Mahadev and Co. and Others vs Agricultural Produce Marketing Committee and Another

Mukundakam Sharma, C.J.—By filing these appeals, the appellants seek for a restraint order against the respondents from being dispossessed from the phars being utilised by them in the agricultural produce market. The appellants are traders/commission agents dealing in wholesale business of potatoes and onions in Azadpur Mandi, Delhi. ''B'' category licence has been issued to them under the provisions of the Delhi Agricultural Produce Marketing (Regulation) Act, 1998 and the Rules framed thereunder.

The issue that is involved in these appeals is, however, not pertaining to their category ''B'' licence or the shops which are allotted to them by the respondents/Agricultural Produce Marketing Committee. The issue that arises for consideration in these appeals is regarding their right to continue to use the phars being utilised by them in the market.

The phars exist in the market area, wherefrom auction of the potatoes and onions takes place and where the produce is displayed and kept for the purpose of auction. Permission for user of such space for purpose of auction was given by the respondent for a period of 12 months which expired in 1997. Phars are open platforms, wherefrom auction of produce is done. Phars cannot be locked. The relevant terms and conditions, on which such permission was granted to the appellants and which have a bearing on the facts and circumstances are quoted herein below:

The permission is purely on temporary basis and would in no way confer any right/claim/privilege beyond the period for which the permission has been granted. Clearly, the permission granted shall not be construed as tenancy.

The fee for the use of space shall be Rs. 0.75 (paise seventy five only) per sq. ft. per month and the same shall be paid quarterly at the beginning of each quarter.

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The space (phar) or any portion thereof shall not be parted with or subletted or allowed for use of any other person/commission agent.

No structure of any type either temporary or permanent shall be constructed at the space and the site shall not be used for the purpose other than for the purpose of unloading/auctioning of the community for which permission has been granted.

The permission shall be subject to review after every 12 months for the purpose of fresh arrangement and no commission agent shall have any right or claim for either grant of permission or grant of permission in respect of any particular space (phar) or continuity over the space.

The space shall be used only for unloading auctioning of the commodity for which the permission has been granted.

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The permission for the use of space (phar) shall automatically stand cancelled, if the ''B'' category licence of the commission agents concerned is cancelled. When the permission has been granted for use of space (phar) to group of firms (sister concerns), this condition shall apply when ''B'' category licence of all the firms constituting the group are cancelled.

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The market committee reserves the right to cancel/withdraw the permission for any reason/reasons considered appropriate by the committee.

A reading of the aforesaid terms and conditions makes it crystal clear that permission was granted to use the open platform/phars purely on temporary use basis and only for the period of 12 months at the specified fee, without there being any right conferred. There is also no dispute to the fact that the permission granted to the appellants for user of such phars lapsed with efflux of time some time in 1997, but despite the said fact the appellants have been allowed to continue to occupy the same.

It was pleaded by the respondents in their written statement that allotment and right to use phars was examined and a seniority list was drawn up by the Screening Committee recommending allotment of phars amongst the commission agents. The allotment actually ought to have been made every year. The Screening Committee made certain observations regarding allotment of phars while making recommendations, which were considered by the Marketing Committee in its meeting held on 3.9.2004 when Resolution No. 517/2004 was passed. The said resolution was passed on the twin criteria of (i) those paying higher market fee be given more space because of their volume of business; and (ii) effort should be made to accommodate as many commission agents as possible.

The contention that was raised by the respondents was that the appellants have no right to continue to use the phars and the Marketing Committee was still within its right to lay down the parameters for allotment of such phars.

The appellants filed a suit in this court seeking for a decree of declaration that the Marketing Committee is not properly constituted and, therefore, they have no jurisdiction to amend the criteria and change the earlier criteria, as mentioned in the memorandum dated 13.7.1994. In the said suit, a decree for permanent injunction was also sought for restraining the respondents from dispossessing the appellants from their respective phars under the amended criteria. In paragraph 19 of the plaint, it was stated by the appellants that cause of action for instituting the suit arose on 8.4.2004 when the respondents issued the impugned memorandum. The criteria adopted by the respondent Committee was also challenged in the aforesaid suit in which an application seeking temporary injunction was filed. The said interim application filed under Order XXXIX, Rules 1 and 2 of the CPC was taken up for consideration by the learned Single Judge and by a detailed order passed on 24.3.2006, the said application seeking injunction was dismissed.

Being aggrieved by the said order, the present appeal is filed by the appellants on which we have heard the learned counsel appearing for the parties.

The learned Single Judge while dismissing the said injunction application considered various clauses of the permission granted to the appellants regarding the user of the space/phars and also the fact that the permission, which was granted to the appellants, was only for 12 months, which had expired with efflux of time, and that the appellants were in occupation of the said phars without there being any further valid written permission granted to them. The learned Single Judge also considered the decision of the Division Bench of this court in Agriculture Produce Market Committee Vs. Potato and Onion Merchant Association, On consideration of the aforesaid decision and also the records of the case, the learned Single Judge held that the appellants cannot claim any right to continue to occupy and use the phars to the exclusion of other traders who fulfill the criteria and are better placed than the appellants for the allotment of phars. The interim order which was granted in favour of the appellants was vacated and the injunction application was dismissed.

Mr. G.N. Aggarwal, Advocate vehemently submitted before us that the appellants are in peaceful, settled possession of the aforesaid space on the basis of valid licence granted to them and, therefore, they cannot now be evicted without following the due process of law. It was also submitted by him that there can be no auction from the shop of the appellants, which are allotted to them under licence and, therefore, open platform/phars must be allotted to the appellants to enable them to display the produce on the platform from which auction is to take place. It was also submitted that the licence which was granted to the appellants for user of the platform/phars could be revoked only by issuing a notice and upon due compliance with the principles of natural justice. It was stated that the appellants have right to get their licence renewed. He also relied upon various decisions, both of this court and of the Supreme Court to support his contention that where a person is in settled possession of the property, even on the assumption that he had no right to remain on the property, he cannot be dispossessed from the property except by recourse to law. There is no dispute to the aforesaid proposition laid down in the decision of the Supreme Court in Krishna Ram Mahale (Dead), by his Lrs. Vs. Mrs. Shobha Venkat Rao, and N. Umapathy Vs. B.V. Muniyappa, which he has relied upon.

Having regard to the terms and condition of the use of phars quoted above, we are of the opinion that the instant case, however, is not one of settled possession. The appellants were allowed to use the platform, which is an open space i.e. phars, and which cannot be locked. The shopkeepers use the platform or phars during the day-time for the purpose of display and auction. This platform belongs to and is in ownership of the respondent and remains in possession and control of the respondent. The respondent has not lost possession of the platform or phars. The appellants were granted right of permissive user of the platforms/phars and such right is not the same as under a lease nor can it be linked and connected to the category ''B'' licence which is granted to them to trade under the Act.

Difference between a lease and licence is well known Having examined the terms of the permission quoted above, the pleadings and nature and purpose of phars, we also have no doubt that the appellants were licencees and not lessees who have continued to use the phars even after the term of the licence has expired. In case of licence the position is well settled that a licensee has only the right to use the property in terms of the license and a licence does not confer right of exclusive possession. The supreme court in the case of Associated Hotels of India Ltd. Vs. R.N. Kapoor, observed as under:

...if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful.

Further in the case of The Corporation of Calicut Vs. K. Sreenivasan, it was held as follows:

It is true that a licensee does not acquire any interest in the property by virtue of grant of licence in his favour in relation to any immovable property, ...Occupation of the licensee is permissive by virtue of the grant of licence in his favour, though he does not acquire any right in the property and the property remains in possession and control of the grantor, ... But in a case of licence, no interest in the property is created by virtue of the grant, but a person acquires a right to continue his occupation by virtue of the authority granted in his favour under the licence unless the period of licence has expired or the same has been determined or licence has been revoked and/or the licensee is evicted by the grantor. ...In view of the foregoing discussions, we hold that the expression ''unauthorised occupation'' within the meaning of Section 2(f)of the Act would embrace within its ambit the case of the licensee as well after expiry of the period of licence or upon its determination...

In case of C.M. Beena and Another Vs. P.N. Ramachandra Rao, it was observed:

...Only a right to use the property in a particular way or under certain terms given to the occupant while the owner retains the control or possession over the premises results in a licence being created; for the owner retains legal possession while all that the licensee gets is a permission to use the premises for a particular purpose or in a particular manner and but for the permission so given the occupation would have been unlawful.

Thus, from the above discussion it becomes clear that the appellants do not have the right to exclusive possession of the phars. We may now refer to the Full Bench decision of the Delhi High Court in Chandu Lal Vs. Municipal Corporation of Delhi, . In the said case, Delhi Municipality had allotted a kiosk on licence basis. The licence had expired and a suit for permanent injunction was filed along with the application for interim injunction. On the question of licence, it was held that a bare licence does not create any interest in the property and, therefore, a licencee cannot maintain action for it''s possession. A licence is merely a personal privilege and does not amount to easement. The owner continues to be in possession of the property even during the period of the licence and need not secure a decree of a court to obtain this right. Accordingly, the Court rejected the argument that a bare licencee can be in settled possession of the property, as mere licencee has liberty to occupy and use the premises without being in possession. Licencee cannot resist action by the owner to take possession. The argument that a licencee can be in settled possession was rejected by observing that there is basic falacy in this argument as it assumes that a licencee by acquiring liberty to occupy the premises is in possession of the premises. Liberty to occupy and use premises cannot be equated with transfer of possession. In this case, the Court also noticed that for grant of interim injunctions three well established principles are applied. Firstly, the applicant must make out prima facie case. Secondly, balance of convenience should be in favour of the applicant, in that refusal to grant injunction would cause greater inconvenience to the applicant. Lastly refusal to grant injunction would cause irreparable loss. Therefore, Court while granting interim injunction is bound to examine whether the applicants have been able to establish legal right and invasion of that right. Licencees whose licence period has expired or whose licences have been revoked, it was held were not entitled to any injunction because there exists no justification in allowing them to perpetuate their unlawful act.

The Supreme Court in the case of Sopan Sukhdeo Sable and Others Vs. Assistant Charity Commissioner and Others, applied these three principles to refuse and reject prayer for injunction against the owners, by parties who were in settled possession, by observing as under:-

Now the other aspect of the matter needs to be noted. Assuming a trespasser ousted can seek restoration of possession u/s 6 of the Specific Relief Act, 1963, can the trespasser seek injunction against the true owner? This question does not entirely depend upon Section 6 of the Specific Relief Act, but mainly depends upon certain general principles applicable to the law of injunctions and as to the scope of the exercise of discretion while granting injunction. In Mahadeo Savlaram Shelke and Others Vs. Puna Municipal Corporation and Another, it was held, after referring to Woodroffe: Law Relating to Injunctions ; Goyle, L.C.: Law of Injunctions ; Bean, David: Injunctions; Joyce: Injunctions and other leading articles on the subject that the appellant who was a trespasser in possession could not seek injunction against the true owner. In that context this Court quoted Shiv Kumar Chadha and Others Vs. Municipal Corporation of Delhi and Others, wherein it was observed that injunction is discretionary and that: (SCC p.175, para 31)

[J]udicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the court.

Reference was also made to Dalpat Kumar and Another Vs. Prahlad Singh and Others, in regard to the meaning of the words "prima facie case" and "balance of convenience" and observed in Mahadeo case 14 that: (SCC p.39, para 9)

It is settled law that no injunction could be granted against the true owner at the instance of persons in unlawful possession.

Applying the said principles, it cannot be said that the appellants have any right, much less legal right to obtain an interim injunction against the respondent, for right to use the open platform/phars. The right to use the said open platform was given for a limited period and the said period expired nearly 10 years back. The appellants do not have any exclusive right to use and occupy the platform/phars even after the expiry of the period for which the right to use was given. The cases of settled possession relied upon by the appellants are not applicable.

A similar question as sought to be raised herein was raised before this court earlier in the case of Agriculture Produce Market Committee v. Potato & Onion Merchant Association (supra), wherein same contentions and arguments as in the present case came up for consideration before the Division Bench of this court. The Division Bench, which rendered the said decision, held that while granting temporary injunction under Order XXXIX, Rule 1 and 2 CPC this Court is entitled to and bound to take into consideration the facts on the basis of which the Administrator took the step of revoking the licence. It was also held that having regard to the right of the Administrator to take steps under the particular terms of the licence and having regard to the malpractices which had come to his notice, no temporary injunction under the equity jurisdiction of the Court was called for. In the said decision it was held that the express term of the licence of 1979, permits the Committee to revoke the licence without any show cause notice. It was also held that the said term governs the rights of the parties and, therefore, a show cause notice as contemplated by Section 35 need not have been given.

Counsel appearing for the appellants sought to distinguish the said case on the ground that the aforesaid injunction was denied to the association as they indulged in malpractices, which is not the ground in the present case.

Agriculture Produce Marketing Committee case was filed by an Association in representative capacity on behalf of its members. In the said case almost similar contentions were raised. It was submitted that licence given by the Marketing Committee to the merchants'' association must be deemed to be licence given u/s 34 of the Act, which ought to be renewed and can be cancelled or suspended in accordance with Sections 35 and 25 of the Act. The Division Bench of this Court examined the licence granted in respect of phars/platforms and held that the said licence was different from the licence issued u/s 34 of the Act. Section 34 of the Act requires application for issue of licence in Form-A and also for issue of licence deed in Form-A in terms of Rule 12 of the Rules. The Division Bench held that the grant of permission to use phars/platforms is for the limited purpose of conducting auctions from the said platform and is not analogous to issue and grant of licence under Rule 12 and, therefore, the procedure as prescribed u/s 35 of the Act is not attracted.

We are not concerned here with the licence relating to the shops of the appellants, but with the platforms which are allotted to them only for a period of 12 months, which period has already expired and thereafter there was no written permission granted for user of such platforms by the appellants.

It is thus established that the trading licence granted to the appellants enables them to run their business. This is different from the permission which is granted to the appellants for user of the phars and, therefore, the principles laid down in respect of licence issued for trading would stand on a different footing than that of permission granted for user of the phars. The respondents are unable to cope with the demand for user of the aforesaid phars. Number of such phars are limited and it is not possible to grant such phars to each one of the commission agents, who are allotted with shops in the said market area. Therefore, a device has been chalked out as to how to permit user of such phars, which are limited in number, and to allot them to the most deserving cases. So long the aforesaid criteria laid""down by the Marketing Committee are not held to be ultra vires, or bad, or illegal, they cannot be injuncted upon in the manner sought by the appellants.

The phars for user of which the permission is granted by the respondents did not form part of the licence, which is granted to the appellants by making allotment of shops in the market area. Such phars are allotted on year to year basis and on criteria being laid viz. that of the highest turnover and the market fee paid in the last three years. The aforesaid period has also expired with efflux of time whereafter no extension has been granted in the matter to the appellants. The plea that the appellants have a right of extension of the licence is prima facie without any merit, for the nature of the use of the phars, the duration of which is only 12 months, is governed by the terms and conditions, and, therefore, the same would not confer any right or privilege beyond the period for which permission was granted. The appellants are not deprived of the licence to carry on business in the market area, but there being lesser number of phars available than the number of traders requiring phars, a criteria is evolved for giving permission for user of such phars. ""One of the terms of the said permission provides that the permission is subject to review after every 12 months. Having considered the aforesaid position and upon careful perusal of the findings and the order passed by the learned Single Judge, we find no infirmity in the said order. We find no merit in these appeals and the same are dismissed. However, it is clarified that the observations and findings given above are for the purpose of deciding the appeal and are prima facie and tentative in nature and will not be binding on the trial court.