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132 paragraphs · 9,507 wordsP.N. Mookerjee, J.—These two appeals arise out of two suits for ejectment and they are directed against the dismissal of those suits. The appeals are by the Plaintiffs and they raise questions, which are of some complexity and importance.
The circumstances, leading to these litigations, as stated in the respective plaints, were shortly as follows:
Premises No. 46B, Chowringhee Road, otherwise known as "King''s Court" belonged originally to the Nawn Estates Limited. In or about the year 1953, on May 15 of that year to be exact, the Plaintiffs-Appellants, two limited companies, Dunlop Rubber Company (India) Ltd. and Guest Keen and Williams Ltd. purchased the said premises from the said owner, the Nawn Estate Ltd., for residential occupation of the members of their respective staff. At the time of the said purchase, the disputed flats, flats Nos. 9 and 8, were in the occupation respectively of the Respondents Rule Dutta (F.A. No. 489 of 1960) and B.M. Lall, since deceased, predecessor of the other Respondents on record, namely, J.M. Lall and others (F.A. No. 490 of 1960), as tenants or under claims of tenancies under the said previous owner and they were all accepted as tenants by the Appellants under and in accordance with English Calendar month at the respective rentals of Rs. 390-8 and Rs. 350. On or about June 1, 1953, the Appellants intimated to the said Respondents the fact of their above purchase with requests to them to vacate the respective flats in their occupation as the Appellants required them for the occupation of their staff, for which purpose the said purchase had been made by them.
The requests, however, were not, complied with and eventually, notices of ejectment were served upon the said tenants, asking them inter alia to vacate the disputed premises in their respective occupation, as aforesaid, with the expiry of November, 1957 and September, 1958, respectively and there being no compliance this time too, the instant suits were instituted on August 13 and December 10, 1958. The suits were filed on the ground of the Plaintiffs'' reasonable requirement of the disputed premises for their own occupation, to wit, occupation of their staff.
The suits were contested and the defence inter alia was
(a) that the notices of ejectment were bad and invalid in law and
(b) that the suits were not maintainable on the ground of the Plaintiffs'' reasonable requirement under the above Act, as there was no, such reasonable requirement, as required by the same either in fact or in law.
At the trial, the point of notice does not appear to have been pressed. The common ground, however, on which the two suits were dismissed by the learned trial Judge, was the Plaintiffs'' failure to prove reasonable requirement, as required by, or, in accordance with law. The learned trial Judge was inclined to hold partly in favour of the Plaintiffs on this part of the case, as, in his view, they had succeeded in proving their reasonable requirement of the suit premises but his ultimate finding was that they (the Plaintiffs) could not succeed as they had failed to establish such reasonable requirement for their own occupation. He rightly took the relevant provision, Clause (f) of Section 13(1) of the West Bengal Premises Tenancy Act, 1956, as consisting of two parts, obliging the landlord to prove (a) his reasonable requirement of the suit premises and (b) that for his own occupation. On the first, his view was in the Plaintiffs'' favour; on the second against them, particularly because he felt compelled to hold, on the authority of this Court''s decision in O.C. Ganguly v. Kamalpat Singh Dugar 51 C.W.N. 208, that the Plaintiffs'' employees concerned would, in the, circumstances, be tenants under them and not licensees, in which case their possession or occupation would be on their own behalf and not on behalf of the Plaintiffs and accordingly, their occupation would not be the Plaintiffs'' occupation. Left to himself, the learned Judge, it seems sufficiently clear, would have taken the other view, but he felt oppressed by the above decision and followed it under compulsion.
The contest between the parties, as already seen, centres round the question of the Plaintiffs-Appellants'' reasonable requirement of the disputed premises for their own occupation. The point of notice, as stated above, was not pressed before the learned trial Judge in the corresponding suits and it has not been pressed in this Court either in these two appeals. Indeed, on the said point, nothing can be said in favour of the Defendants Respondents. The decision of the learned-trial Judge, therefore, holding the notices of ejectment in these two cases as valid and sufficient, is affirmed.
The real controversy arises on the other question, namely, the Plaintiffs'' reasonable requirement of the disputed premises for their own occupation. This matter has to be considered from two points of view : (i) Plaintiffs'' reasonable requirement of the disputed premises and (ii) reasonable requirement for their own occupation. Both, again, have factual and legal aspects, or, in other words, the above two questions of the Plaintiffs'' reasonable requirement and that for their own occupation have to be considered as a matter of fact and also as a matter of law. In the instant case, again, the latter is of primary importance, as the Plaintiffs, on their own case, require the disputed premises for the occupation of their staff and equate the same to their own occupation and further, the Plaintiffs, as joint owners, require separate portions of the disputed premises for their individual or separate staff under mutual arrangement or agreement and so the point also arises whether such separate requirements of the individual Plaintiffs would be relevant and sufficient under the law. Granting, however, that these legal requirements are satisfied in the instant case, the Plaintiffs, on their evidence, must be held to have made out a case of their reasonable requirement of the disputed premises for their own occupation. That evidence has been accepted by the learned trial Judge and accepted as sufficient on the point and we see no reason to differ from him. Upon that evidence, the nett position on this part of the case stands as follows:
That, for convenience and greater efficiency and as a matter of necessity, so far at least as their "touring" officers are concerned, the Plaintiffs require accommodation for their staff. That requirement is also supported from the economic point of view and as a matter of fact on the above grounds and having regard to difficulties in the matter of residential accommodation in the city, the Plaintiffs have to enter into agreement with some of their officers to provide them with such accommodation.
In the above context and circumstances, the Plaintiffs in our opinion have succeeded in establishing the factual element, necessity for them on this part of the case and the real question, which arises is whether they have made out the necessary legal element or the requirement of law under the relevant statutory provision, namely, Section 13(1)(f) of the West Bengal Premises Tenancy Act, 1956, or, more precisely, its relevant part, to enable them to get decrees in the instant cases.
Now, the relevant statutory provision, namely, the relevant part of Section 13(1)(f) of the West Bengal Premises Tenancy Act, 1956, reads as follows:
(f) Where the premises are reasonably required by the landlord...for his Own occupation if he is the owner....
The legal aspect of the matter, as discussed by the learned Advocates on the above statutory provision, raises, broadly, four questions:
(1) What is the meaning of the word "landlord", whether it includes joint landlords, whether the requirement of one or more, but not all of joint landlords, would be relevant and sufficient and whether the individual requirements of several or different joint landlords would serve the purpose?
(2) What is the meaning of the word "his"--Does it include "its" or, "their" in the neuter gender, so as to apply to artificial persons e.g. companies, as in the present case, or is it restricted to natural persons, including, of course, females or the feminine gender?
(3) What is the meaning of the words "own occupation"--Does it mean physical or actual occupation or constructive occupation too and if so, to what extent? and
(4) Does the occupation of the Plaintiffs'' staff or officers in the instant case constitute the Plaintiffs'' own occupation within the meaning of the above statutory provision?
On the first of the above three questions, we do not feel much difficulty. Under the General Clauses Act, both Central and State, "singular" in a statute ordinarily includes the plural. The word "landlord", therefore, includes "landlords" and thus applies to the case of joint landlords too. So, the requirement of joint landlords also would be within the section. The requirement of some of the joint landlords, where the others reasonably adopt the same, or, in other words, where the others accept the same and where, further, it would be reasonable on their part to provide for it, would also be well within the statute. Vide Tarak Chandra Mukherjee v. Ratanlal Ghosal 1959 C.L.J. 136 and Kanika Devi v. Amarendra Nath Roy Choudhuri 65 C.W.N. 1078, reversing Amarendra Nath Roy Choudhuri v. Kanika Devi 64 C.W.N. 29 (Notes); See also M. Levi v. Dinendra Nath Das Unreported decision in F.A. 188 of 1959. The current English view on the point is, no doubt, apparently, different but it seems to us that, properly analysed, the difference would not be real and the basis or fundamental test would be whether, in the circumstances, it would be reasonable on the part of the non-requiring group of landlords to provide for the requirement of the other or the requiring group. That test will reconcile the two types of decisions, be it in the context of relative social conditions or otherwise, which do not involve any fundamental difference or fundamental divergence of view. The conditions before their Lordships in the different cases were sufficiently different to warrant their different conclusions upon the above test. On the test again, the answer to the remaining part of the first question, set out above, would be quite clear and easy. If the circumstances be such that it would be reasonable for the joint landlords to agree to and provide for their mutual requirements of the disputed premises or for one set to agree to and provide for the individual and particular requirements of the other or others such mutual or individual and particular requirements being themselves reasonable, it would be a case well within the statute. On the first question, therefore, the answer here must be in favour of the Plaintiffs-Appellants.
The second question needs no long discussion. Under the I General Clauses Act, both Central and State, the masculine in a statute, ordinarily, includes the feminine, but nothing specific is mentioned about the neuter gender. The matter, thus, falls to be judged solely on the particular statute before the Court. The West Bengal Premises Tenancy Act uses the masculine term in many of its sections, both in relation to tenants and landlords. Obviously, also, both tenant and landlord under the said Act include artificial persons. With reference to neither, however be it tenant or landlord, does the statute use anywhere any term of the neuter gender but uses the masculine term in all places. In such circumstances, it is obvious that the masculine terms in the statute must, include not only their femine counterparts but also corresponding neuter gender unless, of course, the same be excluded on any special consideration. The decision, cited by Mr. Mitra, namely, State Trading Corporation of India Ltd. v. The Commercial Tax Officer AIR 1963 S.C. 1811, in support of his contrary submission does not apply to affect the above construction of this particular statute. That decision was inter alia under the Citizenship Act and the relevant statutory provisions, which came up for consideration there, clearly exclude artificial persons and neuter gender (vide, in particular, p. 1824 of the Report). This was clear from the terms of the said provisions and their context and the scope and purpose of the statute in question, as pointed out by their Lordships. The decision, therefore, is clearly distinguishable and does not help Mr. Mitra.
In the premises, the second question is answered in the affirmative and in favour of the Plaintiffs.
It was next argued on behalf of'' the tenants-Respondents and that relates to and covers the third point, set out above,--that the statute in question, in its relevant Clause (f) of Section 13(1) does not recognise Company''s, or, for the, matter of that, any artificial person''s occupation and for that, reliance was placed on the principles, deducible from the English cases in Reidy v. Walker (1933) 2 K.B. 57, Hiller v. United Diaries (London) Limited (1934) 1 K.B. 57 and S.L. Dando Ld. v. Hitchcock (1954) 2 K.B. 317. These cases, however, as we have already held in Overseas (India) Private Ltd. v. United Sank of India Ltd. Unreported decision in F.A. 795 of 1961, are plainly distinguishable, having regard to the key-note, scope and purpose of the statutes, under which they were decided (vide also, in the connection, per Bachawat, J. in the Special Bench Case of Krishna Prosad Bose Vs. Sm. Sarajubala Dassi and Another, . See also Haskins v. Lewis (1931) 2 K.B. 1 and Skinner v. Geary (1931) 2 K.B. 547. Indeed, it will be too much to say (vide Siri Kishan v. Ghanesham Dass ILR (1963) P & h. 115 that our Act recognises only physical or actual occupation and not constructive occupation or occupation of a juristic or artificial person and as a matter of fact, even in England same view is to be found in Duke of Richmond v. Dewar and the Gadogan Hotel Company Limited 38 T.L.R. 151. We, accordingly, answer the third question too in favour of the Appellants.
On the fourth question, which is the most difficult and which contain the crucial point in the case, the overall position stands thus:
The officers or members of the staff, for whom, the Plaintiffs allege they reasonably require the disputed premises, have, as part of their relevant or relative service contracts or agreements, the following:
Whereas the Licensee (officer) is in the employment of the Company and for the proper performance of his duties in such employment the Company has agreed to his occupation with effect from...of a flat in the Company''s residential, property situated in 46B, Chowringhee Road, Calcutta and such servants quarters and garage as may be allotted by the Company from time to time for his use. Now it is hereby agreed as follows:
(1) The Licensee whilst in the employment of the Company at Calcutta and for the sole purpose of the Licensee being more conveniently situated in such employment is hereby permitted by the Company to occupy as a licensee during the term of his employment at Calcutta, Flat No...situated in the Company''s property known as King''s Court, or such other flat as may be allotted to the Licensee at the Company''s discretion (hereinafter referred to as "the said premises") subject to the terms and conditions hereinafter contained.
(2) The Licensee shall pay to the Company each month as and by way of licence fees a sum which may be varied by the Company from time to time at its discretion and the Company shall be entitled to deduct such licence fees from the emoluments due or to become due to the Licensee from the Company.
(3) The occupation of the said premises by the Licensee is a condition of his employment at Calcutta with the Company and such right of occupation shall forthwith cease upon his employment being terminated by the Company or on his leaving such employment or on his transfer away from Calcutta or on his death whichever is earlier. Notice given by the Company to the Licensee of termination of employment or of transfer away from Calcutta shall be deemed to be sufficient notice of revocation of the licence.
(4) The Company shall be entitled to determine forthwith the licence hereby granted if the licensee shall fail to comply with any of the terms and conditions herein contained and on his part to be observed and non-compliance with the terms and conditions herein contained may be deemed by the Company to be misconduct.
(5) These presents shall not or shall not be deemed to create any relationship of landlord and tenant between the Company and the Licensee in respect of the said premises.
(6) The Company shall pay all present and future revenue and Municipal taxes payable in respect of the said premises and keep the said premises in repair during the continuance of these presents.
Conditions to be complied with by the Licensee.
1 ... ... ... ... ... ... ...
... ... ...
... ... ...
... ... ...
(7) The Licensee will not permit any persons other than his own personal servants to occupy the servants'' quarters allotted to him by the Company and will not permit the garage allotted to him by the Company to be used for residential purpose.
(8) The Licensee shall not take in any paying guest without prior written permission from the Company and such permission shall be deemed to have been withdrawn when the paying guest ceases to reside.
(9) Except during prolonged absences from Calcutta the Licensee shall not let or part with possession of the whole or any part of the said premises to any person firm or company. During periods when the Licensee is absent for purposes of leave or in the performance of his duties he shall continue to pay to the Company the licence-fees due under Clause 2 of this agreement but may with the prior written consent of the Company permit a caretaker to occupy the said premises during the period of the Licensee''s absence.
... ... ...
... ... ...
... ... ...
(vide Ext. 4).
Whereas
The Licensee is in the employment of the Company and for the proper performance of his duties in such employment the Company has agreed to his occupation with effect from...of a flat in the Company''s residential property situated in Calcutta and such servants'' quarters and garage as may be allotted by the Company from time to time for his use.
Now it is agreed as follows:
(1) The Licensee whilst in the employment of the Company at Calcutta and for the sole purpose of the Licensee being more conveniently situated in such employment is hereby permitted by the Company to occupy as a licensee during the term of his employment at Calcutta Flat No...situated in the Company''s property known as King''s Court, Calcutta, or such other flat as may be allotted to the Licensee at the Company''s discretion (hereinafter referred to as "the said premises") subject to the terms and conditions hereinafter contained.
(2) In the event of the Company deciding to levy licence fees and the Company reserves the right to do so without prior notice the Licensee shall pay to the Company each month such licence fees which may be varied by the Company from time to time at its discretion and the Company shall be entitled to deduct such licence fees from the emoluments due or to become due to the Licensee from the Company.
(3) The occupation of the said premises by the Licensee is a condition of his employment at Calcutta with the Company and such right of occupation shall forthwith cease upon his employment being terminated by the Company or on his leaving such employment or on his transfer away from Calcutta or on his death whichever is earlier. Notice given by the Company to the Licensee of termination of employment or of transfer away from Calcutta shall be deemed to be sufficient notice of revocation of the licence.
(4) The Company shall be entitled to determine forthwith the licence hereby granted if the licensee shall fail to comply with any of the terms and conditions herein contained and on his part to be observed and non-compliance with the terms and conditions herein contained may be deemed by the Company to be misconduct.
(5) These presents shall not be deemed to create a relationship of landlord and tenant between the. Company and the Licensee in respect of the said premises.
(6) The Company shall pay all present and future revenue and Municipal taxes payable in respect of the said premises and keep the said premises in repair during the continuance of these presents.
Conditions to be complied with by the Licensee.
... ... ... ... ... ... ...
... ... ...
(7) The Licensee will not permit any persons other than his own personal servants to occupy the servants quarters allotted to him by the Company and will not permit the garage allotted to him by the Company to be used for residential purpose.
(8) The Licensee shall not take in any paying guest without prior written permission from the Company and such permission shall be deemed to have been withdrawn when the paying guest ceases to reside.
(9) The Licensee shall not let or part with possession of the whole or any part of the said premises to any person, firm or company. During periods when the Licensee is absent from Calcutta the Company may assign the premises to any other employee or suitable person at its sole discretion.
(vide Ext. 4(a))
Whereas the Licensee is in the employment of the Company and for the proper performance of his duties in such employment the Company has agreed to his occupation with effect from...of a flat in the Company''s residential property situated in 46B, Chowringhee Road, Calcutta and such servants quarters and garage as may be allotted by the Company from time to time for his use.
Now it is hereby agreed as follows:
(1) The Licensee whilst in the employment of the Company at Calcutta and for the sole purpose of the Licensee being more conveniently situated in such employment is hereby permitted by the Company to occupy as a Licensee during the term of his employment at Calcutta Flat No...situated in the Company''s property known as, King''s Court, or such other flat as may be allotted to the Licensee at the Company''s discretion (hereinafter referred to as "the said premises") subject to the terms and conditions hereinafter contained.
(2) The Licensee shall pay to the Company each month as and by way of licence fees a sum of...which may be varied by the Company from time to time at its discretion and the Company shall be entitled to deduct such licence fees from the emoluments due or to become due to the Licensee from the Company.
(3) The occupation of the said premises by the Licensee is a condition of his employment at Calcutta with the Company and such right of occupation shall forthwith cease upon his employment being terminated by the Company or on his leaving such employment or on his transfer away from Calcutta or on his death, whichever is earlier. Notice given by the Company to the Licensee of termination of employment or of transfer away from Calcutta shall be deemed to be sufficient notice of revocation of the licence.
(4) The Company shall be entitled to determine forthwith the licence hereby granted if the Licensee shall fail to comply with any of the terms and conditions herein contained and on his part to be observed and noncompliance with the terms and conditions herein contained may be deemed by the Company to be misconduct.
(5) These presents shall not or shall not be deemed to create a relationship of landlord and tenant between the Company and the licensee in respect of the said premises.
(6) The Company shall pay all present and future revenue and Municipal taxes payable in respect of the said premises and keep the said premises in repair during the continuation of these presents.
Conditions to be complied with by the Licensee
I. ... ... ... ... ... ... ...
... ... ... ... ... ... ...
(7) The Licensee will not permit any persons other than his own personal servants to occupy the servants quarters allotted to him by the Company and will not permit the garage allotted to him by the Company to be, used for residential purpose.
(8) The Licensee shall not take in any paying guest without prior written permission from the Company and such permission shall be deemed to have been withdrawn when the paying guest ceases to reside.
(9) Except during prolonged absence from Calcutta the Licensee shall not let or part with possession of the whole or any part of the said premises to any persons firm or company. During periods when the Licensee is absent for purposes of leave or during prolonged absence in the performance of his duties when his wife and/or children do not remain in occupation of the said premises, he shall not pay to the Company the whole or any part o� the licence fees due under Clause 2 of this agreement. During such periods the Company shall have the right to install a caretaker in the said premises. In the event of the Company not exercising this right the Licensee may with the prior written consent of the Company permit a caretaker to occupy the said premises during the period of the Licensee''s absence at a licence fee to be set by and paid to the Company by the caretaker.
... ... ...
... ... ...
(vide Ext. 4(a))
On the above, the point immediately arises whether the said officers will be tenants or licensees of the Plaintiffs in respect of the accommodation to be provided to them under the above terms. If they are tenants, they would have an interest in the premises concerned apart from and as distinguished from the Plaintiffs'' and their occupation of the same would be under their said independent interest and to that, extent, not on behalf but in spite of the Plaintiffs and it would be difficult to hold that such occupation on their part would be the Plaintiffs'' occupation for the purpose of the present statute. If, on the other hand, the said officers be licensees, they would have no independent interest in the disputed premises and their occupation would be the Plaintiffs'' occupation under the above Act. To fins conclusion, there can be, in our opinion, no legitimate or valid objection and indeed, no serious objection was raised to the above point of view save and except what has already been disposed of, namely, that landlord''s own occupation for purposes of the above Act must be physical or actual occupation by him.
The point thus narrows down to the consideration whether the aforesaid officers are tenants or licensees under their above service contracts or agreements. This, as we have hinted above, is a point of some nicety and complexity and obviously of some importance too. Relevant tests have varied from time to time. What was regarded as settled law on the point at one stage became unsettled in course of time. Ideas have changed with changing social conditions and law has moved to keep pace with the same. The test of exclusive possession, which was once held in England as infallible and a sure determination on the question of the above status or relationship, has later been found wanting and the English Judge had to fall back on the somewhat elusive but more honest test of intention. This golden rule--the rule of intention is the catch-key for solving many legal problems. It has often succeeded in resolving intricacies of law, where other efforts have failed in matters like the present, this theory of intention has often proved to be the key-note or repository of success and courts have found the necessary solution, either in its discovery of the legislative intent, where a statute fell to be considered, or, in the discovery of the appropriate intention of the parties in unravelling the mysteries of legal relationship.
The source of this discovery is the opposite document, if any, and/or surrounding or attending circumstances, wherever appropriate and in the instant cases, this source will, of course, be the several or particular agreements, referred to above, in the light of relevant circumstances, throwing light on any ambiguity therein. Primarily, then, we have to construe the several agreements, of which the relevant terms have been set forth hereinbefore and such construction will have to be made in the light of the distinction between tenants and licensees as deducible from the decided cases or appropriate authorities. To them, then, we shall first and immediately turn.
A very accurate summary of this part of the law in England is to be found in Halsbury''s Laws of England, vol. 23 (3rd or Simond''s Ed.) at pp. 410 and 427, Articles 990 and 1022, which without the case references, may be quoted here as follows:
P. 410:
Article 990. Servant and tenant. A servant in occupation of premises belonging to his master may be a tenant or a licensee according to the intentions of the parties as disclosed by their conduct and the circumstances of the case. The servant is a licensee if all that was intended was that he should have a personal privilege with no interest in the land. If there is a written agreement containing provisions which are only consistent with a tenancy, then the servant is a tenant even if the agreement purports expressly to negative the creation of a tenancy.
Where it is necessary for the due performance of his duties that servant should occupy certain premises, or where he is required to occupy premises for the more satisfactory performance of his duties although such residence is not necessary for that purpose, he occupies in the capacity of a servant; but where a person is merely permitted to occupy premises, whether as a privilege, or by way of remuneration or part payment for his services, he occupies as tenant and not as a servant, unless the circumstances show that there was no intention to create the relationship of landlord and tenant, in which case the servant will only be a licensee. The circumstance that a person is allowed, as part of his remuneration, to carry on his own business in the premises he is required to occupy does not alter the character of his occupation into that of a tenant.
Occupation by the servant is occupation by the master and a servant has neither estate nor interest in the premises he occupies in that capacity; but the relation of master and servant and of landlord and tenant may exist between the same parties, even though the servant occupies the premises of his master rent free as part remuneration for his services.
P. 421 : (See 4. Licences).
Article 1022. Principles of determining whether agreement creates lease or licence. In determining'' 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. The parties to an agreement cannot, however, turn a lease into a licence merely stating that the document is to be deemed a licence or describing it as such; the relationship of the parties is determined by law on a consideration of all relevant provisions of the agreement; nor will the employment of words appropriate to a lease prevent the agreement from conferring a licence only if from the document it appears that it was intended merely to confer a licence. In the absence of any formal document the intention of the parties must be, inferred from the circumstances and the conduct of the parties.
Article 1023. Nature of grant of exclusive possession. The fact that the agreement grants a right of exclusive possession is not in itself conclusive evidence of the existence of, a tenancy, but it is a consideration of the first importance.
In deciding whether a grantee is entitled to exclusive possession regard must be had to the substance of the agreement. To give exclusive possession there need not be express words to that effect, it is sufficient if the nature of the acts to be done by the grantee requires that he should have exclusive possession.
The grant of an exclusive right to a benefit can, however, be inferred only from language which is clear and explicit. If an exclusive right of possession of the purposes for which the premises may be used the reservations or restriction will not necessarily prevent the grant operating as a lease.
Article 1024. When grant conferring exclusive possession operates merely as licence. A grant which considers the right to exclusive possession may operate as a licence in the following circumstances which negative the intention to create a lease. A requisitioning authority which has no estate or interest in the land cannot grant a lease and any grant by that authority can only take effect as a licence. A deserted wife is entitled to exclusive possession of the matrimonial home and cannot be evicted by her husband or persons claiming under or through the husband with knowledge of the wife''s rights, but her right is a mere licence or equity and does not-amount to an equitable estate or interest. A family arrangement may include an irrevocable grant of the right to exclusive possession but the grantee may nevertheless be a licensee and not a tenant and cannot acquire title based on adverse possession. A person may be allowed temporary rights of exclusive possession to alleviate hardship or for other reasons which negative the intention to create a tenancy which would confer on the grantee a permanent right of occupation under the Rent Restrictions Acts and in these circumstances the grant may be construed as a licence. Where, however, a purchaser is allowed into possession pending completion, it seems that the purchaser is normally a tenant at will and not a licensee.
The fundamental change in the relative idea or outlook, the dynamic growth of the underlying conception and the studied development of the ruling distinction between lease or tenancy and licence is neatly expressed by Denning, L.J. in Errington v. Errington (1952) 1 K.B. 290 (296-8) and reiterated by him and Sommerwhile, L.J. in Cobb v. Lane (1952) 1 All. E.R. 1199. The relevant passages may be quoted as follows:
P. 154-5 of the A.E.R. report (Per Denning, L.J.):
The classic definition of a licence was propounded by Vaughan, C.J. in the seventeenth century in Thomas v. Sorell (1673) Vau 330 (351);
A dispensation or licence properly passed no interest, nor alters or transfers property in anything, but only makes an action lawful, which without it had been unlawful.
The difference between a tenancy and a licence is, therefore, that in a tenancy an interest passes in the land, whereas in a licence it does not. In distinguishing between them a crucial test has sometimes been supposed to be whether the occupier has exclusive possesion or not. If he was let into exclusive possession he was said to be a tenant, albeit only a tenant at will; See Doe d. Tomes v. Chamberlane (1839) 5 M.& W. 14, Lynes v. Snaith (1899) 1 Q.B. 486 whereas if he had not exclusive possession he was only a licensee; Peakin v. Peakin (1895) 2 L.R. 359. This test has, however, often given rise to misgiving because it may not correspond to realities. A good instance is Howard v. Shaw (1841) 8 M.& W. 118, where a person was let into exclusive possession under a contract for purchase. Alderson, B. said that he was a tenant at will and Parke, B. with some difficulty agreed with him, but Lord Abinger, C.B. said:
While the Defendant occupied under a valid contract for the sale of the property to him, he could not be considered as a tenant.
Now, after the lapse of a hundred years, it has become clear that the view of Lord Abinger was right. The test of exclusive possession is by no means decisive. The first case to show this was Booker v. Palmer (1942) 2 All. E.R. 674 (677) where an owner gave some evacuees permission to stay in a cottage for the duration of the war, rent free. this Court held that the evacuees were not tenants, but only licensees. Lord Greene, M.R. said:
To suggest there is an intention there to create a relationship of landlord and tenant appears to me to be quite impossible. There is one golden rule which is of very general application, namely, that the law does not impute intention to enter into legal relationship where the circumstances and the conduct of the parties negative any intention of the kind.
Those emphatic words have had their effect.
We have had many instances lately of occupiers in exclusive possession who have been held to be not tenants, but only licensees--when a requisitioning authority allowed people into possession at a weekly rent; Minister of Health v. Bellotti (1944) K.B. 298, South-gate Borough Council v. Watson (1944) K.B. 541, Minister of Agriculture and Fisheries v. Mathews (1950) K.B. 148; when a landlord told a tenant on his retirement that he could live in a cottage rent free for the rest of his days: Foster v. Robinson (1951) 1 K.B. 149; when a landlord, on the death of the widow of a statutory tenant, allowed her daughter to remain in possession paying rent for six months : Marcroft Wagons Ltd. v. Smith (1951) 2 K.B. 496; when the owner of shop allowed the manager to Jive in a flat above the shop, but did not require him to do so and the value of the flat was taken into account at (sic) a week in fixing his wages; Webb Ltd. v. Webb (1951) E.G.D. 163. In each of those cases the occupier was held to be a licensee and not a tenant. Likewise there are numerous cases where a wife who has been deserted by her husband and left by him in the matrimonial home has been held to be, not a tenant of the husband owner, Bramwell v. Bramwell (1942) 1 K.B. 370, Pergeter v. Pergeter (1946) 1 All. E.R. 570, C.A., nor a bare licensee, Old Gate Estates, Ltd. v. Alexander (1950) 1 K.B. 311, but to be in a special position, a licensee with a special right under which the husband cannot turn her out except by an order of the Court, Middleton v. Baldock (1950) 1 K.B. 657.
The result of all these cases is that, although a person who is let into exclusive possession is, prima facie, to be considered to be a tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. Words alone may not suffice. Parties cannot turn a tenancy into a licence merely by calling it one. But if the circumstances and the conduct of the parties show that all that was intended was that the occupier should be granted a personal privilege with no interest in the land, he will be held only to be a licensee. In view of these recent cases I doubt whether Lynes v. Snaith Supra and the case of the game, keeper referred to therein (1899) 1 W.B. 1 Q.B. 490 would be decided the same way today.
P. 1201 : (Per Somervell L.J.).
In Errington v. Errington Supra (2) Denning, L.J., addressed himself to the question whether exclusive possession was, as is suggested in some cases, the test, so that, if you find exclusive possession, you must find a tenancy at will. That test was, undoubtedly, as I read it, applied and acted on by the Divisional Court in Lynes v. Snaith Supra (3). In that case Lawrance, J. said (1899) 1 Q.B. 488:
As to the first question, I think it is clear that (the Defendant) was a tenant at will and not a licensee; for the admissions state that she was in exclusive possession a fact which is wholly inconsistent with her haying been a mere licensee.
Denning, L.J., came to the conclusion that that was no longer a final test and I think it may be that there is a certain ambiguity in the expression. In Errington v. Errington Supra (2), Foster v. Robinson Supra (4) and Marcroft Wagons Ltd. v. Smith Supra (5), it was clearly intended that the person who occupied the premises should have the possession which normally people have in their homes. Those cases show that exclusive possession is not a test negativing the possibility of the occupier''s being a licensee. If you use the expression "exclusive possession" as meaning the rights which a tenant has against his landlord, then, of course, it might well be that an admission of that would lead to the conclusion arrived at in Lynes v. Snaith Supra (3). The report of that case does not give very full information regarding what was said when the Defendant there originally went into possession, but, in so far as, both in the argument and in the judgment, the case proceeded on the basis that exclusive possession was wholly inconsistent with a licence, it seems to me that it is inconsistent with the three authorities in this Court to which I have referred.
In his judgment in Lynes v. Snaith Supra (3) Channel, J. referred (1899) 1 Q.B. 490) to an unreported case of a gamekeeper who was assigned a cottage to reside in by his employer and on the gamekeeper''s death widow was permitted to continue residing there rent-free, without having any service to perform. It was held that that was a tenancy at will and that the Statute of Limitations would run. No doubt, in former days, except for the question of the statute, the distinction between a tenancy, whether at will or for a period and a licence was not so important as it has become since the Rent Restrictions Acts came into operation. In many cases under those Acts it has a special importance. That fact has led to an examination of the distinction and the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties. As I read what Lord Greene, M.R. said in Booker v. Palmer Supra, which was cited by Denning, L.J. in Errington v. Errington Supra and what is at any rate, implicit, if not so stated, in the other cases, that is the guide which we have to apply...P. 1202 (Per Denning L.J.):
Under the old cases there would have been some colour for saying that the brother was a tenant at will, but the old cases can no longer be relied on. Owing to the impact of the Rent Acts, the Courts have had to define more precisely the difference between a tenant and a licensee. I endeavoured to collect the cases, in Errington v. Errington Supra and since that case was decided we have added one more.... Only last week we had a case where an employer had bought a house and allowed his servant to live there simply on the servant''s paying interest on the purchase price. It was held that the servant was not a service occupier nor a service tenant, but only a licensee: See Gorham (Contractor) Ltd. v. Field (1952) C.P.L. 266 C.A. The question in all these cases is one of intention: Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land?
This new law was cited with approval by Subba Rao, J. in Associated Hotels of India Ltd. Vs. R.N. Kapoor, in the following passage:
There is a marked distinction between a lease and a licence.... A lease is...a transfer of an interest in land (immovable property)...(licence) does not create in his (licensee''s) favour any estate or interest in the property. There is, therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in Errington v. Errington Supra wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p. 155:
The result of all these cases is that, although a person who is let into exclusive possession is prima facie to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy.
The Court of Appeal again in Cobb v. Lane Supra considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document at p. 1201, Somervell, L.J. stated:
...the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties.
Denning, L.J. said much to the same effect, at p. 1202:
The question in all these cases is one of intention : Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land?
The following propositions may, therefore, be taken as well-established : "(i) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (ii) the real test is the intention of the parties--whether they intended to create a lease or a licence; (iii) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property of which the legal possession continues with the owner, it is a licence; and (iv) if under the document a party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease." and although the said observations may not, technically speaking, have the binding force of a Supreme Court decision or even of a Supreme Court obiter dictum, (they representing Subba Rao J.''s own or personal opinion, the other learned Judges (S.K. Das and A. K. Sarkar, JJ.) not expressing themselves on the point), We respectfully agree with the same and hold that they represent the true legal position in the matter. We are also unable to accept Mr. Ginwalla''s submission that, on this point, the Indian law, as expounded by Subba Rao, J. in the above passage is different and materially different, from the English law, as laid down in the decisions, quoted by him. As we have said above, the said decisions were cited with approval by Subba Rao, J. and he intended to follow them and did not express any dissent from them or any different point of view. It is true that, under the old law on the point, both here and in England, the test of exclusive possession was the determinant and it excluded the owner as well (vide, in this connection, Errington v. Errington Supra and the cases, cited therein and The Governor-General of India in Council v. The Corporation of Calcutta 51 C.W.N. 517 (522). Under the new law, too if we may use that expression, the position is the same here as in England and Subba Rao, J. merely emphasised that aspect of the matter and explained the said common rule of law by construing, the above decision in manner aforesaid. Exclusive possession is no longer the decisive element or the determinant in the matter and it does hot necessarily exclude the owner, although, it does so prima facie, subject to rebuttal by proof of the actual intention of the parties to the contrary. That is the law in this country as much as it is in England. We do not agree with Mr. Ginwalla that, in England, exclusive possession has lost all importance, while, in this country, it still remains the prima facie determinant. Under the law in both the countries, intention is the determinant but exclusive possession is the prima facie index of that intention, rebuttable by other relevant circumstances or evidence. We may also point out that, although we have spoken of the new law and the old, it is really one law in the course of development or at different or progressive stages and indeed, the only difference is that the theory of intention, which was all along present in the so-called old law, though only in the under-current, has asserted itself and risen also to the surface and has now permeated the whole law on the point.
Under the agreements before us, the Plaintiffs'' employees concerned are to have exclusive possession of the premises or accommodation, allotted to them and though that is consistent with both licence and tenancy or lease, it certainly inclines prima facie to the latter. Excepting term No. 9, however and possibly, term No. 6--all the other terms of the aforesaid agreements, as quoted above, lean more in favour of licence than lease or tenancy, however much term No. 5, in spite of its language, may not be conclusive on the point. The said excepted terms also, namely, terms or Clauses Nos. 6 and 9, the light of what we shall presently see herein below, do not necessarily raise any inconsistency with a case of licence. We may mention here that the other or the unquoted terms of the above agreements are consistent with both lease and licence and are not inconsistent with either.
In the above context, the ultimate balance tilts in favour of licence and the case of tenancy has to be rejected. (Vide in this connection Megarry--The Rent Acts, 9th Ed. (1961) pp. 49-51).
To explain ourselves and to explain the position more fully, we may add the following:
Where an employer provides his employee with residential accommodation either in aid or for facility of employment, he does not necessarily make a demise in favour of the employee but he may. The relationship between the two has to be determined on the construction of the agreement under which the employee is let into possession. This is, sufficiently clear from the case of Facchini v. Bryson (1952) 1 T.L.R. 1386 see also Torbett v. Faulkner (1952) 2 T.L.R. 659, even though the actual or ultimate decision there was in favour of a tenancy. That is explained by the distinction of that case from the present cases as also the other cases cited, namely, Tobertt v. Faulkner (1952) 2 T.L.R. 659, which, though a case of oral agreement, is nearer to the cases before us on relevant or material facts. The same remarks apply to The Three D''s Company Ltd v. Barrow Unreported (unreported), cited in Facchini v. Bryson (1952) 1 T.L.R. 1386. In the said two cases, The Three D''s Company Ltd. v. Barrow Unreported and Facchini v. Bryson (1952) 1 T.L.R. 1386, the agreements under consideration were more consistent with tenancies than with licences, as will be evident, particularly, from the following observation of Somervell, L.J. in the unreported case. The Three D''s Company Ltd. v. Barrow Unreported, as quoted by himself in the reported case Facchini v. Bryson (1952) 1 T.L.R. 1386 at pp. 1388-9 of the Report upon the material provisions there:
That provision is one which is only appropriate and relevant if the document is giving no the party who is going to live in the house exclusive possession. I should have thought that it was quite unnecessary if a servant was merely occupying the house that the landlord should stipulate that he should be allowed to go and see the condition of it. No doubt, further down, the Lord Justice observed:
If by looking into the operative clauses in the agreement one comes to the conclusion that the rights of the occupier to use a neutral word are those of a lessee, the parties cannot turn it into a licence by saying at the end, this is to be deemed to be a licence,
but that was only to emphasise the rule of intention, which, on the agreements before the Court in the said two cases, affirmed the creation of licences.
The agreements, we have to consider here, are, however, differently worded and the instant case bears no analogy to either Facchini v. Bryson (1952) 1 T.L.R. 1386 or The Three D''s Company''s case Unreported.
In construing the agreements before us, it has to be borne in mind that the expression "let" is not always equivalent to or synonymous with the word "demise" nor, is a covenant for quiet enjoyment--and a covenant for repairs stands on no different footing:--inconsistent with a case of licence. This is clear from Jones v. Lavington (1903) 1 K.B. 253 and Warr v. London County Council (1904) 1 K.B. 719. The quoted terms 6 and 9 of the agreements before us would not, therefore, necessarily support a case of tenancy. We may add further that the word "let" in the quoted Clause 9 has been used in the sense of parting with possession and not in the sense of subletting to an under-tenant.
The position in Nippon Menkwa Kalmohiki v. F. Port-lock AIR 1922 Bom. 70 was factually different in essential particulars (vide p. 72 of the Report). At any rate, it may well be termed a decision under the old law, which has materially changed with the progress of time and the impact of social legislations, the Rent Restrictions and the Rent Control Acts and/or otherwise. This new outlook is well illustrated by the cases, already cited on the point and Booker v. Palmer Supra E. Moss Ltd. v. Brown (1946) 2 All. E.R. 557 Marcroft Wagons Ltd. v. Smith Supra Murray Bull and Company Ltd. v. Murray (1953) 1 Q.B. 211 and Wilfred Isaac v. Hotel De Paris Ltd. (1960) 1 W.L.R. 239. And Megarry in his well-known treatise "The Rent Acts", Ninth Edition (1961), referred to above, at pp. 45--55, has summed up this new law with admirable precision, clarity and brevity in all its leading features.
One word before we close the above discussion, we have dealt with the matter on the broad distinction between lease and licence and have not deemed it necessary to discuss the modern third classification of "service occupation" vide Torbett v. Faulkner Supra, as, obviously such occupation is only one form--a particular kind--of licence. (See the above case and Megarry pp. 51-3, cited above). We may add, however, that, on our findings, made above, the present cases may also be held to be cases of "service occupation" or of that particular form or kind of licence, which the said expression signifies; at any rate, as seen above, they fall within the general concept of licence and may well be regarded as cases of "possessor licence" to borrow Megarry''s expression on the point. (Vide p. 45 of his above book).
The foregoing discussion leads to the conclusion that the instant agreements are agreements of licence as distinguished from agreements are agreements of licence as distinguished from agreements of lease or tenancy and in that view, in the light of what we have said before, we would answer the fourth question too in favour of the Plaintiffs-Appellants and uphold their claim for eviction on the ground of their reasonable requirement of the disputed premises for their own occupation.
In the premises, the two appeals (Nos. 489 and 490 of 1960) will be allowed and the judgment and decrees of the Court below will be set aside and the Appellants-Plaintiffs'' corresponding suits will be decreed, subject to this that the tenants Defendants concerned will have time till the end of January next to vacate the disputed premises in their occupation, provided of course, that they go on depositing, in the trial Court, to the credit of the Plaintiffs-Appellants month by month, regularly, according to the English Calender, within the 15th of the next succeeding month according to the same Calender, amounts, equivalent to their respective rentals and in default of any two of such deposits, the above provision for time or grace period will automatically lapse and the particular decree or decrees for eviction will become executable forthwith.
There will be no order for costs in any of the above appeals in this Court or in the Court below either.
Banerjee, J.
I agree.