Meghalaya High Court
Smti. Swapna Das vs Chief Executive Officer And Ors on 1 July, 2014
Author: T Nandakumar Singh
Bench: T Nandakumar Singh
THE HIGH COURT OF MEGHALAYA
WP(C) No.200/2010
Smti. Swapna Das,
W/o late Bimal Das,
Short Round Road, Shillong,
Meghalaya. :::: Petitioner
-Vs-
1. Chief Executive Officer,
Shillong Municipal Board,
Shillong.
2. State of Meghalaya to be represented by the
Secretary in the Ministry of Municipal Affairs,
Government of Meghalaya.
3. M/s H.M. Cements,
C/o Vikash enterprise,
Salonsar Mansion, Police Bazar,
Shillong-1. :::: Respondents.
WP(C) No.201/2010 Smti. Jyoti Debnath, W/o late S.C. Debnath, Laitumkhrah, Shillong. :::: Petitioner
-Vs-
1. Chief Executive Officer, Shillong Municipal Board, Shillong.
2. State of Meghalaya to be represented by the Secretary in the Ministry of Municipal Affairs.
3. M/s H.M. Cements, C/o Vikash enterprise, Salonsar Mansion, Police Bazar, Shillong-1. :::: Respondents.
WP(C) No.202/2010 Shri. Saugata Dutta, S/o late H.S. Dutta, L. Dey Compound, Jail Road, Shillong. :::: Petitioner Page 1 of 22 -Vs- 1. Chief Executive Officer, Shillong Municipal Board, Shillong.
2. State of Meghalaya to be represented by the Secretary in the Ministry of Municipal Affairs, Government of Meghalaya.
3. M/s H.M. Cements, C/o Vikash enterprise, Salonsar Mansion, Police Bazar, Shillong-1. :::: Respondents.
BEFORE
THE HON'BLE MR JUSTICE T NANDAKUMAR SINGH
For the Petitioners : Mr. LR Das, Adv.
For the Respondents : Mr. ND Chullai, Sr. Adv
Mr. KP Bhattacharjee, GA
Mr. K Baruah, Adv for respdt.No.1
Mr. S Sen, Adv for respdt.No.3
Date of hearing : 27.06.2014
Date of Judgment & Order : 01.07.2014
JUDGMENT AND ORDER
These three writ petitions involving the similar facts and laws seeking similar prayer were taken up for joint hearing for disposal by a common judgment and order. Accordingly, these writ petitions are being disposed of by this common judgment and order.
2. Heard Mr. LR Das, learned counsel for the petitioners and Mr. K Baruah, learned counsel for the respondent No.1 as well as Mr. ND Chullai, learned Sr. GA assisted by Mr. KP Bhattachrjee, learned GA appearing for the respondent No.2. Also heard Mr. S Sen, learned counsel for the respondent No.3.
Page 2 of 22
3. The facts of the case in the three writ petitions are similar except that writ petitioner in WP(C)No.201/2010 Smti.Jyoti Debnath is the wife of (L) Sailendra Ch. Debnath with whom the Shillong Municipal Board (for short „SMB‟) entered into an agreement dated 07.01.1991 for allowing to occupy the Stall No.282 measuring 10‟x9‟=90 sq.ft. over the existing stalls i.e. 1st floor within the Municipal Compound at Jail Road, Shillong and also that the writ petitioner in WP(C)No.200/2010 stated that Stall No.240 at Jail Road, Shillong was allowed to occupy on transfer after she purchased the right over the said Stall No.240 from one Shri.Sukanta Chkraborty and entered into an agreement dated 05.05.1993 with the SMB. The plot of land i.e. Stall No.240 measuring 7‟x22‟=154 Sq.ft. in WP(C)No.200/2010 situated at Jail Road, Shillong, Stall No.282 measuring 10‟x9‟=90 Sq.ft. in WP(C)No.201/2010 situated at Jail Road, Shillong and Stall No.280 measuring 10‟x15‟=150 Sq.ft. in WP(C)No.202/2010 situated at Jail Road, Shillong are the land vested in the SMB. Under Section 62 of the "Meghalaya Municipal Act, 1973" (for short "the Municipal Act, 1973‟) the Municipal property includes property of whatever nature or kind which may become vested in the Board, be under its direction, management and control. Section 62 of the Municipal Act, 1973 reads as follows:-
"Municipal Property
62. Municipal property - (1) Subject to any reservation made by the State Government all property of the nature hereinafter in this section specified and situated within the municipality shall vest in and belong to the Board and shall, with all property of whatever nature or kind which may become vested in the Board, be under its direction, management and control, that is to say -
(a) all public roads including the soil, the pavements, stones and other materials thereof and all drains, bridges, trees, erection materials, implements and other things provided for such roads;Page 3 of 22
(b) all public streams, channels, water-courses, springs tanks, reservoirs, cisterns, wells, aqueducts, conduits, tunnels, pipes, pumps and other water-works whether made laid are created at the cost of the Board or otherwise and bridges, buildings, engines, works, materials and things connected therewith or appertaining thereto and also any adjacent land, not being private property, appertaining to any public tanks;
Provided that water-pipes and any water-works connected therewith or appertaining thereto which with the consent of the Board are laid or set up in any street by the owners of any mill, factory, workshop or the like primarily for the use of their employees shall not be deemed to be public water-works by reason of their use by the public;
(c) all public sewers and drains, all works materials and things appertaining thereto and other conservancy works;
(d) all sewage, rubbish and offensive matter collected by the Board from roads, latrines, sewers, cess-pools and other places;
(e) all public lamps, lamps-posts and apparatus connected therewith or appertaining thereto and all public gates, markets, slaughter houses and public buildings of every description which have been constructed or are maintained out of the municipal fund;
(f) all land or other property transferred to the Board by the Government or acquired (by the Board) by gift, purchase or otherwise for local public purposes. (2) The State Government may, by notification in the official gazette, direct that any property which has vested under sub-S. (1) in the Board shall cease to be so vested, and thereupon the property specified in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property. Provided that in case the Board has already invested any money or made any commitment, the State Government shall not pass any order divesting the Board in respect of the property without consulting the Board."
4. The Municipal Board entered into an agreement with Smti. Swapna Das writ petitioner in WP(C)No.200/2010 on 05.05.1993, husband of writ petitioner in WP(C)No.201/2010 on 07.01.1991 and writ petitioner in Page 4 of 22 WP(C)No.202/2010 on 07.01.1991 respectively for allowing them to occupy the Stalls mentioned above with the terms and conditions mentioned in the said agreement itself. As the present writ petitions are to be decided taking into consideration of the terms and conditions of the said agreements dated 05.05.1993, 07.01.1991 and 07.01.1991 between the parties, it would be more beneficial to quote one of the agreements which are pari materia hereunder:-
"LEASE/AGREEMENT The Shillong Municipal Board represented by the Chief Executive Officer grants unto you SMTI. SWAPNA DAS W/o Shri. Bimal Ch. Das, Police Reserve, Shillong a Stall No.240 at Jail Road, Shillong an area of 7'x22'=154 Sq.ft. (one hundred fifty four square feet) (1st floor) for business purpose and to observe/comply with and strictly fulfilling the terms and conditions prescribed by the Shillong Municipal Board as may be from time to time be amended by the Board as appearing hereinbelow:-
1. That the Lessee shall construct the Stall on the above noted plot at her own expenses according to the Plan and Specifications;
2. That the Lessee shall pay rent @ Rs.308.00 (Rupees three hundred eight) only per month or Rs.3,696.00 (Rupees three thousand six hundred ninety six) only per year. The Shillong Municipality reserve every right to re-
assess the Stall rent from time to time;
3. That the Lessee shall use the Stall for her own business in Godown-cum-Office and for no other purpose and it shall not be used for residential purpose;
4. That you are permitted to install electric fittings in the Stall at your own cost provided the Shillong Hydro Electric Co. grants permission and you shall have to obtain separate meter of your own and shall have to pay the monthly consumption of current;
5. That the overall control and superintendence of the said plot of land and the Stall thereon shall remain vested in the Board whose duly authorized official(s) shall at all reasonable hours be entitled to inspect the said stall about its bonafide user its stage of repairs and cleanliness;
Page 5 of 22
6. That the Lessee shall not deal with any other business except the purpose for which the stall is allotted and under no circumstances they shall have right to sublet, transfer or sell the stall or any part of it to anybody;
7. That the Lessee shall have no interest in the said plot of land nor she be deemed to have exclusive possession thereof. Lease shall not be hereditary but on production of a succession certificate the Board may consider cases individually;
8. That the Shillong Municipal Board reserve the right to extend the period of Lease;
9. That on expiry of the Lease, the Lessee shall be given the first preference in case of renewal of the Lease to use the plot of land and the stall thereon for further period provided the Lessee had conformed to all the terms and conditions/rules prescribed thereof during her prior occupation of the plot of land and the stall thereon;
10. That on expiry of the period of Lease, if not renewed or on the revocation thereof under the terms and conditions prescribed herein, the Shillong Municipal Board shall take exclusive and absolute possession of the land and deal with it in such manner as it may deem fit;
11. That the Lessee shall keep the Stall neat and clean and carry out annual repairs and painting at her own cost;
12. That you shall have to obtain the requisite license from the Board on payment of prescribed fees in carrying on such business which the Shillong Municipal Board imposed license fee;
13. That you shall not stock or deal in any dangerous or inflammable articles or any articles prohibited by Law;
14. That the Lessee shall abide by all reasonable rules and regulations that the Board may come up from time to time or adopt for the interest of the Board;
15. That the Lessee shall get the underground water pipe lines if any passing through the site be shifted at her own cost by engaging a Registered Plumber under the overall supervision of the Water Works Department; Page 6 of 22
16. That in default of your monthly payment of rent as stipulated at above or infringement of any of the conditions appearing hereinbefore shall entail the revocation of the License and the Legal consequences as aforesaid, shall follow;
17. That the Lessee shall abide by the Municipal Rules and Orders issued from time to time and in the event of the breach of any of the terms and conditions hereinbefore stipulated in this Lease it shall be void and liable to be cancelled forthwith.
In witness whereof I do hereunto sign and set my hand this the 5th day of May, 1993.
Sd/-
Chief Executive Officer, Shillong Municipal Board.
Fully understanding and agreeing the terms and conditions as embodied I subscribe my hand this the 5 th day of May 1993.
Sd/-
(SMTI.SWAPNA DAS) LESSEE.
Witnesses:-
1. Sd/- Shakhar Chakraborty
2. Sd/- Bimal Das"
5. On perusal of the said agreement dated 05.05.1993, more particularly conditions No.5 & 7, it is clear that the overall control and superintendence of the said plot of land and Stalls thereon shall remain vested in the Board and no interest in the said plot of land nor he/she be deemed to have exclusive possession thereof and the Lease shall not be hereditary but on production of a succession certificate, the Board may consider cases individually. The Notice dated 02.07.2010 was issued by the Chief Executive Officer, SMB to the writ petitioners informing them that the Stalls occupied by them are required to be taken back by the office of the SMB for development purposes and therefore, as per the terms and Page 7 of 22 conditions of the Stalls agreements/allotment orders, the writ petitioners were requested to handover the unencumbered possession of the Stalls/Space to this Office and vacate the same by 15.07.2010. One of the notices dated 02.07.2010 issued to the writ petitioners is reproduced hereunder:-
"Office Of The SHILLONG MUNICIPAL BOARD Bishop Cotton Road (Opp. Sherwood Bungalow) Shillong-793001, Meghalaya http://smb.gov.in __________________________________________________ No. SMB/L/315/2010-11/179 Dated Shillong, the 2.7.2010.
To, SMTI. SWAPNA DAS STALL No.240 1st Floor Jail Road, Shillong.
Sub: Handing over of Municipal Stall at Jail Road, Shillong.
With reference to the subject indicated above, I am to inform you that the Stall occupied by you is required to be taken back by the Office of the Shillong Municipal Board for development purposes. Therefore, as per terms and conditions of the Stall agreement/allotment order you are hereby requested to handover the unencumbered possession of the Stall/Space to this office and vacate the same by 15/7/2010.
Sd/-
Chief Executive Officer, Shillong Municipal Board"
6. The petitioners further stated that the move of the respondent- Municipality is covered by veil of secrecy designed to benefit a business house and also that the respondent-Municipality had reportedly entered into an agreement with M/s H.M. Cement Pvt. Ltd. (Company for short) for construction of a commercial complex-cum-Five Star Hotel on the Shillong Municipality premises. The Company has demolished the old office building and barricaded it from all sides by tin sheets and had started ground work for raising the multi-storied-multi million rupee business empires. The writ Page 8 of 22 petitioners also further stated that raw of small RCC stalls on the eastern side of the Municipal building had been demolished and the entire raw is now multi-storied. The occupants of small shops/stalls are running their business under the permission of the Municipality. The petitioners also further stated that the respondent-Municipality‟s impugned action i.e. Notice dated 02.07.2010 for vacation of the Stalls is bias and malafide and by taking vague ground of developmental purposes, the respondent-Municipality had short circuited the due process of law.
7. Municipal Board had filed affidavit-in-opposition in the three writ petitions wherein, it is stated in clear terms that the writ petitioners have not been paying their rents from October, 2009 and thereby rendering them as defaulter entailing the revocation of the lease. Para 6 of the Affidavit-in- opposition filed by the Municipal Board reads as follows:-
"6. That in reply to the averments made in paragraphs 3 and 4 of the petition, the deponent say that as per the lease agreement dated 5th May, 1993 (Annexure-II to the writ petition), amongst other clauses, the relevant ones are reproduced hereinbelow:-
Clause 7 - That the Lessee shall have no interesting the said plot of land nor she be deemed to have exclusive possession thereof. Lease shall not be hereditary but on production of a succession certificate the Board may consider cases individually;
Clause 8 - That the Shillong Municipal Board reserve the right to extend the period of Lease;
Clause 10 - That on expiry of the period of Lease, if not renewed or on the revocation thereof under the terms and conditions prescribed herein, the Shillong Municipal Board shall take exclusive and absolute possession of the land and deal with it in such manner as it may deem fit;
Clause 16 - That in default of monthly payment of rent as stipulated at above or infringement of any of the conditions appearing hereinbefore shall entail the revocation of the License.
Clause 17 - That the Lessee shall abide by the Municipal Rules and Orders issued from time to time and in the event of the Page 9 of 22 breach of any of the terms and conditions hereinbefore stipulated in this Lease it shall be void and liable to be cancelled forthwith.
In terms of the lease agreement the last payment of monthly rent was made by the petitioner on 24.7.2009 for the period of July, 2009 to September, 2009. Since then the petitioner has failed to remit the monthly rent thereby rendering her a defaulter entailing the revocation of the lease.
It is also stated that the premises which was leased out to the petitioner is being used as a godown and not as a stall as alleged in the petition."
It is also stated in the affidavit-in-opposition filed by the Shillong Municipal Board that the Urban Affairs Department, Govt. of Meghalaya has executed an agreement with the M/s H.M. Cements Ltd. for the purpose of development of Shillong Municipal Board under PPP scheme (Public Private Partnership). Accordingly, an agreement had entered into with M/s H.M. Cements Ltd. on 25.06.2010 in order to provide much needed infrastructure and revenue to the SMB. The Deed of Agreement dated 25.06.2010 is for the interest to enhance the revenue of the Board, which needs funds for the public service in the Municipal area.
8. From the submissions of the learned counsel appearing for the parties, it appears that this Court is called for a decision mainly the point/issue as to whether or not the said agreements between the parties so called lease/agreement one of which is quoted above is a lease or license? Mr. LR Das, learned counsel for the petitioners vehemently submitted that the said agreement is a lease and therefore, the revocation of the lease should be in accordance with law and the right under the said lease/agreement is hereditable. To the contra, Mr.ND Chullai, learned Sr. GA appearing for the respondent No.2 contended that since the period/terms of the agreement is more than a year, if it is a lease, the procedural requirements as to how the lease made provided under Section 107 of the Page 10 of 22 Transfer of Property Act, 1882 are required to be followed. Lease is defined under Section 105 of the Transfer of Property Act, 1882 and the procedures how the lease is to be made is provided under Section 107 of the Transfer of Property Act, 1882. Rights and liabilities of lessor and lease are provided under Section 108 of the Transfer of Property Act, 1882. For easy reference, Sections 105, 107 and relevant portions of Section 108 of the Transfer of Property Act, 1882 are quoted hereunder:-
"105. Lease defined.--A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined.--The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.
107. Leases how made.- A lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.
[All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.
[Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:] Provided that the State Government may from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.]
108. Rights and liabilities of lessor and lessee.- In the absence of a contract or local usage to the contrary, the lessor and the lessee of immovable property, as against one another, respectively, possess the rights and are subject to the liabilities mentioned in the rules next following, or such of them as are applicable to the property leased:-
(A) Rights and liabilities of the lessor Page 11 of 22
(a) The lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover;
***** ****** *****
(o) the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell [or sell] timber, pull down or damage buildings [belonging to the lessor, or] work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto;
(p) he must not, without the lessor's consent, erect on the property any permanent structure, except for agricultural purposes; ..............‖
9. Section 17 of the Registration Act, 1908 provides that the documents of which registration is compulsory. Section 17 of the Registration Act, 1908 reads as follows:-
"17. Documents of which registration is compulsory.- (1) The following documents shall be registered, if the properties to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, of the Indian Registration Act 1866, or the Indian Registration Act 1871, or the Indian Registration Act 1877, or this Act came or comes into force, namely:-
(a) instruments of gift of immoveable property;
(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property;
(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and
(d) leases of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
(e) non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or Page 12 of 22 order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property:] Provided that the [State Government] may, by order published in [Official Gazette], exempt from the operation of this sub-
section any lease executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rent reserved by which do not exceed fifty rupees. ....."
10. Undisputedly, the said agreements between the parties were not registered and the procedures for making a lease as provided under Section 107 of the Transfer of Property Act, 1882 were not followed. It is an admitted case of the parties that no doubt the Indian Easements Act, 1882 is not extended to the State of Meghalaya but the spirit of the Indian Easements Act, 1882 is followed in the State of Meghalaya inasmuch as what is meant by license and rights and liabilities of the licensee and grantor are decided in the matters arising in the State of Meghalaya by looking into the provisions of Indian Easements Act, 1882. Sections 52, 61, 62 & 63 of the Indian Easements Act, 1882 read as follows:-
"52. "License" defined.- Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.
61. Revocation express or implied.-The revocation of license may be express or implied.
Illustrations
(a) A, the owner of a field, grants a license to B, to use a path across it. A, with intent to revoke the license, locks a gate across the path. The license is revoked.
(b) A, the owner of a field, grants a license to B to stack hay on the field. A lets or sells the field to C. The license is revoked.
62. License when deemed revoked.- A license is deemed to be revoked -Page 13 of 22
(a) when, from a cause preceding the grant of it, the grantor ceases to have any interest in the property affected by the license;
(b) when the licensee releases it, expressly or impliedly, to the grantor or his representative;
(c) where it has been granted for a limited period, or acquired on condition that it shall become void on the performance or non-performance of a specified act, and the period expires, or the conditions is fulfilled;
(d) where the property affected by the license is destroyed or by superior force so permanently altered that the licensee can no longer exercise his right;
(e) where the Licensee becomes entitled to the absolute ownership of the property affected by the license;
(f) where the license is granted for a specified purpose and the purpose is attained or abandoned, or becomes impracticable;
(g) where the license is granted to the licensee as holding a particular office, employment or character, and such office, employment or character ceases to exist;
(h) where the license totally ceases to be used as such for an unbroken period of twenty years, and such cessation is not in pursuance of a contract between the grantor and the licensee;
(i) in the case of an accessory license, when the interest or right to which it is accessory ceases to exist.
63. Licensee's rights on revocation.-Where a license is revoked, the licensee is entitled to a reasonable time to leave the property affected thereby and to remove any goods which he has been allowed to place on such property."
11. The Apex Court, by referring to the judgment rendered by Lord Denning in Errington v. Errington and Woods: (1952) 1 KB 290: (1952) 1 All ER 149 (CA), held in Associated Hotels of India Ltd. v. R.N. Kapoor:
AIR 1959 SC 1262: (1960) 1 SCR 368 held (AIR pp.1269-70, para 27) that:
"27. .......... The following propositions may, therefore, be taken as well established: (1) to ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties - whether they intended to create a lease or a licence; (3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the Page 14 of 22 property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document a party gets exclusive possession of the property, ‗prima facie' he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease.‖ (SCR pp. 384-85 of the Report)."
12. On perusal of the ratio laid down by the Apex Court in R.N. Kapoor's case (Supra) relying on the decision rendered by Lord Denning in Errington's case (Supra), it is clear that a crucial point for distinction between the lease and license is that if under the document a party gets exclusive possession of the property. The Apex Court in Sohan Lal Naraindas v. Laxmidas Ragunath Gadit: 1971 (1) SCC 276 had discussed the distinction between the lease and license and held that the crucial test is if under the document a party gets exclusive possession of the property. Paras 9 & 10 of the SCC in Laxmidas Ragunath Gadit's case (Supra) read as follows:-
"9. Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operates as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject-matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a licence. In determining whether the agreement creates a lease or a licence the test of exclusive possession, though not decisive, is of significance. Mrs. M.N. Clubwala v. Fida Hussain Saheb and Others: 1964 (1) SCR 270: AIR 1963 SC 1279.
10. The Trial Court regarded exclusive possession of the premises given to the defendant as conclusive of the question whether the loft was in the occupation of the defendant as tenant. The Court observed that on a consideration of the clauses of the agreement it was unable to reach a conclusion whether the agreement was intended to operate as a lease or as a licence but since exclusive possession was given it must be regarded a lease. The High Court considered all the covenants and the attendant circumstances and reached the conclusion that having regard to the exclusive possession given to the defendant it was intended to confer an interest in the loft Page 15 of 22 and on that account the agreement operated as a lease and not as a licence."
13. The Apex Court by taking cue of the decision of Lord Denning in Errington's case (Supra) and Cobb v. Lane: (1952) 1 All ER 1199 (CA) held in NewBus-Stand Shop Owners Association v. Corporation of Kozhikode & Anr: (2009) 10 SCC 455 held that the crucial test for distinction between the lease and license is that if under the document a party gets exclusive possession of the property. Paras 18, 19, 20 & 22 of the SCC in NewBus-Stand Shop Owners Association's case (Supra) read as follows:-
"18. Reference in this connection may be made to the decision of the Court of Appeal in Errington v. Errington and Woods:
(1952) 1 KB 290: (1952) 1 All ER 149 (CA). Lord Denning in deciding the issue whether an agreement is a lease or licence referred to the decision given by Vaughan, C.J. in the seventeenth century in Thomas v. Sorrell: 1673 Vaugh 330:
(1558-1774) All ER Rep 107. In the said judgment (Sorrell case: 1673 Vaugh 330: (1558-1774) All ER Rep 107), Vaughan, C.J. outlined certain features of lease which are as follows*: *Ed: As observed in Errington v. Errington and Woods: (1952) 1 KB 290 at pp.296-97.
―........ ‗A dispensation or licence properly passeth no interest nor alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful'. The difference between a tenancy and a licence is, therefore, that, in a tenancy, an interest passes in the land, whereas, in a licence, it does not. In distinguishing between them, a crucial test has sometimes been supposed to be whether the occupier has exclusive possession or not. If he was let into exclusive possession, he was said to be a tenant, albeit only a tenant at will (see Doed Tomes v.
Chamberlaine: (1839) 5 M & W 14 and Lynes v.
Snaith: (1899) 1 QB 486: (1895-99) All ER Rep 997 (DC)), whereas if he had not exclusive possession he was only a licensee: Peakin v. Peakin: (1895) 2 IR
359.‖ Relying on the said principle, Lord Denning explained that the difference between a tenancy and a licence is that, in a tenancy, an interest passes in the land, whereas, in a licence, it does not.Page 16 of 22
19. The position has been further elucidated by saying that it has to be ascertained whether the occupier has exclusive possession or not. The learned Judge also explained that the test of exclusiveness sometimes gives rise to misgivings and that the test of exclusive possession is by no means decisive. In the instant case we have found from the conditions of licence that exclusive possession is not given to the members of the appellant Association and possession is always retained with the Corporation. Even though exclusive possession is not a decisive test, but the absence of exclusive possession is certainly one of the indications to show that the agreement is one of the licence and not of lease.
20. Relying on Errington: (1952) 1 KB 290: (1952) 1 All ER 149 (CA), the Court of Appeal again dealt with this question in Cobb v. Lane: (1952) 1 All ER 1199 (CA). Here also Lord Denning held that the distinction between lease and licence has become very important as several Rent Restrictions Acts have come into operation. The learned Judge held whether the agreement is a lease or a licence must depend on the intention of the parties. Therefore, in all such cases the following question should be posed by the court:
―.......... Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land?‖ (All ER p.1202 C of the Report).
If we follow the said principles in the instant case, we find that what was given to the shop holders was merely a licence and not a lease.
22. If we apply the aforesaid principles in the facts of the case in hand, we are bound to hold that the agreement between the parties merely falls under the category of licence as the licensee is never given the exclusive possession. The Corporation retained the exclusive possession of the shops and this is clear from the conditions of the licence discussed above."
14. It is fairly well settled law that while deciding the types of agreement or interpreting the agreement, the name of the agreement of the terms use "lease" or "licence", "lessor" or "licensor, "rent" or "licence fee" are not decisive factors. The nature of the document is to be determined by finding the real intention of the parties from a total reading of the document and also by considering the surrounding circumstances. Para 27 of the SCC Page 17 of 22 in NewBus-Stand Shop Owners Association's case (Supra) reads as follows:-
"27. In a rather recent judgment of this Court in C.M. Beena v. P.N. Ramachandra Rao: (2004) 3 SCC 595 the learned Judges relied on the ratio in Associated Hotels of India Ltd.: AIR 1959 SC 1262: (1960) 1 SCR 368 in deciding the difference between lease and licence. In Para 8 of the said judgment, learned Judges held that the difference between lease and the licence is to be determined by finding the real intention of the parties from a total reading of the document, if any, between the parties and also considering the surrounding circumstances. The learned Judges made it clear that use of terms ―lease‖ or ―licence‖, ―lessor‖ or ―licensor, ―rent‖ or ―licence fee‖ by themselves are not decisive. The conduct and intention of the parties before and after the creation of relationship is relevant to find out the intention. The learned Judges quoted from the treaties of Evans and Smith on The Laws of Landlord and Tenant and of Hill & Redman on Law of Landlord and Tenant in support of their proposition."
15. On bare perusal of the said documents i.e. so called lease/agreements between the SMB and the petitioner in WP(C)No.202/2010 and predecessor of the petitioners in WP(C)No.200 & 201/2010 for the said Stalls, it is crystal clear that the exclusive possession of the said Stalls were never handed over by the SMB and the right under the said agreements are not hereditable. This would be clear from Paras or terms No. 5 & 7, which read as follows:-
"5. That the overall control and superintendence of the said plot of land and the Stall thereon shall remain vested in the Board whose duly authorized official(s) shall at all reasonable hours be entitled to inspect the said stall about its bonafide user its stage of repairs and cleanliness;
7. That the Lessee shall have no interest in the said plot of land nor she be deemed to have exclusive possession thereof. Lease shall not be hereditary but on production of a succession certificate the Board may consider cases individually."Page 18 of 22
16. For the foregoing discussions, this Court is of the considered view that the said so called leases/agreements are not Lease Deeds and those are License. Para 17 of the said license clearly stated that in the event of breach of any of the terms and conditions, the license shall be void. Where a license is revoked, the licensee is entitled to a reasonable time to leave the property and to remove any goods which it has been allowed to place on such property. Accordingly, the writ petitioners shall be entitled a reasonable time to vacate the Stalls and handed over the unencumbered possession to the SMB.
17. Mr. LR Das, learned counsel for the petitioners made a faint attempt to support the case of the petitioners that the writ petitioners are the statutory tenants. There is no question of statutory tenant in the case of license. It is well settled that the statutory tenants are also liable to pay rent. The terms "statutory tenant" denote a tenant whose contractual tenancy has been terminated but who has become entitled to continue to remain in possession by virtue of the protection afforded to him by the statutes in question. Even the statutory tenant/tenant-in-substance has the liabilities to pay rent. The Constitution Bench in Gian Devi Anand v. Jeevan Kumar & Ors: (1985) 2 SCC 683 held (Paras 15 & 30 of the SCC) that:
"15. We do not consider it necessary to refer to the various English cases and the other English authorities cited from the Bar. The English cases and the other authorities turn on the provisions of the English Rent Acts. The provisions of the English Rent Acts are not in pari materia with the provisions of the Act in question or the other Rent Acts prevailing in other States in India. The English Rent Acts which have come into existence from time to time were no doubt introduced for the benefit of the tenants. It may be noted that the term "statutory tenant" which is not to be found in the Act in question or in the other analogous Rent Acts in force in other States in India, is indeed a creature of the English Rent Act. English Rent Act 1977 which was enacted to consolidate the Rent Act 1968, parts III, IV and VIII of the Housing Finance Act, 1972, the Rent Act 1974, sections 7 to 10 of the Housing Rents and Subsidies Act 1975 and certain related enactments, with amendments to Page 19 of 22 give effect to recommendation of the Law Commission, speaks of protected tenants and tenancies in Section1 and defines statutory tenant in Section 2. English Rent Act, 1977 is in the nature of a complete Code governing the rights and obligations of the landlord and the tenant and their relationship in respect of tenancies covered by the Act. As the provisions of the English Act are materially different from the provisions of the Act in question and other Rent Control Acts in force in other States in India, the decisions of the English Courts and the passages from the various authoritative books including the passages from Halsbury which are all concerned with English Rent Acts are not of any particular assistance in deciding the question involved in this appeal. As we have already noticed, the term 'statutory tenant' is used in English Rent Act and though this term is not be found in the Indian Acts, in the Judgments of this Court and also of the various High Courts in India, this term has often been used to denote a tenant whose contractual tenancy has been terminated but who has become entitled to continue to remain in possession by virtue of the protection afforded to him by the statutes in question, namely, the various Rent Control Acts, prevailing in different States of India. It is also important to note that notwithstanding the termination of the contractual tenancy by the Landlord, the tenant is afforded protection against eviction and is permitted to continue to remain in possession even after the termination of the contractual tenancy by the Act in question and invariably by all the Rent Acts in force in various States so long as an order or decree for evictions against the tenant on any of the grounds specified in such Acts on the basis of which an order or decree for eviction against the tenant can be passed, is not passed.
30. These observations were made by a seven-Judge Bench of this Court. It is not doubt true that these observations were made while considering the question of requirement of a notice under section 106 of the Transfer of Property Act before the institution of suit for recovery of possession of premises to which the Rent Act applies. These observations, however, clearly go to establish that mere determination of the contractual tenancy does not in any way bring about any change in the status of a tenant. As aptly observed in this decision, "it will suffice to say that the various State Rent Control Acts make a serious encroachment in the field of freedom of contract. It does not permit the landlord to snap his relationship with the tenant merely by his act of serving a notice to quit on him. Inspite of the notice, the law says that he continues to be a tenant and he does so, enjoying all the rights of a lessee and is at the same time deemed to be under all the liabilities such as payment of rent etc. in accordance with the law."
18. In the given case, the petitioners have no protection under the Meghalaya Urban Areas Rent Control Act, 1972. The protection under the Page 20 of 22 Meghalaya Urban Areas Rent Control Act, 1972, would be available to the tenant paying rent to the full extent allowable under this Act. In the present case, the petitioners who are only licensees, are not even paying the license fees. Section 5 of the Meghalaya Urban Areas Rent Control Act, 1972 reads as follows:-
"5. Bar against passing and execution of decree and orders for ejecment. (1) No order or decree for the recovery of possession of any house shall be made or executed by any Court so long as the tenant pays rent to the full extent allowable under this Act and perform the conditions of the tenancy:
Provided that nothing in this sub-section shall apply in a suit or proceedings for eviction of the tenant from the house -
(a) where the tenant has done anything contrary to the provisions of Cl. (m), Cl.(o) or Cl.(p) of S.108 of the Transfer of Property Act, 1882 (Central Act 4 of 1882) or to the spirit of the aforesaid clauses in the areas where the said Act does not apply; or
(b) where the tenant has been guilty of conduct which is a nuisance or an annoyance to the occupiers of the adjoining or neighbouring houses; or
(c) where the house is bona fide required by the landlord either for purposes of repairs or rebuilding, or for his own occupation or for the occupation of any person for whose benefit the house is held or where the landlord can show any other cause which may be deemed satisfactory by the Court; or
(d) where the tenant sub-lets the house or any part thereof or otherwise transfers his interest in the house or any part thereof without permission in writing from the landlord; or
(e) where the tenant has not paid the rent lawfully due from him in respect of the house within a fortnight of its falling due; or
(f) where the tenant has built, acquired or been allotted a suitable residence.‖
19. It is fairly well settled law that wherever public interest to such a large extent is involved and it may become necessary to achieve an object which serves the public purposes, individual rights may have to give way. Page 21 of 22 The Apex Court in Mardia Chemicals Ltd.& Ors. v. Union of India & Ors:
(2004) 4 SCC 311 held (Para 66 of the SCC) that:-
"66. ...... Therefore, wherever public interest to such a large extent is involved and it may become necessary to achieve an object which serves the public purposes, individual rights may have to give way. Public interest has always been considered to be above the private interest. Interest of an individual may, to some extent, be affected but it cannot have the potential of taking over the public interest having an impact on the socio- economic drive of the country. ......."
20. For the foregoing reasons, this Court is of the considered view that these writ petitions are devoid of merit and accordingly dismissed. The writ petitioners are to handover the unencumbered possession of the Stalls mentioned above to the respondent No.1-SBM in pursuance of the impugned letter/Notice dated 02.07.2010 within a reasonable time of three weeks‟ from the date fixed by the SMB. It is left with the SMB to take up necessary steps for recovering the arrear fees from the writ petitioners. It is made clear that this judgment and order shall not stand in the way of coming to an amicable settlement between the parties if the parties so desired within the period indicated above but this shall not be taken as a direction of this Court.
JUDGE Lam Page 22 of 22