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Venkiteswara Pai v. Padmavathi Ammal
Structured Summary of the Opinion
Factual and Procedural Background
Two connected suits, O.S. 79 of 1122 and O.S. 80 of 1122, were instituted in the District Munsiff's Court of Cranganore concerning two adjoining shop buildings and the sites on which they stood. The plaintiff was the widow and sole heir of Venkiteswara Prabhu (deceased Meenom 1121). In each suit she alleged that her deceased husband had leased the respective shop to the defendant therein at a monthly rent of Rs. 5, that the defendant had defaulted in rent from Karkatagom 1121 and had failed to execute a fresh lease deed on demand, and she sought recovery of possession. Alternatively, she claimed title as heir of her husband.
O.S. 79 of 1122 named Kunhikayi as defendant (lease alleged dated 28-5-1121); O.S. 80 of 1122 named Raya Prabhu as defendant (lease alleged dated 15-5-1115). Both defendants filed written statements denying the leases pleaded by the plaintiff and asserted that they were in possession under leases from one Venkiteswara Pai; Venkiteswara Pai was impleaded as an additional second defendant in both suits.
Venkiteswara Pai, after being impleaded, contended that the deceased had given the sites to him permanently and without rent, that he had constructed two shops at his own cost and had leased them to Kunhikayi and Raya Prabhu. By consent the learned Munsiff tried the suits together. Although the Munsiff found against the leases pleaded in the plaint, he decreed that the plaintiff was entitled to recover possession of the properties, subject to payment to the second defendant of the value of the shop buildings to be fixed in execution.
The second defendant had argued before the Munsiff that, relying on section 60 of the Cochin Easements Act (XXII of 1112), he could not be evicted because, acting on a license granted by the deceased, he had executed works of a permanent character and incurred expenses. The Munsiff rejected this contention for want of evidence that a license had been granted and regarded the transaction as, at best, a grant reserving a right of recovery.
Appeals were brought to the District Court of Anjikaimal (A.S. Nos. 235, 236, 240 and 241 of 1123) by Venkiteswara Pai, Kunhikayi and Raya Prabhu. The District Judge held that section 60 did not apply because Venkiteswara Pai's position was that of a lessee, not a licensee, and dismissed the appeals. Venkiteswara Pai then filed these second appeals to this Court: S.A. No. 293 of 1125 (relating to O.S. 80 of 1122) and S.A. No. 294 of 1125 (relating to O.S. 79 of 1122).
Legal Issues Presented
- Whether the plaintiff was precluded from recovering possession of the plaint properties by reason of section 60 of the Cochin Easements Act (i.e., whether the second defendant was protected as a licensee who had carried out permanent works in reliance on a license).
- Whether, on the facts, the transaction between the deceased (Venkiteswara Prabhu) and Venkiteswara Pai amounted to a license or to a lease (i.e., whether the second defendant had acquired an interest equivalent to exclusive possession such as to make the right a demise rather than a mere license).
- Relatedly, whether authorities relied upon by the appellant (including a decision suggesting application of the principle in section 60 to licenses granted before the Act) were applicable to the facts of these cases.
Arguments of the Parties
Appellant's (Venkiteswara Pai) Arguments
- The plaintiff cannot recover possession because section 60 of the Cochin Easements Act protects those who, acting on a license, execute permanent works and incur expenditure.
- A number of decisions of Indian High Courts support that protection; in particular, Jagat Singh v. Amritsar District Board (referred to) was cited for the proposition that the principle in section 60 should apply to licenses granted even before the Act came into force.
- Evidence of Dwrs. 2 and 9 was relied upon to establish that a license within the meaning of section 52 of the Indian Easements Act had been granted by the deceased to Venkiteswara Pai.
- At earlier stages (written statement) the second defendant's case was that the deceased had given the land permanently (absolute gift) to him — though the appellant continued to press the section 60 argument on appeal.
Respondent's (Plaintiff's) Arguments
- The authorities relied upon by the appellant were accepted as sound law but were said not to apply on the facts: in the cited authorities it was admitted or clearly found that a license had been granted and that the licensee had executed permanent works acting on that license; no such admission or finding exists here.
- The evidence of Dwrs. 2 and 9 — relied on by the appellant to prove a license — were interested witnesses and their evidence was not accepted by the courts below; their testimony in substance indicated that the deceased had given the land "once and for all" and that the grantee obtained full title, not a mere license.
- The lower courts had found that the deceased had given an exclusive right of occupation to the second defendant; the legal effect of the transaction was held to be a leasehold interest, not a license.
- The appellant's earlier pleadings (written statement) did not set up the case of a license but asserted a permanent absolute gift — a fact relevant to the trial courts' evaluation of the nature of the right.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Jagat Singh v. Amritsar District Board, A.I.E. 4940 Lahore 509 | Referred to for the proposition that the principle of protection under the easements statute (section analogous to section 60) should be applied to licenses granted even before the statute came into force. | Cited by appellant; the Court noted the authority but found it inapplicable on the facts because there was no admission or finding of a license having been granted in the present case. |
| Vajravalan v. Abbu, 13 C.L.R. 58 | Supports the proposition that when a site is handed over to a person for putting up a building and the grantee has exclusive occupation, the legal effect is a holding (i.e., a demise) and entitlement to value of the building on eviction. | The lower appellate court relied upon this decision to conclude that the transaction created a leasehold interest. The Court accepted that reliance and applied the principle to hold the second defendant was a lessee. |
| Stamp Reference No. 1 of 1097, 14 C.L.R. 42 | Held that the essential distinction between a license and a lease is exclusive possession; a lease confers exclusive possession even if subject to restrictions. | Used as one of the cochin high court authorities supporting the rule that exclusive occupation points to a lease rather than a license; the Court relied on this line of authority in its conclusion. |
| Mariyam v. Ernakulam Municipal Council, 23 C.L.R. 709 | Affirms that the essential distinction between a license and a lease is exclusivity of possession and that restrictions do not by themselves convert a lease into a license. | Relied upon as supporting authority for treating exclusive occupation as a demise; contributed to the Court's view that the second defendant held a leasehold interest. |
| Lekshmana Iyer v. Mrs. T. Francis, 32 C.L.R. 307 | Stated that the substance of the agreement determines whether a transaction is a lease or license; a license grants authority to do acts on land without passing an estate, while a lease transfers an interest in land. | Adopted by the Court as a statement of the correct test to be applied on the facts; supported the conclusion that the right granted amounted to a lease. |
| Board of Revenue v. South Indian Railway Co., A.I.R. 1925 Madras 434 | Held that one chief consideration is whether exclusive possession is given; if so, the effect is to create a demise of the land. | Quoted as consistent authority; the Court treated it as reinforcing the view that exclusive occupation is indicative of a lease. |
| O. C. Ganguly v. Kamalpat Sing, A.I.R. 1947 Calcutta 566 | Held that if the effect of an instrument is to give exclusive occupation, subject perhaps to reservations, it is a lease; whereas mere permission to use the property while it remains in owner's possession is a license. | Relied upon as illustrating the correct factual inquiry; the Court applied this principle to find in favour of the characterization as a lease. |
| Indian Hotels Co. v. Phiroz Soraji, A.I.R. 1923 Bombay 228 | Decisions of the same purport on the lease-license distinction and the role of exclusive occupation. | Noted among authorities of similar tendency; contributed to the Court's affirmation that exclusive possession supports a lease conclusion. |
| Ram Protap v. National Petroleum Co., A.I.R. 1950 Calcutta 23 | Another authority supporting the distinction that exclusive possession signals a lease. | Referred to as corroborative precedent; the Court treated it as consistent with the line of authorities relied upon. |
Court's Reasoning and Analysis
The Court proceeded by examining whether the material facts amounted to a license entitling the second defendant to protection under section 60 of the Cochin Easements Act or whether the transaction amounted to a demise/lease entitling the plaintiff to recover possession subject to payment for the shop buildings.
First, the Court considered the appellant's reliance on authorities (including Jagat Singh) that, in appropriate cases, extend protection to persons who act upon a license and execute permanent works. The Court accepted the legal propositions in those decisions but emphasized that their applicability depends on factual findings that a license was in fact granted and that the licensee acted in reliance on it to execute permanent works.
The Court reviewed the evidence: it observed that the witnesses (Dws. 2 and 9) relied upon by the appellant were interested witnesses and that the courts below had not accepted their testimony as establishing the grant of a mere license. Rather, their evidence, as interpreted by the lower appellate court, indicated that the deceased had given the land "once and for all" and that the grantee obtained full title to it — i.e., not a mere license.
The Court noted that the second defendant had not pleaded a license in his written statement; instead he had asserted that the land was given to him absolutely. The findings of the courts below were that the deceased had given the second defendant an exclusive right of occupation, and the lower appellate court had concluded that the legal effect of that transaction was to create a leasehold interest, relying on Vajravalan v. Abbu.
Addressing the appellant's attempt to distinguish Vajravalan on the basis that that case concerned a site for a house while this case concerned a site for a shop, the Court found no principled basis in the decision for such a distinction. The Court expounded and adopted the test reflected in commentaries and a lineage of high court decisions: a license does not confer an interest in immovable property, whereas if the right granted confers exclusive occupation (even if subject to reservations or restrictions as to use), the transaction is in law a demise (lease).
Relying on the cited authorities and the factual findings below (exclusive occupation and the absence of reliable evidence of a license), the Court concluded that the second defendant's position was that of a lessee and not of a licensee. Consequently, section 60 (protecting licensees who acted on a license) did not prevent the plaintiff from recovering possession subject to payment for the shop buildings.
Holding and Implications
DISMISSED. The two second appeals (S.A. Nos. 293 and 294 of 1125) are dismissed and the decrees of the courts below are confirmed with costs.
Implications:
- The direct effect is that the plaintiff is entitled to recover possession of the two plaint properties from the second defendant(s), subject to the payment of the value of the shop buildings (as the courts below decreed, to be fixed in execution).
- The Court applied established authority on the lease-license distinction (focusing on exclusive occupation as the key test) and affirmed the lower courts' application of those principles to the facts. The opinion does not announce a new legal principle beyond applying existing authorities to the facts; it confirms the characterization of the second defendant's right as a leasehold interest rather than a mere license and enforces the consequent right of recovery by the plaintiff.
This summary is based exclusively on the contents of the provided opinion and does not add or infer information beyond what the opinion contains.
1. These second appeals arise out of two connected suits brought by the same person in the district munsiffs court of cranganore, O. S. 79 of 1122 and o. S. 80 of 1122. Two adjoining shop buildings and the sites on which they stand formed the subject - matter of dispute in these suits. O. S. 79 of 1122 related to the southern of the two buildings and its site, And o. S. 80 of 1122 to the northern building and its site. Plaintiff is the widow and sole heir of one venkiteswara prabhu, Who died in meenom 1121. Her case in each of the two suits was that the shop in respect of which that suit was filed was leased by her deceased husband to the defendant therein for a monthly rent of rs. 5/ - and the latter had defaulted to pay the rent from karkatagom 1121 and also failed to execute a fresh lease deed in her favour in spite of her demand and that she was therefore entitled to recover possession of the shop and its site from him. Alternatively she claimed in each suit that she was entitled to recover possession of the property on the strength of her husband's title which had devolved on her after his death. One kunhikayi was the defendant in o. S. 79 of 1122 and the lease in his favour was alleged to have been granted by the deceased venkiteswara prabhu on 28 - 5 - 1121. Raya prabhu was the defendant in o. S. 80 of 1122 and the lease in his favour was said to have been granted on 15 - 5 - 1115. Both these persons entered appearance in their respective suits and filed written statements contesting the plaintiff's claim. Each of them denied the lease mentioned in the respective plaint and stated that he was in possession of the shop mentioned therein under a lease from one venkiteswara pai and that the said venkiteswara pai should also be impleaded in the suit. Venkiteswara pai was thereupon impleaded as additional second defendant in both suits. After he was impleaded, He entered appearance in both suits and contended inter alia that at his request the deceased venkiteswara prabhu, Who was his uncle's son, Had given the sites to him permanently and without rent and also agreed that he might construct two shops therein at his own cost, That he had accordingly built the shops at his own cost and leased one of them to kunhikayi and the other to raya prabhu, And that the plaintiff was not, Therefore, Competent to recover possession of the plaint properties in the two suits. On the consent of parties, The learned munsiff tried the two suits together, And though he found against the leases, Set up in the plaints, He held that the plaintiff was entitled to recover possession of the properties and decreed both suits allowing eviction as prayed for subject to payment of the value of the shops, To be fixed in execution, To the second defendant. On the strength of section 60 of the cochin easements act, Xxii of 1112, The second defendant's counsel had contended before the learned munsiff that the plaintiff could not recover possession of the properties since, Acting upon the license which the deceased venkiteswara prabhu had granted to him, The second defendant had executed works of a permanent character and incurred expenses in the execution. The munsiff repelled that contention holding that there was no evidence of such a license having been granted by the deceased venkiteswara prabhu and that at best it could only be said that venkiteswara prabhu had given the land to the second defendant reserving the right to himself to recover it from him at any time. From the decrees in the two suits, Appeals were filed in the district court of anjikaimal by venkiteswara pai as well as kunhikayi and raya prabhu. Venkiteswara pai's appeals were a. S. Nos. 235 and 236 of 1123, And the appeals of kunhikayi and raya prabhu were a. S. Nos. 240 and 241 of 1123 respectively. The learned district judge also heard all these appeals together. The only point that was pressed before him was that the plaintiff was not entitled to recover possession of the properties on account of section 60 of the easements act. The district judge held that section 60 of the easements act did not apply to these cases as the position of venkiteswara pai was that of a lessee and not that of a licensee, And dismissed all the appeals ordering the parties to bear their costs. These second appeals have been filed by venkiteswara pai, The second defendant in both the suits, Against the appellate decrees of the district court. S. A. No. 293 of 1125 relates to o. S. 80 of 1122 and s. A. No. 294 of 1125 to o. S. 79 of 1122.
2. In this court also it was strenuously contended on behalf of the appellant that the plaintiff is not entitled to recover possession of the plaint properties on account of section 60 of the easements act, And a number of decisions of the indian high courts were relied upon in support of that contention. The decision in jagat singh v. Amritsar district board, A. I. E. 4940 lahore 509, Was also referred to by the appellant's counsel in support of the proposition that the principle of section 60 of the easements act should be applied to cases of licenses granted even before the said act came into force. The respondent's counsel had no quarrel with any of those decisions and accepted all of them as laying down good law, But he pointed out that they had no application to this case. In all these cases it was admitted or clearly found that license had been granted by the owner and that acting on that license the licensee had executed works of a permanent character. There is no such admission or finding in this case. The appellant's counsel relied upon the evidence of dws. 2 and 9 to make out a case that a license within the meaning of section 52 of the easements act had been granted by venkiteswara prabhu to venkiteswara pai. But both these witnesses are interested persons and their evidence on the point has not been accepted by the courts below. In fact, The evidence of dws. 2 and 9 is practically to the effect that venkiteswara prabhu gave the land once and for all to venkiteswara pai and that the latter obtained full title to it, And not a mere license, From the grant given by venkiteswara prabhu - see lines 30 to 34 of page 2 of the lower appellate court's judgment. I am therefore unable to hold on the evidence in the case that venkiteswara prabhu had granted a license to venkiteswara pai.
3. The second defendant had not set up the case of license in his written statement. What he stated therein was that venkiteswara prabhu had given the land permanently (i. E. Absolutely) to him and not that he had granted to him a license. What the courts below have found is that venkiteswara prabhu had given an exclusive right of occupation of the land to the second defendant; and according to the lower appellate court, The legal effect of the transaction was to create a leasehold interest in favour of the second defendant. It was relying upon the decision in vajravalan v. Abbu reported in 13 c. L. R. 58, That the lower appellate court arrived at this conclusion. The appellant's learned advocate contended that the above decision was not applicable to the facts of this case, As the land given in that case was for putting up a house and not for putting up a shop as in this case. But there is nothing in that decision for drawing a distinction between a grant for putting up a house and a grant for putting up a shop. What is actually stated therein is:
"when the site has been handed over to komala for putting up a building, I think komala has, In law, A holding in respect of the paramba on which the house stands, And there cannot be any doubt that she is, In the absence of the contract to the contrary entitled to the value of the house on eviction."
commenting on section 52 of the indian easements act which defines the term "license", Krishnananda joshi says in his book 'easements and licenses' that a license does not confer on the licensee an interest in
immovable property and that though it may be coupled with a grant which conveyes an interest in immovable property yet, By itself, It is ever incapable of passing any interest in immovable property. At page 273 of the same book he has mentioned several decisions in support of the proposition that
"if the right granted conveys to the grantee an exclusive right of occupation of the land, Though subject to certain reservations or to restrictions of the purposes for which it may be used, It is in law a demise of the land itself."in such cases, The right granted is not a license. The learned commentator says at the same page:
"for deciding whether a grant amounts to a lease or a licence regard must be had to the substance of the agreement. If, According to the contract the permises are merely to be used in a certain way, And on certain terms, While their possession and control remain with the full owner himself, The right granted is a license. But if the nature of the acts to be done by the grantee require that he should have exclusive possession a lease might be presumed to have been granted,"
this view is supported by a number of decisions of the indian high courts as well as of the erstwhile cochin high court. In stamp reference no. 1 of 1097,14 c. L. R. 42, And in mariyam v. Ernakulam municipal council, 23 c. L. R. 709, The cochin high court held that the essential distinction between a license and a lease is that in the case of the latter the occupant has exclusive possession of the property concerned and that restrictions imposed in the lease need not and will not by themselves convert what is a lease into a license. In lekshmana iyer v. Mrs. T. Francis, 32 c. L. R. 307, The cochin high court held:
"in determining whether a transaction is a lease or a mere license, The substance of the agreement must be considered. The essence of the matter is whether the intention of the parties was to transfer any interest in land, A license is an authority to do some act or series of acts on the land of another without passing an estate in in land. There are no doubt several elements in common to both lease and licence. But the difference is that in the case of a license there is no interest in immovable property transferred to the licensee, While in the case of a lease there is a transfer or carving out of the interest in favour of the person in whose favour the lease is granted."
exactly similar observations have been made in board of revenue v. South indian railway co., A. I. R. 1925 madras 434. It has also been held therein that, In determining whether the grant is a license or a lease, One chief consideration is whether there is any right of exclusive possession given and that if the effect of the document is to give the holder an exclusive right of occupation of the land it will be a demise of the land. The calcutta high court held in o. C. Ganguly v. Kamalpat sing, A. I. R. 1947 calcutta 566:
"if the affect of the instrument is to give the holder the exclusive right of occupation of the land, Though subject to certain reservations or to a restriction of the purposes for which it may be used, It is a lease; if the contract is merely for the use of the property in a certain way and on certain terms while it remains in the possession and control of the owner, It is a licence. Each case must be decided on its own facts, And regard must be had to the substance of the agreement."
the decisions in indian hotels co. V. Phiroz soraji, A. I. R. 1923 bombay 228, And ram protap v. National petroleum co. A. I. R. 1950 calcutta 23, Are also to the same purport. Following these decisions, I hold that the lower appellate court was right in its view that the second defendant is not a licensee but a lessee and that the plaintiff is entitled to recover possession of the properties from him on payment of the value of the shop building.
4. The decrees of the courts below, Are therefore confirmed and these two second appeals are dismissed with costs.
dismissed.
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