Kerala High Court
S.Natarajan vs S.Ganesan on 24 September, 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
MONDAY, THE 24TH DAY OF SEPTEMBER 2012/2ND ASWINA 1934
RSA.No. 1145 of 2012 ()
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AS.147/2011 of II ADDL.DISTRICT COURT, THIRUVANANTHAPURAM
OS.1525/2009 of I ADDL.MUNSIFF COURT, THIRUVANANTHAPURAM
APPELLANT(S)/APPELLANTS/DEFENDANTS:
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1. S.NATARAJAN,, AGED 57 YEARS
S/O T.SHANKARA NARAYANA IYER, RESIDING AT 512,
VTH STREET SHANKAR NAGAR, THIRUVANANTHAPURAM.
2. VALSALA, AGED 50 YEARS,
W/O S.NATARAJAN, RESIDING AT DO-DO-
3. P.KANNAN,, AGED 57 YEARS,
S/O M. PERUMAL PILLAI, RESIDING AT T.C.24/1001,
THYACUD, THIRUVANANTHAPURAM.
4. T.MAYA, AGED 49 YEARS,
W/O P.KANNAN, RESIDING AT -DO-DO-
BY ADVS.SRI.G.SHRIKUMAR, SENIOR ADVOCATE
SRI.ANIL K.NAIR
SRI.SREEJITH S.NAIR
RESPONDENT(S)/RESPONDENTS/DEFENDANTS:
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1. S.GANESAN, AGED 65 YEARS,
S/O G.S.MANIAN, RESIDING AT PARADIS, XXV/2134,
MANJALIKULAM ROAD, THAMPANOOR, THIRUVANANTHAPURAM.
2. MEENA GANESH, AGED 58 YEARS,
W/O GANESAN, RESIDING AT -DO-.
3. GAUTHAM G. SUBRAMANIAN, AGED 31 YEARS,
S/O GANESAN, RESIDING AT -DO -DO-
4. ARJUN G. NAGARAJAN, AGED 31 YEARS,
S/O GANESAN, RESIDING AT -DO -DO-.
BY ADV. SRI.R.T.PRADEEP
BY ADV. SRI.NAIR AJAY KRISHNAN
THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON
24-09-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
THOMAS P.JOSEPH, J.
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R.S.A. No.1145 of 2012
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Dated this the 24th day of September, 2012
J U D G M E N T
The distinction between a 'lease' and 'licence' has many a times been the subject matter of decisions by various courts. It is held that in a lease an interest is created in favour of the lessee over the immovable property while a licence does not create any such interest; instead, it grants the grantee a privilege to do the act permitted by the licence in the property of the grantor which, but for such permission would be unlawful. Though at some point of time it has been held that a licensee does not have possession of the property, later decisions (see for instance, Rajappan v. Veeraraghava Iyer - 1969 KLT 811) have taken the view that a licensee can have some sort of possession of the property for the limited purpose of enjoyment of the licence and therefore, that the licensee is in possession of the premises is no indication that the transaction is a lease. It has also been held that by virtue of Section 53 of the Easements Act (for short, "the Act") a licensee R.S.A. No.1145 of 2012 -: 2 :- is entitled only to get reasonable time to vacate the premises after the period of licence has expired or the licence is terminated and that the licensor can bring a suit for mandatory injunction to direct the licensee to vacate the premises within a reasonable time and before the licensee, as against the licence arrangement has started asserting independent possession of the property with the necessary animus against the licensor. The question in this case is whether the finding of the courts below that Exts.A2 and A3 create only a licence arrangement in favour of the appellants involve any substantial question of law.
2. The respondents owned a multi storied commercial complex referred to in the plaint A schedule. They formed a partnership which is engaged in business in a portion of the building (plaint B schedule) in the name and style, "Laboratory Supplies Co.". While so, the respondents dissolved that partnership and the business was transferred to the appellants as per Ext.A2, Memorandum of Understanding (for short, "the MoU") dated 25.02.2002 followed by Ext.A3, agreement dated 24.07.2002. It is the case of the respondents that to patronize the customers of the respondents, appellants were permitted to carry on business in the plaint B schedule as per terms and R.S.A. No.1145 of 2012 -: 3 :- conditions stipulated in Exts.A2 and A3 for eight months (ending on 31.03.2003) and on condition of payment of `10,000/- per month as consideration for such permission. While so, on 28.05.2009 the respondents by Ext.A4, notice demanded the appellants to vacate the plaint B schedule and remove their articles. Since they did not respond favourably, the respondents filed O.S. No.1525 of 2009 in the First Additional Munsiff's Court, Thiruvananthapuram for a mandatory injunction to direct the appellants give vacant possession of the plaint B schedule property within a time to be fixed by that court and to restrain them from occupying portion of the common area or corridors in the plaint A schedule.
3. The appellants inter alia contended that the transaction between them and the respondents pertaining to the the plaint B schedule is a lease. They claimed the protection of the rent laws in the matter of eviction.
4. The trial court, referring to Exts.A2 and A3 found that what is granted to the appellants is only a privilege to conduct business in the plaint B schedule in accordance with the terms and conditions referred to therein and that created only a licence arrangement between them. Accordingly a decree was R.S.A. No.1145 of 2012 -: 4 :- granted in favour of the respondents.
5. Appellants preferred A.S. No.147 of 2011 in the Second Additional District Court, Thiruvananthapuram. The learned District Judge confirmed the finding of the trial court as to the nature of transaction revealed by Exts.A2 and A3 and dismissed the appeal. Hence this Second Appeal.
6. The learned Senior Advocate for the appellants contended that Exts.A2 and A3, notwithstanding the nomenclature of the said documents or even the terminology used therein, created a lessor-lessee relationship between the respondents and the appellants. Learned Senior Advocate submitted that apart from the fact that plaint B schedule is given in the exclusive possession of the appellants, conduct of the parties after the period mentioned in Exts.A2 and A3 would indicate that the transaction is a lease. The learned Senior Advocate submitted that the trial court was carried away by the fact that Ext.A2 is not prepared in stamp paper (if it were a lease) as required under Article 33 of the Kerala Stamp Act (for short, "the Stamp Act"). It is further contended that so far as the first appellate court is concerned, it was of the view, erroneously, that it was not the business of the respondents to let out the R.S.A. No.1145 of 2012 -: 5 :- plaint A schedule but the averments in the plaint and in particular, what is averred in paragraph 11 would indicate that other portions of the plaint A schedule are let out to other tenants on lease arrangement. Reliance is placed on the decision in Beena v. Ramachandra Rao (2004 [2] KLT 336) and in particular the observations in paragraphs 8 and 9 of the said judgment. According to the learned Senior Advocate, in the circumstances the question whether Exts.A2 and A3 created a lessor-lessee relationship or licensor-licensee relationship involves substantial question of law requiring this Court to entertain the appeal. The learned Senior Advocate contended that the courts below failed to note that it was after 6 years of expiry of the period mentioned in Exts.A2 and A3 that the respondents sought mandatory injunction.
7. It is argued by the learned counsel for the respondents that Exts.A2 and A3 are executed by the parties on account of their free volition and there is nothing wrong in the parties agreeing for a licence arrangement for whatever reason it be. It is pointed out that a reading of Exts.A2 and A3 would show that what is given to the appellants is only a privilege to carry on business (which has been transferred to them) in the R.S.A. No.1145 of 2012 -: 6 :- same premises to patronize customers of the respondents. According to the learned counsel, the expression "rent" and "tenancy" used in Ext.A2 would not alter the nature and character of the transaction between the parties. Learned counsel contended that the delay in instituting the suit is explained by the respondents. Reliance is placed on the decision in Joseph Severance v. Benny Mathew (2005 (4) KLT 290- SC) to justify institution of the suit for mandatory injunction six years after the expiry of the period mentioned in Exts.A2 and A3.
8. True that there is no specific averment in the plaint that the relationship between the appellants and the respondents is one of licensee-licensor but it is seen from the averments in the plaint that what is pleaded by the respondents is that the appellants were given the privilege to carry on business in the plaint B schedule. In paragraph 11 of the plaint it is stated that of late, the appellants started causing nuisance to the 'other tenants' in the building by leaving their articles outside the plaint B schedule. The allegations in the plaint and the prayer for mandatory injunction respondents have sought, indicate that according to them the transaction is a license. R.S.A. No.1145 of 2012 -: 7 :-
9. Exhibit A2, is the MoU which is followed by Ext.A3, agreement for sale. In Ext.A2, MoU in clause 3 it is stated that the respondents have permitted the appellants to carry on business in the premises owned by the respondents on a monthly rent of `10,000/- for a period upto 31.03.2003 on an understanding that the appellants shall vacate the premises on the expiry of the said period and shift the business to another suitable premises. Clause 4 of Ext.A2 states that while in tenancy at the building owned by the respondents, the appellants shall not enter into partnership with any other person for running the business of M/s.Laboratory Supplies Co. or enter into any understanding for transferring the business in any manner. Clause 5 states that the respondents have permitted the appellants to use the trade name, Laboratory Supplies Co. for securing the continued patronage of its customers in future also for the business to be carried on by them.
10. In Ext.A3, almost the same terms and conditions as in Ext.A2 are incorporated. In Clause 4, it is stated that the appellants are permitted to use and occupy the business premises of the respondents including basement and ground floor for a period of eight months from the date of Ext.A3 and that R.S.A. No.1145 of 2012 -: 8 :- the appellants shall before the expiry of the said period (31.03.2003) find alternate accommodation and shift the business of M/s.Laboratory Supplies Co., failing which the respondents shall have the right and privilege to enter the premises and occupy the same.
11. I started by saying that so far as a licence is concerned, it only grants a personal privilege to the licensee to do the permitted act which, but for the such permission would be unlawful while in a lease, there is a transfer of interest in immovable property in favour of the lessee. Exhibits A2 and A3 read as a whole do not indicate that any interest in the plaint B schedule is transferred to the appellants. On the other hand, what I can understand from Exts.A2 and A3 is the grant of a personal privilege to the appellants to carry on business in the plaint B schedule. To be more precise in Ext.A2, clause 3 says that the appellants are permitted to carry on business in the premises. True, the expression 'rent and tenancy' are used in clauses 3 and 4 of Ext.A2. The mere use of such expressions is not sufficient to hold that any interest over the plaint B schedule is transferred in favour of the appellants. This Court in Kavina v. Viswanatha Menon (1974 KLT 606) has held that the R.S.A. No.1145 of 2012 -: 9 :- expression "rented" can mean the licensed premises as well. Therefore I am not very much impressed by the expressions "rent" and "tenancy" used in clauses 3 and 4 of the Exts.A2 in the light of the other clauses in Exts.A2 and A3 which according to me, reveal the intention of the parties at the time of executing Exts.A2 and A3.
12. It is not the nomenclature of the document that is decisive but, the intention of parties. While construing a deed, reference to extrinsic aid to understand the intention of parties is permissible only when the terms and conditions of the deed are ambiguous. Exhibits A2 and A3 are clear that it is a privilege granted to the appellants to carry on business in the demised premises.
13. It is relevant to note from Rajappan v.
Veeraraghava Iyer (supra) that even possession of the premises by the licensee by itself is not sufficient to show that the transaction is a lease. The expression 'possession' is understood by this Court in Anies v. Rapai (1986 KLT 1204). It is held that 'possession' means the physical possibility of a person dealing with property as he likes and it implies some actual power over the object possessed and some amount of will to avail R.S.A. No.1145 of 2012 -: 10 :- oneself of that power. 'Possession' is not necessarily the same thing as occupation or even actual user. There must be the intention on the part of the possessor to exercise control over the subject matter and to exclude others from it.
14. It is useful to refer to clause 4 of Ext.A3 where it is stated that the respondents will have right and privilege to enter the premises and occupy the same (on the expiry of the period fixed therein - 31.03.2003). In other words, respondents have even reserved a right of re-entry in the premises on the expiry of the period mentioned in Ext.A3 - 31.03.2003. That also indicates that though the appellants were in actual user of the plaint B schedule and even if it is said that for proper enjoyment of the permission granted to carry on the business transferred to them in the plaint B schedule it was necessary that appellants should have had possession of the plaint B schedule, that is not 'exclusive possession' as in the case of a lease. For, a right of re-entry is provided for the respondents. Therefore the contention that the appellants are in exclusive possession of the plaint B schedule cannot be accepted.
15. The trial court, in paragraph 10 of the judgment referred to Ext.A2, MoU not being prepared on stamp paper as R.S.A. No.1145 of 2012 -: 11 :- required under Article 33 of the Stamp Act. I am not at the question as to what would be the consequence if Ext.A2 is not executed on stamp paper. The fact that Ext.A2 is not prepared on a stamp paper is also a circumstance indicating the intention of parties that by Ext.A2, they did not intend to transfer any interest over the plaint B schedule. That is all what is intended by the trial court by the observations in paragraph 10 of the judgment.
16. The first appellate court observed that business of the respondents is not letting out but in paragraph 11 of the plaint there is reference to 'other tenants' in occupation of the remaining part of the plaint A schedule. May be, respondents have created lease arrangements with respect to other portions of the building. I am at the question, what exactly was the intention of the parties while executing Exts.A2 and A3.
17. Having gone through Exts.A2 and A3, I can only hold that the intention of the parties was to grant a privilege on the appellants to carry on business in the plaint B schedule which was transferred to them as per Exts.A2 and A3, upto 31.03.2003 subject to the terms and conditions stipulated therein which included that during the said period the appellants had no right R.S.A. No.1145 of 2012 -: 12 :- to form a partnership with themselves and others or enter into any other understanding with others even with respect to the business. In other words, it is clear that the privilege granted to the appellants was personal and was not to be transferred to others either by way of forming partnership or by entering into any other understanding.
18. What then, is consequence if any, of the respondents not filing the suit immediately after 31.03.2003 and instead, issuing Ext.A4, notice only on 28.05.2009 followed by the institution of the suit in the year, 2009, i.e., six years after the expiry date mentioned in Exts.A2 and A3.
19. Under Sec.53 of the Act, on the expiry of the period of licence or its termination the licensee is entitled to a reasonable time to vacate. What is 'reasonable time' would depend on facts and circumstances of each case. It is within the right of the licensor to institute a suit for mandatory injunction before the licensee, after the expiry of the period of licence or its termination, asserted independent possession with the necessary animus against the licensor (See George v. John - 1984 KLT 179 and Joseph Severance v. Benny Mathew). There it is held that the moment the period of licence expires 'possession' of R.S.A. No.1145 of 2012 -: 13 :- the licensee would not become unlawful or would make him a trespasser in the demised premises.
20. In this case as aforesaid the suit comes after six years of the date of expiry of the license. There is no case for the appellants that after 31.03.2003 (the date of expiry mentioned in Ext.A3) they asserted independent and exclusive possession of the property against the interest of the respondents with the necessary hostile animus or have assumed the character of a trespasser. There is also no case that the appellants are occupying the plaint B schedule on any other arrangement with the respondents. On the other hand, they only stated that even after the expiry of the period they were paying enhanced 'rent'. That, in the absence of any plea or evidence on the part of the appellants to the contra, can only be understood as subject to the terms and conditions prescribed by Exts.A2 and A3. I must also notice the explanation offered by the respondents and given in evidence that immediately after Exts.A2 and A3, they had to shift to Chennai in connection with the education of the 4th respondent and after the education of the 4th respondent at that place was over, they came back to Thiruvananthapuram when they noticed certain acts on the part of the appellants which R.S.A. No.1145 of 2012 -: 14 :- caused nuisance to the 'other tenants' of the plaint A schedule building. In the above circumstances there could be no argument on behalf of the appellants that after the expiry of the period of licence (31.03.2003) they have transformed themselves into the position of trespassers in the plaint B schedule or that with the necessary hostile animus to the respondents, they asserted independent possession so that it was necessary for the respondents to institute a suit for possession on the strength of title.
21. On hearing the learned Senior Advocate for the appellants and the learned counsel for the respondents and going through the judgments under challenge as also referring to Exts.A2, A3 and the plaint, I find that the courts below have, based on the evidence come to the correct conclusion that the transaction between the appellants and respondents is one of licence and hence the respondents are entitled to seek mandatory injunction as prayed for. That finding does not involve any substantial question of law requiring this Court to entertain the Second Appeal.
22. At this stage the learned Senior Advocate has requested to grant one years' time for the appellants to vacate R.S.A. No.1145 of 2012 -: 15 :- the plaint B schedule. It is submitted that the appellants are engaged in business in the plaint B schedule and it may require some time for them to wind up the business in the plaint B schedule after recovery of amounts due to them from their customers and find out accommodation elsewhere. Learned counsel for the respondents objected to the grant of one year.
23. Having regard to the submission of the learned counsel on both sides, I am inclined to think that the appellants should be granted some time to vacate the plaint B schedule taking into account the fact that they are running a business in the plaint B schedule, the difficulty in finding out other accommodation immediately and recovering the dues if any from the customers. I am inclined to grant six months' time from 01.10.2012 subject to conditions.
Resultantly, The Second Appeal is dismissed. But the appellants are granted six (6) months' time from 01.10.2012 to vacate the plaint B schedule property subject to the following directions.
(i) Appellants shall, by the expiry of the said period of six months, vacate the plaint B schedule without putting forth any claim or objection on any R.S.A. No.1145 of 2012 -: 16 :- ground whatsoever.
(ii) Appellants shall pay/deposit for payment to the respondents Rs.25,000/- (Rupees Twenty five thousand only) per month commencing from 01.10.2012 till the expiry of six months or till they vacate the plaint B schedule, whichever is earlier.
(iii) The payment/deposit referred to above
may be either by deposit in the account of the
respondents or paid directly to them (with proper
acknowledgment produced in the executing court) or by deposit in the executing court on or before the 10th of every month.
(iv) Appellants shall not, while in occupation of the plaint B schedule create partnership or enter into any other understanding with others regarding the business in the plaint B schedule.
(v) Appellants shall not, induct third parties into possession of the plaint B schedule.
(vi) Appellants shall file affidavit in the executing court within three (3) weeks from this day undertaking to comply with the above conditions.
(vii) In case any of the above conditions is R.S.A. No.1145 of 2012 -: 17 :- violated, it will be open to the respondents to proceed with execution of the decree notwithstanding the time granted hereby.
(viii) Execution of the decree to the extent it concerned the mandatory injunction to vacate the plaint B schedule will stand in abeyance for a period of six months from this day, or, till the appellants vacate the plaint B schedule, or, till any of the above conditions is violated, whichever is earlier. All pending Interlocutory Applications will stand dismissed.
THOMAS P. JOSEPH, JUDGE.
vsv