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2024 Supreme(Online)(KER) 16598
HIGH COURT OF KERALA
A. BADHARUDEEN, J
K.VINOD – Appellant
Versus
AAYISA ANEES – Respondent
CO 3/2023
V.V.SURENDRAN, SRI.P.A.HARISH, SRI.E.NARAYANAN
The distinction between a lease and a licence is crucial; a licence does not confer exclusive possession or transfer of interest in property.
Headnote:(A) Code of Civil Procedure, 1908 - Section 100 r/w Order XLII Rule 1 - Registration Act, 1908 - Section 17 - Indian Easements Act, 1882 - Nature of agreement - Dispute regarding whether the arrangement between parties is a licence or a lease - The trial court found the arrangement to be a licence, while the appellate court reversed this finding, stating the document required registration and that the defendant was in exclusive possession. (Paras 10, 15, 24)
(B) Legal principles - The distinction between a lease and a licence is critical; a lease involves exclusive possession and transfer of interest, while a licence grants permission to use property without such rights. (Paras 15, 26)
Facts of the case:
The plaintiff sought a mandatory injunction against the defendant to vacate premises based on a licence deed executed in 2000. The defendant contended the arrangement was a lease, claiming exclusive possession. (Paras 7, 8)
Findings of Court:
The appellate court's decision to eschew the licence deed was erroneous; the deed was intended to create a licence, not a lease, and the plaintiff's ownership was valid. (Paras 19, 25)
Issues: The court addressed whether the lower appellate court correctly interpreted the nature of the agreement and the necessity of registration for the licence deed. (Paras 5, 6)
Ratio Decidendi: The court concluded that the intention behind the deed was to create a licence, and the appellate court's findings regarding possession and registration were incorrect. (Paras 19, 26)
Result: Regular Second Appeal allowed; judgment of the trial court restored.
JUDGMENT
Dated this the 13th day of March, 2024 This Regular Second Appeal has been filed by the appellant under Section 100 r/w Order XLII Rule 1 of the Code of Civil Procedure (for short, ‘the C.P.C.’ hereinafter), against the decree and judgment in A.S.No.202/2016 on the files of the First Additional District Court, Kozhikode, dated 16.10.2017, arose out of the decree and judgment in O.S.No.611/2014 on the files of the First Additional Munsiff Court, Kozhikode, dated 30.7.2016.
2. Heard the learned counsel for the appellant/plaintiff and the learned counsel appearing for the respondent/defendant.
3. I have perused the trial court records.
4. I shall refer the parties in this appeal as ‘plaintiff’ and ‘defendant’, for convenience.
5. On 3.12.2018, my learned predecessor admitted this appeal by raising the following substantial questions of law:
(i) Was the lower appellate court correct in eschewing Ext.A1 document especially when parties rely upon the same to raise other respective plea?
(ii) Going by the terms of Ext.A1, was the lower appellate court correct in holding that the respondent is in exclusive possession of the plaint schedule property?
(iii) Can a person who is a party to a document contend against the terms of the document?
6. On hearing both sides, another substantial question of law also arises for consideration and the same is as under:
(iv) Whether a deed of licence would require mandatory registration in view of Section 17 of the Registration Act, 1908 ?
7. The plaintiff instituted the suit, seeking the relief of mandatory injunction, directing the defendant to vacate the plaint schedule premises, which the defendant obtained as per an agreement of licence executed in the year 2000. Arrears of licence fee and consequential reliefs also sought for. According to the plaintiff, the plaint schedule property, originally belonged to the father of the plaintiff and his siblings, was entrusted to the defendant, as a licensee, as per licence deed executed on 4.8.2000. Thereafter, the plaintiff got ownership over the same, as per settlement deed No.94/2008. According to the plaintiff, after the execution of settlement deed also, the defendant continued payment of licence fee. Since the defendant failed to vacate the premises even after issuance of notice, terminating the licence, present suit was pressed into.
8. The defendant filed written statement, mainly contending that the arrangement in between the defendant and the predecessors of the plaintiff, is a lease and not a licence, since actual possession was parted at the time when the arrangement was entered into.
9. The trial court recorded evidence. PW1 was examined and Exts.A1 to A7 were marked on the side of the plaintiff. DW1 was examined on the side of the defendant. The trial court found, mainly relying on the recitals in Ext.A1 licence deed dated 4.8.2000 and the evidence of PW1, that the arrangement is a licence and accordingly, the relief of mandatory injunction and payment of arrears of licence fee and use and occupation were granted.
10. The verdict of the trial court was challenged before the First Additional District Court, Kozhikode. As per judgment in A.S.No.202/2016, dated 16.10.2017, the first appellate court reversed the finding of the trial court, mainly on two grounds. According to the first appellate court, Ext.A1 licence deed could not be read in evidence, since the same is a compulsorily registerable document, as the same was one executed at will. Accordingly, the first appellate court eschewed Ext.A1 from consideration. Secondly, it was found that, since the defendant is in exclusive possession of the building, the arrangement is not a licence, but a lease.
Accordingly, appeal was allowed in part.
11. In this matter, the dispute centered on the nature of Ext.A1 and the arrangement intended by Ext.A1.
12. It is argued by the learned counsel for the plaintiff that, on reading Ext.A1, on its preface, the intent behind execution of deed could be noticed. I
