1. The lucid and comprehensive judgment running into 44 pages delivered by the Division Bench of the Court of Small Causes at Bombay on 1st August 1987 in Appeal No. 21.E of 1975 reversing the judgment and order dated 13th December 1974 passed by the Judge, Small Causes Court in Ejectment Application No. 138/619.E of 1971 gives full account of the facts giving rise to this litigation.
2. I give only brief summary needed to understand the issue extracted hereinbelow:
The Issue
The only issue involved in this petition is: Whether the document (Exh. A) executed by the parties at the time when the respondent was inducted in the suit premises, is in the agreement of leave and licence or a deed of lease? In other words, the main question involved in this petition is whether the respondent is licensee or tenant in the suit premises.
Facts-in-brief
3. The petitioner is a owner of the suit building. Ejectment proceedings were initiated by the petitioner under section 41 of the Presidency Small Causes Court Act (“Act” for short) and prayed for ejectment of the respondent and claimed possession of the suit premises comprising of three rooms, kitchen and bath room located on 1st floor of Pruthi Building situated at 196, Prabhat Colony, Santacruz (East), Bombay-400055.
4. On being noticed, the respondent appeared. He filed his defence inter alia raising the plea of tenancy. The trial Judge, on the basis of rival pleadings, framed preliminary issue as required under section 42-A of the Act reading as under:
“Does respondent prove that he is the tenant of the applicant in respect of the suit premises protected under the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act?”
5. On the basis of the above issue the parties were put to trial. The evidence was recorded by the trial Court. The trial Judge vide his judgment and order dated 13th December, 1974 answered the above preliminary issue in negative and in favour of the petitioner herein, holding that the respondent was not a tenant of the suit premises but was a mere licensee.
6. The respondent herein preferred an appeal against the aforesaid judgment to the Small Causes Court, Bombay. The said appeal was disposed of by the appellate bench of the Small Causes Court vide its judgment and order dated 1st August, 1987 and allowed the appeal for the reasons stated therein inter alia holding that the respondent herein was the tenant of the suit premises.
7. Aggrieved by the aforesaid judgment of the Appellate Bench of the Small Causes Court, the petitioner has invoked writ jurisdiction of this Court under Article 227 of the Constitution of India.
8. The controversy raised in this petition relates to the nature of possession of the respondent. The answer to this controversy depends on correct interpretation of the document at Exh. A.
9. The trial Court after taking into account the above document and the oral evidence, held that the respondent was not a tenant of the suit premises protected under the Bombay Rents, Hotel and Lodging House Rates Control Act (“Bombay Rent Act” for short).
10. The Appellate Court, as already stated hereinabove, reversed the above order of the trial Court and, in the facts and circumstances disclosed on record and after appreciating oral as well as documentary evidence on record, reached to the conclusion that all the main ingredients of tenancy were well established and duly proved by the respondent.
11. The Lower Appellate Court, in support of its view, relied upon the following eight characteristics of the document at Exh. A, which are reproduced hereinbelow:
(i) “I have taken a portion consisting 3 rooms, kitchen, bathroom, latrine etc., from the portion of landlord Shri Sardar Singh Pruthi, 1st floor, 196 Pruthi Building, Bombay 55 at leave and licence basis at the rate of Rs. 200/- p.m inclusive of water charges”.
(ii) “I promise to pay the rent regularly up to 10th of each calendar month”.
(iii) “I have paid advance of the rent from 14th to 30th of November 1969”.
(iv) “the period of leave and licence is for eleven months and option of eleven months here”.
(v) “It is only for my personal use of my family and I will allow anybody to let out or to live with me at any cost”.
(vi) “I have paid Rs. 1,000/- in advance without interest with the landlord and will be refunded when I physically vacate the aforesaid premises”.
(vii) “The landlord have no objection for doing business at the aforesaid premises”.
(viii) “In case I pay Rs. 1,000/- more the rent will be reduced by Rs. 15/- i.e Rs. 185/- per month.
The Appellate Court after noticing the above peculiar characteristics of the document in question reached to the conclusion that the document executed by the parties at the time when the respondent was inducted in the suit premises was nothing but a deed of lease and not an agreement of leave and licence as propounded by the petitioner. It was held that the circumstances and evidence on record were sufficient to establish the exclusive possession of the respondent. It was also held that considering the monthly payment of monetary consideration and duration prescribed for use and occupation coupled with exclusive possession of the disputed premises, the intention of the parties was to create tenancy, an interest in favour of the respondent in respect of the disputed premises. The Lower Appellate Court sought to draw credence to its findings from one more document which was available on record, namely, the covering letter dated 2nd March, 1971, sent by the respondent along with cheque for Rs. 1,000/- representing the charges for the period from October 1970 to February 1971. The petitioner neither encashed the cheque nor replied the letter. Instead, a notice was sent on 2nd March, 1971, which was received by the respondent on 11th March, 1971. The letter dated 2nd March 1971 being important piece of evidence contents thereof were also taken into account by the Lower Appellate Court. The material part of the said letter reads as follows:—
“(1) the disagreement had widened regarding the repairs to the premises, rented out to us.
(2) You had therefore held a conference at our house in the first week of February 1971. You had agreed to carry out repairs before the end of February 1971, in turn, you should be paid the detailed rent from October, 1970 to February, 1971.
(3) But it is sorry plight affairs that you have not so far complied with your moral agreement.
(4) However the cheque bearing the rent from October to February 1971 @ Rs. 200/- is appended hereto. We will be extremely happy if you post the same to your banking accounts after you carry out the repairs.
(5) You also assured to install water tank for us similar to that of yours as we pay Rs. 200/- p.m as rent you have assured to provide with this necessity by this month”.
12. The Lower Appellate Court appreciated the aforesaid letter and found that the said letter was written by the respondent without any legal advice, consultation or legal help considering the tenor of the letter in toto. The said letter, at some places did record that premises were taken on “rent”. The Lower Appellate Court found that the tenor of the letter ruled out the possibility of relationship of licensor and licensee and further found that had there been no intention to create leasehold interest in the property, the licensee would not have dared to insist for repairs first and encashment of cheque afterwards.
13. In addition to the aforesaid material on record, the Lower Appellate Court has also taken into account an important extract from the oral evidence; correctly applied the law laid down by this Court as well as the Apex Court; and, by a well reasoned judgment, the appeal was allowed and the finding recorded by the trial Judge on the preliminary issue was set aside and the same was substituted by its own finding holding that the respondent occupied the premises as tenant protected under the Bombay Rent Act. The said order is under challenge in this petition.
Consideration
14. The learned counsel appearing for the petitioner took me through the oral as well as oral documentary evidence and pointed out the demerits of the findings recorded by the Lower Appellate Court. He tried his best to highlight the merits of the finding recorded by the trial Judge. The document, to which my attention was drawn, is the extract of Exh. A, the characteristics of which are already referred to in the opening part of the judgment. The said document, though in a letter form, not only refers to a grant on leave and licence basis at the rate of Rs. 200/- per month inclusive of water charges but promises to pay rent regularly on 10th of each calendar month. The mode of payment of rent and the duration thereof followed by an assurance and promise to pay the rent regularly upto 10th of each calender month unmistakably indicate that monthly rental of the premises was Rs. 200/- inclusive of water charges to be paid regularly on or before 10th of each calender month. While recording the payment of advance amount, it has been described as “rent” and immediately in the next clause the duration of the leave and licence is shown to be of 11 months with one more option to renew for further period of 11 months. The very fact that the said document was for 11 months is indicative of the fact that it was in the back of the mind of the parties that any document for a duration of more than 11 months would attract the necessity of registration thereof under the Indian Registration Act. Thus, an attempt was made to avoid the registration of document. In the same paragraph the respondent has assured the petitioner that he will not allow anybody to let out or use the premises at any cost. The question of allowing to let out the premises can arise only by a tenant.
15. In the latter part of the document, the respondent has further referred to the payment of Rs. 1,000/- in advance without interest and described the petitioner as landlord. The document further records that the landlord has no objection of his doing business in the aforesaid premises. This particular term is indicative of the creation of the leasehold interest in the property, created in favour of the respondent, in pursuance of which he was put in possession with an option to claim renewal and right to use the premises for business purposes. The establishment of business in the premises creates a goodwill. The use of the premises for business and development thereof have their own importance. The use of the premises for business and establishment of business therein for a short duration is inconsistent with the normal behavior of the person taking the premises on leave and licence. The intention of the parties to execute lease cannot be ruled out. All the aforesaid facts, if examined in the light of the terms and conditions set out in the document, are sufficient to spell out the case of creation of lease.
16. The document relied upon in this case, which is a bed-rock of the controversy, if compared with that of the document set out and interpreted by the Apex Court in Associated Hotel India Ltd. v. R.N Kapoor, AIR 1959 SC 1262 and Sohan Lal Naraindas v. Laxmidas Raghunath Gadit† ., (1971) 1 SCC 276, then one can safely reach to the conclusion that the document in question is nothing but a lease deed. If the approach adopted by the trial Court in interpreting the document is accepted, it shall defeat the very object of the Bombay Rent Act. It has an effect of permitting the parties to camouflage the real nature of the transaction by resorting to skilful drafting. Such approach is not permissible in law.
17. The surrounding circumstances are also consistent with the deed being one of lease. The notice to vacate the premises was served on the respondent after several months of expiry of the terms of the agreement. It is not suggested on behalf of the respondent that there was any relationship between the parties or that they were friends which induced the petitioner to allow the respondent to occupy the premises. The realisation of the charges for use and occupation of the premises was the sole consideration of the transaction.
18. I may point out that both the Courts below have also failed to consider and take into account one more important factor that the application for ejectment filed in the trial Court was valued at Rs. 2,400/- for the purpose of Court fees and jurisdiction. Obviously, the said valuation was done in pursuance of clause (xii) of section 6 of the Bombay Court Fees Act, which specifically deals with the valuation of the suits between the landlord and tenant. The valuation for the Court fee and jurisdiction done also indicate that all the while the parties were labouring under the bona fide impression that the dispute between the parties was that of a landlord and tenant. The character of the suit with which the parties approached the trial Court cannot be ignored.
19. The distinction between leave and licence had been well summarised in Halsbury's Laws of England, Fourth Edition, Volume 27 page 13. In determining whether an agreement creates between the parties the relationship of landlord and tenant or merely that of licensor and licensee the decisive consideration is the intention of the parties. Lord Greene, M.R had observed this in Booker v. Palmer, (1942) 2 All ER 674. This is a salutary test. The intention here is manifest. In any event this is a possible view that could be taken. The Apex Court in Venkatlal G. Pittle v. Bright Bros. (Pvt.) Ltd., (1987) 3 SCC 558 and Beoper Sahayak (P) Ltd. v. Vishwa Nath, (1987) 3 SCC 693 held that where it cannot be said that there was no error apparent on the face of the record, the error, if any, has to be discovered by long process of reasoning and the High Court should not exercise jurisdiction under Article 227 of the Constitution. In this connection the observations made by the Apex Court in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale, AIR 1960 SC 137 need to be noticed. Where two views are possible and the trial Court has taken one view which is a possible and plausible view, merely because another view is attractive, the High Court should not interfere and would be in error in interfering with the finding of the trial Court or interfering under Article 227 of the Constitution over such decision.
Conclusion
20. In the aforesaid view of the matter, I am clearly of the opinion that in view of the intention of the parties reflected through the document in question and facts and circumstances of this case, it was a lease and not a licence. The petition, therefore, fails and deserves to be dismissed.
21. Accordingly, the petition is dismissed. Rule stands discharged with no order as to costs.
Petition dismissed.