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Case Number

Civil Rev. Appln. No. 638 of 1995

Attorney(S)

C.R Dalvi with S.M Gorwadkar
Pankaj Savant instructed by M/s Gagrat and Co.

Judges

A.P Shah, J.

Acts

provisions of section 92 of the Indian Evidence Act and sections 52 and 60 of the Easements Act,
SECTION 13 A2 BOMBAY RENTS HOTEL AND LODGING HOUSE RATES CONTROL ACT 1947
provisions contained in Article 254 of the Constitution, the provisions of the Central Acts
provisions of sections 52 and 60 of the Easements Act
provisions of section 6(3) of the Land Acquisition Act,
Section 92 of the Indian Evidence Act
provisions of section 13-A1(1)(A),
13-A2(1) of the Bombay Rent Act
section 13-A2(3)(b)
Section 13-A2,

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Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

The respondent is the owner of a bungalow at 1-B, Dr. Koyaji Road, Pune. By an agreement of leave and licence dated March 2, 1993, the respondent admitted the petitioner as a licensee in respect of the first floor for a period of two years. After the licence period expired, the respondent filed a petition for eviction under section 13-A2 of the Bombay Rents, Hotel Lodging House Rates Control Act, 1947 (the Act), alleging that the petitioner was a licensee who had overstayed.

The petitioner contested the eviction petition, asserting that he was in fact a tenant (not a licensee) and therefore entitled to protection under the Act; he also contended that he had incurred substantial expenditure in renovating and repairing the premises, which undermined the respondent's claim to possession.

The Competent Authority, after recording evidence and hearing both sides, held that the transaction between the parties was one of leave and licence and, because the licence period had expired, directed the licensee (petitioner) to vacate the premises. The Competent Authority rejected the petitioner's contention that the transaction was a lease (relying on explanation (b) to section 13-A2) and also rejected the petitioner's defence based on renovations/repairs.

The present revision application challenges the Competent Authority's order directing delivery of vacant possession to the respondent.

Legal Issues Presented

Whether the transaction between the parties is a lease (tenancy) or a licence, and whether the Competent Authority erred in treating the written agreement as conclusive evidence that it was a licence.
Whether explanation (b) to section 13-A2 of the Bombay Rents Act—providing that a written agreement of licence shall be "conclusive evidence of the facts stated therein"—precludes the court or authority from looking beyond the written agreement to ascertain the real intention of the parties.
Whether the presumption created by explanation (b) is limited (for example to names, description, duration, quantum of payment) or extends to the question of the real intention of the parties.
Whether explanation (b) to section 13-A2 is beyond the legislative competence of the State Legislature or is repugnant to provisions of central enactments (specifically Section 92 of the Indian Evidence Act and Sections 52 and 60 of the Easements Act) such that the central law would prevail under Article 254 of the Constitution.

Arguments of the Parties

Petitioner's Arguments (Mr. Dalvi)

The true nature of the transaction must be ascertained from the real intention of the parties and the surrounding circumstances; substance should prevail over form when determining whether an agreement creates a lease or licence.
The petitioner had exclusive possession under the agreement and therefore, prima facie, should be considered a tenant entitled to statutory protection as a tenant rather than a licensee.
Relied upon Supreme Court authorities (including AIR 1959 SC 1262 — Associated Hotels of India Ltd v. R.N. Kapoor — and (1989) 1 SCC 19 — Smt. Rajbir Kaur v. S. Chokesiri & Co.) for the proposition that lease-versus-licence is determined by intention and circumstances.
Contended that the presumption in explanation (b) should be confined to formal particulars (names, description, duration, quantum of payment), and should not extend to the question of the parties' real intention; it should be open to lead evidence in proceedings under section 13-A2 to show the real transaction was a tenancy.
Contended that explanation (b) is repugnant to Section 92 of the Indian Evidence Act and Sections 52 and 60 of the Easements Act, and that, under Article 254 of the Constitution, the central statutes would prevail over the State provision.

Respondent's Arguments

The respondent asserted that the petitioner was a licensee under the written leave and licence agreement and that the licence period had expired; accordingly the respondent sought eviction before the Competent Authority under section 13-A2 of the Act.
The respondent relied on the written leave-and-licence agreement as conclusive evidence (as contemplated by explanation (b) to section 13-A2) to support the eviction claim.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court (as stated in the opinion)
Associated Hotels of India Ltd v. R.N. Kapoor, AIR 1959 SC 1262	Principle that whether a transaction is a lease or licence is a question of fact to be decided on peculiar facts and circumstances, contents of the document and intention of parties.	The court acknowledged the general rule from this authority, but held that a special statutory provision (explanation (b) to section 13-A2) limits the application of that principle in proceedings under the Bombay Rents Act by making a written licence agreement conclusive evidence.
Smt. Rajbir Kaur v. S. Chokesiri & Co., (1989) 1 SCC 19	Cited by the petitioner's counsel alongside Associated Hotels for the general proposition concerning lease vs licence.	The opinion records that the petitioner relied on this authority, but the court treated the general principles as subject to the special rule of evidence in section 13-A2 and did not accept the petitioner's submission for the present statutory context.
R. v. Levi, (1865) 34 L.J.M.C 174	Definition/explanation of "conclusive evidence" as creating a presumption juris et de jure.	The court relied on this authority to support the proposition that when a statute makes a document conclusive evidence, it shuts out other evidence on the subject.
Smt. Somawanti v. State of Punjab, AIR 1963 SC 151	Interpretation of the effect of statutory provisions making evidence "conclusive" (in the context of section 6(3) of the Land Acquisition Act).	The court quoted this decision to explain that when evidence is made conclusive by statute the court must treat the stated fact as established and that this gives finality to the establishment of a fact by proof of another.
Amarjit Singh v. R.N. Gupta, 1995 (4) BCR 538	Applied in a similar context to reject contentions that the court may go beyond a written licence where a special statutory rule makes the licence agreement conclusive evidence.	The court relied on this decision (Vaidyanatha, J.) as supportive authority that, under the Bombay Rent Act's special rule of evidence, one cannot go beyond the document to find the intention of the parties in leave-and-licence cases.
Shri C.K.S. Rao v. Miss Kanta Udharam Jagasia, 1991 Mah.R.C.J 206	Dealt with section 13-A1(1)(A) (a distinct statutory provision) and the conclusive effect of certificates under that provision; involved findings of mala fide/corrupt issuance.	The court distinguished this case: it explained that the case was decided on its own facts (involving alleged false certificates and mala fides) and thus does not support the petitioner's arguments about explanation (b) to section 13-A2.

Court's Reasoning and Analysis

The court began by acknowledging the well-established general legal principle that the characterisation of a transaction as a lease or a licence depends on the real intention of the parties and on circumstances, not merely on the label given. The petitioner's counsel invoked that general rule and supporting authorities.

However, the court emphasized that the present question arises under a special statutory regime: section 13-A2 of the Bombay Rents Act (introduced by Amending Act No. 18 of 1987) prescribes a specific procedure for eviction of licensees before the Competent Authority and contains explanation (b) which states that an agreement of licence in writing shall be conclusive evidence of the facts stated therein.

The court analysed the legal effect of the phrase "conclusive evidence." It cited the definition of "evidence" from section 3 of the Evidence Act and explained the distinction between ordinary evidence and evidence declared conclusive by statute. R. v. Levi was invoked to define "conclusive evidence" as creating a presumption juris et de jure that shuts out contradictory evidence. The court further relied on the Supreme Court decision in Smt. Somawanti v. State of Punjab to explain that when a statute makes a particular kind of evidence conclusive, the court is bound to hold the fact established when that conclusive evidence is adduced.

Applying these principles, the court held that explanation (b) to section 13-A2 operates to make the written licence agreement conclusive evidence of the facts stated in it, and therefore the Competent Authority was not permitted, in proceedings under that section, to go beyond the document to examine extraneous evidence or circumstances to recharacterise the transaction as a lease.

The court also distinguished the Shri C.K.S. Rao decision relied upon by the petitioner: that case involved section 13-A1(1)(A) (a different statutory context) and was decided on the basis that a certificate had been falsely issued and could be impeached for mala fide exercise of power. The court held that that decision was on its facts and did not support the petitioner's position under section 13-A2.

Finally, the court addressed the constitutional/repugnancy challenge that explanation (b) was inconsistent with Section 92 of the Indian Evidence Act and Sections 52 and 60 of the Easements Act. The court rejected this contention: it observed that Section 92 (dealing with exclusion of oral agreement evidence) and the Easements Act provisions (defining licence and revocation) do not, in the court's view, render explanation (b) inconsistent or repugnant; accordingly, there was no basis to hold the State provision ultra vires or displaced by central statutes in this respect.

In sum, the court concluded that the Competent Authority correctly treated the written agreement as conclusive evidence of a licence under explanation (b) to section 13-A2 and was therefore justified in directing eviction when the licence period expired; the petitioner's attempts to rely on extraneous evidence of tenancy or on constitutional repugnancy failed.

Holding and Implications

Holding: The revision application was dismissed. The court upheld the Competent Authority's finding that the agreement was a licence and that, under explanation (b) to section 13-A2, the written agreement was conclusive evidence of the facts stated therein. The opinion records the operative result in the following terms:

Revision dismissed.

The court also noted an interlocutory procedural outcome: on the oral application of Mr. Dalvi, an ad interim stay was directed to continue until February 29, 1996.

Implications:

The direct effect of the decision is that the Competent Authority's eviction order stands and the petitioner’s challenge was rejected; the written licence agreement was treated as conclusively establishing that the transaction was a licence and the licence-holder had overstayed.
The court reaffirmed that, in the context of the special statutory regime under section 13-A2 of the Bombay Rents Act, the explanation making a written licence agreement "conclusive evidence" prevents admission of extraneous evidence to convert a licence into a tenancy for the purposes of those eviction proceedings.
The opinion does not purport to set a broader binding precedent outside the statutory context described; it confines its holding to the statutory framework (section 13-A2 and its explanation (b)) and expressly distinguishes cases decided under different statutory provisions or on different facts.

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Swami Attah Rapheal Alfandary v. Mrs. Thrity Poonawalla .

1. This revision application takes exception to the order passed by the Competent Authority, Pune, under section 13-A2 of the Bombay Rents, Hotel Lodging House Rates Control Act, 1947 (for short, “the Act”) directing the petitioner to deliver vacant possession of the licensed premises to the respondent.

2. The respondent is the owner of a bungalow situated at 1-B, Dr. Koyaji Road, Pune. Under an agreement of leave and licence dated March 2, 1993, the respondent inducted the petitioner as licensee in respect of the first floor of the said bungalow for a period of two years. After the expiry of the licence period, the respondent filed a petition for eviction against the petitioner before the Competent Authority alleging that the petitioner is staying in the suit premises as a licensee and since the period of licence is expired, he is liable to be evicted.

In contesting the petition, the petitioner's contention was that he is not a licensee, but he is a tenant in possession and he, therefore, is entitled to protection of the Act. The petitioner also contended that he has spent a huge amount in making renovations and repairs to the suit premises and, therefore, the respondent has no right to claim the possession.

After recording evidence and hearing both the sides, the Competent Authority has held that the transaction between the parties is one of leave and licence and since the period of licence has expired, he directed the licensee to vacate the suit premises. The Competent Authority further held that the defence that the transaction is a lease, is not available in view of the presumption raised under explanation (b) to section 13-A2. The defence that the respondent has made major alterations and repairs was also rejected by the Competent Authority.

3. Mr. Dalvi, learned counsel appearing in support of the petition, contended that the question whether a particular transaction is one of lease or licence is required to be decided by ascertaining the real intention of the parties and with reference to the circumstances of the case and the finding of the Competent Authority is erroneous. Mr. Dalvi urged that to ascertain whether a document creates a lease or licence, the substance of the document must be preferred to the form. Mr. Dalvi further urged that under the suit agreement, the petitioner got exclusive possession of the property and, therefore, prima facie, he should be considered to be a tenant. He placed strong reliance upon the decisions of the Supreme Court in AIR 1959 SC 1262, Associated Hotels Of India Ltd v. R.N Kapoor and (1989) 1 SCC 19, Smt. Rajbir Kaur v. S. Chokesiri and Co..

4. There cannot be a quarrel about the legal position on the principles governing the interpretation of a document of the nature of leave and licence. These principles are fairly well established, but the difficulty is about the application of those principles to the facts of the present case where we are dealing with a special legislation, which contains provisions for leave and licence and prescribes a remedy in eviction of licensee, who has overstayed in the premises after the licence period is over. Section 13-A2, which was introduced by Amending Act No. 18 of 1987, lays down the procedure for eviction of licensee before the Competent Authority, which is a special forum provided under part IIA of the Act, which has been inserted by the aforesaid Amending Act. The explanation (b) to section 13-A2 prescribes a special rule of evidence, which provides that an agreement of licence in writing shall be conclusive evidence of the facts stated therein. In view of the special rule of evidence, it is not permissible for the Court to go beyond the document to find out the intention of the parties and to arrive at a conclusion that the document is of lease and not of leave and licence.

5. Mr. Dalvi urged that the presumption raised by clause (b) must be restricted to names of parties, description of premises, duration of transaction and quantum of payment, etc. But, according to Mr. Dalvi, no such presumption can be raised as far as the question of real intention of the parties is concerned. Mr. Dalvi further urged that it is open for a party to lead evidence in proceedings under section 13-A2 to establish that the real transaction is of tenancy. Mr. Dalvi placed reliance on the judgment of Agrawal, J. in Shri C.K.S Rao v. Miss. Kanta Udharam Jagasia, 1991 Mah.R.C.J 206. There is no merit in the contentions of Mr. Dalvi. The object of adducing evidence is to prove a fact. The Evidence Act deals with the question as to what kind of evidence is permissible to be adduced for that purpose and states in section 3 when a fact is said to be proved. That section reads thus:

“‘Evidence’ means and includes—

(1) all statements which the court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry; such statements are called oral evidence;

(2) all documents produced for the inspection of the Court; such documents are called documentary evidence.

A fact is said to be proved when, after considering the matter before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.”

But where a document or evidence is made conclusive it creates a presumption juris et de jure in favour of the truth and legality of the matter stated and no evidence can be adduced to contradict it. Conclusive evidence means an absolute evidence of a fact for all purposes for which it is so made evidence R. v. Levi, (1865) 34 L.J.M.C 174. Therefore, the words appearing in explanation (b) “an agreement of licence in writing shall be conclusive evidence of the fact stated therein” must in the ordinary and grammatical meaning, have the effect of shutting out any other evidence on the subject which might be adduced before the Court.

6. In Smt. Somawanti v. The State of Punjab, AIR 1963 SC 151, the Supreme Court, while interpreting the provisions of section 6(3) of the Land Acquisition Act, observed:

“Since evidence means and includes all statements which the Court permits or requires to be made, when the law says that a particular kind of evidence would be conclusive as to the existence of a particular fact it implies that that fact can be proved either by that evidence or by some other evidence which the Court permits or requires to be advanced. Where such other evidence is adduced it would be open to the Court to consider whether, upon that evidence, the fact exists or not. Where, on the other hand, evidence which is made conclusive is adduced, the Court has no option but to hold that the fact exists. Statutes may use the expression ‘conclusive proof where the object is to make a fact non-justiciable. But the legislature may use some other expression such as ‘conclusive evidence’ for achieving the same result. There is thus no difference between the effect of the expression ‘conclusive evidence’ from that of conclusive proof, the aim of both being to give finality to the establishment of the existence of a fact from the proof of another”.

7. I am fortified in my view by a decision of Vaidyanatha, J. in Amarjit Singh… v. R.N Gupta…., 1995 (4) BCR 538, where the learned Judge has rejected similar contentions raised on behalf of the petitioner therein. In paragraph 4 of the judgment, the learned Judge observed:

“It is true as observed by the Supreme Court in Associated Hotels of India's case, AIR 1959 SC 1262 that the question whether in a particular case the transaction is one of a lease or licence is a question of fact to be decided on the peculiar facts and circumstances of the case, the contents of the document, the intention of the parties etc. But in my view, in the present case, we are guided by a special legislation viz. the bombay rent act which contains provisions for leave and licence in addition to tenancies. A special forum is created for eviction of licensees who are continuing in the premises after the expiry of the licence period.

Section 13-A2(1) of the Bombay Rent Act provides a procedure for eviction of a licensee before a competent authority. Then a special rule of evidence is prescribed in section 13-A2(3)(b) which provides that an agreement of licence in writing shall be conclusive evidence of the facts stated therein.

In view of this special rule of evidence prescribed under the Act we cannot go beyond the document to find out the intention of the parties, the circumstances of the case, the nature of possession etc. as pointed out by the Supreme Court in the Associated Hotels of India's case. That rule may be applicable to leases under the general law. But we are concerned with the leave and licence under a particular statute which prohibits taking of extraneous factors other than the contents of the document to find out the nature of the transaction”.

8. The reliance placed by Mr. Dalvi on the judgment of Agarwal, J. in Shri C.K.S Rao's case (supra) is completely misconceived. In that case, the learned Judge was dealing with the provisions of section 13-A1(1)(A), which made special provisions for a landlord, who holds a scientific post in the department of Atomic Energy of the Central Government or in any of its aided institutions. Under the said provisions, a landlord, who is a scientist, is required to produce a certificate signed by the competent officer and it is provided that the contents of the said certificate are conclusive proof of the facts stated therein and it is not open to the Court to go beyond the certificate. On appreciation of the material produced on record, Agarwal, J. came to the conclusion that a false certificate has been issued by the concerned official and, therefore, it can be challenged on the ground of mala fide or colourable exercise of powers. The said case has been decided on its own facts and it does not support Mr. Dalvi in any manner.

9. In view of the foregoing discussion, it is clear that the Competent Authority was right in holding that the agreement is a conclusive evidence and that the transaction is of a leave and licence. Mr. Dalvi faintly contended that the provisions of explanation (b) are beyond legislative competence of the State Legislature. Mr. Dalvi contended that the said provisions are repugnant to the provisions of Section 92 of the Indian Evidence Act and sections 52 and 60 of the Easements Act, which are the Central Statutes and keeping in mind the provisions contained in Article 254 of the Constitution, the provisions of the Central Acts would prevail. The contention of Mr. Dalvi is required to be stated only to be rejected. Section 92 of the Indian Evidence Act merely provides for exclusion of evidence of oral agreement while the provisions of sections 52 and 60 of the Easements Act define ‘licence’ and provide for revocation of the licence. It is really difficult to understand as to how these provisions can be said to be in any way inconsistent or repugnant with the explanation (b), which provides a special rule of evidence.

10. In the result, the revision application fails and the same is dismissed summarily.

11. On the oral application of Mr. Dalvi, ad interim stay to continue till February 29, 1996.

Revision dismissed.

Swami Attah Rapheal Alfandary v. Mrs. Thrity Poonawalla .

Structured Summary of the Provided Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's Arguments (Mr. Dalvi)

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Swami Attah Rapheal Alfandary v. Mrs. Thrity Poonawalla .

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