Abdulla vs Abdulla and Anr

K.A. Abdul Gafoor

Defendant who is encountered with a decree of mandatory injunction for eviction from the premises of A schedule property with his belongings is the appellant in this case. The only dispute involved is as to whether the transaction evidenced by Ext.Al dated 23-12-1986 is a lease or licence. The substantial question of law raised in the second appeal is also centered around the said transaction which the apellant styles as a lease, whereas the respondents styles it as a licence. The'' said agreement was preceded by other agreements commencing from Ext.A11 dated 27-10-1982 for 11 months period. That is not in dispute. What the appellant submits is that in terms of the said agreement a right in immovable property made mention of in the agreement had been created in favour of the appellant. Therefore it is a lease. More over the. document imposed a liability on the defendant to pay monthly rent to the plaintiffs. The liability to pay rent naturally emanates from a transaction of lease and not a licence. It is further submitted that when a building where hotel and lodging house are being conducted is given away in a transaction as evidenced by Ext.A1 or its preceding agreements, that can be construed only as a lease. Merely because the document styles it as a licence or an agreement, it cannot be termed as a licence. Added to this is the payment made several months as rent to the plaintiffs. In such circumstances, it can only be termed as a lease. Therefore, the lower appellate court had erred in finding it as a licence. It is contended, relying on the decision in Peramanand Gulabchand and Co. Vs. Mooligi Visanji, that exclusive possession of the premises and the liability on the part of the person to whom the premises are entrusted to pay a premium called rent will necessarily give the transaction the colour of the lease and-nothing else. The ruling of this court in the said case squarely applies to the case on hand because as in that case, here also a premise is exclusively given to the control and occupation of the defendant with a liability to pay rent. Therefore, from the facts and surrounding circumstances and the intention to enter into the transaction evidenced by agreement ExtAl and its preceding document, it has to be taken as a lease and not a licence. There is entrustment as evidenced by the agreement between the parties. That denotes exclusive possession with transfer of interest in the property made mention of in the agreement with liability to pay rent and therefore it is a lease, the appellant contends. The appellant fortifies this contention again relying on the decision in Capt. B.V. D''Souza Vs. Antonio Fausto Fernandes, .

It is contended by the respondents that merely because the premium payable is styled as rent, that will not attach the transaction a conclusiveness as it is a lease. For the purpose of creating a lease there shall be a transfer of interest in the immovable property, whereas Ext.Al transaction and the documents preceding Ext.Al will disclose that no interest has been created in any immovable property and the right given to the appellant/defendant is a right to manage an existing hotel and nothing else. By reason of agreement including Ext.A11 it is further contended that the transaction evidenced by Ext.Al enables the defendant/appellant to do something in the premises which in the absence of that permission will be unlawful, if the defendant had done it. Therefore the transaction comes within the four limits of definition of licence in Sec. 25 of the Easement Act. So the lower appellate court has come to the right conclusion that the transaction evidenced by the agreement in question was not a lease; but a licence. It is further contended that even when the first agreement Ext.A11 had been entered into the licence necessary from the local authority to conduct a hotel had been in the name of the plaintiffs and not in the name of the defendant. That itself will conclusively show that the advantage granted to the defendant was only a right to manage the hotel-business and not a right in the property namely the building. This contention is sought to be fortified on the strength of Ext.A16, a copy of the OP filed by the defendants himself wherein he had categorically averred that "the schedule property and building belonging; to the respondents 2 to 4. They as per agreement dated 27-10-1982 had transferred the management of the hotel to the petitioner". Thus an averment so made supported by an affidavit before this court, conclusively proves that, even according to the defendant/appellant, the transaction evidenced by Ext. All, the first agreement between the parties, is only transfer of the management of the hotel and not the transfer of any interest in the building. Of course Ext. A16 is a document after the filing of the suit but that is a document which the defendant cannot deny it, because it is an affidavit submitted to this court to obtain an order. When he had thus submitted to this court that Ext.Al 1 is only an agreement to transfer the management of the hotel to obtain an order against the local authority to issue licence in his favour, he cannot later contend that what he did mean was not that. Thus at any rate the challenge against the impugned judgment shall be repelled, the respondents submit.

In order to determine whether any transaction is lease or licence, till this date, no litmus test is provided by any law. The fundamental aspect now accepted is the intention of the parties while entering into the transaction. That is the real criteria to decide it. Added to this are the facts and circumstances surrounding the transaction and the real and actual mode of occupation by the person who had been entrusted with the property. A reading of Ext.Al which is in same terms as'' the previous agreements between the parties will disclose that what had been transferred, is not the property, but only the right of management of a hotel and lodging house with the necessary item of furniture and utensils. No interest is thus created in the property and period of such transaction is 11 months and that is being continued and renewed from time to time. Even during such renewal the statutory licence to conduct the hotel stood and renewed in the name of the plaintiffs and when the plaintiffs objected to such renewal after the dispute had arisen, the defendant obtained such licence upon orders from the court, subject to the final result of the suit. So the transaction evidenced by the document discloses the intention of the parties While entering into such document was not to create any interest in the property; When thus no interest is created there arise no question of any lease. It is only to manage the hotel business that the permission was granted. Without such permission the management of hotel business by the defendant in the premises would have been unlawful. Therefore the transaction squarely comes within the definition of licence in the Easement Act. Even in the Division Bench decision relied on by the appellant these aspects are supported. The Supreme Court in Qudrat Ullah Vs. Municipal Board, Bareilly, referred to by the Division Bench of this court in M/s. Premanand Gulabchand & Co. v. M/s. Mooligi Visanji (1989 (2) KLJ 125) held as follows: in the separate judgment of justice Venkitachaliah as then he was:

In deciding whether a grant amounts to a lease or only a licence, regard must be had more to the substance than the form of the transaction.

It has been held in Mrs. M.N. Clubwala and Another Vs. Fida Hussain Saheb and Others, that:

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.

Added to this is the decision in Street v. Mount Ford (1985 (2) All.E.R. 289), wherein it had been held that:

the court must pay attention to the facts and surrounding circumstances and to what people do as well as to what people say.

It is true that the document stipulates payment of rent. It is now well settled by several decisions of this court that mere use of the word ''rent'' is not decisive of the relationship between the parties held recently by the Supreme Court in Suhas Yeshwant Chopde Vs. Sachhidanand D. Purekar, . The lower appellate court after evaluating the documentary evidence has found that the transaction evidenced by Ext.Al is a licence and not a lease. That is. after appreciating a document. Appreciation of a document or meaning of entries and contents thereof does not give rise to a substantial question of law as held in Kondiba Dagadu Kadam Vs. Savitribai Sopan Gujar and Others, . Even if the finding is contrary to law that cannot be interfered with under Sec. 100 of CPC unless the dispute between the parties give rise to a question of law as held by the Supreme Court in Hari Singh v. Kanhaiya Lal (1997 (7) SCC 288). When the understanding of document or appreciation of documentary evidence is not a question of law, necessarily there arise no question of law in this appeal as well.

Appeal fails and is dismissed.