Kuppanna Gounder and Another vs Ramaswami Iyer

Ramaswami, J.—This is a Civil Miscellaneous Second Appeal preferred against the Decree and Judgment of the learned Subordinate Judge

of Erode in A.S. No. 79 of 1956, reversing the Decree and Order of the learned District Munsif of Gobichettipalayam in E.P. No. 1042 of 1956

in O.S. No. 73 of 1955.

The facts are : The defendants, appellants, were the lessees under a lease-deed, dated for the year 1954-55 under the first plaintiff. On 19th

April, 1955 the first plaintiff and the second plaintiff who claims to be a tenant under the first plaintiff instituted a suit O.S. No. 73 of 1955 for a

permanent injunction restraining the defendants from interfering with the plaintiff''s peaceful possession and enjoyment of the suit properties and

from entering upon the land on the allegation that as per the lease deed dated 14th April, 1954 the defendants have surrendered possession on

12th February, 1955 and thereafter the first plaintiff has leased the land to the second plaintiff and that the defendants are seeking to interfere with

the possession of the second plaintiff. The defendants contested the suit. On 13th July, 1955 they filed a joint memo, into Court agreeing to the suit

being decreed as prayed for. They also made a joint endorsement on the plaint on 15th July, 1955 to the same effect. The suit was therefore

decreed as prayed for. This joint memo, and the joint endorsement were the result of a compromise between the parties under which as evidenced

by Exhibits A-2 and B-7 the defendants were allowed to raise crops for one year i.e., 1955-56 in consideration of their giving 56J salagais of

paddy to the first plaintiff and to vacate the land on 13th March, 1956. The plaintiffs were anxious in view of the contemplated tenancy legislation

to see that the defendants do not make any claim to remain in the land after 13th March, 1956. It is with this object the document Exhibits A-2 and

B-7 came into existence.

Exhibits B-7 and A-2 are both, dated 13th July, 1955. Under Exhibit B-7 which is styled as a licence after referring to the simple bond

executed on the even date for the sale of the crops, the defendants and their men or persons claiming under them are given permission to enter

upon the land for the purpose of raising the crops and taking away the same till 13th March, 1956. This licence automatically expired on 13th

March, 1956 and thereafter the defendants should not enter on the land and if they did so, the first plaintiff was entitled to execute the decree in

O.S. No. 73 of 1955. Under Exhibit A-2 the paddy yield in the two bogums for the year 1955-56 on the land has been sold to the defendants in

consideration of their paying 56 J salagais of paddy in two instalments of 30 salagais on 30th October, 1955 and 26J salagais on 13th March,

1956. The said 56 salagais of paddy have to be paid whether or not there was yield. The advance amount of Rs. 212-8-0 paid that day by the

defendants was to be returned to them without interest on 13th March, 1956. Then follows the following recital:

It is thus seen that in both Exhibits A-2 and B-7 it is clearly stipulated that after 13th March, 1956, the defendants should not enter on the land

on any account and if they did so, the first plaintiff was at liberty to execute the decree in O.S. No. 73 of 1955

Subsequently after the termination of the period mentioned in the aforesaid documents the defendants prevented the first plaintiff''s lessees from

cultivating the land. Thereupon the plaintiffs filed the petition for contempt. The contention of the defendants was that the aforesaid Exhibits B-7

and A-2 constituted a lease and they being cultivating tenants, are protected under the Madras Cultivating Tenants Protection Act. On the other

hand the contention of the plaintiffs was that Exhibits B-7 and A-2 constituted only a licence.

The learned District Munsif upheld the contentions of the defendants and dismissed the petition. On appeal the learned Subordinate Judge came

to the conclusion that the two documents constituted a licence and not a lease. Therefore he gave the defendants an opportunity to obey the decree

by granting them some time and that if they failed to obey the decree the trial Court was directed to take such step as was open to it under law.

The defeated defendants have now appealed.

The short point for determination in this appeal is whether these composite documents constitute a licence or a lease.

The distinction between a lease and a licence can be gathered from (a) Standard Lexicons, (b) Law Lexicons, (c) Standard Treatises on

Landlord and Tenant"" and (d) Standard Treatises on the Law of Easements and Licences in India.

LEASE.

(a) Funk & Wagnalls:--Law : A contract for the possession and profits of lands for a determinate period, less than the time for which the lessor

holds the same, in consideration of a recompense of rent.

Webster: - A contract by which one conveys lands, tenements, or hereditaments for life, for zt term of years, or at will, or for any less interest than

that of the lessor usually for a specified rent or compensation ; also the act of such conveyance, the instrument by which it is made. Properly a lease

is distinguished from a licence.

Murray''s : - A contract between the parties, by which the one conveys lands or tenements to the other for life, for years, or at will, usually in

consideration of rent or other periodical compensation.

LICENCE.

Funk & Wagnalls : - I. Authority or liberty given to do or forbear an act, specifically in law:

(8) an expression of consent ; permission from some properly constituted authority ; as a license to take timber ; a license to marry.

(b) In patent law, an instrument by which a patentee grants a limited right, or permission to make or use his invention.

(c) In copyright law, a permit given by a copyright holder to reprint or publish extracts from his work.

(d) In Municipal law, an official permit to carry on a business not otherwise allowed.

(e) In International law, permission granted by a belligerent power to its subjects or to those of the enemy, to carry on a trade interdicted by war.

Webster :--Real estate law. An authority granted to a person to do an act or acts on the land of another, without having an interest therein. A

licence is not an easement. A licence as has been authoritatively stated "" passeth no interest, nor alters, or transfers property in anything, but only

makes an action lawful which without it had been unlawful "" Thomas y Sorrell. Vaughan 351

(b) Wharton''s Law Lexicon, Fourteenth Edition, page 577, defines lease as:

Lease (either from locatio, Lat. the letting of property or laisser, Fr., to let, or leapum or leasum, Sax., to enter lawfully), sometimes also called

demise (demissio) is a grant of property for life, or years, or from year to year or at will, by one who has greater interest in the property. The

person granting is called the lessor who is possessed of the reversion...he to whom the property is granted, the lessee. The consideration is usually

the payment of a rent or other annual recompense. The. ancient operative words were ''demise, lease, and to farm let ''or'' demise and lease''. and

at page 590 defines licence as:

Licence (Fr. licentia,Lat.), a permission given by one man to another to do some act which without such permission it would be unlawful for him to

do. It is a personal right, and is not transferable, but dies with the man to whom it is given. It can as a Rule be revoked by the licensor unless the

licensee has paid money for it (Odgers on the Common Law, pages 25, 574). As to the nature and effect of the licence granted to the purchaser of

a ticket for a theatre or other similar entertainments, sec Hurst v. Picture Theatres L.R. (1915) 1 K.B. 1 and Allen & Sons v. King L.R. (1916) 2

A.C. 54. It may be either written or verbal; when written, the paper containing the authority is often called a licence. A licence amounting to or

coupled with an interest in an incorporeal hereditament must be under seal see Lood v.Leadbitter (1845) 13 M. & W. 838 : 153 E.R., or it may

be revocable, but see Lowe v. Adams L.R. (1901) 1 Ch. 598.

Stroud''s Judicial Dictionary, Third Edition, Volume II, page 1600-1601, has the following to say on lease:

(1) If the owner of land consents by deed that another person shall occupy the land for a certain time, that is a lease. Per Bayley, J., St. Germains

v. William 2 B.& C. 220 : 107 E.R. 365. So now, if the document be under hand only Duxbury v. Sandiford 80 L.T. 552.

(2) A lease doth properly signify a demise or letting of lands, rent, common, or any hereditament unto another for a lesser time than he that doth let

it hath in it. For when a lessee for life or years doth grant over all his estate or time unto another, this is more properly called an assignment than a

lease.Touch. 266; see further 4 Cru. Dig. 54; Burton v. Reevell 16 M. & W. 308 : 153 E.R., and Beardmors v. Wilson L.R. 4 C.P. 57. But the

word lease does not in law import a written instrument Per Abinger, C.B., Bridgland v. Shapter 8 L.J. Ex. 246; see also Bicknell v. Hood 8 L.J.

Ex. 193 except it may perhaps be added, in those cases where, by statute, a writing is required;

(3) It is essential to the validity of a lease that it should appear either by express terms or by reference to some writing which would make it certain

or by reasonable inference from the language used, on what day the term is to commence. There must be a certain beginning and a certain ending,

otherwise it is not a perfect lease, and a contract for a lease of land in order to satisfy the Statute of Frauds must contain those elements.

and at page 1638 on licence:

(1) When one finds the words '' licence '' used in a statute the presumption is that it is intended todesignateapurelypersonal privilege Per Black, J.,in

Russel v. Ministry of Commerce for Northern Ireland (1945) N. 1 184, 193;

(2) A licence is an authority to do something which would otherwise be wrongful or illegal or inoperative Per Latham, C.J., in Federal

Commissioner of Taxation v. United Aircraft Corporation 68 C.L.R. 525.

(3) An oral licence for building work to be done under Reg. 56-A(2) of the Defence (General)

Regulations, 1939, is not valid {Jackson Stansfield & Sons v. Butterworth (1948) 2 All. E.R. 558; this is also true of a licence under Reg. 55(1),

but such a licence may have retrospective effect Howell v. Falmouth Boat Construction (1951) 2 T.L.R. 151.

(4) A lease is stated to be the grant of a right to the exclusive possession of land for a determinate term less that which the granter has himself in the

land. The distinction between a lease and a licence is that in the former there is a right to exclusive possession of property, whilst in the latter a right

is conferred which does not give exclusive possession ; the grant of an exclusive right to do something on premises is the grant of a licence only...

Bellantine''s Law Dictionary, Second Edition, (U.S.A.) at page 733 defines ""Lease"" as:

A contract for the possession and profits of lands and tenements on the one side, and a recompense of rent or other income on the other ; a

conveyance to a person for life or years, or at will, in consideration of a return of rent or other recompense; ''a lease doth properly signify a demise

or letting of land, unto another for a lesser time than he that doth let it hath in it'' 32 Am. Jur. 29 . and at page 755 defines ""licence"" as:

A personal privilege to do some act or series of acts upon the land of another, without possessing any estate therein. It is generally revocable at the

will of the landowner, by the death of the licensor, or by his conveyance of the lands to another, or by whatever would deprive him of doing the

acts in question or giving permission to others to do them. 17 Am. Jur. 926. See 23 Am. Jur. 716

A permit or authorization to do what, without a license, would be unlawful 30 Am. Jur. 296. An authority to do some act or series of acts on the

land of another without passing an estate in the land. It amounts to nothing more than an excuse for the acts, which would otherwise be a trespass.

It is personal and can be enjoyed only by the licensee. 32 Am. Jur. 30 A personal, revocable, and unassignable privileges conferred either by

writing or parol to do one or more acts on land without possessing any interest therein.

(c) Woodfall on Landlord and Tenant, Twenty-fifth Edition, at page 8 draws a distinction between lease for exclusive possession and licence to

use as follows:

It has been seen... that there is a demise where a right is granted to the exclusive possession

of lands or tenements for a determinate term. A grant of such exclusive possession is a lease although there may be certain reservations or a

restriction of the purpose for which the possession may be used, and although it may be described as a licence. Nor is an instrument a lease,

although it contains the usual words of demise, if its contents show that such was not the intention of the parties...

Hill and Redman''s Law of Landlord and Tenant, Tenth Edition, at pages 8-8 states in regard to this distinction:

It is essential to the creation of a tenancy of a corporeal here ditament 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 licence, and not a

lease. In deciding whether a grant amounts to a lease, or is only a licence, regard must be had to the substance of the agreement, for the law will

not impute an intention to enter into the legal relation of landlord and tenant where circumstances and conduct negative that intention....

Adkin''s Handbook on the Law Relating to Landlord & Tenant, Fourteenth Edition by Raymond Walton, at pages 31-32 catalogues the following

essential differences between a lease and a licence:

Whether a transaction is a lease or a licence depends primarily upon the intention of the parties ; but where there is no clear intention shown, the

following differences are very material.

A lease always entitles the tenant to the exclusive possession of the property let for some definite period, but a licence does not usually entitle the

licensee to exclusive possession; it merely gives him the right to use the premises for a given purpose and to do something rightfully which would

otherwise be a trespass.

A lease conveys an estate in the land to the tenant, but a licence passes no estate in the land to the licensee.

A lease when granted cannot be revoked ; but the grantor of a licence may revoke it at any time, upon reasonable notice, even if granted by a

deed, unless it is coupled with the valid grant of an interest in land, or is necessarily attended in its excution with expense to the licensee, or is

coupled with an agreement not to revoke the licence. Such agreement must either be made by deed or be made for a valuable consideration.

A lease can be assigned to a third party in the absence of express stipulation to the contrary ; but a licence, unless coupled with an interest in land,

cannot be assigned.

A lease is not determined if the landlord who granted the lease ceases to be the owner, provided the estate out of which the lease was granted is

not determined ; for instance, if he sells his interest n the property or if he dies but a licence, if revocable, is determined if the grantor ceases to hold

the property over which it is exercised.

These principles are deducible from the well-known English decisions : Glenwood Lumber Co., Ltd. v. Phillips L.R. (1904) A.C. 405 Gobb v.

Lane (1952) 1 All. E.R. 1199, Wintergarden v. Millenium L.R. (1948) A.C. 173, Errington v. Errington (1952) 1 All. E.R. 149, Provincial Bill

Posting Co. v. Low L.R. (1909) 2 K.B. 344, Minister of Health v. Ballotti (1944) 1 All. E.R. 238, In re Ramsbottam (1948) 1 All. E.R. 201 and

In re Thompson (1945) 2 All. E.R. 49.

(d) K.N. Joshi''s Easements and Licences, Third Edition, 1957 at page 254 distinguishes a licence from a lease as follows:

It is essential for creation of a tenancy over a corporeal hereditament that the tenant should have a right to the exclusive possession of the premises.

If the right granted conveys to the grantee an 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 in law a demise of the land itself. But where the grantee-takes under the grant only the right to use the

premises without exclusive possession, the right granted operates as a license and not as a lease.

Seeni v. Santhanathan (1896) 6 M.L.J. 281 : ILR 20 Mad. 58 , Athakutti v. Govinda I.L.R.(1892) Mad. 97, Secy, of State v. Bhupatchandra

I.L.R.(1929) Cal. 655, Jai Narain v. Murtuja AIR 1951 Pat. 190 Vipra v. Shivaji Govind AIR 1953 Sau. 135. Venkateswar v. Padmavathi AIR

1953 Trav-Co. 582, The Indian Hotels Company Ltd. Vs. Phiroz Sorabji Contractor, , Behari Lal Vs. Chhote and Others, , Board of Revenue v.

S.I.Ry. (1924) 48 M.L.J. 161 : ILR 45 Mad. 368 AIR 1925 Mad. 434 , Governor in Council v. Indramani AIR 1950 E.P. 296, Dau Dayal Vs.

Brij Mohan and Another, , Thimmarayappa v. Narayanappa AIR 1954 Mys. 89 and Korahv.Kurup AIR 1956 Tra. Co. 1 .

B. B. Katiar''s Law of Easements & Licenses in India, Third Edition, (1956) at page 387 distinguishes between a licence and lease as follows:

We have seen that a licence is distinguishable from a licence coupled with a grant of profits or interest in land. One of the forms of the latter, which

is of common occurrence and very often hard to distinguish from the former is a lease. The cardinal distinction between the two is that in a lease

there is a transfer of an interest in land, whereas in the case of a licence there is no transfer of interest although the licensee acquires a right to

occupy the land... Secretary of State v. Karuna Kant Chowdhry I.L.R.(1907) Cal. 82 , Per Mukerji, J.; see also Umed Rasul v. Anath Bandhu

I.L.R.(1901) Cal. 637.

Bearing these principles in mind if we examine the facts of this case we find that the composite documents constitute only a licence. The

intention of the parties and the express terms of the two documents show that the first plaintiff was anxious to see that the defendants did not claim

any right to continue in the land, if the tenancy legislation is to be passed by the Legislature and the defendants were willing not to claim any right to

continue in the property provided they were allowed to raise a crop for one year on the land in consideration of their paying 56 J salagais of paddy

to the plaintiffs. Neither party therefore could have intended in the circumstances to bring into existence a lease in favour of the defendants. This is

corroborated by the liberty given to the first plaintiff to execute the decree in O.S. No. 73; of 1955 in case the defendants entered on the land after

13th March, 1956. The defendants have admitted the possession of the plaintiffs as claimed by them in the suit. The subsequent agreement

between the parties as evidenced by Exhibits A-2 and B-7 did not constitute a tenancy agreement. The parties intended Exhibit B-7 to be a mere

licence granted for a definite period to do certain acts viz., raising of crops on the land during that particular period and nothing more. The mere

fact that Exhibits A-2 and B-7 taken together may contain the usual words of a demise would not convert this licence into a lease. On this

conclusion it follows that it was perfectly open despite the coming into existence of the Cultivating Tenants Protection Act for the tenant to

surrender possession and if the tenant voluntarily surrenders possession he cannot seek the protection of the Act and claim to be put back in

possession of the property. This is exactly what had happened in the present case.

The net result of this analysis is that the decree and judgment of the learned Subordinate Judge are irreproachable and this appeal has got to be

dismissed and is hereby dismissed with costs.