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Citation Codes
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Disposition
Judges
Acts
  • CPC (Code of Civil Procedure)
  • The Bombay Rent Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Rent Control Act
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Judges
Acts
  • CPC (Code of Civil Procedure)
  • The Bombay Rent Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Rent Control Act
Smart Summary

Factual and Procedural Background

The appellant, owner of Flat No. 6 (Unit No. 201) in “Sidhivinayak Apartments,” Pune, granted the respondent possession of the premises under a letter dated 24-3-1984 for a “purely temporary” period of six months while the respondent considered purchasing the flat. A security deposit of Rs 40,000 and monthly payments of Rs 1,000, described in the letter as “rent,” were agreed upon. When the appellant later sought possession, the respondent asserted tenancy rights under the Bombay Rents, Hotel and Lodging House Rates (Control) Act (“Bombay Rent Act”).

In Special Civil Suit No. 281 of 1987, the VIIth Joint Civil Judge, Senior Division, Pune, held that the respondent was a tenant protected by the Act. The High Court of Bombay dismissed the owner’s appeal on 11-6-1997. The present matter is an appeal to the Supreme Court challenging those concurrent findings.

Legal Issues Presented

  1. Whether the agreement dated 24-3-1984 created a landlord–tenant relationship protected by the Bombay Rent Act or merely granted the respondent a temporary, revocable licence pending a possible sale.
  2. Consequently, whether the suit for eviction treating the respondent as a trespasser was maintainable.

Arguments of the Parties

Appellant's Arguments

  • The 24-3-1984 document was fundamentally an agreement for sale coupled with a temporary licence, not a lease.
  • The use of the word “rent” in the agreement and subsequent receipts was not determinative of tenancy; case law establishes that nomenclature alone cannot decide the legal relationship.
  • Because the respondent agreed to vacate after six months, no tenancy was intended or created.

Respondent's Arguments

  • The monthly payments labelled “rent” and the continued occupation indicated a tenancy protected by the Bombay Rent Act.
  • Accordingly, the appellant’s suit for eviction treating the respondent as a trespasser was not maintainable.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Supreme Court closely examined the wording and substance of the 24-3-1984 letter. Key features influencing its analysis were:

  • The respondent’s request for occupancy “on purely temporary basis” for six months, with an explicit promise: “I will vacate the premises … at the expiry of our agreed period of 6 months.”
  • The absence of any clause permitting the respondent to remain as a tenant should the contemplated sale fail.
  • The subsequent letter dated 9-11-1984, in which the respondent referred to the arrangement as one of “adjustment and help,” reinforcing the temporary nature of occupation.

The Court reiterated that use of the term “rent” is not conclusive of a tenancy and emphasised that the true nature of the transaction must be gathered from the document as a whole. It held that the agreement was “an agreement for sale coupled with a licence” and not “an agreement to sell coupled with a lease.” The lower courts erred by giving undue weight to the word “rent” while disregarding the temporary and conditional features of the arrangement.

The Court further noted that a separate suit filed by the appellant under the Rent Act was expressly “without prejudice” and could not alter the legal character of the original relationship determined in the present proceedings.

Holding and Implications

The appeal is allowed; the judgments of the trial court (11-8-1988) and the High Court (11-6-1997) are set aside. The suit for possession and mesne profits is decreed in favour of the appellant. Mesne profits are to be quantified under Order 20 Rule 12 CPC in separate proceedings. Execution of the possession decree is stayed for six months, conditional upon the respondent filing an undertaking to vacate within that period.

Implications: The decision restores possession to the owner and underscores that the substance of an agreement—not isolated terminology—determines whether a licence or tenancy exists. No new precedent is expressly set, but the ruling reaffirms existing principles regarding the distinction between licence and tenancy.

    Suhas Yeshwant Chopde v. Sachhidanand D. Purekar .

    1. Leave granted.

    2. This is an appeal directed against the judgment of the High Court of Bombay, dated 11-6-1997 dismissing the appeal preferred against the judgment dated 11-8-1988 in Special Civil Suit No. 281 of 1987 of the VIIth Joint Civil Judge, Senior Division, Pune.

    3. The suit was filed by the appellant for eviction of the respondent on the ground that the respondent was inducted into possession as a licensee and stating that the said licence was terminated by notice. The respondent claimed that he was a tenant entitled to the benefits of the Bombay Rent Act. The learned trial Judge and the High Court came to the conclusion that the respondent was a tenant entitled to the benefit of the said Act and the suit for eviction treating the respondent as a trespasser was not maintainable. The owner has filed this appeal against the judgment.

    4. The question of relationship between the appellant and the respondent depends upon construction of the agreement dated 24-3-1984 executed between the parties. The said agreement reads as follows:

    Copde S.Y,

    Proprietor,

    Chope Engineers & Contractors,

    1622, Sadashiv Peth,

    Pune-411 030.

    As I (S.D Purekar) am in urgent need of residential accommodation and on my request you are giving me your unsold Flat No. 6 (Unit No. 201) on second floor in ‘Sidhivinayak Apartments’ at S. No. 46/6 Plot No. 4, Erndawana, Pune-4 for occupancy on purely temporary basis for the period of 6 months from 16-3-1984. This period may be extended from 16-3-1984. This period may be extended if required by mutual consent.

    I intend to purchase the same flat. I will give my confirmation and sign an agreement in this regard with you by 10th July, 1984.

    I will be paying you Rs 40,000 (Rs forty thousand only) by cheque as security deposit which will not bear any interest and Rs 1000 (Rs one thousand only) as monthly rent which will be paid on every 1st day of the month.

    In addition to this I will pay you water and electricity charges in full and half the municipal taxes.

    You are free to sell this flat and I will vacate the premises by prior notice of one month without any complaint.

    I will vacate the premises held by me at the expiry of our agreed period of 6 months.

    If I want to vacate the premises at the earlier date than the agreed period I will inform you one month in advance in writing.

    I will keep the premises in good condition and will abide by the apartments by-laws and will cooperate with other members of the apartments.

    I am signing here on behalf of me and my family.

    Dated: 24th March, 1984

    Witness:

    1. B.L Dhaurker,

    519.B Kastra Peth,

    Pune-11.

    Signature

    Sachhidanand Datta Purekar

    236, Deshpande Lane,

    Erandol.

    (Jalgaon)

    5. A reading of the above letter shows that the respondent who was in urgent need of residential accommodation requested the appellant to allow the respondent to occupy the unsold Flat No. 6 (Unit No. 201) on second floor of the building for occupancy “on purely temporary basis for the period of 6 months from 16-3-1984”. The said period could be extended by mutual consent. The other important recital in the document is about the respondent's willingness to vacate the premises on the expiry of the period of 6 months. It reads as follows:

    “I will vacate the premises held by me at the expiry of our agreed period of 6 months.”

    6. It will thus be noticed that the substance of the agreement was that it was an agreement of sale of the flat and Rs 40,000 to be paid as security deposit. There was no provision that in the event of the sale transaction not going through or not fructifying, the respondent would continue as a tenant. It is true that the document used the word “monthly rent of Rs 1000” but it is now well settled by several decisions of this Court that mere use of the word “rent” is not decisive of the relationship between the parties. The document dated 24-3-1984 is an agreement for sale coupled with a licence agreement. It was not an agreement to sell coupled with a lease. It is also significant that in a subsequent letter dated 9-11-1984, the respondent stated as follows:

    “This is in full sense of earnestness and I do not have the slightest will to exploit you and, as a good friend, I wish, you too shall be the same in return. It is simply a matter of adjustment and help and more so because we belong to one creed. Duping is not in our blood. I hope this clears your fears and reservation.”

    7. In the light of the above letter also it appears to us that the intention of the parties at the time when they entered into the agreement dated 24-3-1984 was that the respondent should occupy the premises on a “purely temporary basis” for a period of 6 months before which the respondent would decide whether he would execute a regular agreement of sale by way of confirmation.

    8. The learned trial Judge and the High Court have given more importance to the word “rent” used in the abovesaid agreement and in some subsequent receipts signed by the respondent. In our view, they are not conclusive of the question. In view of the delay, the appellant had filed a separate suit on the basis that the respondent was a tenant under the Rent Control Act. But that suit was filed expressly stating that it was without prejudice to his contentions in the appeal then pending in the High Court. We are of the view that the decision in the appeal before us arising out of the suit of 1987 for possession should conclude the issue irrespective of the decision in any other proceedings.

    9. In the result, the judgment of the learned Single Judge dated 11-8-1988 and that of the High Court dated 11-6-1997 are set aside and the suit is decreed for possession and mesne profits. Mesne profits shall be determined by way of separate application filed under Order 20 Rule 12 CPC. So far as the decree for possession is concerned, the same shall not be executed for a period of 6 months from today on condition of the respondent filing the usual undertaking in this Court in usual terms to vacate the premises at the end of the period of 6 months. The undertaking shall be filed within 4 weeks from today.

    10. So far as the mesne profits up to the end of 6 months from today are concerned, they shall also be determined in the application filed under Order 20 Rule 12 CPC. The appeal is allowed in the above terms. There shall be no order as to costs.

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    Comments

    Suhas Yeshwant Chopde v. Sachhidanand D. Purekar .
    (Apr 9, 1999)