Possession post-lease expiry must be lawful for licence renewal; otherwise, it is deemed unlawful.

1Leave granted.

2Smt. Saleha Begum, the 3rd respondent had demised her property, namely, Shahensha Mahal situated on Congress Road, Governorpet, Vijayawada, A.P. to the appellant for a period of 20 years by lease deed dated January 1, 1964 and in furtherance thereof, the appellant has been running the exhibition of Cinematograph films in the said theatre. The lease, by efflux of twenty years, contracted thereunder expired on December 31, 1983. When the appellant sought renewal of the licence granted under the A.P. Cinemas (Regulation) Rules, 1970 (for short, 'the Rules'), the landlady objected to the renewal. The licensing authority and the appellate authority had granted licence but in a writ petition filed by the landlady the learned single Judge held that the appellant is not in lawful possession of the theatre and that, therefore, the grant of renewal was justified in law. This was affirmed in W.A.Nos. 1118 and 1183 of 1992 dated September 3, 1993. Thus, these appeals by special leave.

3Sri. U.R. Lalit, learned senior counsel for the appellant, contended that in 1983, the Rules have been amended and the pre-existing Rule has been bifurcated into initial grant of licence in R.11(B) and renewal is separately dealt with under R.12(B). R.11(B), sub-rule (2) envisages proof of lawful possession of the site, building and the equipment, while R.12(B) expressly omits to satisfy the requirement. The rule making authority having had knowledge of the decisions rendered by various courts including this Court on the insistence of proof of lawful possession by the licensee and . unlawful or litigious possession disentitles the licensee to have renewal, rule making authority had done away with the requirement of being in lawful possession at the stage of granting renewal. On interpretation of the rules, the legislative intendment should be given effect to. The Full Bench of the Andhra Pradesh High Court in Smt. Y. Anasuya v. Government of A.P. , 1993 (1) ALT 661 (FB) wrongly interpreted the rule bringing the requirement of being in lawful possession at the stage of granting renewal. He also further contended that the appellant having lawfully entered into possession and having remained in possession during the subsisting period of lease and after expiry thereof, his possession also is juridical possession until he is duly ejected by a decree of the Court. His possession cannot be termed to be unlawful nor can he be treated as a rank trespasser. The appellant is in long settled possession. The object of the Rules is to facilitate the exhibition of cinematograph films to entertain the public. When the licensee is in settled possession protected by general law, he continues to be in lawful possession till he is duly ejected. While interpreting the Rule, the court would endeavour to give effect to the juridical possession so long as he is not duly ejected in due course of law. The Full Bench, therefore, was not right in its conclusion. In support thereof, he placed reliance on the decisions of this Court in Lalu Yeshwant Singh v. Rao Jagdish Singh and Others 1968 (2) SCR 203 and in Krishna Kishore Firm v. Govt. of A.P. and Others 1990 Supp. (2) SCR 8 at 11. He also cited in his support East India Hotels Ltd. v. Syndicate Bank 1992 Supp. (2) SCC 29.

4Sri. K. Ram Kumar, learned counsel appearing for respondent No.3, contended that under the conditions of the lease, on its expiry, the appellant had to deliver not only the vacant possession but also the equipment without claiming any compensation. There is nothing to indicate that the landlady had acquiesced in the appellant's continuance in possession of the theatre after the expiry of the lease. In fact, the landlady filed O.S. No. 538/85 on the file of the Court of the Principal Subordinate Judge at Vijayawada for eviction of the appellant from the demised premises which would indicate that the possession of the appellant was never treated to be lawful. It is also contended that the Full Bench