Market Committee vs Shri Chetan Sachdev

Surinder Gupta, J.—Having lost before both the courts below, the appellant-defendant (herein referred as, ''the defendant'') has preferred this regular second appeal. The substantial question of law to be determined in this appeal is as under:-

As to whether the finding recorded by the courts below to hold the plaintiff-respondent to be the licensee and not a lessee, is perverse and is based on mis-appreciation of evidence?

Kalumal Shorimal Nathumal Sachdev Rangwala, Private Family land Dharmath Trust, Katra Hari Singh Amritsar, through its Managing Trustee Chetan Sachdev plaintiff-respondent (herein referred as, ''the plaintiff'') has filed the suit for mandatory injunction directing the defendant Market Committee to hand over the possession of the licensed premises measuring 12000 square yards of land in village Badali Guru Urban, Tehsil & District Amritsar comprised in khasra No. 414 min khata/khatauni No. 3/16 as per jamabandi for the year 2000-01. The case of the plaintiff in brief is that the land in question was given to the defendant committee for use as grain market for a period of one year commencing from 1.3.2004 to 31.3.2005 as licensee. A license deed dated 27.5.2004 was executed. After the expiry of license period, a notice dated 16.4.2005 was served upon the defendant to surrender the possession of the land in question to the trust. The notice was replied by the Secretary of the Market Committee on 21.4.2005 (Ex. P4) claiming possession over the suit property as tenant. The trust filed the suit before the trial court claiming the relief of mandatory injunction; mesne profits and relief of permanent injunction to restrain the defendant from using and occupying the licensed premises and from carrying out any construction or setting up of permanent structure over the land in dispute.

The defendants alleged their possession over the suit property as tenant under Devki Nandan Sachdev @ Rs. 7,500/- per annum and using the site as grain market for the public welfare. Regarding the licensed deed, it has been alleged that it is not a registered document and is not admissible in evidence. It has been pleaded that this document, in fact, is a rent deed. It is admitted that the plaintiff is the owner of the suit land which is in possession of the defendant for the last about 30 years. In nutshell, the defendant contested the suit of the plaintiff with the plea that the relationship between the parties is that of landlord and tenant and not of licensor and licensee. The defendant also took the preliminary objection with regard to maintainability of the suit and the locus standi of the plaintiff to file the present suit.

Replication was also filed. From the pleadings of the parties, the trial court framed the following issues:-

Whether the plaintiff is entitled to permanent injunction restraining the defendant from using the suit premises as licensee? OPP

Whether the plaintiff is entitled for mandatory injunction directing the defendant to hand over the vacant possession of the suit property to the plaintiff? OPP

Whether the plaintiff is entitled to permanent injunction restraining the defendants from carrying out any construction over the suit property and setting up any structure over the same? OPP

Whether the plaintiff is entitled to mesne profits? If so, to what extent? OPP

Whether the suit of the plaintiff is legally maintainable? OPP

Whether the plaintiff has concealed the material facts from the court? OPD

Whether the suit of the plaintiff is liable to be dismissed for want of legal notice upon the defendant? OPD

Whether the defendant is licensee over the suit property? OPP

Relief.

The trial court decreed the suit and also allowed the mesne profits @ Rs. 7500/- per annum for the use and occupation of the property in dispute, after the expiry of license period on 31.3.2005. The appeal filed by the Market Committee was dismissed and the judgment and decree passed by the trial court was affirmed.

I have heard learned counsel for the parties and perused the record with their assistance.

Learned counsel for the appellant-defendant has stressed on the point that both the courts below have failed to appreciate the evidence in its proper spirit and the conclusion recorded by both the courts that the document Ex. P1 was a license deed, is not correct. In fact it was a rent deed and this document was also not duly proved by the plaintiff. He has supported his arguments while relying upon the judgments delivered in the cases of Satwir Kumar Vs. Subhash Kukreja, ) and Rekha Mukherjee and Another Vs. Anjana Aditya,

Learned counsel for the respondent-plaintiff has argued that the specific plea of the plaintiff is that the land was given to the defendants as licensee. A license deed in this regard was executed and the same is admitted by the defendant. The original document was in possession of the defendant but they failed to produce the same. The document and the statements of the witnesses on file prove the case of the plaintiff and the defendant has not been able to lead evidence to rebut the contention of the plaintiff that the suit land was given to the defendant for use and licensee.

The respective contentions of the learned counsel for the parties have been given a considered thought. The first contention of the learned counsel for the respondent-plaintiff is that PW-1 Devki Nandan Sachdev, a star witness of the plaintiff has admitted that the Market Committee had been using the premises in question since 1979. This shows that the Market Committee was already in possession of the suit property before the execution of the license deed dated 27.5.2004.

In order to appreciate the contention of the learned counsel for the respondent-plaintiff it is required to have a look at the statement of PW-1 Devki Nandan Sachdev, wherein he has stated as follows:-

.... The premises in question was taken by defendant on license basis and not on rent basis and time to time license deeds were executed. I do not recollect initially when the premises was taken on license by the committee. In the year 1979 defendant market committee was also using the premises in question. Defendant is not in possession but is simply using the suit property. The license fee is Rs. 7500/- per year and even in the year 1979 the rate of license fee was same. Writing were executed from time to time as per the request of the defendant market committee. The requests were made verbally. And after the acceptance of verbal request writing was effected. I have not brought copies of those writings as these are in custody of the defendants.......

The appellant-defendant is a statutory authority which maintain the record regarding every document and the transactions entered into by it. The plaintiff has produced the license deed Ex. P1 which is an admitted document. The contention of the learned counsel for the respondent-plaintiff is that the appellant had been taking the premises in dispute on license basis from time to time. In the year 1979 also, the Market Committee was using the premises in question. The entire record and documents were available with the Market Committee to show that it had been paying 7,500/- per annum to the plaintiff not as a license fee but as a rent. Not even a single receipt of payment of rent has been put to the plaintiff''s witness or has been produced. No document, record or evidence has been produced on the file to show that it has been making entry in its account books regarding payment of Rs. 7,500/- per annum as rent to the plaintiff. The question which arises for consideration is as to what has prevented the appellant-defendant from producing its record in support of its contentions. This fact is admitted even by DW-1 Santokh Singh, Mandi Supervisor that there was ''katcha'' temporary shed over the suit land. He has also admitted the execution of license deed Ex. P1 and that the land in question was taken from the plaintiff-Trust for its use and occupation by the defendants. The execution of Ex. P1 was never challenged by the appellant. He has further admitted that the Market Committee maintains its record regarding the payment of amount relating to the premises in question, but the same has not been produced. The license deed Ex. P1 was executed by the Secretary of the appellant-Committee but he has not been examined to state as to under what circumstances he has executed this license deed for the suit land.

From the factual position that has come on file, particularly from the statement of the witnesses examined by the plaintiff and the document Ex. P1, it is amply proved on the file that the land in dispute is an open space which the appellant had been using as Kachi Mandi. There is no permanent structure over this site. It is also proved that the defendant had taken this land from the plaintiff-Trust even prior to the execution of the license deed Ex. P1. No iota of evidence has come on file to suggest that Rs. 7,500/- per annum were paid by the appellant to the plaintiff-Trust as rent. Vide letter Ex. P5 dated 7.6.2005 the Market Committee has requested the plaintiff-Trust to execute the document on the pattern of the earlier years for the suit land as the commission agents of Chheharta, Amritsar had desired that the Mandi should remain on the land of the Trust. It also requested the Trust to receive the rent. This recital in Ex. P5 reflects that deeds were being executed with regard to the suit land in between the plaintiff and the appellant prior to 7.6.2005. Such deeds must be in possession of the appellant and could be produced in order to support its contention that the land in dispute was taken on rent. In Rekha Mukherjee''s case (supra), the Calcutta High Court observed as under:-

..... It is settled position that in order to come to a conclusion as to whether a particular document is lease or license, it is necessary that instead of relying on its form, the substance, as made out in the body of the agreement along with other surrounding circumstances, should be looked into. It is necessary to do so in order to give protection to the tenants, as provided in the Rent Act. This procedure is also to be followed to prevent the landlords to take a shortcut measure to oust a tenant by describing him as a licensee in the document in question. In other words, if it appears that an attempt has been made to prepare a document by exercising camouflage in order to give a colour of a license to an agreement, which was in fact a tenancy agreement, then the Court has every right to interfere. It is necessary to do so when it appears to the Court that the owner/landlord in order to avoid the rigour of the Rent Act has been made an attempt to give the colour of license to an agreement which in fact amounts to an agreement for tenancy......

In the present case, the above observations, as made by the Calcutta High Court, are not applicable because the appellant in this case is a statutory authority having Government Officers looking after its functioning. It is not supposed that the Government officers/officials had been obliging the plaintiff by executing such documents as Ex. P1.

The learned counsel for the appellant, has relied upon the observations made by the Apex Court in the case of Capt. B.V. D''Souza Vs. Antonio Fausto Fernandes, wherein it was observed that "for ascertaining whether a document creates a license or lease, the substance of the document must be preferred to the form. It is not correct to say that exclusive possession of a party is irrelevant but at the same time it is not conclusive. The other tests, namely, intention of the parties and whether the document creates any interest in the property or not, are important considerations."

The Hon''ble Supreme Court in the case of The The New Bus Stand Shop Owners Assn. Vs. Corporation of Kozhikode and Another, , in para No. 21, observed as under:-

Relying on those two decisions of the Court of Appeal, this Court in Associated Hotels of India Ltd. Vs. R.N. Kapoor, , discussed this issue in very lucid terms. Justice K. Subba Rao, who was in minority, discussed this question with a clarity which is often associated with His Lordship�s opinion. The learned Judge referred to Section 105 of the Transfer of Property Act and then compared it with Section 52 of the Indian Easements Act. After referring to those two Sections and also after referring to the decision in Errington (supra) the learned Judge pointed out the distinction between the lease and the licence by expressly approving the tests laid down by Lord Denning and which may better be quoted:

The following propositions may, therefore, be taken as well established: (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties - whether they intended to create a lease or a licence; (3) 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 (4) 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....

The above matter related to the possession of the shops and offices in the municipality bus stand building owned by the Corporation of Kozhikode in the State of Kerala. The appellants were alleging their possession as a licensee contesting the plea of the State of Kerala that such license should be treated as lease and at the time of renewal of the same, stamp duty as payable on lease be given. The Hon''ble Supreme Court, taking into account all the facts and circumstances, held that the relationship in between the shop owners and the corporation was that of licensor and licensee and not that of the lessor or lessee.

A look at the evidence led by the parties in the civil suit shows that the plaintiff has been able to prove on file that the defendant was in user of the land in question as licensee. The defendants were never handed over the exclusive possession of the suit land as tenant. The letter of the defendant Ex. P5, clearly shows that they have been seeking user of the suit land on yearly basis. The appellants were allowed to create a temporary shed of bamboos and take temporary water and light connection over the suit land which do not reflect their exclusive possession, rather this facility was given only to facilitate the operation of the mandi over the suit land during the harvesting season.

The citations referred by the learned counsel for the appellant i.e. Satwir Kumar''s and Rekha Mukherjee''s (supra) have no applicability in the facts and circumstances of the present case.

The learned counsel for the appellant has also raised the point of maintainability of the suit filed on behalf of the Trust, during the course of arguments, but that require no discussion as such point was neither specifically pleaded nor argued before the trial or first appellate courts.

Both the courts below have returned concurrent findings of fact in favour of the plaintiff-respondent after appreciating the evidence in the right perspective.

In view of my discussion above, the substantial question of law framed in this appeal is answered in favour of the respondent. Resultantly, finding no merits in the appeal, the same is dismissed.