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1994 Supreme(Mad) 121

High Court of Judicature at Madras
MISHRA & S.M. ALI MOHAMED
T. Sekaran
Versus
The Managing Director, Thiruvalluvar Transport Corporation, Madras
O.S.A. Nos. 9, 18 & 19 of 1994
Decided On :Decided on: 25-01-1994

Advocates Appeared:
For the Appellant:N. Jothi, Advocate.
For the Respondent:Krishna Srinivasan, Advocate.

The distinction between a lease and a license is determined by the intention of the parties, as evidenced by the terms of the agreement and the circumstances of the case.

Headnote:

LEASE OR LICENSE - DISTINCTION - TRANSFER OF PROPERTY ACT, 1882, SS. 105, 108 - INDIAN EASEMENTS ACT, 1882, S. 52 - AGREEMENT DESCRIBING PARTIES AS LICENSOR AND LICENSEE - CONDITIONS INDICATING INTENTION TO CREATE LICENSE - NO LEASEHOLD INTEREST CREATED - APPELLANT NOT ENTITLED TO INJUNCTION TO RESTRAIN RESPONDENT FROM AUCTIONING PROPERTY.

Fact of the Case:

Appellant and respondent entered into an agreement pursuant to which appellant was to be in possession of a property on condition that he should run a hotel for the service to the passengers at the bus stop of the respondent-Transport Corporation. The period of the agreement had expired long before and the appellant was holding over. Appellant claimed to be a lessee, while the respondent claimed he was a licensee. Appellant filed a suit seeking an injunction to restrain the respondent from auctioning the property for induction of a new incumbent either as a licensee or a lessee. The trial court dismissed the appellant's applications for temporary injunction, mandatory injunction, and reduction of rent. The appellant challenged the dismissal of his applications in the instant appeals.

Finding of the Court:

The court held that the appellant was a licensee and not a lessee, based on the following factors: * The agreement between the parties described them as licensor and licensee, and the document was called a license. * The conditions of the agreement indicated that the appellant was only permitted to use the property for the purpose of running a hotel, and that the legal possession of the property remained with the respondent. * The appellant had not made out a prima facie case that he was a lessee.

Issues: 1. Whether the appellant was a lessee or a licensee? 2. Whether the appellant was entitled to an injunction to restrain the respondent from auctioning the property?

Ratio Decidendi: 1. The court held that the appellant was a licensee and not a lessee, based on the following factors: * The agreement between the parties described them as licensor and licensee, and the document was called a license. * The conditions of the agreement indicated that the appellant was only permitted to use the property for the purpose of running a hotel, and that the legal possession of the property remained with the respondent. * The appellant had not made out a prima facie case that he was a lessee. 2. The court held that the appellant was not entitled to an injunction to restrain the respondent from auctioning the property, because: * He had not come to court with clean hands, as he had defaulted in paying the stipulated fee or rent for the property. * He had not made out a prima facie case that he was a lessee. * The balance of convenience did not favor granting an injunction, as the respondent would suffer greater inconvenience if the injunction was granted.

Final Decision: The court dismissed the appeals.

Judgment :-

MISHRA, J.

1. We are satisfied that these appeals do not merit any detailed hearing and are fit to be dismissed in limine . Still we do not propose to dismiss the arguments of the learned counsel for the appellant seeking admission of the appeals dismissively and accordingly propose to deal with the arguments by him.

2. It is not in dispute that the appellant and the respondent entered into an agreement pursuant to which he was, according to the appellant, to be in possession of a property on condition that he should run a hotel for the service to the passengers at the bus stop of the respondent-Transport Corporation. The period of the agreement has expired long before and the appellant is holding over.

3. According to the appellant, he is a lessee in respect of the said property. According to the respondent, he is a licensee. Petitioner-appellant has been served with a notice by one of the officers of the respondent-Corporation to vacate or else to face eviction. Before, however, the instant suit, the appellant came to this Court with a writ petition in W.P. No. 5714 of 1993 seeking interference of the Court to restrain the respondent from auctioning the property for induction of a new incumbent either as a licensee or a lessee. The said writ petition has been dismissed. Before filing the suit and during the pendency, however, the petitioner has not paid the stipulated fee according to the respondent and rent as lessee according to the appellant, for quite sometime and has fallen in arrears, in respect of one property in a sum of Rs. 1,37,647.50 and in respect of another in a sum of more than Rs. 8,00,000/-.

4. The respondents counter is categoric that the appellant herein was granted licence from 1.2.1988 to 31.3.1991, which was extended from 1.2.1991 to 31.1.1992 and from 1.2.1992 to 31.1.1993. Since the licence has expired, the appellant has no right to move the Court and seek an order of temporary injunction.

5. The learned single judge, who has heard the three applications (1) for ad-interim injunction; (2) for mandatory injunction to direct the respondent to stop the buses at the motel (the property) in possession of the appellant as a lessee) for the passengers to have refreshment and (3) for the tent to be reduced for the period from 25.3.1993 onwards till the respondent permitted the buses to stop at the motel for refreshment, has dismissed them saying,

(1) that the petitioner has suppressed the fact that he had moved this Court in W.P. No. 5714 of 1993 which has been dismissed and that he had not been paying rent and had fallen in arrears and thus, has not come with clean hands to seek equity as it is well settled that one who seeks equity must act in equity; and

(2) that it is not a case in which the Court should on the pleadings hold prima facie for the purpose of injunction that the appellant is a lessee and grant any injunction.

5 a.) The conclusion recorded by the learned single judge that in case of a licensee whose period of licence has expired, the Court should not grant temporary injunction, cannot be disputed for the simple reason that temporary injunction is granted only in the cases which are covered by the three cardinal principles, namely,

(1) by making out a prima facie case;


(2) on showing the balance of convenience petitioners in favour, in that the refusal of the injunction would cause greater inconvenience to him; and

(3) where on refusal of the injunction, the petitioner seeking injunction would suffere irrepairable or serious injury.

The Court in such a case also sees that before invoking the jurisdiction of the Court for temporary injunction, the party has shown that it has a legal right and that right has been invaded. The view taken by the learned single judge is the same as taken by a Full Bench of Delhi High Court in the case of Chandu Lal v. Delhi Municipality (AIR 1978 Delhi 174).

6. It is well settled that whether an agreement has created a lease or licence is not left only to the

























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