Patna High Court
Thakur Prasad vs The State Iron & Steel Co. Ltd. on 8 July, 1975
Equivalent citations: AIR 1976 PATNA 156
ORDER S.K. Choudhuri, J.
1. This appeal by the defendant has been filed against the concurrent judgments of the Courts below decreeing the plaintiff's suit.
2. A suit was filed for eviction of the defendant from the property fully described in Schedule A of the plaint and in the map annexed thereto, which consists of two plots in the vegetable plantform in Bistupur Market in the town of Jemshedpur, and for recovery of tolls and compensation amounting to Rs. 263.00. The plaintiff's case, in short, is that the defendant was a licensee in respect of the property covered by Schedule A of the plaint, on a daily toll of 50 paise. The further case of the plaintiff is that the defendant repeatedly defaulted in paying the tolls since the 24th May, 1964 in spite of repeated demands. A notice to quit and vacate the said plots was given asking the defendant not to use the disputed property on expiry of the 31st August, 1965. It is said that as the defendant did not pay any heed to the said notice, the present suit was filed.
3. The defence taken is that the disputed property was allotted, to Dilip Sao on a monthly rental of Re. 1/- which was subsequently increased to Rs. 15/-per month when the ground was cemented and a tin shed was constructed by the plaintiff. When Dilip Sao became old he used to run the business, i. e. the vegetable shop situate in the disputed property, under the style Ashok Kumar Madan Gopal and his grandsons used to manage the same. The further defence is that the suit was not maintainable and also barred by limitation. It has been denied that there was any default in payment of rent and the notice that was given was not legal and operative. It is also said that the plaintiff was not the owner of the disputed property.
4. The trial Court framed several issues one of which was "whether the defendant is a tenant or licensee under the plaintiff". The trial Court on a consideration of the materials on record decided all the issues in favour of the plaintiff and held that the defendant was a licensee with regard to the disputed property and, therefore, it decreed the suit.
5. On appeal preferred by the defendant, the lower appellate Court formulated five points for its consideration. Point No. 2 was "whether the defendant is a tenant or licensee under the plaintiff". It answered all the points against the appellant. While deciding point No. 2 as formulated by it, the lower appellate Court held that the defendant was in occupation of the disputed property not as a tenant but as a licensee. Thus it dismissed the appeal. Hence the present second appeal.
6. Mr. N. N. Roy, learned counsel appearing on behalf of the appellant has contended that the finding that the defendant was a licensee is vitiated in law. He contended that it being a mixed question of law and fact the appellant is entitled to raise this question in a second appeal. He further contended that the ingredients that are necessary for arriving at a finding that the defendant was a licensee have not been found by either of the Courts below. Neither of the Courts below have entered into the question as to the nature of right in the disputed property that was held by the defendant. This is a case where there is no document executed between the parties. Had there been a document then it could have thrown light as to the nature of the right that the defendant was holding in the disputed property, and from, which the intention of the parties could have been gathered, but unfortunately in this case there is no document executed by the parties. In such a situation it is well settled that the intention between the parties has to be gathered from the surrounding circumstances and the conduct of the parties. In case of lease, interest in the property is transferred but in case of licence the right to enjoyment in the property in a particular manner and for a particular purpose is only given. It is further well settled that exclusive possession Coupled with transfer of a right to enjoy the property is the test for determining as to whether the disputed right is a leasehold or is merely a licence. If the defendant has taken the property only to use it without any exclusive possession coupled with a transfer of right, to enjoy the property then certainly it will amount to a licence. But if, on the other hand, control of the property has been given exclusively to the defendant in the disputed property and exclusive possession has been parted with transfer of interest in it, then it will amount to a lease. Therefore, in this particular case a document being absent the intention has to be gathered from the circumstances and the conduct of the parties. Reference was made at the Bar to a recent decision of the Supreme Court in Qudrat Ullah v. Municipal Board, Bareily, (AIR 1974 SC 396) and reliance was placed on paragraph 7 of said judgment. It has been held therein as follows :--
"There is a no simple litmus test to distinguish a lease as defined in Section 105, Transfer of Property Act from a licence as defined in Section 52, Easements Act, but the character of the transaction turns on the operative intent of the parties. To put it pithily, if an interest in immovable property, entitling the transferors 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. Marginal variations to this broad statement are possible and Exts. '1' and '4' fall in the grey area of unclear recitals. The Law on the point has been stated by this Court in the Associated Hotel's case, 1960-1 SCR 368 = (AIR 1959 SC 1262)........."
6-A. I may usefully refer to the decision in the case of M. N. Clubwala v. Fida Hussain Saheb, (AIR 1965 SC 610) which has been referred to in the aforesaid Supreme Court decision from which quotation has been made by me above. In M. N. Clubwala (supra) the question arose as to whether a stallholder of a market wag lessee or a mere licensee. While deciding the said question Mudholkar J. speaking for the Court, has stated as follows:--
".........Whether an agreement creates between the parties the relationship of landlord and tenant or merely that of licensor and licensee the decisive consideration is the intention of the parties. This intention has to be ascertained on a consideration of all the relevant provisions in the agreement. In the absence, however, of a formal document the intention of the parties must be inferred from the circumstances and conduct of the parties (Ibid p. 427). Here the terms of the document evidencing the agreement between the parties are not clear and so the surrounding circumstances and the conduct of the parties have also to be borne in mind for ascertaining the real relationship between, the parties. Again, as already stated, the documents relied upon being merely agreements executed unilaterally by the stallholders in favour of the landlords they cannot be said to be formal agreements between the parties. We must therefore, look at the surrounding circumstances. One of those circumstances is whether actual possession of the stalls can be said to have continued with the landlords or whether it had passed on to the stall-holders. Even if it had passed to a person, his right to exclusive possession would not be conclusive evidence of the existence of a tenancy though that would be a consideration of first importance. That is what was held in Errington v. Errington and Woods, 1952-1 KB 290 and Gobb v. Lane, 1952-i All ER 1199........."
In that very paragraph his Lordship has further stated as follows :--
".........In the case before us, however, while it is true that each stallholder is entitled to the exclusive use of his stall from day to day it is clear that he has no right to use it as and when he chooses to do so or to sleep in the stall during the night after closure of the market or enter the stall during the night after 11.00 P. M. at his pleasure. He can use it only during a stated period every day and subject to several conditions. These circumstances, coupled with the fact that the responsibility for cleaning the stalls, disinfecting them and of closing the market in which the stalls are situate is placed by the Act, and the regulations made thereunder and the licence issued to the landlords would indicate that the legal possession of the stalls must also be deemed to have been with the landlords and not with the stall-holders. The right which the stall holders had was to the exclusive use of the stalls during stated hours and nothing more. Looking at the matter in a slightly different way it would seem that it could never been the intention of the parties to grant anything more than a licence to the stall-holders........."
7. Now coming to the case under consideration and keeping the aforesaid principles as stated above, let us see if the judgments of any of the Courts conform to the law already stated earlier. The trial Court has decided issue No. 5 in paragraph 9 of its judgment. Neither of the Courts below have decided the point in issue by referring to the circumstances of the case and conduct of the parties. The trial Court has not taken into consideration any of the circumstances as indicated in the aforesaid decision of the Supreme Court in M. N. Clubwala, (AIR 1965 SC 610) (supra) to find out the intention of the parties. It has, after considering irrelevant matters, jumped to the conclusion that the defendant was a licensee. Similarly the lower appellate Court has dealt with the said point in paragraph 6 of its judgment it has also not considered the relevant circumstances and the conduct of the parties to find out the true nature of the right which the defendant was holding in the suit property. In that view of the matter I cannot but remand the case to the lower appellate Court for deciding the appeal in accordance with law as indicated in the aforesaid Supreme Court judgments referred to by me above.
8. In the result, the appeal is allowed, the judgment and decree of the lower appellate Court are set aside and the case is remanded to the lower appellate Court for disposing of the appeal in accordance with law and in the light of the observations made above. The cost of this appeal will abide the result of the appeal before the lower appellate Court.