Kerala High Court
C.Rajesh vs T.P.Moosa Haji on 30 November, 2012
Author: Thomas P.Joseph
Bench: Thomas P.Joseph
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE THOMAS P.JOSEPH
FRIDAY, THE 30TH DAY OF NOVEMBER 2012/9TH AGRAHAYANA 1934
RSA.No. 1038 of 2012 ()
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SA.51/2009 of III ADDITIONAL SUB COURT, KOZHIKODE
OS.251/2008 of ADDITIONAL MUNSIFF COURT-I, KOZHIKODE
APPELLANT(S)/RESPONDENT/DEFENDANT:
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C.RAJESH,
S/O.KUNHAMBU, AGED 35 YEARS,
RESIDING AT "CHYTHANYA"HOUSE
POOZHARI AMSOM AND DESOM
KANNUR TALUK. NOW BUSINESS AT SOUMYA TEXTILES,
GROUND FLOOR, CENTURY TOWER, OPP: INDOOR STADIUM,
RAJAJI ROAD, CALICUT,
KASABHA AMSOM AND DESOM OF KOZHIKODE TALUK.
BY ADVS.SRI.SHYAM PADMAN
RESPONDENT(S)/APPELLANTS/PLAINTIFFS:
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1. T.P.MOOSA HAJI,
AGED 59 YEARS, S/O.POCKER,
RESIDING AT THAZHEPEEDIKAYIL HOUSE,
P.O.PULIYAVU CHEKKIYAD AMSOM AND DESOM VATAKARA TALUK,
KOZHIKODE DISTRICT - 673509.
2. T.P.ALIKUTTY, AGED 53 YEARS, S/O.POCKER, RESIDING AT
THAZHEPEEDIKAYIL HOUSE,
P.O.PULIYAVU CHEKKIYAD AMSOM AND DESOM VATAKARA TALUK,
KOZHIKODE DISTRICT-673509.
3. T.YOUSAF, AGED 57 YEARS, S/O.IBRAHIM, MADAPPALLI COLLEGE P.O.
OORALUNGAL AMSOM AND DESOM, VATAKARA TALUK,
KOZHIKODE DISTRICT - 673 101.
ADV. SRI.K.M.FIROZ - FOR R1 TO 3
ADV. SMT.M.SHAJNA - FOR R1 TO 3
THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON
30-11-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
THOMAS P. JOSEPH, J.
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R.S.A. No.1038 of 2012
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Dated this the 30th day of November, 2012.
JUDGMENT
This second appeal is drawn from the judgment and decree of the III Additional Sub Court, Kozhikode in A.S.No.51 of 2009 raising a dispute as to whether the transaction between the appellant and respondents is a lease or a license.
2. The respondents/plaintiffs filed O.S.No.251 of 2008 in the Additional Munsiff's Court-I, Kozhikode for a decree for mandatory injunction, recovery of arrears of license fee and damages for unauthorised use and occupation from the date of determination of the license by efflux of time claiming that the schedule rooms belonging to the respondents were given to the appellant on a license arrangement for a period of 11 months as per Ext.A1, agreement dated 13.01.2007. It is the case of the respondents that the license fee was fixed as `7,000/- per month and at the time of Ext.A1, `1,00,000/- was paid by the appellant as security. The license fee is in arrears from 01.03.2007. As per the terms of Ext.A1, agreement the license was revoked as per notice consequent to the default in payment of license fee. The notice issued to the appellant was returned unserved. At any rate, the license stands determined by efflux of time by 30.11.2007 (which is the time fixed as per Ext.A1). RSA No.1038/2012 2
3. The appellant claimed that he got possession of the schedule rooms under an oral lease in December, 2004 and has been in possession and enjoyment of the said rooms as a tenant since then, paying rent at the rate of `4,000/- per month. He has paid `1,00,000/- as security. The respondents used to get documents styled as agreement of license for their tax purposes. Those agreements are sham documents. It is also the case of the appellant that he has paid the rent till February, 2007. The appellant is entitled to the protection of Act 2 of 1965.
4. The trial court, from the evidence of PW1 was of the view that from December, 2004 onwards there was a lease in favour of the appellant and in such a situation it is unlikely that he would switch over to a license arrangement from 01.01.2007 onwards. Ext.A1 was executed only to protect interest of the respondents. The learned Munsiff was of the view that Ext.A1 was only a camouflage to cover up the real transaction between the parties which is one of landlord-tenant. So holding, the prayer for mandatory injunction was disallowed and the suit was dismissed with costs.
5. Aggrieved, the respondents preferred A.S.No.51 of 2009. While that appeal was pending, the respondents filed I.A.No.945 of 2009 under Order XLI, Rule 27 of the Code of Civil Procedure (for short, "the Code") to receive as additional evidence the license agreements dated 16.02.2004 and 25.01.2006 executed by the appellant. The learned Sub Judge allowed that application and marked the said documents as Exts.A5 and A6 rejecting the objection of the RSA No.1038/2012 3 appellant that those documents are not properly proved in evidence. Learned Sub Judge heard the appeal and by the impugned judgment, found that the transaction between the parties as per Ext.A1 is only a license and hence the respondents are entitled to the reliefs prayed for. Accordingly the respondents were given a decree for mandatory injunction, recovery of arrears of license fee and damages for use and occupation at the rate of `7,000/- per month. That judgment and decree are under challenge in this second appeal.
6. The learned counsel for the appellant has contended that the first appellate court was not correct in admitting Exts.A5 and A6 as additional evidence without formal proof of the same. It is argued that it was wrong to allow I.A.No.945 of 2009 even before the appeal was heard. The appellant stands deprived of an opportunity to explain Exts.A5 and A6 and adduce contra evidence regarding that.
7. It is further argued by the learned counsel that at any rate, finding of the first appellate court that Ext.A1, agreement evidences a licensor-licensee relationship is erroneous. According to the learned counsel, the first appellate court has not adverted to the conduct of the parties before Ext.A1 in deciding whether Ext.A1 was really intended to take effect. The contention of the appellant that Ext.A1 is a sham document intended by the respondents for tax purposes was not seriously taken into account. The learned counsel also pointed out from the evidence of PW1 that the appellant continues to be in possession of the schedule rooms from December, 2004 and even after Ext.A1, RSA No.1038/2012 4 agreement dated 13.01.2007 which is an indication that the transaction is a license. Reliance is placed on the decision in Beena v. Ramachandra Rao (2004 (2) KLT 366). According to the learned counsel, in identical circumstances the Supreme Court has found that the transaction between the parties is a lease.
8. The learned counsel who took notice for the respondents has contended that when the execution of Ext.A1 is admitted, the function of the court is to consider from Ext.A1 whether the said transaction is a lease or license. According to the learned counsel, referring to extraneous matters to decide the issue would arise only when the terms and conditions of the agreement are ambiguous. When the terms and conditions of the agreement are not ambiguous, intention of the parties has to be gathered from the recitals therein and not from extrinsic circumstances. It is also contended that even exclusive possession of the premises with the licensee is not an indication of any lease arrangement.
9. The 3rd respondent has given evidence as PW1. Though in the plaint it is claimed that the shop rooms were permitted to be used and enjoyed by the appellant to stock his goods (in connection with the textile business elsewhere) since 01.01.2007 as per Ext.A1 dated 13.01.2007, it has come in evidence that the appellant was in enjoyment of the shop rooms since December, 2004. In cross examination, PW1 stated that the appellant was in possession of the shop rooms from December, 2004 onwards and for such RSA No.1038/2012 5 possession, he was paying 'rent' at the rate of `4,000/- per month. The respondents used to issue receipts for the same. He admitted Ext.B1 series (17 in number) as "rent" receipts issued for the period prior to 01.01.2007. He claimed that including the shop rooms, there are 28 rooms belonging to the respondents some of which are given on lease and while some are given on license arrangement. The respondents are maintaining accounts for receipts of rent/license fee. It was suggested to PW1 that to avoid disclosure that "rent" was being collected for the shop rooms the said accounts are not produced. He denied the suggestion and stated that it is difficult to produce the accounts since the accountant is staying far away. At another stage of the cross examination PW1 stated that what was being received from the appellant was not "rent" but, "license fee".
10. When a request for reception of additional evidence is made in the appeal, such request has to be considered while hearing the appeal and not prior to that. The reason is that it is while hearing the appeal that the court has to decide whether additional evidence produced in the appeal is necessary and relevant for a decision of the appeal. Reception of additional evidence may even require a remand of the case to give the opposite party opportunity to controvert it and adduce evidence. In this case the appellant is admitting execution of Exts.A5 and A6. Challenge is only to the manner of admitting those documents in evidence. But reception of Exts.A5 and A6 in this case in the appeal is of no consequence since the first appellate court has not based its decision on Exts.A5 and A6. The learned counsel who appeared for the RSA No.1038/2012 6 respondents submitted that he is not relying on Exts.A5 and A6 for a decision in the second appeal. Hence marking of Exts.A5 and A6 has become inconsequential.
11. So far as evidence of PW1 relied on by the appellant is concerned, true that he has referred to the respondents receiving "rent" and issuing receipts for the same. Merely for the reason of PW1 at one point of time referring to the consideration the respondents have received from the appellant as "rent", I am not inclined to think that the said expression would clinge the issue. That is because it has been held that the expression "rent" is comprehensive enough to include "license fee" as well. Support for that proposition comes from Sorab alias S.P.Kavina v. Viswanatha Menon (1974 KLT 606). The first appellate court also has adverted to a decision on that point.
12. Nor am I impressed by the argument that PW1 has admitted that the appellant has been in "possession" of the shoprooms from December, 2004 onwards but in the plaint, what is averred is only occupation from 01.01.2007 onwards and hence the case of the respondents should be frowned upon. For, in this case the respondents are claiming relief as per Ext.A1 and what was necessary to state in the plaint was only the transaction covered by Ext.A1.
13. Then the next question is whether finding of the first appellate court that Ext.A1 discloses only a license arrangement involves any substantial question of law? The trial court observed that Ext.A1 was intended to protect the RSA No.1038/2012 7 interest of the respondents. It is admitted that the appellant is a businessman engaged in extensive business in textiles. It is not as if he is a novice in the matter of taking buildings on rent or on license arrangement as the case may be. At least, I must presume that the appellant was aware of what is a lease or license arrangement.
14. I am given a copy of Ext.A1 and I have perused it. I find that the terms and conditions stated therein indicated that it is a license arrangement. It is seen that even 'possession' of the premises was not given to the appellant but, he was merely permitted to occupy the premises for the purpose of the license subject to the terms and conditions stated therein. As per Ext.A1, the relationship between the appellant and the respondents is only of licensee- licensors.
15. What is frowned upon by the law is parties entering into some agreement as a camouflage to cover up the real transaction. I have not been shown any law or authority which states that the parties shall not enter into a license arrangement. Primarily, it is for the parties to decide what should be the relationship between them, whether it should be of landlord-tenant or licensor- licensee. The mere fact that the licensee is in exclusive possession of the property is not an indication that the transaction is a lease (see Rajappan v. Veeraraghava Iyer (1969 KLT 811). That is because, for the beneficial enjoyment of the right created by the license, even exclusive possession of the shoprooms may become necessary. It is admitted that the shoprooms were RSA No.1038/2012 8 given to the appellant for stocking his textile goods. When valuable articles are kept in the premises referred to in Ext.A1, it is only natural that its lock and key is in the custody of the appellant. I do not expect the lock and key or a duplicate of the key to be given in the custody of the respondents - licensors. Therefore, the fact of exclusive possession or that lock and key of the shoprooms are with the appellant would not make any difference.
16. When the terms of the document are clear, the intention of the parties is to be gathered from the terms itself. The court can look into the surrounding circumstances only when there is ambiguity in the terms and conditions. If the recital in Ext.A1 is clear, effort should be given to the intention of the parties as revealed by the recitals in that document. In such a situation, the court cannot go behind the recitals and find out the intention of the parties (see Thampi Gounder v. State of Kerala (1994 (1) KLT 89) and Joe Joseph & Others v. K.C.Moideen (1996 (1) KLJ 656).
17. I must also notice that though the trial court rejected, the first appellate court has accepted Ext.A4 which shows that at least for January and February, 2007 the appellant has paid "license fee" at the rate of `7,000/- per month. The learned counsel for the appellant submits that the first appellate court was not right in acting upon Ext.A4 since it was found to be not genuine by the trial court. The finding of the first appellate court that Ext.A4 can be acted upon is one of fact based on evidence and that involves no substantial question of law.
RSA No.1038/2012 9
18. Having regard to the above circumstances, I find myself unable to accept the argument of the learned counsel that from December, 2004 until Ext.A1 there was a lease arrangement. Even if it is assumed for the worst that there was a lease arrangement until Ext.A1 dated 13.01.2007, it is not as if terminating that arrangement the parties could not enter into a fresh arrangement in the form of a license. If that be so, Ext.A1 would indicate that the prior arrangement, whatever it be was put an end to and a fresh arrangement was entered into between the parties. Viewed in that line also, finding of the first appellate court has to be accepted.
19. The decision relied by the learned counsel for the appellant ofcourse, on the facts of that case held that it is a lease arrangement. A decision is authority for what it actually decides. Unconnected with the facts involved, a decision cannot be applied as an authority.
20. On hearing the learned counsel on both sides I do not find any substantial question of law involved in the decision of the first appellate court since the finding is based on the evidence and the position of law as it stands.
21. Lastly, it is argued by the learned counsel for the appellant that though a sum of `1,36,000/- was deposited by the appellant in the first appellate court and withdrawn by the respondents, the first appellate court has RSA No.1038/2012 10 not given adjustment of that amount. The learned counsel also requested that the appellant may be given ten (10) months' time to vacate the shop rooms since he has to find out alternate arrangement to keep his textile goods.
22. The learned counsel for the respondents in fairness has conceded that if any amount has been deposited by the appellant and withdrawn by the respondents, that amount could be adjusted in the amount payable by the appellant to the respondents. The submission is recorded.
23. So far as time requested for by the appellant is concerned, after hearing the learned counsel for the respondents also I am inclined to allow the request having regard to the nature of business the appellant is carrying on and the difficulties in getting alternate accommodation to keep his valuable articles but, that has to be subject to terms and conditions.
Resultantly, second appeal is dismissed with the following directions:
i. It is directed that the amount if any deposited by the appellant in the first appellate court, if not withdrawn by the respondents so far, could be withdrawn by them and on such withdrawal the respondents shall adjust the said amount in the amount if any, found due to the respondents from the appellant as per the decree of the first appellate.
RSA No.1038/2012 11
ii. In case the said amount has already been withdrawn by the respondents, the same shall be adjusted in the amount if any due from the appellant as aforesaid. In that case, interest (as allowed by the first appellate court) shall not run on that amount from the date of withdrawal.
iii. The appellant is granted ten (10) months' time to vacate the schedule rooms but, subject to the following conditions:
(a) The appellant shall, by the expiry of the said period of ten (10) months from this day vacate the rooms without putting forth any claim or objection on any ground whatsoever.
(b) The appellant shall not, during the said period induct third parties into possession or create documents with respect to the said premises.
(c) The appellant shall clear all the arrears due till 30.11.2012 (after adjustment of the amount as aforesaid) if any payable to the respondents within three months from this day.
(d) The appellant shall continue to pay/deposit in the executing court for payment to the respondents damages for use and occupation at the rate of `7,000/- per month from 01.12.2012 onwards. The amount shall RSA No.1038/2012 12 be paid/deposited on or before the 5th day of the succeeding month and if that day happens to be a holiday, such payment/deposit shall be made on the next working day.
(e) The appellant shall file an affidavit in the executing court within two weeks from this day undertaking to comply with the above conditions.
(f) In case any of the above conditions is violated, it will be open to the respondents to proceed with the execution of the decree.
(g) It is directed that execution of the decree in A.S.No.51 of 2009 of the III Additional Sub Court, Kozhikode will stand in abeyance for the period granted hereby or till the appellant violates any of the above conditions or till the appellant vacates the premises, whichever is earlier.
All pending interlocutory applications will stand dismissed.
THOMAS P.JOSEPH, Judge.
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