissible provided the case involves a substantial question of law which is altogether different from a mere question of law. The existence of a substantial question of law is a foundational parameter for invoking the jurisdiction.

37. In the instant case, the material available on record and the evidence has rightly been appreciated by the Courts below and accordingly, a conclusion has been drawn that the instant deed is not the lease and is a license. The same does not seem to be perverse or arbitrary and more importantly, the Court does not find any substantial AIR 2002 SC 1428.

- 18 question of law which has arisen for adjudication in the instant appeal and accordingly, the appeal fails and is hereby dismissed.

38. All pending applications are also disposed of. No costs.

JUDGE NOVEMBER 27, 2024