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citation codes
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  • S.3 and S.4 read with schedule III of the Delhi Laws Act 1915 (Act VII (7) of 1915).
  • S.56 of the Specific Relief Act 1877, cls.(d),(f) and (i).
  • PAYMENT OF WAGES ACT
  • Section 53, Specific Relief Act
  • Section 56, Specific Relief Act
  • S.52, Indian Easements Act, 1882,
  • S.56 (d), Specific Relief Act.
  • S.56 (f), Specific Relief Act
  • S.64, Indian Easements Act
  • S.57, Specific Relief Act,
  • S.19, Specific Relief Act."
  • Indian Easements Act
  • S.56, Easements Act
  • S.52, Easements Act,
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Citation Codes
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citation codes
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  • S.3 and S.4 read with schedule III of the Delhi Laws Act 1915 (Act VII (7) of 1915).
  • S.56 of the Specific Relief Act 1877, cls.(d),(f) and (i).
  • PAYMENT OF WAGES ACT
  • Section 53, Specific Relief Act
  • Section 56, Specific Relief Act
  • S.52, Indian Easements Act, 1882,
  • S.56 (d), Specific Relief Act.
  • S.56 (f), Specific Relief Act
  • S.64, Indian Easements Act
  • S.57, Specific Relief Act,
  • S.19, Specific Relief Act."
  • Indian Easements Act
  • S.56, Easements Act
  • S.52, Easements Act,
Smart Summary

Factual and Procedural Background

The suit arises from an Articles of Agreement dated 8 February 1946 between the Governor-General in Council acting through the North Western Railway Administration ("the licensor") and Rai Sahib M. Gulab Singh and Sons ("the licensee"). The agreement granted the licensee the sole and exclusive right to sell newspapers, books, periodicals and travellers' requisites and to erect book-stalls on station premises controlled by the North Western Railway for a five-year term (with renewal at the licensor's option). Consideration included annual advance payments (Rs.36,200) and a security deposit (Rs.10,000). The licensee set up stalls and incurred substantial capital expenditure.

Because of the impending partition of the Punjab, the parties modified payment terms (noted by letter dated 8 July 1947) to a royalty of 3% of gross earnings, payable half-yearly; that letter also warned that the term might not be guaranteed after the railway's division. Between April 1947 and September 1948 complaints were made against the licensee and warnings issued. On 29 September 1948 the Chief Administrative Officer (deemed to be the General Manager) ordered that notice be issued because the licensee's "work is unsatisfactory and he is unable to conduct business as book stall contractor."

A notice dated 5 October 1948 purported to determine the contract under clause 11 with effect from 31 December 1948. After a legal notice under s.80 CPC alleging illegality and mala fides in the termination, a fresh notice of termination was issued on 18 November 1948 from Railway Headquarters stating termination pursuant to clause 11. The licensee thereafter applied for an injunction.

On 31 December 1948 R.B. Lala Sohan Lal (claiming to represent the licensee) instituted the suit and obtained on that day an interim injunction from the Subordinate Judge, First Class, Delhi (presented at the Judge's residence because court was closed). The defendant (Dominion of India through Chief Administrative Officer, Eastern Punjab Railway) applied under Order 39 Rule 4 CPC to discharge the injunction. The Sub-Judge by judgment dated 9 March 1949 refused to discharge the injunction. The defendant appealed; Falshaw, J. dismissed that appeal by judgment and order dated 28 March 1949. The defendant filed this Letters Patent Appeal which was heard by Chief Justice Das (with Soni, J. concurring).

Legal Issues Presented

  1. Whether the interlocutory (temporary) injunction issued by the Subordinate Judge on 31 December 1948 (treated as effective from 3 January 1949 nunc pro tunc) was properly granted and should be maintained or should be discharged.
  2. Whether the Articles of Agreement constituted only a license revocable at the will of the licensor or an irrevocable license (i.e., whether the licensee had rights equivalent to a grant or interest that would justify injunctive relief).
  3. Whether, in the present circumstances, the licensor was entitled to terminate under clause 11 because the licensee breached specified conditions or was unable to conduct the business and the General Manager (or his successor) was made the sole judge of that question.
  4. Whether relief by injunction (temporary or perpetual) was precluded by statutory or equitable considerations cited by the appellant — specifically provisions of s.56 (clauses (d),(f),(i)) and related provisions of the Specific Relief Act and the Indian Easements Act (e.g., ss.52, 53, 56, 57, 60, 64) — or whether damages were the exclusive or appropriate remedy.

Arguments of the Parties

Appellant's Arguments (Dominion of India / Railway Administration)

  • The plaint was improperly stamped and contained blanks on 31 December 1948, so no injunction should have been granted on that date (a technical objection; deficit stamp duty was later cured and Court treated injunction effective from 3 January 1949).
  • The agreement was only a license revocable at the will of the licensor (not creating an interest in land or an irrevocable right).
  • In any event, the licensee had committed breaches of clauses 2, 4, 10 and 12 and clause 11 expressly empowered the licensor (with the General Manager as sole judge) to determine the agreement; accordingly the licensor was entitled to revoke the license.
  • The suit for injunction was not maintainable under s.56 of the Specific Relief Act — citing subclauses (d), (f) and (i) — and the public duties or commercial discretion of the Railway preclude injunctive interference; further statutory provisions (e.g., s.64, Indian Easements Act) were relied on to contend damages may be the exclusive remedy.
  • Reliance was placed on authorities to the effect that even where a license might appear irrevocable, remedies may be confined to compensation/damages rather than injunctive relief.

Respondent's Arguments (Licensee)

  • The respondent contended many of the complaints were unfounded and had been considered by the Railway without further action; the termination was therefore illegal, invalid and mala fide and not issued by competent authority (contentions framed in the s.80 notice).
  • The respondent pointed out that the Minister of State for Transport and Railways wrote (29 October 1948) that termination resulted from a decision of the Central Advisory Council for Railways (relied on as evidence of procedural endorsement).
  • The respondent sought injunctive relief to restrain termination and interference with possession of book-stalls; alternatively the respondent sought damages (pleaded in the s.80 notice in the alternative).
  • The respondent argued that the agreement contained terms and an implied negative covenant (e.g., clause 22) that could be enforced by injunction (reliance on s.57 Specific Relief Act was pressed).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Thomas v. Sorroll (1679) Vaughan's Rep. 344 Definition of a license: a permission that does not pass an interest but makes an action lawful; distinctions between bare license and license coupled with grant. Quoted at length to explain the nature of a license and to ground analysis of whether the agreement conferred only a license or something more.
Musket v. Hill (1839) 5 Bing. N.C. 694 Authority approving Thomas v. Sorroll's definition. Used as supporting authority for the definition of license relied upon by the Court.
Wood v. Leadbitter (1845) 13 M. & W. 838 Common-law rule that a mere license is revocable; distinction that licenses coupled with grant may be irrevocable but grants of interests often require deed under seal. Carefully considered: Court contrasted common-law rigidity with equitable doctrines and noted the Indian Easements Act adopts the stricter common-law test in some respects.
Newby v. Harrison (1861) 1 J. & H. 393 Followed the definition of license; illustrated license and grant distinctions. Listed among authorities supporting the conceptual framework for license/incidents; used as supporting precedent.
Heap v. Hartley (1889) 42 Ch.D. 461 Explanation that an "exclusive license" is nevertheless a leave to do a thing (a contract not to give leave to others) and often revocable; breach gives right to damages. Used to show exclusivity does not necessarily make a license irrevocable and that damages may be available for breach.
Krishna v. Rayappa, 4 Mad. H.C.R. 98 Indian case following English definition of license. Cited to show continuity of the definition of license in Indian jurisprudence.
Taylor v. Waters (1816) 7 Taunt 374 Example where a ticket to enter a theatre was treated as a license coupled with a grant and held irrevocable. Used by the Court as an example of when a license may be irrevocable because coupled with a grant (distinguishing different categories of licenses).
Doe v. Wood (1819) 2 B. & Ald. 724 Grant of right to dig/search for metals treated as license coupled with a grant to take ore found. Cited as example of license coupled with a grant making it irrevocable as regards takings from the land.
Webber v. Lee (1882) 9 Q.B.D. 315 Right to shoot game and take it away held to be a profit a prendre (an interest) rather than a mere license. Referenced to show categories where rights may amount to profits and not mere licenses.
Lowe v. Adams (1901) 2 Ch. 598 Authority of like effect on classification of rights over land. Referred to among authorities distinguishing profits and licenses.
Prosonno Coomar Singha v. Ram Coomar Ghose, 16 Cal. 640 Right to use defendant's land as a privy held to be a mere license and revocable at will. Used to show Indian examples of revocable licenses.
Wilson v. Tavner (1901) 1 Ch. 578 Agreement to erect hoarding held to be a mere license revocable at will; remedy is damages. Cited to support the proposition that revocable licenses yield damages and not injunctions.
Kerrison v. Smith (1897) 2 Q.B. 445 Breach of an exclusive license gives right to sue for damages. Referenced to illustrate available remedial measure (damages) for breach of an exclusive but revocable license.
Woodfall on Landlord and Tenant; Joshi on Easement (textbooks) Textual commentary on license/easement principles. Referred to for doctrinal support on the nature and incidents of licenses.
Hurst v. Picture Theatres Ltd. (1915) 1 K.B. 1 Equitable principle that a license coupled with an interest may be treated as irrevocable; courts will give relief in equity. Cited and relied upon to show that on equitable principles the agreement might prima facie be treated as a license coupled with an interest, but the Court ultimately held clause 11 altered that position.
Frogley v. Earl of Lovelace (1859) Johns 333 Chancery could treat licenses as irrevocable on equitable grounds. Mentioned to illustrate equity's remedial approach to licenses coupled with grants.
Jagat Singh v. District Board, Amritsar (I.L.R. (1941) 22 Lah. 413) Application of Easements Act principles and the reception of English equitable rules as rules of justice, equity and good conscience. Relied upon to justify applying modern English equitable decisions where the Easements Act does not extend or is narrower.
Sri Sri Iswar Gopal Jew v. Globe Theatres Ltd. (I.L.R. (1944) 2 Cal. 542) Referenced in connection with equitable treatment of licenses. Listed among authorities showing the equity approach in India/Calcutta.
Arpan Ali v. Janendra Kuntar Pal (AIR (32) 1945 Cal. 413) Calcutta decisions applying equitable principles on licenses. Referred to as part of the supporting Indian jurisprudence for the equitable approach.
Liggins v. Inge (1831) 7 Bing. 682; Plimner v. Wellington Corporation (1884) 9 A.C. 699 Parties can agree that a license that would otherwise be revocable is to be irrevocable. Adduced to show that express or implied contractual terms can override prima facie revocability.
Gujrat Ginning & Manufacturing Co. Ltd. v. Moti Lal Hirabhai Spinning & Mfg. Co. Ltd. (AIR 1936 P.C. 77) Judicial application of parties' ability to create irrevocable settings by agreement. Cited to show acceptance of contractual freedom to make a license irrevocable.
Ganga Sahai v. Badrul Islam (AIR 1942 All. 330) See citation in relation to contractual modification of license incidents. Referenced among authorities on licensor-licensee contractual relations.
Aldin v. Lehimer Clark Muirhead & Co. (1894) 2 Ch. 437 Where a license is revoked without reasonable notice, remedy is damages and interlocutory injunctions were refused. Invoked to support the proposition that damages may be the appropriate remedy where revocation is lawful or where notice is inadequate.
Smart v. Jones (1864) 83 L.J.C.P. 154 Damages are the remedy when a revocable license is revoked though it was obtained for consideration. Referred to as authority for the damages remedy where licenses are revocable.
Swarnomoyee Peskar v. Chunder Kumar Das; Motilal Rai v. Kalu Mandan (Calcutta cases) Calcutta High Court decisions holding that even in revocation of an irrevocable license the remedy may be damages. Cited by the appellant and discussed by the Court; Chief Justice notes some High Court judges consider those cases over-extended but acknowledges their existence.
Mathuri v. Bhola Nath (56 All. 975) Commentary by Sulaiman, C.J. in relation to remedies and application of Easements Act principles. Referenced in the discussion on remedy (damages vs. injunction) in the Indian context.
Shyam Lal v. Munna (8 Luck. 278) Views on remedies and license doctrine by Srivastava, J. Referenced among Indian case authorities on the remedy question.
Booker v. Palmer (1942) 2 All E.R. 674 Equitable observation that law does not impute intention to create legal relations where circumstances negate such intention (quote by Lord Greene MR). Quoted by Soni, J. to support the conclusion that parties' conduct may demonstrate lack of intention to create protected legal occupation rights.
S.L. Kapoor v. Emperor (AIR 1937 Lah. 547) Referenced for the proposition that some contracts involving public duties may not be specifically enforceable. Cited by appellant regarding public duty objection; Court rejected the submission that the Railway had a specific duty to arrange sale of books that would bar injunction here.
Messrs. Deutsche Dampschiff Fahrts Gesellschaft Hansa v. Pestonji Bikhaji (AIR 1925 Sind 347) Authority relevant to inability to specifically enforce certain contracts. Relied on by the appellant to argue the contract could not be specifically enforced; Court treated this as a point with some force but not decisive given revocability.
Gulab Singh v. Punjab Zamindara Bank Ltd. (AIR 1942 Lah. 47) Authority on the enforceability of contracts of detailed regulatory character. Cited in the Court's discussion of specific enforcement objections under s.21 Specific Relief Act.
Peacock on Easement (textbook) Textual authority that where an irrevocable license's enjoyment is obstructed the remedy may be injunction or damages. Referred to for the proposition that equity may grant injunctions to give effect to an irrevocable license.

Court's Reasoning and Analysis

The Court proceeded stepwise. It first disposed of the procedural technicality that the plaint was improperly stamped on 31 December 1948, accepting the curing of the defect by 3 January 1949 and treating the injunction as effective from that date (nunc pro tunc).

The Court then set out the legal framework: Section 53 Specific Relief Act (temporary injunctions regulated by the Code of Civil Procedure and O.39 Rr.1–2) and the settled principle that the Court has discretion to grant or refuse temporary injunctions and ordinarily will not grant them where the pleadings show the suit is not one for a perpetual injunction. It reviewed distinctions between a bare license and a license coupled with a grant/interest, citing both common-law and equitable authorities and the statutory provisions in the Indian Easements Act (notably ss.52 and 60).

Applying these principles to the agreement's terms the Court examined key clauses:

  • Clause 1 granted "the sole and exclusive right" to sell on station premises but did not transfer any interest in the land; it was at best a license to enter and a grant of the right to carry on business within the premises.
  • Clauses 2, 22 and other clauses (4–9, 10, 12, 16, 19, 25) showed the license was for a term, for consideration, assignable with consent and included an undertaking that on payment and performance the licensee "shall peaceably hold and enjoy" the benefits (clause 22) — factors tending to indicate permanence and potential irrevocability.
  • Clause 11, however, expressly empowered the licensor to determine the agreement on specified grounds (non-payment, willful breach, unsatisfactory work, inability to conduct the business) "of which the General Manager shall be the sole judge"; clause 19 required removal of stalls on termination.

The Court analysed the effect of clause 11 against the background of the Easements Act (s.60) and equitable developments in English law (e.g., Hurst v. Picture Theatres). It concluded that, under s.60 (and the common-law rule), the license prima facie was revocable because it was not coupled with a transfer of property and the book-stalls did not amount to a permanent work within s.60(b). Clause 22, read in isolation, might have created an implied contract not to revoke the license if obligations were performed; but clauses 11 and 19 — read together with clause 22 — showed the parties intended that the license would be revocable upon the happening of specified contingencies, and that the General Manager's opinion on certain matters was to be decisive.

The Court emphasised the contractual choice of the parties in making the General Manager (and by notification the Chief Administrative Officer) the sole judge of whether the licensee's work was unsatisfactory. That officer had, on 29 September 1948, expressly directed that notice should be issued because the licensee's work was unsatisfactory. There was no allegation or proof of fraud or actual misconduct by that officer in the affidavits before the Court; absent such proof, the Court would not lightly impeach the officer's decision. Granting an injunction would, the Court said, frustrate the very contractual provision that made the licensor's revocation lawful on certain foundations.

On the remedial point the Court noted competing statutory provisions and authorities. It acknowledged authorities (including some Calcutta High Court decisions) suggesting damages may be the appropriate or exclusive remedy for revocation. It also considered, but found unnecessary to determine finally, whether statutory provisions such as s.64 of the Indian Easements Act (which prescribes compensation where a license granted for consideration is interrupted) ousted equitable relief; the Court's primary ground for decision was that, on the contract's plain terms, the license was revocable in circumstances established by the licensor's officer and thus not a case for perpetual injunction.

The Court therefore concluded that a perpetual injunction could not possibly be granted at trial, and consequently the interlocutory injunction should not have been granted or maintained. The Court set aside the orders below vacating the interlocutory injunction and ordered the respondent to pay costs of this appeal and of the Courts below. Justice Soni concurred, adding complementary reasoning about the constrained nature of the license and the parties' conduct (including the 8 July 1947 letter and subsequent royalty arrangement).

Holding and Implications

HOLDING: The Letters Patent Appeal is allowed; the orders of the Courts below are set aside and the interlocutory (temporary) injunction granted by the trial Court on 31 December 1948 is vacated.

Implications:

  • Direct effect on the parties: The interlocutory injunction restraining the Railway from terminating or interfering with the licensee's possession is vacated; the respondent (licensee) is ordered to pay the costs of this appeal and of the Courts below.
  • The Court's analysis determines, on the facts and clauses before it, that the Articles of Agreement constitute a license that was revocable under clause 11 when the contingencies specified arose and the General Manager (through the Chief Administrative Officer) adjudged the licensee's work to be unsatisfactory.
  • The Court did not decide definitively all contentious questions about whether damages might be the exclusive remedy under certain statutory provisions (e.g., s.64 Easements Act) or under all circumstances; the judgment rests primarily on contractual construction (cl.11/19/22) and the absence of any proven fraud or misconduct by the officer whose opinion was made decisive by the contract.
  • No pronouncement was made that creates a novel rule of law beyond the application and reconciliation of established authorities and statutes to the present agreement; the decision turns on the construction of the particular contractual terms and the evidential record before the Court.

Administrative note recorded in the opinions: Chief Justice Das ordered the appeal accepted and interlocutory injunction vacated; Justice Soni directed parties to appear before the trial judge on 3 October 1949 to fix a date to proceed with the case in accordance with law. Appeal allowed.

    Dominion Of India v. R. B. Sohan Lal

    Judgement

    DAS, C.J. - This is a Letters Patent appeal from the judgment and order of Falshaw, J. dated 28th March 1949 whereby he dismissed an appeal from an order made by the learned Subordinate Judge, 1st Class; Delhi, on 5th March 1949 dismissing the appellants application for vacating the interim injunction that had been granted by the learned Sub-Judge on 31st December 1948. The material facts may shortly be stated as follows.

    2. On 8th February 1946, certain Articles of Agreement were made between the Governor-General in Council acting through the North Western Railway Administration (hereinafter called "the licensor") and Rai Sahib M. Gulab Singh and Sons printers, publishers and book-sellers (hereinafter called "the licensee") whereby the licensor granted to the licensee who agreed to accept, for the term and subject to the conditions and reservations thereunder written, the sole and exclusive right to sell to the travelling public newspapers, books, periodicals and the usual travellers requisites and to erect book-stalls for the purpose on station premises under the control of the North Western Railway Administration wherever the licensor might consider necessary. The agreement was to come into force from 1st July 1946, for a period of 5 years renewable at the option of the licensor, for a further period of 5 years on the same terms and conditions. The license was to terminate on the expiry of 5 years without any formal notice unless it was renewed by the licensor. In consideration of the grant of the license, the licensee agreed to pay to the licensor yearly an advance on 1st July of each year commencing from 1946 a sum of Rs.36, 200 and to deposit a sum of Rs.10,000 as security for the due and proper fulfillment on his part of the conditions of the agreement. The other terms and conditions of the license will be referred to hereafter in detail. Pursuant to this license the licensee set up book-stalls in different railway stations under the control of the North Western Railway Administration, and on or from 1st July 1947 started the selling of newspapers, books, periodicals and the usual travellers requisites to the travelling public. It- is not disputed that in constructing the bock stalls and purchasing books and periodicals, etc., Indian and foreign, the licensee laid out considerable capital.

    3. In view, however, of the then impending partition of the Punjab, it was arranged that instead of paying Rs.36,200 the licensee would pay royalty at 3 % of the gross earnings of the book-stalls in addition to the usual percentage of the revenue derived from the display of advertisements on the book-stalls and that such royalty would be payable in half yearly installment at the end of every six months commencing from 1st July 1947. This arrangement was noted by the General Manager (Commercial) in his Letter No. pb-11/5 dated 8th July 1947. In the concluding paragraph of that letter it was stated that in view of the impending division of the North Western Railway it was not possible to guarantee that the licensee would hold the license for the full term of 5 years and that each of the two railways into which the North Western Railway would be divided would be at liberty to make their own arrangement in the manner they might deem fit. No formal agreement appears to have been executed incorporating any such term nor was any endorsement made on the Articles of Agreement as contemplated by cl.25 thereof.

    4. It is alleged that between April 1947 and September 1948 the Railway Administration received diverse complaints against the licensee from members of the public, high railway officials and even from some member of the Railway Board and gave numerous warnings to the licensee. The licensee, however, states that the complaints were not at all well founded and the Railway Administration must have considered the explanations and replies of the licensee adequate, for the matter was dropped and no further step was taken against the licensee. The Railway Administration, however, contends that no drastic step had been taken on the previous occasions as it intended to give the licensee a chance to improve matters but finding that the licensee was paying no heed to the warnings the Chief Administrative Officer, E.P. Railway who, by virtue of Notification No. P.T.N. 47/ 126 dated 10th May 1948, was to be deemed to be the General Manager of that railway issued an order over his signature on 29th September 1948 to the following effect:

    "Issue notice. His work is unsatisfactory and he is unable to conduct business as book stall contractor."

    5. Pursuant to this order a notice dated 5th October 1948 was issued to the licensee stating that as the latters work had proved to be unsatisfactory it had been decided to determine the contract in terms of cl.11 of the agreement and notifying that the contract would stand terminated and cease with effect from 31st December 1948, This notice was issued from the Headquarters office of the E.P. Railway at Delhi and was signed by somebody for the Chief Administrative Officer. In reply to a letter written on 22nd October 1948 by the licensee through its manager the Honble Shri K. Santhanam, the Minister of State for Transport and Railway, wrote on 29th October 1948 stating that the termination of the contract was the result of a decision taken by the Central Advisory Council for Railways. On 29th October 1948 the licensee by and through its advocate Lala Amar Nath Monga of Delhi served a notice under S.80, Civil Procedure Code on the Dominion of India through the Chief Administrative Officer, East Punjab Railway, Delhi, stating that the allegations in the notice dated 5th October 1948 received by his client at his Delhi Office were absolutely incorrect and had not been proved on due enquiry and contending that the purported termination of the contract was illegal, invalid and mala fide and the contract could not, therefore, be terminated before 30th June 1951. It was also maintained that the notice of termination had not been issued by a competent authority. The notice concluded with the intimation that after the expiration of two months, the licensee would institute a suit against the Dominion of India

    "for an injunction restraining you from terminating this contract and taking any action in pursuance of the alleged termination and otherwise interfering with his possession of the book stalls and the enjoyment and exercise of the rights under the aforesaid agreement, and in the alternative for assessment and award of damages or for both and you will be liable to cost of litigation."

    In view of the objection taken in the last mentioned notice under S.80 of the Code that the notice of termination had not been issued by a competent authority, a fresh notice of termination was issued on 18th November 1948 from the Railway Headquarters in Delhi for and on behalf of the Governor-General of India and served on the licensee at its office also in Delhi. Alleging that the licensees work as book stall contractor had proved to be unsatisfactory and it had been found that it was unable to conduct this business, the notice concluded that pursuant to cl.11 of the agreement the Governor-General of India thereby gave the licensee final notice of termination of the said agreement. It does not appear and indeed it is not contended by the licensee that any fresh notice under S.80 of the Code was given by the licensee. In the meantime on 5th November 1948, the licensee submitted an application offering 12% of the gross sales for the grant of a fresh license for bookstalls on the Delhi Station for which tenders had been invited by advertisements, a fact which has been relied upon as evidencing the licensees acquiescence in and acceptance of the termination of the previous agreement.

    6. On 31st December 1949, R.B. Lala Sohan Lal claiming to be the karta and proprietor of the joint Hindu family business of M. Gulab Singh and Sons, the licensee above named, instituted the present suit, out of or in connection with which the present appeal has arisen, in the Court of the Sub-Judge, First Class, Delhi, against the Dominion of India through the Chief Administrative Officer, Eastern Punjab Railway, Delhi, claiming in Para. 13 of the plaint that:

    "The defendant he restrained by perpetual injunction from preventing the plaintiff from exercising sole and exclusive rights to sell to the travelling public newspapers, books, etc., and the usual travellers requisites and interfering in possession of book-stalls erected for the said purpose at the station premises under the control of the Eastern Punjab Railway Administration and from allowing or authorising any other person or party to exercise the rights vesting in the plaintiff under the agreement, dated 8th February 1946, and from determining with effect from 31st December 948 the contract dated 8th February 1946, entered into between the plaintiff and the Governor-General in Council.

    Any other relief may be granted to the plaintiff which the plaintiff may be found entitled in lieu of and in addition to S.19, Specific Relief Act."

    This plaint along with a petition under O.39, Rr.1 and 2 and S.151, Civil Procedure Code, supported by an affidavit of R.B. Sohan Lal, was presented before the Sub-Judge at his residence because the Court was closed on 31st December 1948 and on the same day the learned Sub-Judge granted a temporary injunction until the decision of the case in terms of the prayer of the plaint as quoted above. Immediately after this order for injunction was served on the defendant, the latter on 15th January 1949 filed an application under O.39, R.4 of the Code praying that the injunction issued on 31st December 1948 be discharged and set aside. The learned Sub-Judge by his judgment delivered on 9th March 1949 dismissed the defendants application and maintained the temporary injunction till the decision of the suit. From this judgment the defendant appealed to this Court and Falshaw, J., by his judgment and order, dated 28th March 1949 dismissed the defendants appeal. The defendant then filed the present Letters Patent Appeal which has now come up before us for final disposal. The question we have to decide is whether the order for temporary injunction issued by the learned Subordinate Judge and maintained by Falshaw, J. was properly issued and whether it should be maintained or should be discharged.

    7. Learned counsel for the appellant points out that on 31st December 1948 the plaint was not properly stamped and had even blanks at several places in its body and therefore the plaint could not be properly admitted and in the premises (sic) no temporary injunction could be properly granted. I am not prepared to vacate the temporary injunction on this hypertechnical ground. The deficit stamp duty was, however, paid and the blanks filled in by 3rd January 1949 and the defect was cured on that date. I am quite prepared to regard the temporary injunction as effective on and from the last mentioned date and not on and from 31st December 1948 on the principle of nunc pro tune. I now proceed to deal with the principles governing temporary injunctions.

    8. Section 53, Specific Relief Act provides that temporary injunctions are regulated by the Code of Civil Procedure. I leave out of consideration here the powers of the Chartered High Courts to issue temporary injunctions, for here I am concerned with the power of the Subordinate Judge of Delhi to issue the temporary injunction I have mentioned. Cases in which a temporary injunction may be granted are mentioned in O.39, Rr.1 and 2 of the Code. In the present case, R.1 has no application and may be passed over. Rule 2 provides that in any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not the plaintiff may apply for a temporary injunction to restrain such breach of contract or injury and the Court may grant such injunction on such term as the Court thinks fit. The present case is one for restraining the defendant from committing a breach of contract or other injury and strictly according to the terms of the rule the Court may grant a temporary injunction. But the use of the word "may" clearly implies that the Court has a discretion in the matter, this discretion is to be exercised judicially and according to well-settled principles. One of such principles is that in a case of the kind referred to in the Rule the Court will ordinarily decline to grant a temporary injunction if the plaint and the affidavits filed by the parties show on the face of them that the case is not one for a perpetual injunction. Section 56, Specific Relief Act specifies the cases where a permanent injunction cannot be given. The contentions of the appellant as disclosed in its petition for discharge of the temporary injunction and the supporting affidavit of Shri Bodhraj and as elaborated by learned counsel in his arguments before us are that no temporary injunction should have been issued because no permanent injunction can be issued in this case at the trial for following reasons: (i) that the articles of agreement constituted only a license revocable at the will of the appellant; (ii) that at any rate the respondent licensee had been guilty of breaches of cls.2,4,10 and 12 of the articles of agreement as held by the Chief Administrative Officer who was made the sole judge thereof under cl.11, consequently the appellant licensor was under the last mentioned clause entitled to revoke the license; (iii) that the suit for injunction was not maintainable under S.56 of the Specific Relief Act 1877, cls.(d),(f) and (i).

    9. Regarding (i) and (ii): It will be convenient to deal with these two heads of Objections together. It is necessary, in order to correctly decide these points, to remember the true nature and legal incident of a license. In Thomas v. Sorroll, (1679) vaughans Rep. 344, Vaughan, C.J. defines a license in the following terms:

    "A dispensation or license properly passeth no interest, nor alters or transfers property in anything, but only makes an action lawful, which without it had been unlawful. As a license to go beyond the seas, to hunt in a mans park, to come into his house, are only actions which, without license, had been unlawful. But a license to hunt in a mans park and carry away the deer killed to his own use; to cut down a tree in a mans ground, and to carry it away the next day after to his own use, are licenses as to the acts of hunting and cutting down the tree, but as to carrying away of the deer killed and tree cut down, they are grants."

    This definition of license was quoted with approval in later English cases, Musket v. Hill, (1839) 5 Bing. N.C. 694: (9 L.J.C.P. 201), Wood v. Leadbitter, (1845) 13 M. and W. 838: (153 E.R. 351), Newby v. Harrison, (1861) 1 J. and H. 393: (9 W.R. 849) and Heap v. Hartley, (1889) 42 Ch.D. 461: (58 L.J.Ch. 790) and was also followed in India in Krishna v. Rayappa, 4 Mad. H.C.R. 98 and has been substantially reproduced in S.52, Indian Easements Act, 1882, as

    "a right to do, or to continue to do, in or upon, the immovable property of the granter, something which would, in the absence of such right, be unlawful:"

    provided that such right does not amount to an easement or an interest in the property. A right conferred by a ticket to enter and remain in a theatre during a performance was, in Taylor v. Waters, (1816) 7 Taunt 374: (129 E.R. 150), held not to be an interest in land but a license coupled with a grant of the right to witness the performance, and as such irrevocable. Again, the grant of a free gift to dig, work, mine and search for tin and other metals was regarded as a license coupled with a grant of such ore as would be found or got (see Doe v. Wood, (1819) 2 B. and Ald. 724: (106 E.R. 529) and Muskett v. Hill, (1839) 5 Bing. N.C. 694: (9 L.J.C.P. 201). Newby v. Harrison, (1861), 1 J. and H. 393: (9 W.R. 849) affirmed on appeal in (1861) 30 L.J.Ch.863, shows that a permission to enter upon a canal and take away the ice is a license as regards the entering but a grant as regards the ice to be carried away. A grant by deed of the sole and exclusive right or liberty to put or use pleasure boats for hire on a canal was in Hill v. Tupper, (1863) 2 H. and C. 121: 32 L.J.Ex. 217, held to be a mere license.In Webber v. Lee, (1882) 9 Q.B.D. 315; (51 L.J.Q.B. 485), the right to shoot game and take it away when shot, was, however, held to be a profit a prendre. To the like effect was the decision in Lowe v. Adams, (1901) 2 Ch. 598: (70 L.J.Ch.783). In Prosonno Coomar Singha v. Ram Coomar Ghose, 16 Cal. 640, the right to have the use of the defendants land as a privy was a mere license revocable at the will of the defendant. In Wilson v. Tavner, (1901) 1 Ch.578: (70 L.J.Ch. 263), where the defendant agreed in writing to let the plaintiff erect a hoarding for the purpose of a bill-posting and advertising station upon the forecourt of a cottage and to permit him to use the gable end of another cottage for the same purpose at a yearly rent it was held that the agreement did not amount to a demise but was a mere license revocable at will. In such a case the licensee is nevertheless entitled to sue for damages: Kerrison v. Smith, (1897) 2 Q.B. 445: (66 L.J.Q.B. 762). The case of Wood v. Leadbitter, (1845) 13 M and W. 838: (153 E.R. 351), requires careful consideration. The facts in that case were somewhat similar to those in Tayler v. Waters, (1816-7 Taunt 374: 129 E.R. 150) (supra). The plaintiff purchased for a guinea a ticket for the Doncaster race meetings entitling the holder to admission to the ground-stand and to the enclosure during every day of the races which lasted four days. The plaintiff came into the enclosure on one of the race days and while the races were going on, the defendant under the orders of Lord Eglintoun, one of the stewards, requested the plaintiff to leave the enclosure. Upon the plaintiff declining to do so, the defendant took him by the arm and put him out of the enclosure. The plaintiff thereupon sued for trespass for assault and false imprisonment. Upon the direction of Baron Rolfe the jury found a verdict for the defendant. A rule nisi was obtained for a new trial on the authority of Tayler v. Waters, (1816-7 Taunt, 374: 129 E.R. 150) (supra) that independently of any grant from Lord Eglintoun the plaintiff had a license from him to be in the enclosure at the time he was turned out and that such license was under the circumstances irrevocable. The Court of Exchequer discharged the rule. Alderson B. in delivering the judgment of the Court observed:

    "A mere license is revocable but that which is called a license is often something more than a license; it often comprises or is connected with a grant, and then the party who has given it cannot in general revoke it, so as to defeat his grant, to which it was incident. It may further be observed, that a license under seal (provided it be a mere license) is as revocable as a license by parol; and on the other hand, a license by parol, coupled with a grant, is as irrevocable as a license by deed, provided only that the grant is of a nature capable of being made by parol. But where there is a license by parol, coupled with a grant, or pretended grant, of something which is incapable of being granted otherwise than by deed, then the license is a mere license; it is not incident to a valid grant, and it is, therefore, revocable. Thus, a license by A to hunt in his park, whether given by deed or by parol, is revocable; it merely renders the act of hunting lawful, which, without license, would have been unlawful. If the license be, as put by Chief Justice Vaughan, a license not only to hunt but also to take away the deer when killed to his own use, this is in truth a grant of the deer with a license annexed to come on the land; and supposing the grant of the deer to be good, then the license would be irrevocable by the party who had given it; he would be estopped fron defeating his own grant or act in the nature of a grant. But suppose the case of a parol license to come on my lands, and there to make a watercourse, to flow on the land of the licensee. In such a case there is no valid grant of the watercourse, and the license remains a mere license and, therefore, capable of being revoked. On the other hand, if ouch a license were granted by deed, then the question would be on the construction of the deed, whether it amounted to agrant of the watercourse; and if it did, then the license would be irrevocable."

    10. In this case, the grant of the right to remain on the land to witness the races was regarded as a grant of an interest in the land and as this grant was not made by a deed under seal as required by law, the common law Court could not recognise the grant and, therefore, there being no grant which could be acted upon by the Court the license to enter upon the land could not be said to be incidental to any grant and, therefore, it remained a mere license and as such was revocable at will. The decision, therefore, was based entirely on the fact that the common law Court could not recognise such a grant unless it were under seal. But in similar circumstances the Court of Equity in England, prior to the Judicature Act would, by treating that as done which ought to be done, regard the license as irrevocable and give relief to the licensee by way of specific performance and injunction. Reference may be made to the case of Frogley v. Earl of Lovelace, (1859) Johns 333: (123 R.R. 147) and the other cases on this point referred to in Hurst v. Picture Theatres Limited, (1915) 1 K.B. 1: (83 L.J.K.B. 1837). Although many of the cases decided by the Chancery Courts prior to the Judicature Act as pointed out by Phillimore, L.J. in the last mentioned case, related to an interest given in land, that very case shows that in order to make the license irrevocable, the grant need not necessarily amount to a transfer of an interest in the land itself and that a license to enter upon the grantors close coupled with an interest e.g., the right to take away the hawk or the deer or the fish killed or the stone of other mineral found or to enjoy any other privilege will also make the license irrevocable. Thus, the license to come upon the grantors premises coupled with the right acquired for consideration to witness a performance there is equally irrevocable although there is no transfer of any interest in the premises or even to any particular seat. Since the Judicature Act, therefore, the decision in Wood v. Leadbitter, (1845 13 M. and W. 153 E.R. 351) (supra) cannot be a adopted in its entirety for all Courts in England will he bound to apply the rule of equity: See Hurst v. Picture Theatres, (1915) 1 K.B. 1: (83 L.J.K.B. 1837). This case is referred to by Tek Chand, J. in Jagat Singh v. District Board Amritsar, I.L.R. (1941) 22 Lah. 413: (AIR (27) 1940 Lah. 509), by Blagden, J. in Sri Sri Iswar Gopal Jew v. Globe Theatres Ltd., I.L.R. (1944) 2 Cal. 542 at p.547: (AIR (34) 1947 Cal. 200) and by R.C. Mitter, J. in Arpan Ali v. Janendra Kuntar Pal, AIR (32) 1945 Cal. 413: I.L.R. (1945) 2 Cal. 361: 49 C.W.N. 346 Reference may also be made on this point to Woodfall on Landlord and Tenant, 24th Edn., p.7 and Joshi on Easement, p.273.

    11. To summarise: A license may be of two kinds, namely, a bare license which is purely a matter of personal privilege and a license coupled with a grant or interest of the nature mentioned above. A bare license without more is always revocable at the will and the pleasure of the licensor and is not assignable although S.56, Easements Act permits the assignment of a license to attend a public place of entertainment in the absence of any contrary intention. The power of revoking a bare license is not affected by the fact that the license had been given for valuable consideration: See Wood v. Leadbitter, (1845-13 M. and W.838: 153 E.R. 351) (supra). Nor does an "exclusive license" differ in its incidents from an ordinary license. In Heap v. Hartley, (1889) 42 Ch.D. 461: (58 L.J.Ch 790), Fry, L.J. explained that "an exclusive license was a leave to do a thing, and a contract not to give leave to anybody else to do the same thing". A breach of such an exclusive license may give the licensee a right of action but if it is otherwise revocable then on its revocation, the implied negative covenant will, I apprehend, give a right of action in damages as on breach of contract. On the other hand, if a license is coupled with a grant or interest then the grantor cannot in general revoke it so as to defeat the grant to which it is incident. Since the Judicature Act, even if the grant be defective in law e.g., for want of a deed under seal, the license will still be regarded as irrevocable and relief will be granted by all Courts in England on equitable principles. Further a bare license becomes irrevocable when the licensee acting upon the license, executes a work of a permanent character and incurs expense in doing so. Tek Chand, J., in Jagat Singh v. District Board Amritsar, (I.L.R. (1941) 22 Lah. 413: AIR (27) 1940 Lah. 509) (supra) stated that this doctrine was based on equitable considerations and was really an application of the rule of estoppel. Be that as it may, it is quite clear from the authorities that, subject to any special agreement to the contrary, a license is revocable unless, (1) it is coupled with a grant or interest or (2) the licensee acting upon the license has spent money in executing works of a permanent nature. The Indian Easements Act incorporated these principles in a somewhat restricted form. Section 60, runs as follows:

    A license may be revoked by the grantor, unless-

    (a) it is coupled with a transfer of property and such transfer is in force;

    (b) the licensee, acting upon the license, has executed a work of a permanent character and incurred expenses in the execution."

    12. The first of the two tests of irrevocability laid down in the section is obviously narrower than the corresponding test laid down in the English cases. In order to be irrevocable under the section the license has to be coupled with a transfer of property, whereas under the English cases it is enough if it is coupled with a grant or interest in the nature of profit. It appears to me that clause (a) has adopted the rigid common law rule laid down in Wood v. Leadbitter: (1846-13 M. and W. 838: 153 E.R. 351) (supra) and therefore in the cases to which the Indian Easements Act applies it may not be possible to apply the more liberalised principles adopted by the Courts of Equity and referred to in Hurst v. Picture Theatres Ltd., (1915-1 K.B. 1: 83 L.J.K.B. 1837) (supra). Be that as it may, the two tests of irrevocability established by the cases and referred to above, or by the Indian Easements Act will, however, give way to the special agreement, if any, of the parties. Thus a license which is prima facie irrevocable either because it is coupled with a grant or interest or because the licensee has erected works of a permanent nature there is nothing to prevent the parties from agreeing expressly or by necessary implication that the license nevertheless shall be revocable. See Liggins v. Inge, (1831) 7 Bing. 682 at pp.688, 694 which was applied by the Judicial Committee in Plimner v. Wellington Corporation, (1884) 9 A.C. 699 at p.714: (53 L.J.P.C. 104), Gujrat Ginning and Manufacturing Co. Ltd., Ahmedabad v. Moti Lal Hirabhai Spinning and Manufacturing Co. Ltd., Ahmedabad, AIR (23) 1936 P.C. 77 at p.82: (160 I.C. 837) and Ganga Sahai v. Badrul Islam, AIR (29) 1942 ALL. 330: (202 I.C. 678). On the same reasoning, I should think, there will be nothing to prevent the parties from agreeing expressly or impliedly that a license, which is prima facie revocable being not within either of the two categories of irrevocable license should nonetheless be irrevocable.

    13. As regards the remedy, even where the license is revocable the licensee is entitled to a reasonable notice before the license is revoked. If, however, the license is revoked without reasonable notice the remedy of the licensee is by way of damages and not by way of an injunction. Aldin v. Lehimer Clark Muirhead and Co. (1894) 2 ch. 437 at p.447: (63 L.J.Ch. 601) and Wilson v. Tavener, (1901) 1 Ch. 578: (70 L.J.Ch. 263), where an interlocutory injunction bad been refused. Even if the license is obtained for consideration, yet if it is otherwise revocable and is revoked the remedy of the licensee is damages: Smart v. Jones, (1864) 83 L.J.C.P. 154: (10 L.T. 271), Kerrison v. Smith, (1897) 2 Q.B. 445: (66 L.J.Q.B. 762), Prosanna Coomar Singha v. Ram Coomar Ghose, 16 Cal. 640. The reason is obvious, for to restrain the revocation of a revocable license is to make it revocable. If, however, the license is irrevocable and its enjoyment is obstructed by the licensor there is authority that the remedy of the licensee is either by way of injunction or in damages (see Peacock on Easement, 3rd Edn., p.680). As already stated the Court of Equity will give relief by way of specific performance or injunction. An irrevocable license for a term implies an undertaking on the part of the licensor not to revoke it during its term and even if the license be not specifically enforceable for any reason, a threatened breach of the license may be prevented by enforcing this implied negative covenant by means of an injunction - a remedy which really gives effect to the irrevocability of the license. As against this reference is made on behalf of the appellant to S.64, Indian Easements Act which provides:

    Where a license has been granted for a consideration, and the licensee, without any fault of his own, is evicted by the grantor before he has fully enjoyed, under the license, the right for which he contracted, he is entitled to recover compensation from the grantor." It is argued, not without some force, that if the statute applies, it having prescribed a specific remedy, no other remedy is available and in case of revocation of an irrevocable license the only remedy is by way of damages. Reliance is also placed on some decisions of the Calcutta High Court to the effect that even in the case of revocation of an irrevocable license the only remedy is by way of damages: Per Mookerjee, J. in Swarnomoyee Peskar v. Chunder Kumar Das, 12 C.L.J. 443: (8 I.C. 793) and Motilal Rai v. Kalu Mandan 19 C.L.J. 321: (AIR (1) 1914 Cal. 173). Sulaiman, C.J. in Mathuri v, Bhola Nath, 56 ALL. 975: (AIR (21) 1934 ALL. 517) and Tek Chand, J. in Jagat Singh v. The Distract Board, Amritsar, I.L.R. (1941) 22 Lah. 413: (AIR (27) 1940 Lah. 509) and Srivastava, J. in Shyam Lal v. Munna, 8 Luck. 278: (AIR (20) 1933 Oudh 69) expressed the view that Mookerjee, J. in the two Calcutta cases went a bit too far.

    14. Keeping the above principles in mind I now proceed to examine and analyse the terms of the agreement which is before us. Turning to the articles of agreement I find that the parties are described as "licensor" and "licensee" which though not without some significance is not at all decisive. By clause (1) the licensor grants to the licensee

    "the sole and exclusive right to sell to the travelling public newspapers, books, periodicals and the usual travelers requisites and to erect book stalls for the purpose on station premises under the control of the North Western Railway Administration wherever the licensor may consider necessary."

    The site and space of the book-stalls are to be determined by the licensor. It is quite clear that this clause does not amount to any grant of any interest in the station premises or any particular part of it. At best this clause by itself is a license to enter upon the station premises coupled with a grant of the right to carry on the business of a book-seller within the station premises. This grant purports to give to the licensee "the sole and exclusive right". This grant is by clause (2) for a period of 5 years certain with an option for renewal by the licensor - a fact which may be taken into consideration in determining whether the license was intended to he revocable. This grant is not gratuitous but was made in consideration of the agreement on the part of the licensee to pay a sum of Rs.36,200 per annum and to deposit a sum of Rs.10,000 as and by way of security to be utilized in the way specified in clause (3) and to deposit further security. Clauses (4) and (5) provide for payment by the licensee of a percentage of the revenue derived from advertisements. Clauses (6), (7) and (8) enjoin upon the licensee the duty of keeping proper accounts of income derived from advertisements, of allowing inspection thereof to the officer deputed by the licensor, of preparing and submitting yearly accounts showing the licensors share of such revenue and of payment of all moneys due to the licensor simultaneously with the submission of the accounts. Clause (9) forbids assignment or transfer of the licensees rights and privileges to any other person without the previous consent in writing of the licensor - a provision which implies that there may be an assignment with the requisite consent and therefore indicates a certain amount of permanency of the license. Clauses (10),(12),(13) and, (is) regulate how the licensee is to carry on the business which show that the licensee is to be under the control of the licensor in minute details. Thus the licensor may prescribe the uniforms to be worn by the servants of the licensee, may criticise the price, character and newness of the literature exposed for sale which criticisms will have to be given effect to, may invite others to open book stalls at any station where the licensee may have closed down his book stalls, may even require electric bulbs of any particular candle power to be used in the stalls. Clause (16) imposes on the licensee the liability to pay all rates, taxes, cesses and assessments payable to the Government or local authorities in respect of the book-stalls and the land underneath the same. It has not been suggested that this provision gives the licensee any interest in any part of the station premises. Clauses (17) and (18) provide for some concession in railway freight and fares in respect of transport of the licensees book stalls, etc., and its employees and may be passed over. Clause (20) absolves the licensor from all responsibility for any stock etc., that may be placed at the stations by the licensee and enjoins that the licensees employees should be under the control of the stationmasters. Clause (21) forbids employment of licensors servants by the licensee. Clause (23) provides for indemnity to the licensor against all claims under the Workmens compensation act and clause (24) throws all responsibility on the licensee for compliance with the provisions of the Payment of Wages Act. Any modification of the terms is by clause (25), rendered ineffective unless and until the same is endorsed on the agreement itself or is incorporated in a formal instrument signed by the parties. Clauses (26) and (27) require no special mention for the purposes of the present appeal. I skipped over the following three clauses because they are very important and require to be quoted in extenso:

    "11 If the half yearly lump sum of Rs.36,200 or the fresh security or part thereof is not paid by the licensee on the date or within the periods laid down in cl.3, whether the same shall have been legally demanded or not, or if the licensee willfully commits any breach of the undertakings herein contained, or if his work proves in any way to be unsatisfactory, or if he is found unable to conduct the business as book stall contractor of which the General Manager shall be the sole judge, it will be lawful for the licensor to determine this agreement by giving one calendar months notice to the licensee in writing of the intention of the licensor to determine this agreement at the expiration of the notice, but without prejudice to any rights of the licensor accruing under this agreement against the licensee or any obligation to return the sum of rupees ten thousand (10,000):

    Provided further that in the event of the termination of the agreement in terms of this clause the annual lump sum of Rs.36,200 deposited by the licensee in advance shall be forfeited by the licensor and the licensee shall not be entitled to the refund of the same or any part thereof.

    "19. Within one month from the date of the determination of this agreement, under any of the conditions of this agreement, the licensee shall remove all book stalls together with all advertisements thereon or other materials or erections which may have been placed upon the property or premises of the North Western Railway under the provisions of this agreement without any objection or claim for compensation whatever. In the event of default by the licensee, it shall be lawful for the licensor to remove or cause to remove the said stalls and materials and to sell them by auction and recover any amount due from the licensee under the terms of this agreement from the Sale-proceeds, placing the balance, if any, at the credit of the licensee to be paid to them on demand.

    "22. On the licensee paying the yearly lump sum herein reserved and performing and observing the several conditions stipulated in this agreement the licensor agrees that the licensee shall peaceably hold and enjoy the benefits and rights granted by the licensor."

    The question now before us is as to whether this agreement, having regard to its terms, constitutes a license at all and, if yes, whether it constitutes a revocable or irrevocable license and finally what the remedy of the licensee is for a threatened or purported revocation of the license.

    15. I approach this question first on the basis that the Easements Act applied to this case by virtue, as contended by the appellant, of S.3 and S.4 read with schedule III of the Delhi Laws Act 1915 (Act VII (7) of 1915). I have already referred to S.52, Easements Act, which defines a "license". It is quite clear that cl.(1) of the agreement confers on the licensee a right to do in or upon the immovable property of the licensor something, namely, selling books etc. which would, in the absence of such right, be unlawful. It is also clear that such right does not amount to an easement as defined in S.4 of that Act or an interest in the property. It consequently follows that this clause (1) creates only a license. The terms of this agreement show that it is not "coupled with a transfer of property" within the meaning of cl. (a) of S.60 of the Act. The license may be coupled with a grant of the right to carry on business in the station premises but there is no transfer of property in the sense that any interest in the station premises has been transferred.Nor is there by any suggestion that the book-stalls set up by the licensee constitute the execution of a work of a permanent character within the meaning of cl. (b) of S.60. As this license does not fall either within cl.(a) or clause (b) of that section it must he regarded, prima facie and in the absence of anything else, to be a revocable license. Is there anything special in the agreement which will override this prima facie conclusion? That the license is for a period of 5 years, that it has been granted for very valuable consideration and that it is assignable with the requisite consent of the licensor are elements which may, to a certain extent, incline the Court towards the view that the license was intended to be irrevocable but are not to my mind, decisive on the question. Clause (22), however, clearly implies that the licensee performing all its obligations under the agreement it will be entitled to peaceably enjoy the license for the full term. Adopting the language of Buckley, L.J. in Hurst v. Picture Theatres Ltd., (1915 1 K.B. 1: 83 L.J.K.B. 1837) (supra at P.10), I would be prepared to say that there is "included in that contract a contract not to revoke the license" if the licensee performs all its obligations under the agreement and I would be inclined to hold, if that clause stood alone, that the parties by their special contract made the license, which was prima facie revocable under S.60, an irrevocable license and that a threatened revocation thereof should be enforced by an injunction restraining the breach of the implied negative covenant. But this clause (22) has to be read along with and in the light of the preceding clauses (11) and (19) which I have quoted above. These clauses clearly envisage the revocation of the license on the happening of certain things. Reading cl.(11) and cl.(22) together the position appears to be that the license is irrevocable if the licensee performs its obligations but if it fails to do so it will be lawful for the licensor to revoke it. It is not necessary to enquire whether the words "of which the General Manager shall be the sole judge" in cl.(11) govern only the clause immediately preceding those words or they govern all the clauses preceding them, for the revocation has been founded inter alia on breach of the immediately preceding clause. If these words were not in cl. (11), it would have been an issue of fact at the trial whether there had been a default on the part of the licensee within the meaning of that clause and there might have been some plausibility and force in the argument that until that issue had been decided by the Court there should be a temporary injunction. Here, however, the parties have, by their special contract made the General Manager, whose place is now taken by the Chief Administrative Officer by virtue of the notification I have referred to, the sole judge of that issue and that officer has adjudged it by his order dated 29th September 1948 which has also been mentioned above. I do not read the words "of which the General Manager shall be the sole judge" as at all constituting an arbitration agreement in the nature of like provisions in building contracts whereby the architect employed by the owner is made the sole judge of the act or conduct or claim of the contractor. In building contracts, the architect is actually appointed as arbitrator by the submission clause and the architect has to observe and perform the obligations of an arbitrator. The words in cl.11 with which we are concerned are by no means a submission to arbitration of the General Manager so as to impose upon the General Manager the duties of an arbitrator in the matter of giving notice of meeting, hearing parties and the like. All that the words mean is that it shall be lawful for the licensor to revoke the license if in the opinion of its General Manager the licensee has been guilty of any breach of any of the conditions of the license. It does not mean that the General Manager has to give notice to the parties, hold meetings and make an award declaring that there has been any breach on the part of the licensee. Further, there is ample evidence on the record to show that time and again and on several occasions warnings were given to the licensee as to various breaches and calling upon it to rectify its conduct so as to put the business in a satisfactory order and eventually on 29th September 1948, the Chief Administrative Officer ordered that as the licensees "work was unsatisfactory and he was unable to conduct business as bookstall contractor" notice should be issued terminating the license. The licensee agreed to abide by the opinion of the General Manager and cannot now be heard to complain against it. Learned counsel for the respondent-licensee has drawn our attention to a letter dated 29th October 1948, written by the Honble Sri K. Santhanam, Minister of State for Transport and Railways, that the termination of the contract was the result of a decision taken by the Central Advisory Council for Railways. If the Chief Administrative Officer took the precaution out of abundant caution of having his own decision endorsed by the Central Advisory Council for Railways, that circumstance does not alter the fact that the Chief Administrative Officer had decided the question of which he had been made the sole judge. There is on the affidavits no charge, and far less any proof, of actual misconduct, on the part of the Chief Administrative Officer personally which may in any way be taken as vitiating his judgment and decision. In the absence of any charge of fraud or actual misconduct against the officer personally and of any proof on record I do not think his decision can be challenged in any Court. Such being the position, I am quite satisfied that this is not a case where a perpetual injunction could possibly be issued at the hearing and, therefore, on principle, no temporary injunction should have been granted in this case. If the Calcutta decisions referred to above were correct the only remedy, if any, of the respondent licensee would lie in damages unless of course cl.(11) bars even that remedy as to which I express no opinion. Again, if the argument that the Indian Easements Act having, by S.64, prescribed the special remedy by way of damages, no other remedy is available were sound, then also no injunction can be granted. Finally, if the license has, by special agreement, been made revocable on certain grounds as to the existence of which a particular persons opinion has been made the sole test and criterion and he has expressed his opinion as I hold he has, then also there can be no injunction, for to grant an injunction in such circumstances will be to make that irrevocable which the parties themselves had by their special contract thought fit to make revocable.

    16. The position will not be any different if the Indian Easements Act did not apply and if the matter had to be governed by the general principles of law. It has been said in Jagat Singh v. District Board, Amritser, (I.L.R. (1941) 22 Lah. 413: AIR (27) 1940 Lah. 509) (supra) that even if the Act does not extend to a particular territory, the provisions of the Act may be applied as rules of justice, equity and good conscience. As I have said that the provisions of the Act are in some respects narrower than the law as has been liberalised in modern decisions and I am, therefore, prepared to apply the principles now established by modern decisions of the English Courts which have been adopted by the High Court of Calcutta where the Act does not extend as better rules of justice, equity and good conscience. According to the principle enunciated in Hurst v. Picture Theatres Ltd., (1915 1 K.B. 1: 83 L.J.K.B. 1837), the Articles of Agreement before us does constitute a license coupled with an interest and, therefore, is prima facie irrevocable. The facts that the license is for a term of 5 years certain, that it was granted for valuable consideration and that it contemplated even assignment of the licensees rights under certain conditions and that it was provided that the licensee would peaceably enjoy the grant for the full term if it performed its obligations (cl.22) certainly tend to reinforce the prima facie conclusion that the license was intended to be irrevocable. But cl. (11) and cl.(19) to which reference has been made appear to me to completely change the position by providing that, on the happening of certain contingencies of which the General Manager was to be the sole judge, it should be lawful for the licensor to revoke the license. For the reasons already stated, this makes the license revocable and the opinion of the General Manager cannot be challenged in any Court in the absence of any charge of fraud or actual misconduct on his part personally as to which there is no iota of evidence on the affidavits. Even on this basis the license being revocable, the remedy cannot be by way of injunction for, there can be no question of preventing a person from doing what by special contract it is lawful for him to do. It is thus quite clear, whether the Indian Easements Act applies or not, that the Articles of Agreement in suit properly construed constitute only a revocable license and the revocation thereof cannot be prevented by injunction, What other remedy the licensee may have does not require consideration in this appeal and I express no opinion in that behalf. It is enough, for the purpose of disposing of this appeal, to say that it is not a case for perpetual injunction and consequently no interlocutory injunction should have been made. This aspect of the matter which I have been considering at some length does not appear to have been brought to the notice of Falshaw, J.

    17. Re. (iii): In view of the conclusion I have arrived at on questions (i) and (ii) this third question need not be dealt with in any great detail. It is urged that an injunction cannot be granted in this case because it will interfere with the public duties of the Railway Administration within the meaning of S.56 (d), Specific Relief Act. In support of this argument, reliance is placed by learned counsel for the appellant on the decision in S.L. Kapoor v. Emperor, AIR (24) 1937 Lah. 547: (38 Cr.L.J. 793). I am not convinced that there is any specific duty cast by law on the Railway Administration to arrange for sale of books on the Railways stations. This is an agreement entered into by the licensor and the licensee and should be subject to the ordinary incidents of agreements of this kind. In these days, the Government departments freely enter into contracts of different kinds including those of a commercial nature and it will be intolerable if the Government can on a far-fetched plea of public duty commit a breach of such contracts with impunity. Further, issuing an injunction if it were permissible will only result in the licensee continuing to do the business and although the licensor may not be satisfied with the licensees working, the travelling public will yet have at least a part of the amenities by way of book-stalls on the station premises and, therefore, the alleged public duty of the licensor will not be interfered with to such am extent as to warrant the withdrawal of the Courts process by way of injunction.

    18. It is next urged that this contract cannot be specifically enforced and, therefore, under S.56 (f), Specific Relief Act not perpetual injunction can be granted. section 21 of that act specifies the contracts which cannot be specifically enforced. It is alleged that the nonperformance of this contract can be well compensated by damages. Indeed, in its notice under S.80 of the Code the licensee claimed damages in the alternative. I need say nothing more on this point except that this contention, which is not without some force, has to be examined in the light of the counter contention that a revocation of a contract of this type may reflect on the reputation of the licensee which it may be difficult to compensate in terms of money. It is also alleged that a contract of this kind which runs into numerous details cannot, under cl.(b) of S.21, be specifically enforced, Akin to this objection is the other one under cl.(g). Reliance is placed on Messrs. Deutsche Dampschief Fahrts Gesselchaft Hansa of Bremen v. Firm of Pestonji Bikhaji, AIR (12) 1925 Sind 347: (89 I.C. 321); Gulab Singh v. Punjab Zamindara Bank Ltd., AIR (29) 1942 Lah. 47: (199 I.C. 667). I am not of opinion that these are idle contentions or devoid of force. It is also urged that the licensee is completely under the control of the licensor and is practically a railway servant as a railway caterer has been held to be in S.L. Kapoor v. Emperor, AIR (24) 1937 Lah. 547: (38 Cr.L.J.793) and the contention is that a contract of employment is never specifically enforced, for a recalcitrant servant cannot be thrust upon an unwilling master. Merely because a person may be a railway servant within the meaning of the Railways Act does not necessarily mean that that person is servant for all purposes and that all the principles of law relating to master and servant must apply. Apart from these arguments, it seems to me that there cannot be specific performance of a contract which by its own terms is revocable at the will of a party thereto because the decree, if any, may be rendered nugatory at the will and pleasure of that party. There can be no injunction, for, as I have said the Court ought not to prevent a person doing what, by contract, it is lawful for him to do.

    19. Learned counsel for the respondent urges that even if the contract cannot be specifically enforced, as it implies a negative covenant, that negative covenant ought, under S.57, Specific Relief Act, to be enforced by injunction. This argument overlooks the effect of the revocability of the contract. An implied covenant is but a term of the contract and if the contract is revocable, the contract with all its terms, positive and negative, is at an end and there can be no question of enforcing any of its terms by way of a specific performance or by injunction.

    20. It is finally argued by learned counsel for the appellant that no permanent injunction can be issued under S.56 (i). This is another way of putting the case, namely, that adequate relief may be obtained by way of damages which I have already dealt with.

    21. I have pointed out that in view of the conclusions I have arrived at under questions (i) and (ii) above this question (iii) does not arise. For the reasons stated above, I accept the appeal, set aside the orders of the Courts below and vacate the interlocutory injunction granted by the trial Court on 31st December 1948. The respondent must pay the costs of this appeal and of all the Courts below.

    22. SONI, J. - I am in respectful agreement with my Lord the Chief Justice but I would like to add a little to what he has said in his judgment. In this case, the terms of agreement between the parties provided thus:

    "1. The licensor hereby grants to the licensee who agrees to accept for the term and subject to the conditions and reservations hereunder written, the sole and exclusive right to sell to the travelling public newspapers, books, periodicals and the usual travellers requisites and to erect book-stalls for the purpose on station premises under the control of the North Western Railway Administration wherever the licensor may consider necessary. The site and space to be occupied by book-stalls shall be determined by the licensor who will also approve of the design of such book-stalls. The licensee shall not offer for sale or exhibit on railway premises without the previous assent of the licensor any book, newspaper, periodical or printed matter of advertisement. The licensor reserves to himself the right to prohibit the sale at book-stalls, or on the station platforms of any book, newspaper or other literature and miscellaneous articles which he considers to be indecent or otherwise objectionable, the decision of the General Manager, North Western Railway, or his representative being final and binding on the licensee.

    10. The licensee shall keep the book-stalls in a clean and smart condition and shall maintain fresh and up-to-date stocks of books, magazines, etc., for the benefit of the travelling public.

    12. The licensee shall provide sufficient permanent staff at each book-stall to efficiently carry out the obligations undertaken by him. All vendors of papers and all other persons employed by the licensee at all book stalls on the railway stations shall at the expense and cost of the licensee be clad in such uniform and in such manner as the licensor may, from time to time, require.

    13. The licensee may exercise his own discretion in fixing the prices to be charged at their book-stalls, but in respect of imported literature, such as magazines, periodicals, illustrated papers, etc., the prices must not exceed those usually charged for the same articles by firms carrying on similar business at Lahore and Delhi. The licensor shall be at liberty, at any time during the continuance of this agreement, to criticise the price, character and newness of the literature and other goods exposed for sale, and the licensee shall have to give effect to such criticisms."

    23. The object of the agreement is to give the plaintiffs the sole and exclusive licence and privilege to sell newspapers, books, periodicals and other articles. All these must meet with the approval of the General Manager of the Railway or his representative. As a necessary part of such privilege, the plaintiffs could erect bookstalls on the railway premises. But the plaintiff could not do as they liked with the premises. They were not given a general right of occupation but only aright to use the sites and spaces allotted to them for the purpose of selling books, periodicals etc. Even that right was subject to restrictions. The sites and spaces allotted to them may be wherever the Railway may consider necessary and shall be determined by the Railway. The designs of bookstalls must be approved. The plaintiff servants are to a certain extent under the control of the Railway. The books, periodicals etc., are to be approved by the Railway, so also their condition and prices. The plaintiffs are thus controlled in many essential modes of enjoyment. How, then, can it be said that they are tenants having exclusive legal occupation of the premises? What is granted is, in my opinion, a restricted licence to make profits on land by trading upon it. The plaintiffs learned counsel argued that it stood on the same footing for this purpose as a licence to take a profit out of land, as a profit a prendre, In the case of a profit a prendre the profit arises out of the land itself, as, for instance, in carrying away of the tree cut down mentioned by Vaughan, C.J. in Thomas v. Sorrel, (1679 Vaughans Rep.344) cited by my Lord the Chief Justice. But in the case of profit to be obtained by the exercise of a licence on the land, which is not derived out of the land itself, it cannot, in my opinion, be said that an interest in land is conferred.

    24. It was next argued that at all events an injunction is the proper remedy for the breach of the contract which is alleged to have taken place in the present case. The circumstances of this case have, however, to be taken into consideration. This agreement was entered into on 8th February 1946 at Lahore with the North Western Railway Administration. On 8th July 1947 a letter was sent to the plaintiff which ran thus:

    "It is noted that you are agreeable to pay Royalty at the rate of 3 per cent of the gross earnings of the bookstalls in addition to the usual percentage of the revenue derived from the display of advertisements on bookstalls. You will please note that Royalty will be payable in half yearly installments at the end of every six months, commencing from 1st July 1947.

    2. In view of the impending division of the Northern Western Railway, you will appreciate that it is not possible to guarantee that you will hold the licence for the full term of five years. Each of the two railways into which the N.W. Railway will be divided will be at liberty to make their own arrangements in the manner, they may deem fit."

    25. It was thus made clear that the term of five years was not guaranteed, if the plaintiffs chose to continue to work on the East Punjab Railway, The plaintiffs were ordered by the trial Court on 5th February 1949, on the application by the defendant to produce the original of this letter as also other documents. They did not produce the original letter of 8th July 1947, but they produced the original letter of the Railway, dated 11th February 1948, in which a copy of this letter was reproduced by the Railway. In this letter 11th February 1948, it was said:

    "Please refer to the General Manager, (Commercial) North Western Railways letter No.Pb,11/5, dated 8th July 1947, (copy enclosed for ready reference) and arrange to remit early the first installment of royalty at the rate of 3 per cent of the gross earnings which was due on the 1st January 1948."

    The plaintiffs chose to work on East Punjab Railway and it is admitted that instead of Rs.36,200 which was to be paid yearly in advance under the original agreement, this royalty of 3 per cent of the gross earnings was to be paid and has continued to be paid.

    " There is one golden rule", said Lord Greene, M.R. in Booker v. Palmer, (1942)-2 All E.R. 674 at p.676, "which is of very general application, namely, that the law does not impute intention to enter into legal relationships where the circumstances and conduct of the parties negative any intention of the kind."

    26. From the language of the agreement and the circumstances of this case, I cannot come to any other conclusion than that in this case a licence pure and simple was intended to be granted revocable at the will of the grantor. This is emphasized in cl.11, by making the General Manager of the Railway the sole judge of whether the licensee is working satisfactory or able to conduct the business as book stall contractor. Under, cl.22, the licensor agreed that the licensee shall peaceably hold and enjoy the benefits and rights granted by the licensor on condition that the licensee performed and observed the several conditions stipulated in the agreement, the sole judge of which was under cl.11, the General Manager of the Railway.

    27. The circumstances under which the agreement was terminated by the Chief Administrative Officer of the East Punjab Railway, who took the place of the General Manager, have been dealt with at length by my Lord the Chief Justice and I do not want to add to what he has said except that in a letter from the Director Railway Board No.461-TG/PT: A, dated 17th July 1947, to the General Manager, North Western Railway, Lahore, it was stated in para 3:

    "During the course of the Councils deliberations, certain members commented adversely on the nature of the literature exposed for sale by your present bookstall contractors and referred to the absence from the bookstalls of books in Bengali and Hindi. The Board observe that you also consider that Messrs. Rai Sahib M. Gulab Singh and Sons are not rendering satisfactory service, and they desire that the firm should be informed of this and of the complaints against them, and warned that they must put their business on a satisfactory footing not later than the end of the present year. Immediately thereafter, the position may be reviewed and the Board advised of your conclusions and in the event of your deciding that further action must be taken, the nature of such action."

    28. I cannot presume that the Chief Administrative Officer of the East Punjab Railway did not exercise his independent judgment when he held on 29th September 1948, the plaintiffs work was unsatisfactory and he was unable to conduct business as bookstall contractor.

    29. It has been alleged by the plaintiffs that there has been a breach of the terms of the licence.

    "If a licence is revoked in breach of a contract", said Lord Greene in the case already cited, "the remedy is damages and nothing else, the reason being that the licensee has no estate in the land at all."

    30. I agree in the order proposed by my Lord the Chief Justice that the temporary injunction granted by the trial Judge must he vacated and that this appeal should be accepted with costs throughout. Parties are directed to appear before the trial Judge on 3rd October 1949, who will then fix a date for proceeding with the case in accordance with law.

    Appeal allowed.

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