Shri Madan Mohan Saraswat Alias Sharma vs Shri Santosh Kumar Agarwal and Another

Valmiki J Mehta, J.—By the present appeal filed u/s 96 of the Code of Civil Procedure, 1908, the Appellant challenges the impugned judgment and decree of the trial court decreeing the suit of the Respondent/Plaintiff for possession and damages against the Appellant on the ground that the Appellant was a licensee of the premises and not a tenant.

The property in question is the first and second floor of premises No. 1407/2, Gurdwara Road, Kotla Mubarakpur, New Delhi. The case of the Respondent/Plaintiff was that the premises were given on license to the Appellant/Defendant at a license fee of Rs. 2,000/- per month around 20.1.1987 and which license was to continue till 31.3.1990. The case of the Plaintiff further is that on failure of the Appellant/Defendant to vacate the premises given on license basis, the Plaintiff served a notice dated 29.12.1992 and when the Appellant failed to comply with the same, the subject suit for possession and damages was filed.

The case of the Appellant/Defendant in the written statement was that he was a tenant and not a licensee. The rent was, however, said to be Rs. 300/- and not Rs. 2,000/- per month. After completion of the pleadings, the Trial Court framed the issues on 6.12.1993 and issues No. 1 and 2 are the relevant issues with respect to whether the relationship between the parties is of a landlord and a tenant or a licensor and a licensee. These two issues read as under:

i. Whether the suit is barred u/s 50 of Delhi Rental Control Act? OPD

ii. Whether the Plaintiff have no cause of action alleged in para 5 of the preliminary objection? OPD.

This is a fact which has admittedly emerged on record that the relationship between the parties was a commercial relationship because after all, it was against payment of consideration. There is no written document/ agreement between the parties which was entered into at the time of commencement of the relationship. The Appellant contends that he is a tenant and the Respondent took up the stand that the Appellant was only a licensee.

Whether the person is a tenant or a licensee in a premises is a question which has now been addressed by various Courts including this Court and the Supreme Court on thousands of occasions. In the absence of a written document, the facts and circumstances of each case have to be seen to determine whether the relationship is of a landlord and tenant or a licensor or a licensee. There is no one single litmus test. Various aspects have to be seen including exclusive possession of the property, the nature of the transaction in question, whether the claimed licensor has unrestricted ingress and egress in the property and so on. In this regard, reference may be invited to the following decisions:

In the case of Mrs. M.N. Clubwala and Another Vs. Fida Hussain Saheb and Others, , the Apex Court emphasized that if there is exclusive possession to which a person was entitled in the property, the agreement would be considered not as the mere licence but as a lease.

Again the Hon''ble Supreme Court in the case of Qudrat Ullah v. Municipal Board, Bareilly, reported as AIR 1994 SC 396 observed that:

There is no simple litmus to distinguish a lease as defined u/s 105 Transfer of Property Act from a licence as defined in Section 52 of the Easement Act. But the character of the transaction turns on the operative interest of the parties. To put it pithily, an interest in immovable property, on titling the transferors to enjoyment, is created, it is a lease if permission to use land without right to exclusive possession is alone granted, a licence is the legal result. Marginal variations to the broad statement are possible and Nos. 1 and 4 fall in the grey area of unclear recitals.

In the case of B.M. Lall (Dead) by Lrs. Vs. Dunlop Rubber and Co. Ltd. and Others, , it has been held that a lease is a transfer of a right to enjoy the premises whereas the licence is a privilege to do something on the premises which otherwise would be unlawful. In the absence of any written document or formal deed, the intention of the parties must be inferred from the circumstances and the conduct of the parties. The test of exclusive possession is not conclusive, though it is a very important induction in favour of the tenancy. The question is not of the language used by the parties but of substance and the label which the parties chose to put upon the transaction is not decisive. The salutary test in determining whether an agreement between the parties created the relationship of landlord and tenant or merely that of licencer and licencee is the intention of the parties. To put precisely if an interest in immovable property entitling the transferee to enjoyment is created, it is a lease, if permission to use the land without exclusive possession is also granted, a licence is a legal result. Mere use of word "tenant" or "licencee" is immaterial.

Applying the tests as laid down aforesaid, it is quite clear that the Appellant is a tenant in the premises and not a licensee. The Appellant has exclusive possession of the premises with him and there is no unrestricted ingress, egress or interference by the Respondent with respect to the subject premises. It is not even the case of the Respondent that he has any duplicate set of keys with him of the premises, and it has come in evidence, that the keys of the premises are only with the Appellant. Of course, the trial court has disbelieved the receipts relied upon by the Appellant being Exb.DW-5/1 and 2, however, even if the same are ignored that does not take away from the fact that why should after all in a commercial relationship where consideration is paid, and where exclusive possession of a property is with the Appellant, the relationship would not be of a landlord and tenant. It is well-known that to avoid rigours of the rent control legislation devices are adopted by landlords, to defeat the rights of the tenants, and in that context, the Supreme Court has laid down the tests to distinguish a tenant from a licensee as given above.

I am also of the opinion that the trial court has gravely erred in ignoring the proved document and compromise entered into between the parties being Exb.DW-1/3. A reference to this document shows that the Appellant is described as a tenant at two places in this document. This document has been duly proved and exhibited in the court below as evidence and the same is signed by both the Appellant and the Respondent. This document also clearly proves that the Appellant was a tenant and not a licensee.

In my opinion, there is a clear cut illegality and a perversity in the impugned judgment and decree which persuades this Court to interfere with the impugned judgment and decree and the same is set aside. The trial court has failed to discuss the most relevant aspect with respect to the exclusive possession of the premises being with the Appellant and the Respondent not having any keys of the premises as also the fact that no unrestricted right of ingress and egress existed in favour of the Respondent and against the Appellant with respect to the premises. The document Exb.DW-1/3 has also been illegally and perversely ignored by the trial court.

In view of the above, the appeal is allowed. The impugned judgment and decree is set aside. Since the suit for possession fails, the claim for damages also fails. However, the Appellant shall be liable to pay charges at the rate of Rs. 2,000/- per month with respect to the suit premises in terms of the impugned judgment from the date from which the said charges have been found to be payable by the trial court. Let a decree be drawn up. Trial court record be sent back.