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1970 Supreme(Bom) 2

IN THE HIGH COURT OF BOMBAY
(J. C. Shah C. J., K. S. Hegde and A. N. Grover JJ.)
SOHANLAL NARAINDAS - Appellant.
vs.
LAXMIDAS RAGHUNATH - Respondent.

Exclusive possession of the premises given to the defendant is conclusive of the question whether the loft was in the occupation of the defendant as a tenant.

Headnote:

LICENCE VS LEASE - EASEMENTS ACT, 1882 - SECTION 52 - TRANSFER OF PROPERTY ACT, 1882 - SECTION 105 - Exclusive possession of the premises given to the defendant is conclusive of the question whether the loft was in the occupation of the defendant as a tenant.

Fact of the Case:

Plaintiff commenced an action in the City Civil Court, Bombay, for a decree in ejectment against the defendant, alleging that the defendant was occupying a loft under an agreement of a license dated November 3, 1958 and that the license had been duly terminated and withdrawn, but the defendant had failed and neglected to vacate the loft notwithstanding the demand. The defendant contended that he was a tenant of the loft, that the tenancy had not been duly terminated as required by law, that he was entitled to the protection of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and that the Court had no jurisdiction to try the suit.

Finding of the Court:

The High Court held that on the terms of the agreement and in the light of the surrounding circumstances the relationship between the parties was that of landlord and tenant.

Issues: Whether the agreement dated November 3, 1958 was a lease or a license.

Ratio Decidendi: The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject-matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a license.

Final Decision: Appeal dismissed with costs.

JUDGMENT

SHAH C. J.-Sohanlal Naraindas-hereinafter referred to as the plaintiff -commenced an action in the City Civil Court, Bombay, for a decree in ejectment against Laxmidas Raghunath-hereinafter called the defendant-alleging that the defendant was occupying a loft 18’ x 15’ on the upper floor of a building at Pragraj Galli, Mulki Jetha Market, Bombay, under an agreement of a licence dated November 3, 1958 and that the licence had been duly terminated and withdrawn, but the defendant had fi1ed and neglected to vacate the loft notwithstanding the demand. The defendant contended that he was a tenant of the loft, that the tenancy had not been duly terminated as required by law, that he was entitled to the protection of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and that the Court had no jurisdiction to try the suit.

2. The trial Court dismissed the suit holding that the defendant was a tenant of the plaintiff and not his licensee. The decree was confirmed in appeal by the High Court of Bombay. The High Court held that on the terms of the agreement and in the light of the surrounding circumstances the relationship between the parties was that of landlord and tenant. With certificate granted by the High Court the plaintiff has appealed to this Court.

3. The certificate granted by the High Court is defective. The plaintiff applied for certificate under Article 133(1)(a) of the Constitution and in the alternative under Article 1 33(1)(c) of the Constitution. The High Court passed an order certifying the case under Article 133(1)(c). A certificate granted by the High Court must be supported by adequate reasons. It is obligatory upon the High Court to set out the question of public or private importance which in their opinion falls to be determined in the proposed appeal. Since we are of the view that there is no merit in this appeal, we have not thought it fit to vacate the certificate.

4. The agreement dated November 3, 1958 was recorded formally in writing and was duly executed. The plaintiff was the lessee of a shop No. 11 in Pragraj Galli, Mulji Jetha Market, and the loft of that shop was the subject-matter of that agreement. The period of the agreement was one year. It was staled in the agreement that the loft "was given on leave and licence basis for use and occupation" of the defendant on the terms and conditions mentioned therein. The relevant conditions were:

"1. The owner (the plaintiff) has agreed to grant the leave and licence for use and occupation of the said loft (Medo) of the said shop for a period one year commencing from Aso Vad 13, S. Y. 7014 to Aso Vad 12, S Y.2015

2. The licensee (the defendant) shall pay to the owner monthly compensation or licence fee at the rate of Rs. 750 per month and the licensee has paid Rs. 3,0"0 (Rupees three thousand) only to the owner as compensation or licence fee for the said period in advance on or before the execution of this agreement.

3. The licensee shall have no right as a tenant or sub-tenant in respect of the said loft (medo) of the said shop. The licensee shall not sub-let, allow to use, transfer or assign in any way the said loft (medo) of the shop to anyone else.

4. The owner shall bear and pay the rent of the said shop.

5. The licensee shall me and occupy the said loft (medo) of the said shop as a cloth merchant only and shall not be entitled to carryon any other business.

6. The parties hereto shall give one months clear notice of their intention to terminate this agreement in writing.

7.* * * * *

8. If the licensee commits breach of any of the terms of this agreement in that case the owner shall be entitled to terminate and revoke the leave and licence hereby granted without giving notice to the licensee."

5. The defendant Was put in exclusive possession of the loft. The plaintiff did not reserve possession of any part of the loft or a right of entry therein. The loft had a separate entrance. The customers of the defendant used the separate entr












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