A.P.S.R.T.C. vs Nellajerla Jayalakshmi and Others

K. Ramaswamy, J.—The respondents herein were admittedly inducted into possession of the site in the appellant''s Bus Station Complex Tanuku in the month of July, 1978 for running various stalls on deposit of certain amount and on furnishing security. They continued to remain in possession from time to time till July 16, 1985. Thereafter, tenders were called to accord license to run the stalls, Earlier thereto, it is the case of the appellants that, the respondents-herein have surrendered possession under Exs.B5 to B8, and when the appellants were finalizing the tenders received pursuant to the notification, the suit in O.S. No. 80 of 1988 was filed in the court below and Interlocutory application No. 862 of 1988 was also filed, seeking ad-interim injunction under Order 39, Rules 1 and 2 and Section 151 CPC, to restrain the appellants from ejecting the respondents or interfering or disturbing their possession and enjoyment thereof except in accordance with law. The court below, by the impugned order dated September 27, 1988 while holding that the respondents-herein are only licensees, issued the ad-interim injunction restraining the appellants-herein from evicting the respondents in terms of the license deeds, Exs.B1 to B4 and thereafter, the court below made the interim injunction absolute. Assailing the legality thereof, this appeal has been preferred.

The contention of Sri D. Reddappa Reddy, Learned standing counsel for the appellants-herein is that when once the appellants-herein are found to be the owners of the property in question and that the respondents were inducted as licensees, by efflux of time, after expiry of the period of license, the respondents have legal right to continue in possession and that therefore, the respondents cannot interdict the action taken by the appellants in granting the license to others to run the stalls in the premises belonging to the appellants, and that the court below has committed grievous error in granting an injunction against the appellant herein. The question therefore, is what is the right the respondents have in the stalls to which licenses were granted to them in July 1978?

The Court below has noticed relevant clauses in the license. Clause 12 thereof, accords the right to erect stalls at the own costs of the respondents and the respondents cannot make additions or alternations without the prior written approval of the appellants-licensers. Clause 15 prohibits sale of articles except in accordance with the prevailing market rate an exhibiting a price list of the commodities Clause 17 stipulates that the license is terminable by giving one months notice on either side during the subsistence of the license without assigning any reasons. Admittedly, the license granted in this case was for a period of three years. The appellants have reserved their right to terminate the license by giving one months'' notice if the place is required by them. Clause 19 of the license provides that on expiry of the period of license or upon its termination, the licensee should deliver vacant possession of the premises, and on their failure to deliver vacant possession, the licenser is entitled to forfeit the security deposit made in the license. Further, Clauses 24 and 25 of the license provides that the licensee has to maintain the quality on the goods approved by the committee and sale thereof.

Thus, it is clear from the above conditions in the license granted by the appellants to the respondents, that the respondents were inducted into possession of the stalls, which the respondents have erected at their own expense as licensees and that the period of license is for three years and that in the interrignum if the licenser or the licensee intends to put an end to the license it can be terminated by issuing one months notice on either side. On expiry of the period of license, the licensee should deliver vacant possession to the licenser.

Section 52 of the Indian Easements Act, 1882 (Act 5 of 1882) for short the Act, provides that

Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in upon the immovable property of the grantor, something which would in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license.

Therefore, when the grantor has given the right to continue in possession of the immovable property for a specified period, in the absence of any other right which otherwise would be unlawful but for the grant, the right is called license and the licensee is entitled to continue in possession in terms of the grant.

Section 62(c) of the Act provides that,

Where it has been granted for a limited period, or acquired on condition that it shall become void on the performance or non-performance of a specified act, and the period expires, or the condition is fulfilled, the license is deemed to have been revoked.

Unlike a tenant a licensee never had and does not have judicial possession. This is manifested by the definition of ''license'' in Section 52 of the Act as being grant of a mere right to do upon the property in terms of the grant. In its absence, the possession is unlawful. This is the essential characteristic of license as distinct from lease. Lease is transfer of right to enjoy immovable property u/s 105 of the Transfer of Property Act for certain period in consideration of price. In the case of license the legal possession continues to remain with the owner. The licensee remains in possession only during the currency of license. Thereafter, it is unlawful.

Therefore, when the period has been prescribed in the grant of license, on expiry thereof, the license is deemed to be revoked, and thereby the licensee acquires no right to continue, except in accordance with the terms of the grant. Admittedly, the license period in this case expired by July 16, 1988. Therefore, by operation of Section 52 read with Section 62(c) of the Act, the possession of the respondents/licensees after July 16, 1988 would become unlawful. The question, therefore, it whether the respondents herein are entitled to the injunction as prayed for?

It is no doubt true that the respondents were inducted into possession initially for a period of three years by virtue of the license granted to them and that they were permitted to erect stall at their own expense. But, the possession is permissive only during the subsistence of the period of license without any juridical possession and it comes to a terminus with the expiry of the period of license, by efflux of time or determination on issue of one months notice by either side. Thereafter, they cannot have any higher right than what was granted to them under the grant of licenses, Exs.B1 to B4. The nomenclature of the documents are not conclusive. It has to be gathered from the intention of the parties as evidenced by the documents and the surrounding circumstances.

The essential distinction between a ''license'' and a ''lease'' has been adumbrated u/s 52 of the Act. In Chandulal v. Delhi Municipality AIR 1978 Del 174 (FB), a Full Bench of the Delhi High Court considered the effect of ''license''. In paragraph 34 of the judgment, it was held that when the license was granted for a period of eleven months, on expiry of the said period, the possession of the licensee would be unlawful. In the same paragraph No. 34 of the judgment, it was observed:

The petitioners being licenses with liberty to occupy and use the Kiosk for a period of 11 months in the first instance could not be said to be in legal possession of the premises, the legal possession all long remained with the Corporation. On revocation of the'' license they cease to enjoy the liberty to continue to occupy the Kiosk so as to derive the Corporation to evict them in due course of law, nor can the petitioners'' possession be said to be "settled possession" as was sought to be made out.

Therefore, it was held in the case mentioned supra, that the possession of the petitioner therein being not lawful, they were not entitled to the protection of injunction sought for. The same ration applies to the facts of the case on hand.

In Saraswathi v. Pedapapa Raju 1967 (1) An. WR 301, this Court has to consider the possession of the tenant by holding over after the expiry of the period of the lease. The lease provides that the tenant should hand over possession on expiry of lease of five years without any notice. It was contended therein that after the expiry of lease, as rent was accepted, he is a tenant by holding over and he is entitled to notice to quit u/s 106 of the Transfer of Property Act. In that context, it was held that "it is manifest that at the expiry of the period of five years, the lease had terminated and if the landlord was so inclined he could take delivery of possession without a notice to quit". On the facts, it was held that since rent was accepted he is a tenant holding over and he is entitled to quit notice. A fortiors the ratio applies to the case on hand that on expiry of the period of license the possession of the licensee becomes unlawful and the licensees are not entitled to the notice to quit nor protection of injunction and that thereby, the appellants-corporation is entitled to deal with the property in question in accordance with law and take possession from the respondents.

For all the aforesaid reasons, the appeal is allowed, and the injunction granted by the court below is set aside, but in the circumstances, without costs. The respondents are granted two months time to deliver vacant possession of the premises to the appellants.