Delhi High Court
Sh. Roop Kumar vs Mohan Thedani & Ors. on 19 January, 2001
Equivalent citations: 2001IIAD(DELHI)153, 90(2001)DLT427, 2001(57)DRJ709, AIR 2001 (NOC) 38 (DEL), 2001 A I H C 1501, (2001) 3 PUN LR 29, (2001) 1 RENTLR 694, (2001) 57 DRJ 709, (2001) 2 RENCJ 355, (2001) 1 RENCR 652, (2001) 90 DLT 427
Author: A.K. Sikri
Bench: Arun Kumar, A.K. Sikri
ORDER A.K. Sikri, J.
1. This Regular First Appeal is filed by the appellant, who was defendant in the suit, against judgment and decree dated 19th December, 1996 passed by the learned Additional District Judge, Delhi in Suit No. 256/91 filed by the respondents (plaintiffs in that suit) thereby decreeing the said suit in favor of the plaintiffs and against the defendant/appellant. The impugned decree runs as follows:
"a) a decree for Rs.5,500/- is hereby passed in favor of the plaintiff and against the defendant in respect of commission charges for the period from 14th October, 1977 to 31st March, 1978 @ Rs.1,000/-p.m.;
(b) a decree for Rs.25,500/- is hereby passed in favor of the plaintiff and against the defendant in respect of commission charges for the period from 1st March, 1978 to 14th March, 1980 @ Rs.1,000/- p.m. and subject to payment of proper court fee;
c) a decree for Rs.2,500/- is hereby passed for damages for use and occupation of premises for the period from 15th May, 1980 till 14th October, 1980 and subject to payment of proper court fee in favor of the plaintiff and against the defendant;
d) a decree for possession in respect of shop No.15A/16-1 Ajmal Khan Road, Karol Bagh, New Delhi as described in the site plan attached with the plaint is hereby passed in favor of the plaintiff and against the defendant;
e) the plaintiff shall be entitled to further damages for use and occupation @ Rs.500/- p.m. from the date of suit till delivery of possession and subject to payment of proper court fee;
f) Cost of the suit also awarded in favor of the plaintiff and against the defendant."
2. Respondent No.1 Sh.Mohan Thedani is a tenant in respect of premises No.15A/16 (Shop No.1), Ajmal Khan Road, New Delhi at a monthly rent of Rs.2,000/-. The said shop was registered under the Delhi Shops and Establishment Act as M/s Esquire with respondent No.1 as his sole proprietor. This name was changed to M/s Purshottam's subsequently. Respondent No.2 who is father of respondent No.1, was General Power of Attorney holder of the respondent No.1. Respondent No.2 acting on behalf of the respondent No.1 entered into Agreement dated 15th May, 1975 with the appellant on the terms and conditions mentioned in the said Agreement. No nomenclature is assigned to this Agreement. This Agreement discloses that the appellant is the proprietor of M/s Roop Tailors and Drapers which had been functioning from A-7, Prahlad Market, Deshbandu Gupta Road, Delhi. He was anxious to shift his business on main Ajmal Khan Road, New Delhi in the premises of respondent No.1. For this purpose Agreement in question was entered into and the terms and conditions mentioned in this Agreement are described as 'agency terms and conditions'. As per this Agreement, respondent No.1 was to provide his shop where the stitched garments and materials were to be kept for display and calls. Measurements, cuttings and fittings were to be done in the premises. Appellant was to cut/fit and get the garments tailored and look after the tailoring workshop at Prahlad market and was to supply the materials (suiting, shirting etc.) for sale. He was also to provide for all kind of stationary and packing materials etc. and was responsible for keeping the staff and paying salaries to them. Respondent No.1 was to receive, by way of commission, 12 per cent on tailoring and 3 per cent on sale of materials of all kind. This commission was to be paid by 10th of every month. The appellant was supposed to keep true accounts of dealing in tailoring and cloth materials etc. with copies of such accounts, as per proforma, statements monthly to the respondent No.1. The Agreement further specifically mentions vide para 3 thereof, that the respondent No.1 was the legal tenant of the premises and rent was to be paid by the respondent No.1 to the landlord. In para 9 it was again clarified that the respondent No.1 is the full and legal tenant of the premises of the concerned business and shall remain full tenant of rights of possession of the premises and appellant had nothing to do with the tenancy/possession. This Agreement was for a period of five years and renewable for a further period of five years with mutual consent on fresh terms as may be agreed upon at that time.
3. It is the case of the respondents that the Agreement was duly acted upon by the parties in the letter and spirit. Possession of the premises remained with the respondents and at no time it was vested with the appellant. However, for efficient discharge of his duties towards his customers, the appellant brought his tailors in the said shop. The appellant rendered true and faithful accounts up to 30th June, 1976 and made the payment thereof by means of cheques and otherwise. Thereafter although he rendered accounts up to 30th March, 1978 but did not pay the commission as per the said accounts and pleaded financial hardship. After 30th March, 1978 appellant neither rendered accounts nor made any payment. Respondents served legal notice dated 24th January, 1979 upon the appellant calling upon him to clear the commission due and render the accounts. No reply was given by the appellant. After the expiry of the Agreement, the appellant was asked to discontinue the business and vacate the premises in question but he criminally trespassed into the same and continued to occupy the same against the wishes and consent of the respondents. Proceedings under Section 145 of The Code of Criminal Procedure, 1973 were initiated by the respondents. On the other hand, appellant also filed a suit for injunction. In the said suit statement was given by the respondents that they would not dispossess the appellant except in accordance with law. In these circumstances respondents filed suit No. 145/80 claiming various reliefs including possession, rendition of accounts and payment in accordance thereof till 14th May, 1980 and damages for wrongful user and occupation of the premises w.e.f. 15th May, 1980. In the plaint filed by the respondents, the Agreement was described as 'agency-cum-deed of license'.
4. Appellant contested the aforesaid suit and the main defense of the appellant was that he was a lawful occupant of the premises in question which was in his exclusive possession. Respondents had inducted him as sub tenant on a monthly rent of Rs.500/-. It was also pleaded that respondents got signed some documents from the appellant for protecting them against fixation of standard rent and eviction. The Agreement in question was sham document and was of no legal consequence. There was no license-cum-agency as alleged. The Agreement was never intended to be acted upon nor the same was ever acted upon. It was only a clever device of the respondents to protect the rights of respondent No.1 from his landlord. The real intention between the parties was to create sub-tenancy and respondents had in fact let out the premises to the appellant at a monthly consideration of Rs.500/-.
5. After the completion of pleadings and submission of documents by both the parties, the trial Court framed the following issues:
1. Whether the plaintiff No.2 entered into an agreement dated 15th May, 1975 with the defendant at the instance of the plaintiff No.1 as pleaded in para 4 of the plaintiff? If so its effect?
2. Whether the defendant is an accounting party in terms of the said agreement dated 15th May, 1975 as alleged in para 5 of the plaint?
3. Whether the defendant criminally trespassed into the disputed shop as alleged in para 10 of the plaint? If so its effect?
4. Whether the suit has not been properly valued for the purposes of court fee and jurisdiction as pleaded in para 3 of the written statement (preliminary) objections?
5. Whether the suit is bad for mis-joinder of parties as alleged in para 2 of the written statement (preliminary objections)?
6. Whether the defendant is a lawful occupant of the disputed shop on payment of a consideration of Rs.500/- as alleged in para 4 of the written statement (preliminary objections)? If so its effect?
7. Whether the alleged agreement dated 15th May, 1975 is a forged and fictitious document and was never intended to be acted upon as alleged in para 4 of the written statement?
8. Whether the suit is liable to be stayed under Section 10 CPC as alleged in para 10 of the written statement?
9. Whether the plaintiff No.2 has got no locus standi to bring forward the present suit?
10. Whether this court has got no jurisdiction to entertain the present suit?
11. Relief.
The following additional issue was also framed:
12. Whether the suit as framed is not maintainable in view of the objections contained in paras 9 and 10 of the amended preliminary objections in the amended written statement? OPD."
6. Both the parties led evidence in support of their respective cases. Respondents examined as many as 9 witnesses. Appellant also examined 7 witnesses in support of his defense. Thereafter the impugned judgment and decree followed, against which present appeal is preferred by the appellant.
7. It may be mentioned at this stage that after the Agreement dated 15th May, 1975 (Ex.PW-6/2) was entered into between the parties herein, landlord of the premises in question had filed eviction petition against respondent no.1 before the Rent Controller, Delhi seeking eviction on the ground of sub-letting. Appellant was however not imp leaded as party in the said petition nor was he summoned as witness. The respondent No.1 contested that petition on the ground that the premises were not sub-let and in fact the appellant was only a licensee. This defense of the respondent No.1 was accepted by the Rent Controller who returned the findings that it was a case of license and not tenancy and ejectment petition by the landlord against respondent No.1 was dismissed.
8. Both the parties agree that the basic question which requires consideration in the instant case is as to whether the relationship between the respondent and appellant was that of licensor and licensee or it was that of Lesser and lessee. The decision on this aspect would have bearing on all other issues.
9. We may say at the outset that by the impugned judgment and decree dated 19th December, 1996 the learned Additional District Judge has held that transaction between respondent No.1 and the appellant evidenced by the Agreement dated 15th May, 1975 amounts to license and not sub-letting. However, while deciding this question, the discussion in the impugned judgment proceeds on the basis as if appellant was party to the ejectment proceedings filed by the landlord against respondent No.1 on the ground of sub-letting and appellant had himself put up the defense, Along with respondent No.1, that it was a case of license and not a tenancy, and therefore, it was not permissible for him now to wriggle out of this admission and put up a case of sub-letting. This is clear from the following observation in the impugned judgment.
"This Agreement is dated 15th May, 1975 and proved as Ex.PW-6/2. This Agreement is not denied by the defendant. It is the stand of the defendant that this document was executed between the parties just to put up a defense to the application for ejectment filed by the owner/landlord of the property against the tenant Shri Mohan Thedani on the ground of sub-letting. In fact the ejectment application on the ground of sub-letting was actually filed and this document was proved as a deed of license-cum-agency agreement. The defendant agreed to that status of licensee in the said ejectment proceedings before the Rent Controller, due to the defense put up by the present defendant Roop Kumar and the present plaintiff Mohan Thedani before the Rent Controller, the findings on the ejectment application came that it was a case of license and not a tenancy and so the application of the owner/landlord for ejectment of the present plaintiff and the defendant from the premises was dismissed by giving a finding that there was no sub-letting but it a case of license-cum-agency agreement. At the stage there was a complete unity of the mind between the present plaintiff and the defendant. So it cannot be said that there was no such document executed between the plaintiff and the defendant. So it is held that this document dated 15th May, 1975 was actually executed between the parties."
10. The learned Additional District Judge nurtured this wrong notion which runs through the entire judgment while deciding other issues as well. As already pointed out above, appellant was neither a party in the aforesaid eviction petition filed by the landlord nor was he even summoned as a witness. Therefore, the learned Additional District Judge was clearly in error in deciding the issues in question on the basis as if appellant had agreed to the status of a licensee in the ejectment proceedings before the Rent Controller and was now backing out of that Agreement. Therefore, we have no hesitation to hold that the reasoning given by the learned Additional District Judge in support of his findings on various issues and particularly issues No. 1, 6, 7 and 10, which deal with this aspect, cannot be sustained. This being the position, in view of the powers conferred upon this Court by Rules 30, 32 and 33 Order 41 of Code of Civil Procedure and with the consent of parties, the arguments were heard on the merits of the issues framed in the suit. After hearing the case at length, we are of the opinion that the conclusions arrived at by the learned Additional District Judge on the aforesaid issues are correct though reasoning in support of these conclusions is not sustainable. We accordingly proceed to record our reasoning in support of the conclusions.
11. It may be stated at this stage itself that in so far as findings of the learned Additional District Judge on issues No. 4, 5, 8, 9 and 12 are concerned, the appellant accepted the same and did not press these issues. In fact as already pointed out above, the main thrust of the appellant's argument was that the transaction in question between the parties amounted to sub-letting of the premises whereby the appellant was given exclusive possession of the premises on a consideration of Rs.500/- per month as rent and Agreement dated 15th May, 1975 was a sham and was never acted upon.
12. In support of this submission learned senior counsel Sh.R.P.Bansal as well as Sh.Pradeep Nandrajog appearing for the appellant submitted that the Agreement dated 15th May, 1975 did not have any label attached to it. No nomenclature was given. It was not mentioned that it was a license Agreement. As per the established position in law it was permissible for the Court to see the substance of the Agreement and the real relationship which the parties intended to create. It was submitted that although the word 'agency' was used in the body of the Agreement but no relationship of principle and agent was created by that Agreement as would clear from the provisions of Section 182 of the Indian Contract Act. In their attempt to establish that it was really a case of sub-letting of the premises by respondent No.1 who was a tenant, the learned counsel emphasised that possession of the premises was with the appellant. The appellant had led evidence for use and occupation of the premises in question. The amount which is paid cannot be treated as commission. It can therefore only be described as rental for use and occupation of the premises in question. Therefore, if the real intention is seen behind the document in question it clearly created tenancy and not a license. All the legal requirements of tenancy as contained in Section 105 of Transfer of Property Act were fulfillled. In support of this submission, reliance was placed on the Division Bench judgment of this Court in the case of M/s Didi Modes Pvt. Ltd. & Anr. Vs. M/s Hind Trading & Manufacturing Co. .
13. On the other hand Sh. Neeraj Kaul appearing for respondents submitted that the very defense of the appellant that the Agreement in question created lease in favor of appellant was not open to him in view of provisions of Section 16(2) of Delhi Rent Control Act, 1958 as per which no sub-tenancy could be created without previous specific consent in writing of the landlord permitting such sub-tenancy. Admittedly as there was no consent of the landlord, sub-tenancy would be unlawful and something which was forbidden by law could not be pleaded. It was further submitted that the Agreement dated 15th May, 1975 in fact was a commission-cum-license Agreement which was duly acted upon inasmuch as the appellant had rendered the accounts in accordance with the said Agreement till March, 1978 and paid commission till June, 1976. The respondents had sent notice demanding the commission for further period and also for rendition of accounts which was not replied to by the appellant. Appellant had even made a statement in proceedings under Section 145 Code of Criminal Procedure wherein he never stated that he was a sub-tenant. His only defense was that eviction proceedings between the landlord and respondent No.1 were pending and in view of the pendency of these proceedings he was not vacating the premises. It was also submitted that in view of unambiguous nature of the Agreement dated 15th May, 1975 it was not open to the appellant to lead any evidence thereby attempting to show the attendant circumstances that real intention was to create tenancy. (Refer: 1995 Supp. (1) SCC 806, Swarn Singh Vs. Madan Singh). Even otherwise appellant had not been able to give any cogent evidence to show that the appellant was paying rent at the rate of 500/-p.m. The oral statements made by him or his other witnesses are neither capable of believing nor such statements are admissible in view of the provisions of Sections 91 and 92 of the Evidence Act. (Refer:1. , Delta International Ltd. Vs. Shyam Sunder Ganeriwalla and Anr., 2. , Mansarover Builders (P) Ltd. Vs. UOI & Ors.). It was further submitted that although the appellant was not given possession, even if it is presumed that the appellant was in possession, this possession was not exclusive possession. Even otherwise such exclusive possession was not the determinative factor to conclude that transaction in question was a lease and not license. In the instant case, the appellant was not able to show that any rent was paid. On the other hand, the respondents had proved on record that the appellant had acted upon the Agreement by himself submitting the statements giving the account of tailoring and sale of material as well as paying commission on the basis of statements as per the terms of the Agreement. When these factors are taken into consideration coupled with the fact that the plea of sub-tenancy was not permissible, the mere possession was not sufficient to create tenancy in favor of the appellant.
14. We have already recorded our findings/conclusions to the effect that the Agreement, or transaction between the parties for that matter, was in the nature of license and not lease.
15. The admitted facts borne out of the pleadings and evidence on record may be summarised first. These are as follows:
1) Execution of Agreement dated 15th May, 1975 is admitted. Appellant has also admitted that it was signed by him.
2) As per this Agreement, the respondent No.1 was to receive 12 per cent on tailoring business and 3 per cent on sale of materials of all kind by way of commission. For this purpose, the appellant was to keep two accounts and render the same as per proforma statements every monthly. Admittedly the appellant gave the statement of sale of cloth/material as well as that of tailoring. Ex.PW-6/4 is the statement of sale of cloth for the period July, 1975 to March, 1976 and 3 per cent commission thereon is worked out as Rs. 6,198/37 paisa. Ex.PW-6/5 is the statement of tailoring business book by the appellant for the period July, 1975 to March, 1976 and 12 per cent commission thereon as calculated as Rs.9,770/48 paisa. Likewise Ex.PW-6/6 to Ex.PW-6/9 are the statements for the period of April, 1976 to March, 1978 both in respect of tailoring as well as sale of cloth/material with commission at the rate of 12 per cent and 3 per cent respectively worked out. The statements are prepared and signed by the appellant which were handed over to the respondent No.1.
3) The appellant gave the cheques to the respondent on account of aforesaid commissions. Cheque dated 12th August, 1975 is for Rs.963/43 paisa which corresponds to the commission for the month of July, 1975 towards sale of cloth as well as tailoring. Likewise cheque dated 19th September, 1975 is for Rs.915/57 paisa which tallies with the commission for the month of August, 1975. Thereafter there are two cheques of odd amounts; one is dated 28th November, 1975 for Rs.2,539/77 paisa and other is dated 29th January, 1976 for Rs.3,161/16 paisa. There is another cheque dated 18th April, 1976 which is again of odd amount although in the document exhibited this amount is not discernible. Apart from that there are four more cheques dated 13th April, 1976, 9th November, 1976, 15th November, 1976 and 19th November, 1976 for Rs.1,000/-, Rs.1,500/-, Rs.1,000/- and Rs.1,000/- respectively. On the basis of these last four cheques, it was sought to be contended by learned counsel for the appellant that the appellant had started paying rental of Rs.500/-p.m. We shall advert to this aspect at the appropriate stage. Suffice is to state at this stage that earlier cheques correspond to the amount of commission as per the account rendered by the appellant himself.
4) Although no label is attached to the Agreement, admittedly it does not specify any monthly amount to be paid by the appellant to respondent No.1, i.e. no fixed monthly amount either by way of rent or otherwise is specified.
5) When the appellant was not rendering the accounts or remitting the commission as per the Agreement, respondent no.1 served legal notice dated 24th January, 1979 (Ex.PW-6/10). This notice was duly received by the appellant but appellant did not give any reply to the same. Thus he neither controverter the allegations contained in the said notice nor putforth plea, at that time, that he was in fact a lessee of the premises in question at the rate of Rs.500/- and was therefore neither liable to render the accounts nor liable to pay commission.
6) The eviction petition filed by the landlord against the respondent no.1 for eviction on the ground that respondent No.1 had sub-let the premises to appellant without his permission was dismissed by the Court of Rent Controller holding that the Agreement in question created license and not lease. We are mindful of the fact that appellant was not a party to this litigation, and therefore, those findings would not be binding on the appellant. However, what is emphasised is that this very document has been interpreted by the competent Court of law. The question to be determined is as to whether appellant has been able to prove the contrary which aspect would be dealt with at a later stage.
7) Appellant had given statement before the Sub-Divisional Magistrate in proceedings under Section 145 of Code of Criminal Procedure. Their also he mentioned that he was not vacating the premises in view of litigation filed by the landlord against respondent No.1 and he did not state that he was a lessee in the premises and had right to stay in that premises as a lessee.
8) The statement given by the appellant in proceedings under Section 145 of Code of Criminal Procedure further shows that appellant had atleast knowledge of the proceedings pending before the Rent Controller which were filed by the landlord against the respondent No.1.
9) Apart from the Agreement dated 15th May, 1975 statement of commission furnished by the appellant himself and the cheques given by him, there is no documentary evidence to suggest that there was any Agreement between the parties whereby respondent no.1 had let out the premises to the appellant at the rate of Rs.500/-p.m.
16. As against the aforesaid documentary evidence, the case set up by the appellant is that the appellant was a lessee in premises in question for which rent was Rs.500/-p.m. He has tried to set up a case by leading oral evidence whereby attempt is made to suggest that although appellant had given the cheques for commission, balance amount after adjusting Rs.500/- as rent was given back by respondent No.1 to appellant in cash. He has also tried to suggest, again by leading oral evidence that the so-called rent after March, 1976 was paid in cash. Reliance was placed on the statement of respondent No.1 before Sub-Divisional Magistrate in proceedings under Section 145 of Code of Criminal Procedure wherein the respondent No.1 has admitted payment of cash amount also. This oral testimony of the appellant neither inspires any confidence nor even can be read into evidence in view of the provisions under Sections 91 and 92 of the Indian Evidence Act. The arrangement entered into between the appellant and respondent No.1 culminated into Agreement dated 15th May, 1975. Both the parties knew fully well that in the absence of written consent of the landlord, it would be unlawful for respondent No.1 to sub-let the premises. It is for this reason that the respondent No.1 wanted to give the premises to the appellant on license basis and charging commission on sales. The appellant was also beneficiary of this arrangement. Had it been sub-tenancy, the landlord would have succeeded in the eviction petition filed by him against respondent No.1 and result thereof would have been eviction of not only the respondent No.1 but that of appellant as well from the suit premises. After understanding of the implication of the Agreement dated 15th May, 1975 and taking benefit thereof, it is dishonest and impermissible for the appellant to now contend that in reality the impugned Agreement created sub-tenancy and was not license. In fact the appellant took the benefit of Agreement dated 15th May, 1975 for entire five years which was the duration of the Agreement and only when respondent No.1 asked him to vacate the premises, on expiry of the Agreement period, that the appellant has put up the case of sub-tenancy. No doubt it is not the nomenclature but the substance of the Agreement which is required to be seen. There cannot be any quarrel with the proposition of law laid down in the case of Didi Modes Pvt.Ltd.(supra) and the principles culled out thereon are based on catena of judgments pronounced by Supreme Court. In fact to the same effect are the judgments relied upon even by the respondents namely: 1. , Smt. Rajbir Kaur & Anr. Vs. M/s S.Chokesiri & Co., 2. , Puran Singh Sahni Vs. Sundari Bhagwandas Kriplani (Smt.) & Ors., 3. , Delta International Ltd. Vs. Shyam Sunder Ganeriwalla & Anr. and (4) 1995 Supp (1) SCC 306, Swarn Singh Vs. Madan Singh. Therefore each case is to be decided keeping in view its facts and applying on those facts, the principles laid down by the aforesaid judgments. However, reading of the Agreement dated 15th May, 1975 in the instant case does not suggest that it amounted to lease. The Agreement in question recognises respondent No.1 as tenant of the premises who would remain tenant and pay the rent as is clear from paras 3 and 9 of the Agreement which read as under:
: Para-3: The rent of premises 915A/16, Ajmal Khan Road, New Delhi) will be paid by the party of first part who are the legal tenants of the premises.
Para-9: That the party of the first part (M/s Purshotam's) are the full and legal tenant of the said premises of the concerned business, shall remain the full tenant of rights of possession of the premises and the party of the second part has nothing in the tenancy/possession.'
17. The Agreement further stipulates that respondent No.1 would receive by way of commission certain percentage of tailoring business and sale of materials. Paras 6 and 7 which are relevant for this purpose may be reproduced:
" Para-6: That the party of the second part will keep a true accounts of dealing in tailoring and cloth materials etc., shall be furnished copies of such account as per proforma, statements monthly.
Para-7: The agent (M/s Purshotam's) of the first part will receive by way of commission of 12 per cent on tailoring and 3 per cent on sale of materials of all kind. The amount of commission will be paid by the 10th of every month."
18. Admittedly it was not a fixed amount but a fluctuating amount which the respondent No.1 received by virtue of commission which depended upon amount of tailoring business and sale of material generated by the appellant every month. The element of 'rent' is not at all discernible from the payments made by appellant to the respondent No.1. We do not agree with the story projected by the appellant alleging that on these cheques, balance amount after adjusting the sum of Rs.500/- towards so-called rent was refunded by the respondent No.1 to the appellant in cash. The admitted facts mentioned above stare at the face of the appellant and prove to the hilt the falsity of stand taken by him. The appellant also cannot take any support from the statement made by respondent No.1 before Sub-Divisional Magistrate in proceedings under Section 145 of Code of Criminal Procedure. No doubt respondent No.1 has admitted payment of Rs.1,000/- as cash but he has categorically stated that this payment was towards commission and the period of this cash payment as well as other cheques payments was for commission up to March, 1976. Thus the respondent No.1 is consistent in his stand namely the amount in question was paid towards commission and the commission was paid only up to March, 1976. These facts coupled with the fact that Section 16(2) of the Delhi Rent Control Act does not permit sub-letting of the premises without previous consent in writing of the landlord, mere possession of the suit premises would not come to the rescue of the appellant. In the case of Waman Shriniwas Kini, Ratilal Bhagwandas and Co. , the Supreme Court, interpreting relevant provision of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, corresponding to that of Section 16(2) of the Delhi Rent Control Act held that sub-letting without previous written consent is unlawful and if such plea of sub-letting is accepted, it would be enforcing and illegal agreement. No doubt possession of the premises is a paramount consideration but in this case that factor alone would not clinch the issue in favor of the appellant when all other surrounding and attendant circumstances and evidence point out the finger to the other side.
19. At this stage one may usefully refer to the judgment of Supreme Court in Delta International Ltd.(supra) where after elaborate discussion on tests to determine lease or license in a particular case, in the light of various pronouncements, the Supreme Court culled out the following principles:
"(1) To find out whether the document creates a lease or a license the real test is to find out "the intention of the parties"; keeping in mind that in cases where exclusive possession is given, the line between a lease and a license is very thin.' (2) The intention of the parties is to be gathered from the document itself. Mainly, the intention is to be gathered from the meaning and the words used in the document except where it is alleged and proved that the document is a camouflage. If the terms of the document evidencing the agreement between the parties are not clear, the surrounding circumstances and the conduct of the parties have also to be borne in mind for ascertaining the relationship between the parties.
(3) In the absence of a written document and when somebody is in exclusive possession with no special evidence how he got in the intention is to be gathered from the other evidence which may be available on record, and in such cases exclusive possession of the property would be the most relevant circumstances to arrive at the conclusion that the intention of the parties was to create a lease.
(4) If the dispute arises between the very parties to the written instrument, the intention is to be gathered from the document read as a whole. But in cases where the landlord alleges that the tenant has sub let the premises and where the tenant in support of his own defense sets up the plea of a mere licensee and relies upon a deed entered into, inter se, between himself and the alleged licensee, the landlord who is not a party to the deed is not bound by what emanates from the construction of the deed; the tenant and the sub-tenant may jointly set up the plea of a license against the landlord which is a camouflage; in such cases, the mask is to be removed or the veil is to be lifted and the true intention behind a facade of a self-serving conveniently drafted instrument is to be gathered from all the relevant circumstances. Same would be the position where the owner of the premises and the person in need of the premises executes a deed labelling it as a license deed to avoid the operation of rent legislation.
(5) Prima facie, in the absence of a sufficient title or interest to carve out or to create a similar tenancy by the sitting tenant in favor of a third person, the person in possession to whom the possession is handed over cannot claim that the sub-tenancy was created in his favor; because a person having no right cannot confer any title of tenancy or sub-tenancy. A tenant protected under statutory provisions with regard to occupation of the premises having no right to sub-let or transfer the premises, cannot confer any better title. But, this question is not required to be finally determined in this matter.
(6) Further lease or license is a matter of contract between the parties. Section 107 of the Transfer of Property Act, 1882 inter alia provides that leases of immovable property may be made either by a registered instrument or by an oral agreement accompanied by delivery of possession; if it is a registered instrument, it shall be executed by both the lessee and the Lesser. This contract between the parties is to be interpreted or construed on the well-laid principles for construction of contractual terms, viz., for the purpose of construction of contracts, the intention of the parties is the meaning of the words they have used and there can be no intention independent of that meaning; when the terms of the contract are vague or having double intendment, one which is lawful should be preferred; and the construction may be put on the instrument perfectly consistent with his doing only what he had a right to do."
20. Principle No.5 aforesaid directly applies to the facts and circumstances of the present case.
21. In view of the aforesaid discussion, the finding in respect of each issue is as under:
Issue No.1: The Agreement dated 15th May, 1975 was entered into between the parties by mutual consent and appellant/defendant signed the same voluntarily and out of his own free will. It is not a sham document which was in fact acted upon as well.
Issue No.2: Appellant/defendant is an accounting party in terms of Agreement dated 15th May, 1975. As per this Agreement, appellant/defendant rendered the accounts to the respondent No.1 up to March, 1978 and paid the commission up to June, 1976.
Issue No.3: Appellant/defendant did not criminally trespass into the disputed shop. Findings of the trial Court are upheld.
Issues No.4, 5, 7, 8, 9 and 12: The findings of the trial Court are upheld as these were not challenged by the appellant/defendant in the present appeal at the time of arguments.
Issue No.6: Appellant/defendant is unlawful occupant of the disputed shop. He was a licensee which license came to an end on the expiry of five years period as contained in Agreement dated 15th May, 1975 i.e. 14th May, 1980.
Issue No.10: As appellant/defendant was only a licensee and not a Lesser Civil Court/trial Court had the jurisdiction to entertain the present suit.
Issue No.11 : Relief:
a) The trial Court has passed a decree of Rs.5,500/0 in respect of commission charges for the period from 14th October, 1977 to 31st Mach, 1978 at the rate of Rs.1,000/-p.m. which is affirmed.
b) For the period from 1st March, 1978 to 14th May, 1980 appellant has not rendered the accounts. In the absence thereof the trial Court has awarded the commission charges at the rate of Rs.1,000/-p.m. Although the average monthly commission for the period for which accounts were rendered by the appellant comes to more than Rs.1,000/-, we maintain this part of the decree. Accordingly a decree for Rs.25,500/- is hereby passed in favor of the plaintiff and against the defendant in respect of commission charges for the period from 1st March, 1978 to 14th May, 1980 at the rate of Rs.1,000/-p.m. and subject to payment of proper court fee.
c) Appellant is unauthorised occupation of the premises w.e.f. 15th may, 1980. Respondent No.1/plaintiff claimed use and occupation charges at the rate of Rs.1,200/-p.m. However, trial Court has awarded the damages at the rate of Rs.500/-p.m. No. basis is given for awarding the amount of Rs.500/-p.m. Even the commission for the period fro which accounts were rendered would be more than Rs.1,200/-p.m. In normal course, the appellant would have paid at least Rs.1,200/-p.m. even if the appellant was continuing the possession on the basis of Agreement. The rentals in the area in question increased by leaps and bounds after 1980 and claim of Rs.1,200/-p.m. is very reasonable. Therefore, respondent No.1 would be entitled to damages for use and occupation of the premises at the rate of Rs.1,200/-p.m. A decree for Rs.6,000/- is accordingly passed for damages for use and occupation of the premises for the period from 15th May, 1980 to 14th October, 1980 and subject to payment of proper court fee by the respondents/plaintiffs.
d) A decree for possession in respect of shop No.15A/16-1 Ajmal Khan Road, Karol Bagh, New Delhi as described in the site plan attached with the plaint is hereby passed in favor of the respondents/plaintiffs and against the defendant.
e) the respondents/plaintiffs shall be entitled to further damages for use and occupation at the rate of Rs.1,200/- p.m. from the date of suit till delivery of possession and subject to payment of proper court fee.
f) Cost of the suit also awarded in favor of the respondents/plaintiffs and against the appellant/defendant.
The appeal is dismissed with costs. Counsel fee is fixed at Rs.5,000/-. Decree sheet be amended accordingly.