The distinction between a sub-tenancy and a licence depends on the parties' intention, as expressed in the agreement and surrounding circumstances, and whether an interest in the property is created.

Headnote:
LICENCE - DISTINCTION FROM SUB-TENANCY - AGREEMENT OF LEAVE AND LICENCE - INTERPRETATION - CREATION OF LICENCE - PROTECTION UNDER BOMBAY RENTS, HOTEL AND LODGING HOUSES RATES CONTROL ACT, 1947.
Fact of the Case:

The petitioner, occupying half of Room No. 413 under an agreement of leave and licence with the first defendant, challenged the trial court's decision that he was a sub-tenant and not a protected licensee under the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947.
Finding of the Court:

The court held that the agreement between the parties created a licence, not a sub-tenancy, based on the terms of the agreement and surrounding circumstances, including the licensee's lack of exclusive possession and the licensor's retention of control over the premises.
Issues: 1. Whether the agreement between the parties created a sub-tenancy or a licence. 2. Whether the licensee was a protected licensee under the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947.
Ratio Decidendi: 1. The court applied the established legal principles to distinguish between a sub-tenancy and a licence, emphasizing the intention of the parties and the creation of an interest in the property. 2. The court interpreted the agreement's terms and surrounding circumstances to conclude that the parties intended to create a licence, not a sub-tenancy.
Final Decision: The court allowed the petition, set aside the eviction decree against the licensee, and declared him a protected licensee in respect of the portion of the premises he occupied.

JUDGMENT - Smt. SUJATA V. MANOHAR, J.:---The petitioner carries on business in the name and style of M/s. Suren (India) Traders. The petitioner is occupying half portion of Room No. 413 on the 4th floor of Union Bank Building, situate at 66/80 Apollo Street, Fort, Bombay under an agreement of leave and licence between the petitioner and one H.D. Commercial Corporation. The first respondent, Union Bank of India is the owner of the said building. Room No. 413 in the said building was originally given on lease to M/s. H.D. Commercial Corporation at a monthly rent of Rs. 215.36 paise. The tenancy of the said Corporation was terminated by the Union Bank of India by their Advocate's letter dated 6th February, 1965. Thereafter another notice was issued to the said Corporation dated 18th August, 1966 terminating the tenancy and calling upon the said Corporation to pay the rent of the said premises from 1-4-1965 to 31-7-1966. Thereafter, the Union Bank of India (hereinafter referred to as the plaintiff) filed a suit in the Court of Small Causes at Bombay being RAE R Suit No. 799/6720 of 1966 for possession of the said room. M/s. H.D. Commercial Corporation were the first defendants in the said suit. The present petitioner who is in occupation of a half portion of the said room, was joined as defendant No. 2. One Raghunath N. Rao, doing business in the name and style of M/s. S.S. Machinery Parts (India) and occupying the other portion of the said room was joined as defendant No. 3. During the pendency of the said suit defendant No. 3 left the said premises. M/s. Shyama Coastal Shipping Co. Private Limited and M/s. Shyama Engineering Industries were inducted into the said premises (the other half of the said room) during the pendency of the suit and they were also impleaded as party defendants 4 and 5 in the said suit.

2. The proprietor of M/s. H.D. Commercial Corporation was adjudicated insolvent during the pendency of the suit and his estate vested in the Official Assignee.

3. In the said suit it was the contention of the 2nd defendant (who is the petitioner herein) that he was a lawful sub-tenant of the half portion of the said room which was in this occupation from a period prior to 21st May, 1959. During the pendency of the suit, the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 came to be amended. As a result certain licensees, as defined in the said Act, who were in occupation of premises under a subsisting licence prior to 1st February, 1973 were also given protection under the said Act. Thereafter the 2nd defendant amended his written statement and raised a plea that he was a protected licensee under the provisions of the said Act as amended.

4. At the hearing of the suit, various issues were raised as between the plaintiffs and the 1st defendant as also between the plaintiffs and the second defendant. The issues between the plaintiffs and interest defendant were decided in favour of the plaintiffs and the trial Court by its judgment and decree dated 30/31st March, 1979 passed a decree of eviction, inter alia, against the 1st defendant. This decree was not challenged in appeal by the 1st defendant. I am not concerned in the present petition with this decree which has been passed against the 1st defendant.

5. The 2nd defendant's first contention was to the effect that he came to occupy a half portion of the said room prior to 21st May, 1959. He was therefore, a lawful sub-tenant in respect in respect of the said portion, The trial Court held that there was no evidence in support of the 2nd defendant's plea that he had come to occupy a part of the said room prior to 21st May, 1959. It, therefore, negatived the claim of the second defendant as a lawful sub-tenant in respect of the said portion in his occupation. This part of the finding given by the trial Court was not seriously challenged before the Appeal Court. Hence this aspect of the 2nd defendant's case also need not be considered at this stage

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Judicial Analysis