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1974 Supreme(Bom) 140

Bombay High Court
BHASME
Mohan Sons (Bombay) - Appellant
Versus
Lady Sonoo Jamsetji Jejeebhoy - Respondent
Decided On : 10/24/1974

Advocates:
R.B. Andhyarujina i/by S. C. Pratap. Advocate, for Petitioners; M.O. Chinoy i/by M/s. Gagrat and Co., Attorneys, for Opponents Nos. 1 to 4.

Headnote:

CONTRACT - Lease or Licence - Agreement styled as leave and licence - Whether a lease or licence - Principles for determining the nature of the agreement - Exclusive possession - Intention of the parties - Surrounding circumstances - Held, the agreement was a lease and not a licence.

Fact of the Case:

The plaintiffs, trustees of a charity, filed a suit against the defendants for possession of the suit premises on the ground that defendant No. 1, the tenant, had sublet a portion of the suit premises in their occupation to defendant No. 2 after May 1959. The defendants resisted the plaintiffs' suit claim. The trial court decreed the plaintiffs' claim for possession. The appellate court dismissed the appeal filed by the defendants. The defendants preferred a second appeal to the High Court.

Finding of the Court:

The High Court held that the agreement between defendants 1 and 2 under which defendant No. 2 came to occupy a major portion of the suit premises was one of sub-tenancy and not an agreement of leave and licence. The court found that the tenancy of defendant No. 1 was validly terminated. The court also held that the agreement between the parties was a lease and not a licence, considering the exclusive possession given to the licensee, the surrounding circumstances, and the various clauses of the agreement.

Issues: 1. Whether the agreement between defendants 1 and 2 was a lease or a licence? 2. Whether the tenancy of defendant No. 1 was validly terminated?

Ratio Decidendi: 1. In determining whether an agreement creates a lease or a licence, the court must consider the intention of the parties, the exclusive possession given to the licensee, the surrounding circumstances, and the various clauses of the agreement. 2. A lease is created when an interest in immovable property, entitling the transferee to enjoyment, is created. A licence is created when permission to use land without the right to exclusive possession is granted.

Final Decision: The High Court dismissed the second appeal filed by the defendants and confirmed the decree passed by the courts below. The court directed that the decree for possession will not be executed for a period of three months from the date of the order, subject to the undertaking given by the petitioners to maintain the status quo during this period.

ORDER:- The petitioner, a private limited company, is original defendant No. 1 tenant. Respondents Nos. 1 to 4 are the original plaintiffs. They are trustees of the N.M. Wadia Charities, having their office at 22-D Parsi Bazar Street, Fort, Bombay-1. Respondent No. 5 is the original defendant No. 2. It is also a limited company. The plaintiffs had filed a suit against the defendants for possession of the suit premises on the ground that defendant No. 1, the tenant, had sublet a portion of the suit premises in their occupation to defendant No. 2 after May 1959. As this is illegal subletting contrary to the terms and conditions of the tenancy agreement, the plaintiffs were entitled to claim possession of the suit premises. The claim was also based on the ground of arrears of rent from 1-9-1960 to 10-10-1960. Both the defendants had filed separate written statements and resisted the plaintiff's suit claim. One of the contentions raised was that the notice to quit, which was given by the plaintiffs before the institution of the suit was not valid in law. No particulars were furnished in the written statements about the alleged invalidity of the notice to quit. According to defendants Nos. 1 and 2, in fact, there was no subletting. The contract between defendant No. 1 and defendant No. 2 was a contract of leave and licence. A number of issues were framed by the learned trial Judge. Parties relied on both oral and documentary evidence. After part of the evidence was recorded, the defendants raised a specific contention about the invalidity of the notice. In fact two notices were given by the plaintiffs to defendant No. 1. The first notice is of 7/15-1-1960 and the second one is of July 1960. The second notice was expressly given without prejudice to the first notice. During the course of the trial the defendants contended that the first notice was bad in law because it was not given by proper person. It is not necessary to refer to the other contention that, in fact, the notice does not bring about the termination of the tenancy of defendant No. 1 The Secretary of the plaintiffs had given instructions to the advocate and the advocate had issued the notice seeking to terminate the tenancy. The Secretary was not authorised by the plaintiffs who were the trustees of the Trust Property. None of the plaintiffs had entered the witness-box to depose to the fact that all or any one of them had instructed the Secretary to serve the notice on the 1st defendant or otherwise instructed the advocate to write such a letter. As the Secretary was the constituted attorney of the plaintiffs, the contention raised on behalf of the defendants was that the power of attorney does not give any authority to the attorney to terminate the tenancy of the 1st defendants. The said power is restricted to the right to commence and prosecute or appear in and defend all suits, actions and proceedings. The Secretary, although he was the holder of the power of attorney, had no power to instruct the advocate of the plaintiffs to address the letter.

2. As the point was allowed to be raised during the course of the trial, the Secretary was recalled and further examined. The plaintiffs relied upon a document which is marked Ex. M. Ex. M consisted of two parts. The first part was the memorandum submitted by the Secretary to the trustees in which a mention is made of the alleged breach of the terms of the tenancy agreement under which the 1st defendant was in occupation. The Secretary had sought directions of the trustees regarding the breach committed by the 1st defendant. At the foot of the Memorandum there was an endorsement purporting to be in the hand of one of the trustees. Below the endorsement, the trustees i. e. the plaintiffs had signed. The plaintiffs have relied upon this document for establishing their case that the plaintiffs trustees had authorised the Secretary, their Power of Attorney holder, to instruct the lawyer and the lawyer acting on such instructions






















































































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