2010 Supreme(Ker) 939

High Court of Kerala
Thomas P. Joseph, J.
Raveendran - Appellant
Versus
Muhammedali - Respondent
R.S.A. No. 1350 of 2009
Decided On : 12-01-2010

The main legal point established in the judgment is the importance of interpreting the true intent of a deed based on the words used, the nature of the occupation, and the conduct of the parties to determine whether an arrangement constitutes a lease or a licence.

Headnote:

licence arrangement - Eviction - 1. Defendant in O.S. No.155 of 1995 of learned Munsiff- Magistrate, Pattambi is the appellant before me. He has suffered a decree for eviction from the schedule building with damages at the rate of Rs.1,500/- per month. 2. According to the respondent the schedule building belonged to him as per Ext.A1 and as per successive deeds of licence (Exts.A2 to A4) appellant was being permitted to occupy the building for his jewellery business subject to the terms and conditions stipulated in the said deeds. Exhibit A4 is the deed of licence dated 1.10.1994 as per which appellant was permitted to occupy the schedule building for a period of eleven months. On the expiry of that period, respondent demanded vacant possession of the building which the appellant refused and hence the suit for mandatory injunction and recovery of damages. Appellant contended that he is a lessee of the building and that at the time of the original entrustment he had paid Rs.65,000/- to the respondent by way of rent advance. Rent was enhanced periodically and the present rent is Rs.1,500/- per month. He claimed that since he is a lessee of the building he is not liable to be evicted by a mandatory injunction as prayed for by the respondent. Trial court found on evidence that the transaction between appellant and respondent is a licence and hence on expiry of the period of licence referred to in Ext.A4 respondent is entitled to seek eviction of appellant by a decree for mandatory injunction. Damages (for use and occupation) was allowed at the rate of Rs.1,500/- per month. First appellate court has confirmed that finding and decree. Hence the Second Appeal urging by way of substantial question of law whether finding of the courts below that Ext.A4 evidenced a licence arrangement is legally sustainable? Learned counsel for appellant asserted his contention that the transaction, notwithstanding the nomenclature of the documents (Ext.A2 to A4) really evidenced a lease arrangement. According to the learned counsel endorsements on the back of Ext.A2 to A4 obtained from the appellant that he will surrender the building on expiry of the period mentioned therein would indicate that he is a lessee of the premises with possession. Reliance is placed on the decision of the Supreme Court in New Bus stand Shop Owners Assn. v. Corporation of Kozhikode ([2009] 10 SCC 45). In response it is contended by learned counsel for respondent that there is nothing wrong in the parties agreeing to enter into licence arrangement and conducting themselves accordingly. Learned counsel would argue that going by the terms of Exts.A2 to A4 conclusion inescapable is that relationship between the parties is only of a licensor and licensee and the period of licence as per Ext.A4 having expired it was well within the power of the respondent to seek mandatory injunction with damages for use and occupation. 3. It is trite law that in interpreting a document emphasis need not be given to the nomenclature alone (See Rajappan v. Veeraraghava Iyer - 1969 KLT 811). But it is also the cardinal principles of interpretation of a deed that the question is not what the parties may have intended by executing the deed but what is the true meaning of the words used in the deed. Court has to understand the true intent of the deed by the words used in the deed (See Narayani Amma v. Narayanan Namboodiri - 1985 KLT 49) and Hathika v. Padmanabhan - 1994 [1] KLT 345). It has been held that when the terms and expressions used in the deed are clear, intention of the parties has to be gathered from the deed itself and looking into surrounding circumstances is possible only when there is ambiguity in the expressions used in the deed. The Supreme Court in New Bus stand Shop Owners Assn. v. Corporation of Kozhikode (supra) held that the true test to ascertain whether the document is a lease or licence is the nature and quality of the occupation. In a tenancy, interest in the land passes whereas in the licence it does not. Exclusive possession was held to be not a decisive test but its absence signifies that the agreement is for licence and not for lease. 4. It has been held by binding authorities that even exclusive possession is not an indica of a lease arrangement. (see Narayani Amma v. Narayanan Namboodiri and New Bus stand Shop Owners Association case (supra). For the purpose of convenient enjoyment of the licence it may be necessary to give possession of the premises to the licensee. Hence the mere fact of the grantee being in possession cannot be decisive of the question whether the arrangement is lease or licence. 5. Exhibits A2 to A4 are the deeds of licence executed between the parties in this case. Though in Ext.A9, reply appellant has a case that he was forcibly made to sign the documents, there is no acceptable evidence in that line and instead when examined as D.W.1 he has confessed that he has written in his own hand on the back of Exts.A2 to A4 that on the expiry of the period of licence he will surrender the premises to the respondent. Courts below also found that there is no reason to think that there was any foul-play in Exts.A2 to A4 got executed. 6. It is specifically stated in Exts.A2 to A4 that permission is given to the appellant to use the premises as a licensee for the purpose of jewellery business subject to the terms and conditions stated therein. In paragraph 7 of Ext.A4 it is stated that parties have meant and understood the transaction not to be a lease arrangement but only as conferring a personal privilege on the appellant to use the premises for the specific purpose of conducting business in jewellery. It is also stated in Ext.A4 in specific terms that possession of the building remained with the respondent and that its key was entrusted to the appellant to enable him use the building for the purpose he was granted permission to occupy the building. Appellant when examined as D.W.1 had admitted that in Ext.A5, counterfoil of receipt book for payment of (licence) fee he has written in his own hand that he has received receipts for payment of 'licence fee'. A further fact revealed from the evidence of appellant as D.W.1 is that he has taken another room for business purposes and in respect of that room he has executed a 'rent deed'. Hence it is not as if appellant was unaware of the distinction between lease and licence. Being aware of that distinction and with eyes wide open to the terms and conditions appellant has executed Exts.A2 to A4. Courts below found from Exts.A2 to A4 that it evidenced a licence arrangement. Law does not prohibit parties from entering into a licence arrangement and conducting themselves accordingly. I do not find anything to hold that notwithstanding the terms and conditions stated in Exts.A2 to A4 the real transaction was one of lease and that Exts.A2 to A4 were intended as a camouflage to cover up the real transaction. In that view I find nothing illegal in the courts below taking the view that Exts.A2 to A4 revealed licence arrangement. That is a finding of fact entered on the evidence and on proper construction of Exts.A2 to A4. As such no substantial question of law is involved. 7. It has been held that when the period of licence is terminated or it expired by efflux of time it is open to the licensor to sue for mandatory injunction within a reasonable time (see Ayssa Umma v. Ami - 1990 [1] KLT 98 and Joseph Severance v. Benny Mathew - 2005 [4] KLT 290 9SC). Respondent has filed the suit within reasonable time on the expiry of the period stated in Ext.A4. Decree for damages also does not require interference since the amount awarded is the licence fee payable as per Ext.A4. 8. Learned counsel for appellant requested 12 months' time to vacate the premises. It is submitted by learned counsel that appellant is engaged in jewellery business and if, all on a sudden he is evicted his business will be doomed. I have heard learned counsel for respondent in this regard. Having regard to the facts and circumstances of the case and considering the nature of business appellant is admittedly carrying on in the schedule building I am inclined to grant six months' time from this day to the appellant to vacate the premises as per the judgment and decree under challenge.

Fact of the Case:

Defendant in O.S. No.155 of 1995 of learned Munsiff- Magistrate, Pattambi suffered a decree for eviction from the schedule building with damages at the rate of Rs.1,500/- per month. The respondent claimed ownership of the building and permitted the appellant to occupy it for his jewellery business under successive deeds of licence. The appellant contended that he was a lessee and not liable to be evicted, leading to a dispute over the nature of the arrangement.

Finding of the Court:

The court found that the transaction between the parties was a licence arrangement, not a lease, as evidenced by the deeds of licence and the conduct of the parties. The court held that the respondent was entitled to seek eviction of the appellant by a decree for mandatory injunction and confirmed the damages awarded.

Issues: The main issue was whether the transaction between the parties constituted a lease or a licence arrangement, as this determined the appellant's liability for eviction and damages.

Ratio Decidendi: The court emphasized that the true intent of a deed should be understood from the words used in the deed, not just the nomenclature. It considered the nature and quality of the occupation, the distinction between lease and licence, and the conduct of the parties to determine the nature of the arrangement. The court also highlighted that possession alone is not decisive of whether an arrangement is a lease or a licence.

Final Decision: The Second Appeal was dismissed, and the appellant was granted six months' time to vacate the premises, subject to depositing arrears of damages and complying with other conditions.