Calcutta High Court
Shyam Sundar Ganeriwalla And Etc. vs Delta International Ltd. And Anr. on 2 December, 1997
Equivalent citations: AIR1998CAL233, AIR 1998 CALCUTTA 233, (1999) 1 CAL WN 42, (1998) 2 ICC 298, (1998) 2 RENCR 199
Author: Satyabrata Sinha
Bench: Satyabrata Sinha, Ruma Pal
JUDGMENT Satyabrata Sinha, J.
1. Both these appeals arise out of a common judgment and decree passed by a learned single Judge of this Court in Suit No. 491 of 1985 instituted by Delta International Ltd. and another, inter alia, for eviction of the defendants-appellants and other reliefs.
2. The basic fact of the matter is not in dispute.
3. The plaintiffs' predecessor-in-interest Dewar's Garage (India) Pvt. Ltd. (In Short 'Dewar') was maintaining and running a Petrol Service Station for sale of motor spares and components at premises No. 4D, Council House Street, Calcutta. The said Service Station was equipped with requisite Plant and Machinery, Dewar had erected and built certain structures on the said premises. Allegedly an agreement termed as leave and licence was granted by Dewar in favour of Esso Standard Eastern Inc. (in short ESSO). As it was decided by Dewar not to continue to carry on business of Petrol Service Station, an agreement dated 18th July, 1970 was entered into with ESSO. By an order passed in Company Petition No. 331/91 Dewar amalgamated with the plaintiff. The business undertakings and the estates of ESSO had also been taken over by a Parliamentary Act, the same had been transferred and assigned by the Central Government by reason of an appropriate notification issued therefor in favour of M/s. Hindusthan Petroleum Corporation Ltd.
4. The plaintiff-respondent filed the aforementioned suit on the ground that the defendants were guilty of the following breaches :
"(a) Defendants are allowing parking of car at the said premises which is not permissible under the said agreement.
(b) Defendants are failing to properly maintain the Plant and equipments which belong to the plaintiff and to keep the same in working condition. One of the Ramps has ceased to be in working condition.
(c) The defendant No. 1 has failed to keep the said premises duly insured in terms of the agreement and has failed to produce and send copies of the policy of insurance to the plaintiff.
(d) Defendant No. 1 has not paid the licence fees since the month of June, 1980."
5. The plaintiff in its plaint, inter alia, prayed for a decree of perpetual injunction restraining the respondent from using or occupying or carrying on business or fixture, fittings and accessories lying at the said premises as also decree for vacant possession thereof. It also prayed for a decree for damages.
6. The appellants filed separate written statements. The plea taken by the appellants in their written statements inter alia is that the said purported agreement dated 18th July, 1970 is not an agreement of a 'leave and licence' but in fact was a lease. They dented and disputed commission of any breach of the said agreement as alleged. It was further stated that the rent had regularly been paid and as the plaintiff wrongfully refused to accept the rent for the month of May, 1980, all the rents from December 1980 to July 1986 with the exception of August and September, 1981 were deposited with the Rent Controller, Calcutta and after institution of the suit they have deposited the entire arrears together with statutory interest upon obtaining the permission of the Court therefor and it had also been depositing month by month the monthly rent of Rs. 3,950/-.
7. The learned trial Judge in view of the aforementioned pleadings of the parties framed as many as 16 issues as was suggested by the defendants.
8. The learned trial Judge in his judgment-under appeal proceeded on the basis that the suit was mainly for possession of immoveable properties instituted primarily against the first defendant. The learned trial Judge rightly observed that the rights and obligations of the parties flow from the said agreement dated 18th July, 1970 and the main issue in the suit was the construction of the said document. The learned trial Judge in his judgment set out the clauses of Memorandum of agreement and inter alia came to the conclusion that/(sic) intended to enter into an agreement of leave and licence and not a tenancy.
9. Mr. M.K. Ghosh led by Mr. Gautam Chakraborty and Mr. Ghosh appearing on behalf of the appellants in two different appeals inter alia, submitted that upon true construction of the said agreement it would be absolutely clear that the same constitutes a lease. It was further submitted that the plaintiff has miserably failed to prove the alleged violations of the terms of the said agreement as had been pleaded in its plaint or otherwise. It was further submitted that the alleged licence having been terminated by a notice dated 24-10-79 the same could not have been terminated again.
10. Mr. Ranjan Deb led by Mr. P.K. Roy learned Senior Counsel, on the other hand, submitted that the learned trial Judge has rightly considered the document to be one as an agreement of leave and licence and not a lease. The learned Counsel submits that upon reading the entire document it would be evident that it was a case of business lease and not lease of premises. The primary object, Mr. Deb contends was to allow the defendants to take up the business of running the Petrol Service Station and not to grant a lease in respect of the premises in question.
11. Keeping in view the rival contentions as noticed hereinbefore, in our opinion, the primary question Which falls for determination of this Court is as to whether the said agreement dated 18-7-70 constitutes a leave as licence agreed or a lease.
12. It would be useful to record that the learned trial Judge upon considering all the materials of the records has clearly come to the conclusion that the business of Petrol Service Station as was carried out at 4D, Council House Street, were handed over by Dewars along with exclusive possession of the premises in question to ESSO and possession of all the rooms and all the equipments erected on the land and all the keys to all the locks were manifestly made over after the execution of the said agreement dated 18-7-70.
13. Despite such a finding the learned trial Judge assigned two reasons for holding that the agreement constitutes a licence, namely, (1) Clause 12 clearly envisages that the parties had clearly understood that the said agreement would be a licence and not a lease, and (2) a sub-lease was to be granted in favour of the ESSO in case the plaintiff or its predecessor succeeded in obtaining a lease itself from its lessors, one Mallika Investment. The learned trial Judge, however, rightly held that a sub-lease can be granted by a lessee but grant of such sub-lease without the consent of the landlord would constitute a cause of action for evicting the tenant under the provisions of West Bengal Premises Tenancy Act. It was however held :--
"If the agreement itself were a sub-lease then no question would arise for either obtaining such a permission from Mallika Investment of delaying the grant of a sub-lease or, to push the matter logically further, grant a second sub-lease if one sub lease is already existing. This point persuades me to hold, as an important aspect of the matter, that the parties agreed to create a mere licence and not a lease."
14. The learned trial Judge referred to Section 52 and Section 60 of the Easements Act and observed :
"In case the petrol selling machinery and other machinery had actually been sold, or even partly sold by the plaintiff to the first defendant, it would be possible to argue that the 1970 agreement was at least an irrevocable licence in respect therefor.
However, no such sale actually took place. The first defendant or its predecessor for all practical purposes remained a person in the position of a bailee or hirer of the moveable machinery and the chattels on the land. The law of our land does not recognise the passing of property limited by a time interest in chattels only, as it docs recognise the passing of property limited by a time interest in immoveable property in the shape of lease."
15. The learned trial Judge took into consideration the fact that a suit by Mallika Investment (the owner) being Matter No. 2720 of 1987 arising out of Ejectment Suit No. 1152 of 1982 a compromise decree was entered into by and between the landlord and the plaintiff whereby and whereunder a lease was agreed to be granted by the plaintiff thereof to the Delta International (plaintiff of the instant suit).
16. The learned trial Judge, however, held that despite the said decree, the provision of Section 43 of Transfer of Property Act cannot be taken recourse to. The learned trial Judge observed :--
"In this suit, if the notice of revocation of licence is pronounced upon to be bad, the plaintiff cannot get a decree for eviction. In that event it would remain for the defendants to enforce the agreement of 1970 and in the process of such enforcement they might find the 1988 compromise to be extreme helpful."
17. The learned trial Judge also held :--
"Under these circumstances, in my opinion, the said agreement of 1970 was revocable at will, or at best after a reasonable lapse of time since the entering into of that agreement, and that such reasonable time had definitely elapsed by 1985 when the notice of revocation was written and served."
The learned trial Judge noticed the plaintiffs grounds for revocation of the license to the following effect:--
"i) permitting parking of cars at night even though the same was not envisaged in the agreement;
ii) not producing any insurance agreements though an insurance was agreed upon in Clause -8 of the agreement to be taken out by the licensee, and
iii) by not keeping machinery regarding the petrol dealing station in good repair as the licensee was bound to do."
18. One witness was examined on behalf of the plaintiff. As regards the first ground, merely some photographs were produced which the learned court below found to be inadmissible in evidence. The learned trial Judge also did not accept the evidence of P.W. 1 as regard up-keeping of the machinery and insurance. However, according to the learned trial Judge, as the licence was revocable at will, the suit was decreed.
19. In order to construe the aforementioned agreement dated 18th July, 1970 the basic fact of the matter may be noticed. The petitioner's predecessor 'Dewar' was admittedly a monthly tenant under Mallika Investment Company. The plaintiff's predecessor erected and built certain structures. The plaintiff's predecessor-in-interest did not intend to continue the business and, thus, a grant was made to use, occupy, enjoy, run and work the said Petrol Service Station as described in the 1st Schedule therein together with the plant and machinery installed and/or fitted in the shade and structures erected and built and/or standing on the said premises together also with the fixtures and fittings appertaining to the said business, a list whereof was furnished in the 2nd Schedule thereunder written. A sum of Rs. 3,950/- per month was payable by the first defendant on or before \ 5th day of next following month succeeding for which it is due and payable according to English Calendar. The first defendant was to pay the electrical bills, telephone bills etc. It was required to maintain the machineries, fittings and fixtures. It was also entitled to bring any further or other machineries for running the said Petrol Service Station. Clause 8 of the said agreement reads thus :--
"The Licensee shall take out necessary insurance policies according to law or any order or notification by Government or any lawful authority governing the identical business."
20. Clause 9 provides for a revocation of the Licence in the event of any default or breach of the convenants contained therein. The first defendant was in liberty to carry on or continue the business either in its own name or in the name of the licensor or in the name of any other person.
21. Clause 12 which is important for the purpose of this case reads thus :--
"It is hereby expressly agreed upon, and declared by and between the parties that these presents shall not be treated or used or dealt with or construed by the parties in any way as a tenancy or lease or as a document within the purview of the West Bengal Premises Tenancy Act or any modification or amendment thereof or to confer any relationship as landlord and tenant between the parties hereto."
22. Admittedly a sub-lease was to be granted by the predecessor-in-interest of the plaintiff in favour of the first defendant, in the event such a lease was granted by Mallika Investment in its favour for a fixed period of 10 years with 3 renewal options of 10 years each. The first respondent had the right to purchase the equipments, fittings and fixtures at a price of Rs. 2,50,000/- in the case of grant of sub-lease within one year from the date thereof, in which event, a sum of Rs. 1,850/- was only payable per month which obviously was towards the rent of the lands and structure. A sum of Rs. 23,700/- was paid as advance.
23. In the backdrop of events as aforesaid, the point at issue has to be considered. Where an exclusive possession has been granted, a tenancy will be presumed and the same has to be determined from the substance of a transaction as a whole though described as a licence ignoring any of the provisions which are merely pretences or shams. See Street v. Mountford, reported in 1985 Appeal Cases 809.
24. It is now a well settled principles of law that the question as to whether the terms, conditions and convenants contained in an agreement constitutes lease or licence will depend on the intention of the parties. The distinction between a lease and a licence is a veritable right boggling effort into which has fallen a whole army of jurist and legally thinkers. The Court will in a given case may be especially careful to see that wool is not being pulled over its eyes and in deciding whether a lease is masquerading as a licence, will consider the factual background against which a particular document is to be construed.
25. However, it is an accepted principle that the question as to whether the grant constitutes a licence or lease would depend on creation of an interest or estate in the property which is the subject-matter of agreement. Delivery of exclusive possession is one of the most relevant factors although not decisive inasmuch as it can be shown that merely a privilege has been conferred.
26. In Kidar Nath v. Swami Parshad, reported in AIR 1978 Punj & Har 204, it has been held that where exclusive possession of the premises had been given a certain sum of money in every month is payable and the party in possession had the right to instal machinery and had the electric meter in his name and to make repair the premises, the same would be a case of lease and not a licence.
27. In Mohan Sons (Bombay) P. Ltd. v. Lady Sonoo Jamsetji Jejebhoy, , it has been held that the party which has given exclusive possession but contends that the agreement was a bare agreement of leave and licence must show why he gave exclusive possession. No such evidence has been adduced on behalf of the plaintiff in the instant case.
28. It is also well settled that the use of the expression 'lease' or 'licence' is not decisive.
In Inderjeet Singh Sial v. Karam Chand Thapar, , the Apex Court observed :
"The commodity goes by its value; not by the wrapper in which it is packed. A man is known for his worth; not for the clothes he wears. Royal robes worn by a begger would not make him a King. The document is weighed by its content, not the title. One needs to go to the value, not the glitter. All the same, we do not wish to minimise the importance of the right words to be used in documents. What we mean to express is that if the thought is clear, its translation in words, spoke or written, may more often than not, tend to be faulty. More so in a language which is not the mother tongue."
29. In Megarry's Manual of the Law of Read Property, 7th Edition, at page 309 the learned Author states :--
"What must be considered is what the parties have in fact done, and not what they intended, or pretended to do. Their intention is important, however, in deciding whether or not they intended to enter into legal relations, or whether the transaction was a mere family arrangement or act of friendship or generosity."
30. Exclusive possession would entitle the tenant to exclude all others from the premises during the term. However, as regards pretences or shams the learned Author states:
"In determining whether or not a tenancy has been granted, the Court will ignore any provisions in the agreement which are mere pretences or shams seeking to negative a tenancy."
31. The learned trial Judge as noticed hereinbefore has relied strongly upon Clause 12 of the agreement but in the aforementioned decision the learned Judges also noticed the decision in Facchini v. Bryson reported in (1952) 1 TLR 1386, wherein there existed a clause 'nothing in this agreement shall be construed to create a tenancy'.
32. Clause 12, therefore, cannot be said to be a decisive factor in determining as to whether the agreement dated 18-7-1970 constitutes a lease or a licence. The very fact that the parties were two business organisations and evidently had the legal advises would be presumed to have used the said language to make the presumption in such a manner so as to weigh out from the rigorous provision of West Bengal Premises Tenancy Act. Furthermore, if there was no intention to create an interest in the property it could have been stated so specifically in the deed 'itself. For the purpose of distinguishing a lease as defined in Section 105 of the Transfer of Property Act from a licence as defined in Section 52 of the Act, the character of the transaction would turn on the operative intent of the parties. To put it pithily, if an interest in immovable property, entitling the transferees to enjoyment, is created, it is a lease; if permission to use land without right to exclusive possession is alone granted, a licence is the legal result.
33. In Board of Revenue v. A.M. Ansari, , the Apex Court stated (at p. 1817):
"The following propositions may be taken as well established : (i) 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 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 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."
34. Reference in this connection may also be made to Puran Singh v. S.B. Kripalani, wherein the Apex Court has led emphasis on the fact that if the intention is to create interest in the property, it would be a lease as licence does not create any interest in the property.
35. In the instant case admittedly an interest in the property has been created. A bare perusal of the terms referred to hereinbefore, clearly demonstrate that the predecessor-in-interest of the first defendant not only had the exclusive possession but was entitled to use and occupy the same in any manner it likes by excluding others and having a right to include anybody it likes not only as regard the possession of the property but also as regard the business. In fact, admittedly the defendant No. 1 had transferred the property including the right to carry out the business in favour of the defendant No. 2. In Clause 1 of the document in question the second party had been given a right to occupy the properties which had been described in the 1st schedule thereunder written which is the piece and parcel of the land comprising of 4D, Council House Street, Calcutta butted and bounded as mentioned therein. A person docs not occupy only a machinery. It occupies, and enjoys an immoveable property and as noticed hereinbefore in no uncertain terms such right of occupation and enjoyment was granted in respect of an immovable property. Clause 1 further shows in no unmistakable term that such a right of occupation, enjoyment etc. was together with the plant and machinery standing on the lands described in the first schedule of the agreement together with the fixtures and fittings as mentioned in the 2nd Schedule.
36. Furthermore from Clause 16 of the said deed it would appear that the parties have used the word 'demised premises' at two places which clearly shows that the intention of the parties was to create a lease and not a licence. It is also relevant to note that if the intention of the parties was merely to create only a licence and not a lease, a right would not be conferred to transfer the business together with the lands in favour of a third party.
37. A necessary feature of a lease is that the lessee shall acquire a right of possession to the exclusion of the lessor.
In Facchini's case (1952 (1) TLR 1386) (supra) Denning, L.J. stated :
"In all the cases where an occupier has been held to be a licensee there has been something i n the circumstances, such as a family arrangement, an act of friendship or generosity or such like, to negative any intention to create a tenancy."
38. In Glenwood Lumber Co. Ltd. v. Philips, reported in 1904-1907 All ER (Reprint) 203, it was held :--
"In the so-called licence itself it is called indifferently a licence and a demise, hut in the Act it is spoken of as a lease, and the holder of it ' is described as the lessee. It is not, however, a question of words, but of substance. If the effect of the instrument is to give the holder an exclusive right of occupation of the land though subject to certain reservations or to a restriction of the purposes for which it may be used, it is in law a demise of the land itself."
39. It is, however, interesting to note that Lord Denning MR in Shell-Mex and B.P. Ltd. v. Manchester Garages Ltd., reported in (1971) 1 All ER 841, observed:--
"I turn, therefore, to the point : was this transaction a licence, or a tenancy? This does not depend on the label which is put on it. It depends on the nature of the transaction itself: see Addisombe Garden Estates Ltd. v. Grabbe. Broadly speaking, we have to see whether it is a personal privilege given to a person, in which case it is a licence, or whether it grants an interest in land, in which case it is a tenancy. At one time it used to be thought that exclusive possession was a decisive factor, but that is not so."
40. In Marchant v. Charters, reported in (1977) 3 All ER 918, Lord Denning again reiterated the said position and held :--
The test whether the occupant of a single room was a tenant or licensee did not depend on whether he had exclusive occupation, whether the room was furnished or whether the occupation was permanent or temporary. Those were all relevant factors but none was conclusive. The true test was the nature and quality, of the occupation : whether it was intended that the occupation should have a stage in the room or whether he only had permission for himself to occupy the room personally, whether under a contract or not. Applying that test to the circumstances of the case C was not a tenant but a contractual licensee and so was not entitled to security of tenure under the 1968 Act."
41. The Court of appeal again in Somma v. Hazelhurst, reported in (1978) 2 All ER 1011 held, that :--
"having regard in particular to the fact that H and S were liable only for the consideration they had each contracted to pay and were not jointly and severally liable for the total consideration, the separate obligations contained in the two agreements could not be reconstructed into one joint obligation without doing violence to the intention of the parties and rewriting the agreements : it followed that, since there was no joint agreement, there could be no tenancy as neither occupant had the necessary exclusive possession to found one."
42. There can be no doubt that where the language is plain and unambiguous, the same that to be adhered to. However, it is interesting to note that Halsbury, L.C. in North Eastern Rail Co. v. Lord Hastings, reported in (1900-1903) All ER (Reprint) 199, held that in particular circumstances an adherence to the letter of a contract may produce an apparent injustice.
43. The Supreme Court, however, explained Shelt Mex and B.P. Ltd. v. Manchester Garages Ltd. (1971 (1) All ER 841) (supra) in Capt. B.V. D'Souza v. Antonio Fausto Fernandes, wherein L. M. Sharma, J. (as his Lordship then was) while construing an agreement labelled as leave and licence in the light of the provisions of the Goa, Daman and Diu Buildings (Lease, Rent and Eviction Control Act, 1986 held (Para 3 of AIR) :--
"However, this cannot answer the disputed issue as it creates a licence or lease, the substance of the document must be referred to the form. As was observed by this Court in Associated Hotels of India Ltd. v. R.N. Kapoor, , the real test is the intention of the parties -- whether they intended to create a lease or licence. If an interest in the property is created by the deed it is a lease but if the document only permits another person to make use of the property "of which the legal possession continues with the owner" it is a licence. If the party in whose favour the document is executed gets exclusive possession of the property prima facie he must be considered to be a tenant: although -this factor by itself will not be decisive. Judged in this light, there does not appear to be any scope for interpreting Ex. 20 as an agreement of leave and licence."
44. The Apex Court thus observed that if the parties in whose favour the document is executed gets exclusive possession of the property, prima facie he must be considered to be a tenant. Although this by itself will not be decisive. The question as to whether a document is to be construed as a lease or licence, the labelling thereof would not matter.
45. In a recent decision in Smt. Jiwani Kumari Parekh v. Ranjit Roy Pun (Appeal No. 346 of 1995) disposed of on 26-6-1996 a Division Bench of this Court of one of us (S. B. Sinha, J.) was a member upon taking into consideration some of the aforementioned decisions as also Smt. Rajbir Kaur v. S. Chokosiri & Co., , Vallabh Das v. Dr. Madanlal, , Roop Chand v. Gopi Chand, observed :
"Exclusive possession of a property would prima facie constitute a tenancy subject of course to the intention of the parties which has to be gathered not only from reading the contentions of the agreement as a whole, the circumstances attending thereto but also the conduct of the parties. From the decisions referred to hereinbefore it would appear that even the conduct of the parties contrary to the term of the agreement has been taken into consideration for the purpose of arriving at the real intention of the parties.
Section 14 of the Act imposes a restriction upon the tenant to sublet the tenanted premises. We can take judicial notice of the fact that where a statutory or contractual restriction to transfer or assign the property is imposed, contrivances are adopted by the parties to evade such as statutory provision. In order to enable the court to cull out the real intention of the parties, it is, therefore, necessary to consider the circumstances as also the conduct of the parties both at the time of entering into the agreement as also subsequent thereto. In fact, while arriving at a conclusion the court may heavily rely upon the circumstances of the case as it is often said that witnesses may lie but circumstances do not."
46. The fact that such facade, camouflage, make belief or a device and other contrivances are taken recourse to avoid the provision of the statute.
47. In Abhoy Singh Surana v. W. Evans & Co. Ltd., , while dealing with a similar question a Division Bench of this court held that an agreement though termed as an agreement of agency was in fact a subtenancy. In that case paragraph-4 of the agreement stated thus:--
"In lieu of the remuneration hereinbefore agreed to be paid by the Principal to the Agents, the Agents will allow the Principal the proper accommodation in their premises at ground floor at No. 3, Mangoe Lane, Calcutta and the Principal shall provide and maintain a Durban for the purpose of looking after the stocks to be lying in such places. All other staff and employees that would be required shall be directly appointed by the Principal who will be responsible for payment of their salaries and remuneration and for whose acts and omissions the Agent cannot be held responsible in any way."
48. The learned Judges took into consideration the fact that occupation had been given; monthly payment has been fixed, durwan can be employed by defendant No. 2 alone and it can place in the disputed room any number of its employees it likes and also store any amount of goods it likes. It also took into consideration that according to the evidence defendant No. 2 company started its business with a capital of Rs. 4 lakhs and it uses the back portion as its godown. According to D.W. 2 goods lying in the show room of the suit rooms are worth of Rs. 70,000/- to Rs. 80,000/- which demonstrated the extent of occupation under defendant No. 2. Although defendant No. 1 claimed that three or four of his employees were there, the employees were not named. Only one person appeared to say that he worked for defendant No. 1. It is also strange to note that the so-called agent of defendant No. 2 sits with the Managing Director of defendant No. 2 in the same room. It was held :-- "One finds it very difficult to believe that a Managing Director of a company would sit in the same room on the same table with his agent. This clearly shows that there is no special room or table for defendant No. 1 company's personnel to sit. Defendant No. 1 does not disclose how much goods it stores there. Under the agreement, defendant No. 1 is not responsible for the loss of goods of defendant No. 2 from the suit premises. It is very difficult to believe that defendant No. 2 company would store goods in a place where it has no control and where it cannot fix liability upon defendant No. 1 who allegedly occupies jointly the same place with defendant No. 2-company. It is true that some letters may be received by defendant No. I at the suit premises. The evidence of D. W. 2 in this respect is that "occasional letters to the defendant No. 1 come there."If defendant No. 1-company carried business from there, why letter should come only occasionally to this company is not explained."
49. The learned Judges also held :--
"The agreement was merely a facade or a device calculated and designed to conceal the real intent and object of the transaction. Therefore, we hold that the transaction behind the facade was really subletting of suit premises. Not the form but the substance is the determinant.
No doubt, defendant No. I had access to the suit premises but access is one thing and possession is another."
50.In J. Mc. Gaffin v. LIC of India, reported in (1977) 81 Cal WN 629, the defence of the defendant was that a caretaker had been appointed. The learned judge held :--
"It would appear to us however as has been pointed out by Mr. Mukherjee that the plaintiff has also made out a case of transfer of the suit premises to the defendant No. 2. The right of the tenant in respect of the tenanted premises is the right of possession subject to the payment of rent. Section 13(1)(a) states inter alia that transfer in whole or in part of the tenanted premises would be a ground of eviction of the tenant. The transfer of the premises in the said provision in our opinion, means parting of possession of the tenanted premises either in whole or in part. There can be no dispute that under the alleged arrangement the defendant No. 2 was put in possession of the entire premises held by the defendant No. 1 which obviously implies transfer of possession of such premises. It may be of interest to note that even in the last clause of the agreement of caretakership it is provided that the defendant No. 1 would put in funds to the defendant No. 2 for payment of rent to the landlord and in case of his failure to do so the defendant No. 2 would pay rent on behalf of the defendant No. 1. It further provides that all such amount spent by the defendant No. 2 would have to be paid first before the defendant No. 2 was called upon to restore possession of the flat to the defendant No. 1. It is thus obvious that if the defendant No. 1 failed to pay the requisite funds the defendant No. 2 would continue in the premises indefinitely while the tenancy continued to be in the name of the defendant No. 1. It is thus not merely a caretakership arrangement whose duty, as noted by the learned Judge, is to guard and protect the property. The agreement obviously indicates transfer of possession of the suit premises to the defendant No. 2 in the garb of an agreement of caretakership. It may be that the plaintiff has not been able to establish subletting by the defendant No. 1 to the defendant No. 2 but in considering whether the tenant is guilty of any acts within the operation of the provisions of Section 13(1)(a), all circumstances need be considered. On an overall consideration of all facts and circumstances we are of opinion that the caretakership agreement was simply a garb to put the defendant No. 2 in possession indefinitely of the suit premises without the consent and permission of the plaintiff thereby attracting the operation of Section 13(1)(a). We, therefore, affirm the finding of the learned Judge that ground of eviction under Section 13(J)(a) has been established."
51. The learned trial Judge having himself held that an exclusive possession had been granted and an interest having been created, thus in our opinion, committed an error in holding that the said agreement of 1970 constituted a licence and was revocable at will or after reasonable lapse of time.
52. Clause 12 of the document in view of the terms of the document as also the conduct of the parties to the effect that the defendant and/or their predecessor-in-interest were permitted to run the business uninterrupted for a long time would show that the intention of the parties was to create a sub-lease was to be granted. However, in our considered view, the said agreement read as a whole clearly showed the intention of the parties to the effect that a sub-lease was to be granted for a fixed period of 10 years with an option to get the same renewed three times provided a lease is granted to that effect by the owner of :he land in favour of the predecessor of the plaintiff. The said clause had to be inserted in the agreement as evidently the plaintiffs predecessor had no such right at the relevant time. The contemplation of a sub-lease for a fixed term upon obtaining such a right wherefor an endeavour was to be made by the 2nd party clearly pointed to the fact that it was to be granted for a longer term after he became entitled therefor but that did not preclude it from creating a subtenancy from month to month as has been accepted to by the parties and as has been held by the learned trial Judge himself. The parties, also agreed to the rent exclusively payable for the land land for the machinery as would be evident from Clause 16 of the agreement.
53. In this view of the matter we have no doubt in our mind that the said agreement dated 18-7-70 constituted a lease and not a licence and, thus, the parties are governed by the provision of the West Bengal Premises Tenancy Act. We also, on the face of the said agreement, express our inability with respect to the learned trial Judge that the same could be determined at will or after a reasonable time as evidently an interest in the land together With the machinery had been created.
54. The defendants could be evicted, in view of the aforementioned agreement only in the event, of any default or breach of the said agreement on the part of the respondents. .
55. In fact, the plaintiff in its suit had categorically stated that the defendant had committed such breaches as also default. The learned trial Judge himself has disbelieved the evidence of the plaintiff's witnesses in respect of the Breach Nos. A to C as enumerated in paragraph 10 of the plaint.
55A. Apart from the same we find that there was no bar or embargo on the part of the defend-ants to allow parking of car at the said premises. No covenant to that effect had been brought to our notice or do we find any. The particulars of breaches as contained in Clause (b) of paragraph 10 is also vague apart from the fact that no evidence to prove the same has been adduced. As regard Clause 'C', the learned Counsel for the respondent failed to point out any provision of law in terms whereof an insurance policy was to be taken out in terms of Clause 8 of the Agreement.
56. In absence of provision of law in terms whereof the 1st Party was liable to take out an insurance policy, it cannot be said that the defendants have committed breach of the said term. So far as the default in payment of rent since the month of June 1980 is concerned, the defendant has explained the same and has deposited the amount in question with the permission of the Court evidently in terms of Section 17(2) of West Bengal Premises Tenancy Act. In any event, the alleged ground of default on the part of the defendants has not been pressed before us.
57. There cannot, however, be any doubt whatsoever that if only a person is permitted to run a business without creating any interest in the immovable property, the same would constitute a licence and not a lease but such is not the position here.
58. For the reasons aforementioned we express our inability to agree with the judgment and decree passed by the learned trial Judge which is accordingly set aside. Consequently the appeal is allowed and the suit filed by the plaintiff is dismissed. The plaintiff, however, shall be entitled to withdraw the amount deposited by the defendants in this Court if not already withdrawn.
59. In the facts and circumstances of this case the parties shall pay and bear their own costs in these appeals.
All interim orders vacated. Prayer for stay is made and the same is refused.
Let a xerox copy of the Judgment duly signed by the Assistant Registrar of this Court be given to the parties upon their undertaking to apply for certified copy of the Judgment and on payment of usual charges.