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SUPREME COURT OF INDIA
R.S. BACHAWAT, J.M. SHELAT AND V. BHARGAVA JJ.
1. B. M. Lall (dead) by his legal representatives (In C A. No. 2253 of 1966);
2. R. N. Dutta (In C. A. No. 2254 of 1966), Appellants
Versus
M/s. Dunlop Rubber Co. (India) Ltd. and another (In both the Appeals), Respondents.
Civil Appeals Nos 2253 and 2254 of 1966,
D/- 18-7-1967.
Advocates Appeared
Mr. Sarjoo Prasad, Senior Advocate, (Mr. R. Ganapathy Iyer, Advocate, with him), for Appellant (In C. A. No. 2253 of 1966). M/s. Devaprasad Chaudhury and Sukumar Chose, Advocates for Appellant (In C. A. No. 2254 of 1966); Mr. A. K. Sen, Senior Advocate (M/s. S. K. Gambhir and D. N. Gupta; Advocates with him), for Respondents (In both the Appeals).
LANDLORD AND TENANT - Tenancy or License - Agreement between company and officer - Whether creates tenancy or license - Test - Occupation by officer whether on his own account or on behalf of company.
Fact of the Case:
The respondents, two limited companies, jointly purchased premises known as King's Court in Calcutta for providing residential accommodation for their staff. They filed suits against the appellants for recovery of possession of two flats occupied by them as tenants, on the ground that they reasonably required the flats for the occupation of their staff. The trial court dismissed the suits, but the High Court set aside the decrees and decreed the suits.
Finding of the Court:
The Supreme Court held that the occupation of the officer under the standard form of agreement of respondent No. 2 was a license and not a tenancy. The agreement created no interest in the land and gave only a personal privilege or license to the servant to occupy the premises for the greater convenience of his work.
Issues: Whether the occupation of the officer under the standard form of agreement of respondent No. 2 was a tenancy or a license.
Ratio Decidendi: The court held that the agreement between the company and the officer was a license and not a tenancy. The agreement created no interest in the land and gave only a personal privilege or license to the servant to occupy the premises for the greater convenience of his work. The court applied the test laid down in Errington v Errington and Woods, (1952) 1 KB 290 (298) and Associated Hotels of India Ltd. v. R. N. Kapoor, (1960) 1 SCR 368 at pp. 381-385, that the question of tenancy or license is a question of construction of the agreement having regard to its terms, object, and circumstances under which it was executed.
Final Decision: The Supreme Court dismissed the appeals and upheld the decision of the High Court decreeing the suits for recovery of possession of the flats.
Key Points: - The occupation is analyzed under a construction of the agreement considering terms, object, and circumstances (Errington v Errington; Associated Hotels) (!) - The standard form agreement states the occupation is a license, creates no interest in land, and ceases with employment or transfer; it includes license fees and no landlord-tenant relationship (!) (!) (!) - The High Court and Supreme Court held the occupancies were licenses to the officers for the company’s convenience and staff, not tenancies; the appeals were dismissed (!) (!) (!)
Judgement
BACHAWAT, J.:- The respondents are limited companies having their head offices in Calcutta. On May 15, 1953, the two Companies jointly purchased the premises known as King s Court at No. 46-B Chowringhee Road, Calcutta, for the purpose of providing residential accommodation for their staff. They instituted a suit against one B. M. Lall, since deceased, predecessor of the appellants in C. A. No. 2253/66 for recovery of possession of flat No. 8 in the aforesaid premises in his occupation as a tenant, and another suit against the appellant in C. A. No. 2254/66 for recovery of possession of flat No. 9 in his occupation as a tenant, on the ground that they reasonably required the flats for the occupation of their staff. By Section 13 (1) of the West Bengal Premises Tenancy Act, 1956, (West Bengal Act XII of 1956), the tenants are protected from eviction except on one or more of the grounds specified in the sub-section. The grounds mentioned in clause (f) of S. 19 (1) are :-
"Where the premises are reasonably required by the landlord either for purposes of building or re-building or for making thereto substantial additions or alterations or for his own occupation if he is the owner or for the occupation of any person for whose benefit the premises are held:"
The respondents claim that they reasonably require the flat for their own occupation. The trial court dismissed the suits. From these decrees, the respondents flied appeals in the High Court at Calcutta. The High Court set aside the decrees passed by the trial court and decreed the suits. The present appeals have been flied under Certificates granted by the High Court
2. The High Court held that (1) a limited company can be a landlord within the meaning of S. 13 (1) (f) and can reasonably require the premises for its own occupation, and (2) where there are several landlords, the requirement of the premises by the landlords for the occupation of one or more of them is sufficient to bring the case within section 13 (1) (f). These findings are not challenged in this Court. Before us it is also conceded by all the appearing parties that the respondents are entitled to a decree for recovery of possession of the two flats under Section 13 11) (f), if they establish that they reasonably require the Bats for the occupation of respondent No. 2, Guest Keen and Williams Ltd. only.
3. The two courts concurrently found that respondent No. 2 reasonably requires the flats for the occupation of its staff. The Company is under an obligation to provide free residential accommodation for its officers in properties either rented or owned by it. In view of the acute scarcity of accommodation in the city, it is not possible to find other convenient flats for officers who were transferred to the city from other stations. Suitable provision for the accommodation of officers visiting Calcutta on tour is a matter of necessity. The sole question is whether the occupation by its staff officers would be the company s own occupation. The point of dispute on which the two courts differed is whether the officer to whom the flat would be allotted would occupy it as a tenant or as a licensee. It is common case before us that if he is a licensee his occupation would be on behalf of the company and its requirement would be for its own occupation. On the other hand, if he is a tenant his occupation would be on his own account and the company s requirement would not be for its own occupation. It appears that the officers provided with accommodation by the Company are required to execute agreements in a standard form. The terms and conditions of the agreement are as follows :-
1. The Licensee whilst in the employment of the Company at Calcutta and for the sole purpose of the Licensee being more conveniently situated in such employment is hereby permitted by the Company to occupy as a Licensee during the term of his employment at Calcutta Flat No. 25, situated in the Company s property known as Kings Court, Cal
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