- Bookmark
- Share
- CaseIQ
Ulahannan v. George
Factual and Procedural Background
The litigation concerns the proper legal character of a document referred to as Ext. A-1. The appellant (defendant in the original suit) contends that Ext. A-1 creates a lease; the respondent (plaintiff in the original suit) contends that it creates only a licence. The plaintiff sued for recovery of the property; the defendant resisted the suit on the basis that Ext. A-1 created a lease and, alternatively, that even if it were treated as a commercial lease the defendant would be entitled to the benefit of S. 106 of the Kerala Land Reforms Act because the defendant had made certain constructions on the premises.
The trial court examined the evidence and the terms of Ext. A-1 and held that the document evidenced a licence, not a lease, and consequently granted the plaintiff a decree. The defendant appealed; the first appellate court affirmed the trial court's judgment and decree. The matter was earlier referred to the concerned Land Tribunal when the lease question arose; the Tribunal had held the relationship to be licensor-licensee and that Ext. A-1 evidenced only a licence. The defendant then appealed to the present court, which is disposing of that appeal.
Legal Issues Presented
- Whether Ext. A-1 creates a lease (transfer of an interest in immovable property) or merely a licence (a personal privilege without transfer of interest).
- If Ext. A-1 is a licence, whether the licence is rendered irrevocable (or the licensee entitled to protection) on account of permanent constructions executed by the licensee, having regard to S. 60 of the Easements Act and the terms of Ext. A-1.
- Whether, if Ext. A-1 were a lease, the defendant could claim the benefit of S. 106 of the Kerala Land Reforms Act (this ground was pleaded by the defendant but depends on the determination of the first issue).
Arguments of the Parties
Appellant's Arguments
- Ext. A-1 creates a lease and not a licence; consequently, the defendant claims rights attendant on a lessee (including an argument based on S. 106 of the Kerala Land Reforms Act, if a lease is established).
- The appellant relied on a recital in Ext. A-1 which states that the defendant was not entitled to transfer the plot to anyone else; the appellant argued that such a prohibition implies that some interest in the property had been conferred on the defendant.
- The appellant relied on precedent (Kuchunni v. Kuriakose, 1981 K.L.T. 338) which treated a similar recital as more consistent with creation of a lease than a licence.
- On the question of irrevocability, the appellant's counsel submitted that S. 60 of the Easements Act should operate to protect the licensee where permanent works are erected, and that the section lacks a clause excluding operation "notwithstanding a contract", so that where the conditions of S. 60(b) are satisfied the statutory protection should apply despite contractual provisions purporting to make the licence revocable.
Respondent's Arguments
- The respondent maintained that Ext. A-1 creates only a licence and not a lease; the plaintiff contended that the document and the parties' conduct show no intention to create a tenancy (i.e., no transfer of interest).
- The respondent relied on evidence of continuing acts of possession and enjoyment by the plaintiff (for example, the plaintiff taking the yield of a coconut tree and having cut and removed another coconut tree from the suit property after execution of Ext. A-1) to show that exclusive possession was not handed over to the defendant.
- On the question of S. 60, the respondent relied on the clear contractual stipulation in Ext. A-1 that on surrender the defendant must dismantle structures, and on the defendant's own pleading that on termination he would only be entitled to the value of improvements; this, the respondent argued, disentitles the defendant/licensee from claiming the benefit of S. 60.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Errington v. Errington ((1952) 1 All ER 149), Denning L.J. | Explains distinction between tenancy and licence: tenancy transfers an interest; exclusive possession is an important circumstance but not conclusive proof of tenancy where circumstances negative intention to create tenancy. | Quoted to support the proposition that exclusive possession is prima facie indicative of tenancy but not determinative; courts must look to intention and circumstances. |
| Thomas v. Sorrell (Vaughan C.J.) (124 E.R. 1098 at 1109) | Classical definition of licence: a licence passes no interest and only makes an otherwise unlawful action lawful. | Used to state the classic definition of licence and to reinforce that a licence does not transfer interest in the land. |
| Qudrat Ullah v. Bareilly Municipality ((1974) 1 SCC 202 : AIR 1974 SC 396) | There is no simple litmus test to distinguish lease (S.105, Transfer of Property Act) from licence (S.52 Easements Act); the character depends on operative intent—interest + enjoyment implies lease; mere permission without exclusive possession implies licence. | Applied as authoritative guidance for focusing on operative intent and exclusive possession as one of the considerations in characterising the transaction. |
| Cubb v. Lane ((1952) 1 All E.R. 1199) | Emphasises that the central question is intention: whether the occupier was to have only a personal privilege with no interest in land. | Invoked to underscore that the court must ascertain whether the parties intended merely to grant a personal privilege (licence) or to create a tenancy. |
| Doed Tomes v. Chamberlaine; Lynes v. Snaith (cases cited in Denning's discussion) | Historical authorities noting exclusive possession as a test sometimes used to distinguish tenancy from licence. | Referenced within Denning's exposition to show the historical tendency to treat exclusive possession as a key test, but the court treats that as not conclusive. |
| Narayana Moopan v. Sureshan (1985 KLT, Short Notes 22) | Remarks on the role of precedent, the need to follow higher-court decisions and to seek a just solution in particular cases. | Quoted to explain the approach to precedent and the court's duty to follow Supreme Court and High Court precedents while seeking justice in the particular case. |
| Kuchunni v. Kuriakose (1981 K.L.T. 338) | Noted that a recital prohibiting transfer by the occupier is more consistent with creation of a lease than a licence (as cited by the appellant). | The court observed that the appellate court had considered this authority and the relevant recital but chose to consider the document as a whole and other circumstances which offset that recital's influence. |
| Sinha Ramanuja v. Ranga Ramanuja (AIR 1961 SC 1720) | Principle limiting the High Court's jurisdiction in second appeals: High Court ordinarily cannot entertain a second appeal merely on erroneous finding of fact. | Cited to remind that the present court's power in a second appeal is limited and to justify deference to concurrent findings of fact by the courts below. |
| Ganga Sahai v. Badrul Islam (A.I.R. 1942 All. 330) | Holds that a condition in a licence giving the landlord the right to get the site vacated whenever he so chooses deprives the licensee of the benefit of S. 60 of the Easements Act; a contract to the contrary disentitles the licensee from deriving the advantage of S. 60. | Applied to conclude that a clear contractual provision in Ext. A-1 (requiring dismantling on surrender and permitting eviction) disentitles the licensee from claiming S. 60 protection. |
| Chotey Lal v. Durga Bat (AIR 1950 All. 661) | Where a licensee executes permanent works under a clear understanding that he or his heirs may be called upon to leave, he cannot plead such works as a bar to eviction pursuant to the undertaking. | Applied to support the view that the contractual undertaking in Ext. A-1 and the defendant's plea about entitlement only to value of improvements prevent the defendant from relying on permanent works to defeat eviction. |
Court's Reasoning and Analysis
The court began by noting the practical force of concurrent findings: both the trial court and the first appellate court independently found that Ext. A-1 was a licence, and the court emphasised caution in disturbing concurrent findings of fact in a second appeal in the light of limitations on such interference (as explained with reference to Sinha Ramanuja). Nevertheless, the court analysed the legal principles governing the lease-vs-licence inquiry and then tested the facts and document against those principles.
On the legal principles, the court reiterated that the question is essentially one of the parties' operative intention and that the court must first look to the recitals of the document construed in the factual matrix in which it was executed. The court emphasised the cardinal distinction: a lease transfers an interest in immovable property entitling enjoyment, whereas a licence confers permission without transfer of an interest. The court observed that exclusive possession is a significant circumstance indicating a lease but is not conclusive because exclusive occupation can be consistent with a licence in appropriate circumstances (citing Errington and authorities).
Turning to the evidence and the document, the court observed:
- The matter had been referred to the Land Tribunal, which found a licensor-licensee relationship; the appellate court also reviewed the evidence and the recitals of Ext. A-1 and recorded a clear finding that Ext. A-1 evidences a licence.
- The appellate court considered the appellant's reliance on the recital that the defendant could not transfer the plot and the appellant's reliance on Kuchunni, but the appellate court examined the whole document and the surrounding circumstances and found that other recitals and evidence offset the force of that single recital.
- On the factual side, the appellate court found that the defendant did not have exclusive possession: for example, the plaintiff took the yield of a coconut tree on the suit property and had removed another coconut tree after execution of Ext. A-1. These facts supported the conclusion that exclusive possession had not been handed over to the defendant under Ext. A-1.
The court expressly declined to re-appreciate the evidence in detail because its jurisdiction in second appeal is circumscribed; the task was to decide whether the courts below had gone wrong on a substantial question of law in interpreting Ext. A-1. Finding no such error, the court accepted the lower courts' interpretation that Ext. A-1 evidenced a licence.
On the secondary issue—whether the licence, even if such, had become irrevocable through permanent constructions—the court analysed S. 60 of the Easements Act and the relevant authorities. The court noted precedents (Ganga Sahai and Chotey Lal) to the effect that a contractual clause reserving the landlord's right to get the site vacated, or a contract to the contrary, disentitles the licensee from deriving the advantage of S. 60. Ext. A-1 contained an express provision that on surrender the defendant must dismantle structures put up on the land, and the defendant's written statement indicated that on termination he would only be entitled to the value of improvements in respect of permanent structures. These contractual terms, the court held, disentitle the defendant from claiming protection under S. 60.
The court therefore concluded that (i) Ext. A-1 should be interpreted as a licence and not a lease and (ii) even if treated as a licence, the contractual provisions in Ext. A-1 and the defendant's own plea disentitle him from claiming the statutory protection of S. 60 of the Easements Act in respect of permanent constructions.
Holding and Implications
Holding: The appeal is DISMISSED. The court upheld the concurrent findings of the trial court and the appellate court that Ext. A-1 evidences a licence and not a lease, and it held that the appellant (defendant) is not entitled to the benefit of S. 60 of the Easements Act because of the clear contractual provisions in Ext. A-1 requiring dismantling of structures on surrender and the defendant's own pleadings limiting his entitlement to value of improvements.
Implications:
- Direct effect on the parties: The dismissal confirms the plaintiff's entitlement to a decree as awarded by the courts below (the lower courts had held Ext. A-1 to be a licence and granted relief accordingly). The appellant/defendant cannot rely on S. 60 of the Easements Act to prevent eviction or to claim irrevocability by reason of permanent constructions because of the contractual terms in Ext. A-1 and the defendant's pleadings.
- No expansion of legal doctrine: The court applied established principles and existing authorities (as cited) and did not purport to lay down a new rule of general application; the decision rests on interpretation of the particular document and the relevant precedents. The court emphasised the limited scope for re-appreciation of evidence in a second appeal and the need to respect concurrent findings of fact.
- Costs: The court ordered that there will be no order as to costs.
Note: This summary is confined to the contents of the provided opinion and does not add facts or authorities beyond those expressly stated in the opinion.
1. This appeal raises a question of interpretation of a document, Ext. A 1. The appellant would contend that Ext. A-1 creates a lease. The respondent contends that it creates only a licence. The suit for recovery of property was resisted by the defendant contending that Ext. A 1 creates a lease and even if it is assumed to be a commercial lease, since the defendant has made certain constructions in the premises, be is entitled to claim the benefit of S 106 of the Kerala Land Reforms Act. The trial court, after considering the evidence adduced in the case and after analysing the various terms of Ext. A-1, found that the defendant's case of lease is unsustainable. The trial court found that Ext. A-1 evidences a licence and so, the plaintiff is entitled to a decree. The defendant filed as appeal. The appellate court confirmed the judgment and decree of the trial court. Now the defendant appeals.
2. Though affirmation by the first appellate court, of a crucial fast found by the trial court insulates the verdict with no inerrability, but since absolute objective certainty is impossible in the decision process in this imperfact world, there is plain and perfect justification on practical reasons to unopen the pylon when the first two Judges concur in the factual conclusion at separate levels, particularly is the wake of the guillotine rule of prohibition of overseeing by this court it, second appeal, the conclusions on facts by the appellate court made more stringent by the amendment to S. 100. of the Code of Civil Procedure. Court's prime concerts is to avoid miscarriage and failure of justice. Miscarriage and failure of justice may take different forms; are-evaluation of the evidence or a re-appreciation of the evidence at the third tier of the litigation and a finding of fact different from that of the courts below in second appeal, may constitute a plain injustice in law to one of the parties.
3. The question whether a document evidences a lease or a licence is essentially a question of intention. The courts have to gather the intention firstly, from the recitals in the document. Of course, ‘the recitals in the document have to be understood in the setting and circumstances under which the document has been executed. When a question comes up before the court whether a document is a lease or a licence, naturally, the court is bound to keep it mind the cardinal distinction between a lease and a licence. The distinction is that, in a lease, there is a’ transfer of an interest in the immovable property to enjoy it, whereas in a licence, there is no transfer of interest in the immovable property at all. the primary and important character of the lessee's right in his right to possession and enjoyment of the demised land to the exclusion of the lesser. It is always better to remember that the right of exclusive possession was at one time considered an She sigil end signet to rule but a licence. But, modern view as seen taken from the decisions show a different tread and say that exclusive possession is net conclusive though it may-be an important circumstance to hold that the transaction is a lease. This is so, because, exclusive possession of the property is not be considered inconsistent with the occupier being a license and not a tenant. In Errington v. Errington ((1952) 1 All ER 149) Denning L.J pointed cut:
“The difference between a tenancy and a licence is, therefore, that in a tenancy an interest passes in the land, whereas in a licence it does not. In distinguishing between them, a crucial test has sometimes been supposed to be whether the occupier has exclusive possession or not. If, he was let into exclusive possession, be was said to be a tenant, albeit only a tenant at will: see Doed Tomes v. Chamberlaine, (1839) 5 M & W 14. Lvnes v. Snaith, (1899) I Q.B 486; where if he had not exclusive possession he was only a licensee
The result of all these cases is that, although a person who is let into exclusive possession is prima facie, to be considered to be a tenant, nevertheless he will not beheld to be so if the circumstances negative any intention to create a tenancy. Words alone may not suffice.
Parties cannot turn a tenancy Into a licence merely by calling it one. But if the circumstances and the conduct of the parties show that all that was intended was that the occupier should be granted a personal privilege with no interest in the land, be will be held only to be a licensee.”
4. So, in a case where circumstances negative an intention to create tenancy, but the occupier has got exclusive possession of the property, nevertheless, the transaction can be considered not as a. lease, but only as a licence. Now, I may refer to the classic definition of licence by Vaughan C.J 30 Thomas v. Sorrell (124 E.R 1098 at 1109):
“A dispensation or licence properly passeth no interest, nor alters or transfers properly in anything, but only makes an action lawful, which without it had been unlawful.”
5. The Supreme Court in Qudrat Ullah v. Bareilly Municipality ((1974) 1 SCC 202 : AIR 1974 SC 396) observed that:
“There is no simple litmus test to distinguish a lease as defined in S. 105, Transfer of Property Act from a license as defined in S. 52 Easements Act, but the character of the transaction turns on (the operative intent of the parties. To pot it pithily, if an interest in immovable properly, entitling the transferors (sic) to enjoyment, is created, it is a lease; if permission to use land without right to exclusive possession is alone granted, a license is the legal result.”
6. Of ceurse, there will be unclear recitals in the document and the court would be put to the difficulty of investigating she true operative intent of the parties. Krishna Iyer J. has quoted Halsbury's Laws of England, Volume 23, with the remark that it gives “the distinctive flavour, the deceptive labels and the crucial considerations in a lease versus license situation.” He has quoted pages 427, 428 and 429 of the Halsbury's Laws of England, Vol. 23. I shall quote paragraphs 1023 and 1024:
“The fact that the agreement grants a right of exclusive possession Is not in itself conclusive evidence of the existence of a tenancy, but It Is a consideration of the first importance.”
“A grant which confers the right to exclusive possession may operate as a licence in the following circumstances which negative the intention to create a lease.”
7. Decisions are legion on the subject and both the appellant's and the respondent's counsel cited several decisions before me. In considering a question of lease v. licence, I have said in Narayana Moopan v. Sureshan (1985 KLT, Short Notes 22) thus:
“Precedent is the life-blood of legal system, so it is said, and we take this to convey the common sense idea that similar cases are decided similarly. The final type of reason offered in favour of a rigid doctrine of stare decisis is that it offers to litigants some measure of certainty about the likely outcome of a case and that certainty in the law is what Is most fair and just. I should also remember that aphorism that in the decision process the courts are dominantly coerced not by the essays of their predecessors but by a surer thing—by an intuition of fitness of solution to problem. General propositions do not decide concrete cases and ‘the life of the law has not been logic; it has been experience’. Certainly I am bound to follow the precedents of the Supreme Court and the decisions of this Court on the subject. I should not speculate upon improvements in those precedents. A just solution for the particular case is the crucial factor in the decision process. I try to remember that equitable rule of decision that considerations of justice are directly relevant to the justification of any decision.”
8. When the question of lease was raised, the matter was referred to the concerned Land Tribunal. The Tribunal held that the relationship between the parties is that of a licensee and licensor and that Ext. A 1 evidences onlyalicence and not a recency. The appellate court has considered the question in the light of the evidence and the significant recitals in the document, Ext. A-1. The appellate court recorded a clear finding that Ext. A-1 evidences a licence and not a lease. What the appellate court was investigating for the purpose of resolving the controversy was to find an answer to the question whether or not the parties to the document intend to create as between themselves the relationship of landlord and tenant under which an estate is created in the tenant, and certain mutual obligations arise by implication of law. The defendant relied on certain crucial recitals in the document particularly the recital that the defendant was not entitled to transfer the plot mentioned in Ext A 1 to anyone else. It was said that this recital implies that the defendant had acquired some sort of interest in the property in question.
9. The appellant has also relied on a decision reported in Kuchunni v. Kuriakose (1981 K.L.T 338) which has taken note of such a recital and said that such a recital is more consistent with the creation of a lease rather than a licence. But, here, it is not a case where the appellate court has missed to consider this recital and that ‘too in the light of the observations made by this Court in 1981 K.L.T 338. But, the appellate court thought that the document has to be considered as a whole, and other significant recitals and other circumstances also have to be considered to see whether other recitals will offset she influence of the said recital. In this context, I may again refer to the observations of Lord Denning in Cubb v. Lane ((1952) 1 All E.R 1199, 1202):
“the question in all these cases is one of intention: Did the circumstances and conduct of the parties show that all that was intended was that the occupier should have a personal privilege with no interest in the land.”
10. The appellate court found that the defendant had no exclusive possession over the suit property. This the appellate court did cm considering the evidence in the case, particularly in regard to the fact that the plaintiff was taking the yield of one cocoanut tree in the suit property and also the fact that the plaintiff had occasion, after the execution of Ext. A 1, to cut and remove another cocoanut tree. The appellate court said:
“However on going through the deposition of D.W.1 I am not inclined to believe that it was he or his agent who used to take usufructs from that coconut tree. The other coconut tree that stood in the plaint schedule properly was cut and removed by the plaintiff himself. This fact would lend support to the plaintiff's case that be has been in possession and enjoyment of the trees standing in the plaint schedule property.”
11. This would further indicate that exclusive possession was not handed over to the defendant under Ext. A 1. I do not want tore-appreciate the circumstances and other evidence in the casesince my power is only to examine whether the courts below have gone wrong on a substantial question of law. I have to say that if the courts below have sot gone wrong in interpreting the document, Ext. A 1, as a licence, I have no power to interfere with the findings recorded by the courts below, in second appeal. I have to remember the oft-quoted caution, of the Supreme Court in disposing of the second appeals under S. 100, C.P.C In Sinha Ramanuja v. Ranga Ramanuja (AIR 1961 SC 1720), the Supreme Court has said:
“It has now been well settled that the High Court has no jurisdiction to entertain a second appeal on the ground of erroneous finding of fact however gross the error may seem to be. The judgment of the learned Judge does not disclose that there are any permissible grounds for Interference with the finding of the District Judge.”
12. The counsel for the appellant submitted that since the appellant has made some structures of a permanent character, even if Ext. A 1 is considered to be a licence, it is an irrevocable licence, I have to examine this question also. This question has to be considered on the basis that Ext. A 1 is a document evidencing a licence and if the document says that it should be a revocable licence, in the sense that eves if the licence is permitted to execute a work of a permanent character he has to vacate the premises after demolishing the same, can the licensee claim irrevocability under S. 60 of the Easements Act. The counsel for the appellant submits that S. 60 of the Easements Act has not hedged in a clause like ‘notwithstanding a contract’ and the respond ent cannot rely on the clause in Ext. A 1 which would indicate a plain and clear revocability of the licence. The counsel for the appellant submits that as and when the requirements of S. 60(b) are satisfied, the section comes into operation eves if there is a contract which says that the licence is revocable under circumstances which would satisfy the requirements under S. 60(b) of the Easements Act.
13. In Ganga Sahai…Defendant v. Badrul Islam…Plaintiff . (A.I.R 1942 All. 330), considering S. 60 of the Easements Act, the court observed:
“A condition in the licence that the landlord would have the right to get the site vacated whenever he so chose by the licensee deprives the licensee of the benefit of S. 60”.
14. Further, it is said:
“A contract to the contrary disentitles the licensee from deriving advantage conferred by S. 60. There is nothing to preclude a party from binding himself to surrender land, although there may be a construction of a permanent character standing thereon.”
15. In Chotey Lal v. Durga Bat (AIR 1950 All. 661) the court observed:
“Where a licensee executes a work of a permanent character under a clear understanding that be or his heirs may be called upon after certain time to leave the land, it is not open to him to plead such work as a bar against his eviction on a salt brought by the plaintiff in pursuance of the solemn undertaking given by him.”
16. In Ext. A 1, there is a clear provision that at the time of surrender of possession, the defendant should dismantle the structures put up by him is tile land in question and even in the written statement, the defendant's case appears to be that in case of termination of tenancy at the instance of either party, he would only be entitled to value of improvements in respect of the permanent structures put up by him. There is a clear contract which would disentitle the appellant from claiming the benefit under S. 60 of the Easements Act. I see so merit in this point.
17. In the result, the appeal is only to be dismissed and I do so. There will be no order as to costs.
18. Dismissed.
Alert