Y.K Sabharwal, J.— The question involved in this petition is regarding the assessment of property tax under Delhi Municipal Corporation Act, 1957 (for short ‘the act’) pertaining to property No. 13-KM Shakurbasti, Rohtak Rt ad, Delhi. It is a railway property. Its ownership vests in President of India. Under an agreement dated 21st November, 1974 entered into between the Administration on one part and respondent No. 1 on the other, the use of the land in question was granted to respondent No. 1 for the purpose of constructing and maintaining thereon depot for petroleum products. As provided in the agreement, the land is to be used solely for storage of petroleum products and vegetable oils. The agreement, inter alia, provides that respondent No. 1 shall not be entitled to assign, mortgage, sublet or transfer otherwise the privileges mentioned in Clause 1 of the agreement without previously obtaining the consent in writing of the Administration. The agreement describes the arrangement between the parties as a licence.
2. The Assessing Officer of Delhi Municipal Corporation by order dated 25th July, 1984 assessed the rateable value of the property in question at Rs. 1,08,930/ w.e.f 1st April, 1979. The order of the Assessing Officer was challenged by respondent No. 1 by preferring an appeal under Section 169 of the Act 1958. By order dated 2nd June, 1989 passed by learned Additional District Judge, the appeal of respondent No. 1 was allowed and the assessment order dated 25th July, 1984 was set-aside holding that the property in question could not be assessed to property tax under Section 120 of the Act. The order of learned Additional District Judge in now under challenge in this petition filed by the Municipal Corporation of Delhi.
3. The exigibility to property tax of oil tankers to property tax has now not been disputed on behalf of respondent No. 1 in view of the decision of the Supreme Court in The Municipal Corporation of Greater Bombay and others v. The Indian Oil Corporation Ltd. AIR 1991 Supreme Court 686. It has, however, been submitted that respondent No. 1 being only a licensee in respect of property in question, the property tax is not leviable.
4. The dispute, therefore, is whether respondent No. 1 is a licensee or a lessee of the property in question. According to the petitioner/Corporation respondent No. 1 is a lessee as is clearly established from its exclusive long user and also from the terms of agreement dated 21st November, 1974. On the other hand, it has been vehemently submitted that respondent No. 1 is only a licensee and reliance has also been placed on the language of the Agreement dated 21st November, 1974, which describes the arrangement between parties as a ‘Licence’.
5. The answer to the question whether a person is a lessee or a licensee depends upon the real intention of the parties to be gathered from the facts and circumstances of each case and not from the fact as to how the arrangement has been described in the agreement. The real intention of the parties is, therefore, the determining factor and not that respondent No. 1 is described as a licensee in the agreement. One of the factor to be taken in view to decide whether the document in fact is a lease or licence is the factor of exclusive possession.
6. Respondent No. 1 under agreement dated 21st November, 1974 is in possession for last more than 20 years. It was permitted to raise construction under the agreement which it did. Respondent No. 1 has been continuously carrying on business from property in question for nearly 20 years. The possession of respondent No. 1 is exclusive, uninterrupted and without any interference from administration. Respondent no. 1 has the power to mortgage etc. as stipulated in the agreement though with permission in writing of the administration. Under the agreement respondent No. 1 has agreed to pay all rates and taxes etc. whether payable by owner or occupier. The licence is terminable by previous notice of three months in writing from either party. In our view, therefore, clearly the intention of the parties was to create a lease and it is not a case of licensee.
7. Almost an identical question and an agreement containing clauses similar to the one contained in agreement dated 21st November, 1974 came up for consideration before a learned Single Judge of this Court in the case of Bharat Petroleum Corporation Ltd. v. Municipal Corporation of Delhi 64 (1996) Delhi Law Times 237. The learned Judge came to the conclusion that the mere fact that in an agreement the parties have been referred to as ‘licensor’ and ‘licensee’ would not ipso facto turn the said document by virtue of the said references into a licence deed. The earned judge thus held in similar circumstances that the agreement was in fact a lease and the property was subject to property tax. The contention that the property was exempted from tax under Section 119 of the Act and Article 285 of the Constitution of India on the ground that the property belonging to Government of India was exempted was also rejected in Bharat Petroleum's case, holding that what was being taxed was the interest in land which had been passed on under the agreement and not tax on land belonging to the Government. We are in respectful agreement with the views expressed in the case of Bharat Petroleum Corporation Ltd,. We, accordingly, hold that respondent No. 1 is liable to pay the property tax.
8. For the aforesaid reasons, we set-aside the impugned order of learned Additional District Judge dated 2nd June, 1989 and restore the order of assessment dated 25th July, 1984. The rule is made absolute leaving the parties to bear their own costs.