Faramroz M. Marolia vs Davs Ravishanker Girdharlal

Shah, C.J.—This is an appeal from the decision of Chhatpar J. confirming the decree of the District Judge, Central Saurashtra, in a suit for eviction and arrears of rent filed by the Respondent against the Appellant. The premises in question are a shop situated at RajKot, and the grounds on which eviction was sought were (1) that the landlord required the premises reasonably and bona fide for his personal occupation, (2) that the Defendant had sub-let a portion of the premises and had thereby incurred liability to be evicted u/s 13(1)(e) of the Rent Act, and (3) that the premises had not been used without reasonable cause for the purpose for which they were let for a continuous period of six months immediately preceding the date of the suit the plea as to this last point being that the premises had been lying closed since 1-4-1950. The suit was filed before the expiry of the said six months, but the Plaintiff claimed that as the said period of six months had expired during the pendency of the suit Clause (1)(k) of Section 13 applied, and he was entitled to a decree on that ground as well. The trial Court disallowed all the three pleas and gave a decree for arrears of rent only. In appeal, the District Judge, while agreeing with the trial Court that the Plaintiff had failed to prove the first ground, held that he had succeeded in establishing the two other grounds. viz., that the tenant had sub-let the premises and that the premises had not been used without reasonable cause for the purpose for which they were let for Six months prior to the suit and he therefore gave a decree for eviction. The first ground as to the premises being required by the landlord reasonably and bona fide for his personal occupation was not pressed before Chhatpar J. Regarding the sub-letting the Respondent''s case was that the Appellant had sub-let a small room at the back of the shop premises to one Shivlal Panbidiwalla having a shop in the neighbourhood and that the otta of the premises was sub-let to a sweetmeat seller. The learned District Judge accepted this plea of the Respondent on both the grounds, but in second appeal Chhatpar J. held that the Appellant had sub-let the room to Shivlal and had therefore incurred the liability for eviction. The learned Judge however held that the otta was not proved to have been sub-let to the sweetmeat seller. The learned Judge did not record a finding on the third ground, viz., that the premises had remained closed for more than six months prior to the suit, and in the view he took on the question of the sub-letting of the room to Shivlal he confirmed the District Judge''s decree and dismissed the appeal.

Mr. Hathi for the Appellant had urged before us that Shivlal was using the room at the back of the main shop premises by way of license and that the room had not been sub-let. The Appellant had a wine shop in the suit premises and, according to him, as the business of selling wine was slack, due to Government''s policy of prohibition he was not sitting at the shop and had asked Shivlal just to look after the shop and that Shivlal had asked one of his servants to sit in the room to prepare bidis and to look after the shop in the Appellant''s, absence. This story has been properly disbelieved by the learned District Judge, with whose finding Chhatpar J. has concurred, and we also agree with that finding. The concurrent finding also is that Shivlal is in the exclusive possession of the room in question and that the Appellant has not retained. any control or possession, of the same, and the evidence in the case, through which we have been taken, too fully justifies this finding. Now one of the essential conditions of a tenancy is that the tenant should have the right to the exclusive possession of the premises and in distinguishing a lease from a licence, Mulla observes as follows in his commentary on the Transfer of Property Act 3rd Edn., 1949, at pp. 644-645;

Whether an instrument operates as a lease or as a license is a matter not of words but of substance. If the effect of the instrument is not to give exclusive possession, it will take effect as a license though called a lease or letting. On the other hand if exclusive possession is given, it matters not that it is subject to reservations and restrictions. But if it only gives the use of the property in a particular way or on certain terms while it remains in the possession and control of the owner, it will only be a license. In other words for a lease there must be a power and intention to hold the property to the exclusion of the grantor.

Mr. Hathi has cited to us the decision in- The Indian Hotels Company Ltd. Vs. Phiroz Sorabji Contractor, , and has urged that even though the Defendant in that case had the exclusive use of a particular cubicle for two years and it was the intention of the parties that no one should use that cubicle so long as the Defendant kept his car on the premises, it was held that this was not sufficient to show that the agreement was a demise or a lease and not a license. That was a decision on the peculiar facts of that case. Even so the distinction between a lease and a license was distinctly recognised there, and it was held that the test of exclusive possession was the main test to be applied in deciding whether the agreement was a lease or a license. The same view was taken in --Sherif Dadumiyaji v. Emperor AIR 1930 Bom 165 (B) and -- Behari Lal Vs. Chhote and Others, ). The distinction between a lease and a license is laid down as follows in Halsbury''s Laws of England (Second Edition, Volume 20) P. 8 Article 5:

It is essential to the creation, of a tenancy of a corporeal hereditament that the tenant should have the right to the exclusive possession of the premises. A grant under which the grantee takes only the right to use the premises without exclusive possession operates as a license, and not as a lease. In deciding whether a grant amounts to a lease, or is only a license, regard must be had to the substance of the agreement. If the effect of the. instrument is to give the holder the exclusive right of occupation of the land, though subject to. certain reservations, or to a restriction of the purposes for which it may be used, it is a lease; if the contract is merely for the use of the property in a certain way and on certain terms, while it remains in the possession and control of the owner, it is a license.

(See also Hill and Redman''s Law of Landlord and Tenant, Eleventh Edition, Article 5, pp. 10-11 to the same effect). The definition of a lease is contained in Section 105, T.P. Act, under which a lease of ''immovable property is a transfer of a right to enjoy the property etc. A license is defined in Section 52, Easements Act, as a right to do or continue to do in or 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. There is thus no substantial difference between the Indian and the English Law on the subject.

The test therefore, is whether there is a right to exclusive possession. Now hare it is admitted that Shivlal had occupied the room in question for five or six months and one or two of his men used the room for making bidis, and neither the Appellant nor Shivlal alleges that the Appellant had retained control of the room during this period. Exclusive possession of the room was thus given to Shivlal and Shivlal was in the sole occupation of the room. The learned District Judge does not believe that rent was not paid for the occupation, but even if rent was not payable and the servants of Shivlal were permitted to use the room in consideration of their keeping a watch on the premises it would still amount to sub-letting. If the letting may not be for definite period or the tenancy may not be a periodical tenancy, the law will still presume it to be a tenancy at will. However, the nature of the tenancy is immaterial in this case. As the evidence establishes that Shivlal had the right to the exclusive occupation of the room and the Appellant had not retained any control or possession thereof, the agreement was one of a lease and not a license, and since it amounts to subletting the Respondent was entitled to recover possession of the premises in suit u/s 13(1)(e) of the Rent Act.

No other point is urged. We therefore confirm the decree passed by Chhatpar, J. and dismiss this appeal with costs.

Baxi, J.

I agree.