Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The original plaintiff (Mr. Joao Necessidade Roque, Antonio Vas) filed Civil Suit No. 59/1990.D seeking eviction of respondent No.1 (the defendant), demolition of a garage and fence constructed by the defendant, and restoration of the land to its original condition. The dispute concerned the southern portion of a house (No. 115, Loutulim) in which successive written instruments described the defendant's occupation as under leave and licence agreements (initially dated 2-2-1979, with a later instrument dated 4-2-1986). The plaintiff alleged the licence had terminated (initially stated date 1-10-1987, later extended by the plaintiff to 31-1-1990), but the defendant remained in occupation. The defendant pleaded tenancy and invoked protection under the Goa Daman and Diu Building (Lease, Rent and Eviction) Control Act, 1968.

During the suit the original plaintiff died and his legal representatives (the appellants and respondent Nos. 2 and 3) were brought on record. At trial, issues were framed concerning (inter alia) whether the 2-2-1979 leave and licence existed, whether the licence was finally terminated on 30-9-1987, whether the 4-2-1986 instrument was in substance a lease, and whether the defendant was protected as a tenant under the rent control law. The trial Court (Civil Judge, Junior Division, Margao) decreed the suit on 30-10-2001, directing eviction and demolition/restoration.

The defendant appealed (Regular Civil Appeal No. 176/2001) and the lower Appellate Court (IIIrd Additional District Judge, South Goa, Margao) allowed the appeal on 20-10-2004, holding in favour of the defendant (finding a tenancy/lease). Some legal representatives of the original plaintiff thereupon filed the present Second Appeal. The Second Appeal was admitted on the substantial question of law whether the 4-2-1986 document was rightly construed by the Appellate Court as a document of lease.

Legal Issues Presented

  1. Whether the document titled "leave and licence agreement" dated 4-2-1986 was rightly construed by the Appellate Court as a document of lease (the substantial question of law admitted in the Second Appeal).
  2. Whether, as formulated by the trial Court, the plaintiff had proved that a leave and licence agreement executed on 2-2-1979 granted a licence to the defendant to occupy the southern part of the suit house (trial Issue No.1).
  3. Whether the licence was finally terminated on 30-9-1987 despite renewals (trial Issue No.2).
  4. Whether the defendant had proved that the 4-2-1986 (and earlier) agreements, though styled as licence, were in fact leases because of the parties' intention (trial Issue No.3 / Appellate point: whether the defendant proved he is a tenant).
  5. Whether the plaintiff had proved that the defendant had encroached on the property by erecting the garage (appellate point No.3).

Arguments of the Parties

Appellants' Arguments (Mr. Usgaonkar)

  • The lower Appellate Court failed to exercise appellate jurisdiction in accordance with the principles laid down by the Supreme Court (counsel relied on Santosh Hazari v. Purushottam Tiwari).
  • The Appellate Court's findings were perverse and involved misconstruction of documents produced on record, particularly the 4-2-1986 agreement.
  • The Appellate Court did not frame the appropriate point for determination under Order XLI, Rule 31 CPC — namely whether the 4-2-1986 agreement created a licence or a lease — and thus misdirected itself in law.
  • On the proper construction of the 4-2-1986 agreement and the evidence, the relationship was licensor-licensee; the defendant, being literate (a doctor), had entered into multiple leave-and-licence agreements and did not plead camouflage to evade rent legislation.
  • The trial Court's finding of licence was based on proper appreciation of evidence (including an undisputed sketch produced by PW1) and not liable to be set aside as per settled principles; the Appellate Court erred in reversing that finding.
  • Breaks in the sequence of earlier agreements do not, by themselves, convert a licence into a lease.

Respondent No.1/Defendant's Arguments (Mr. Bhobe)

  • The terms of the 4-2-1986 agreement (notably clauses 3 and 9) indicate the parties intended to create a lease rather than a licence — for example, the licensee's responsibility for electricity charges and repair obligations.
  • Evidence of PW1 (Joe Vaz) supports the defendant's case that four to five rooms plus toilet and bathroom were given to the defendant, suggesting exclusive occupation consistent with tenancy.
  • Similar clauses appeared in earlier agreements and are commonly found in lease deeds; the Appellate Court was justified in finding a landlord-tenant relationship.
  • A letter dated 29-5-1987 from the plaintiff to the defendant indicates a lessor-lessee relationship.
  • Continuous possession by the defendant since 02-02-1979 until filing of the suit indicates occupation as a tenant rather than as a licensee.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Santosh Hazari v. Purushottam Tiwari (2001) 3 SCC 179 Settled principles governing interference by a first Appellate Court in appeals. Relied on by appellants to contend the lower Appellate Court misapplied appellate jurisdiction; the Court considered this submission in reviewing the appellate conduct but based its decision on the construction of the 4-2-1986 agreement and applicable precedents.
Capt. B.V. D'Souza v. Antonio Fausto Fernandes (1989) 3 SCC 574 Substance of document preferred to form; exclusive possession is relevant but not conclusive; intention and whether any interest was created are key considerations. Cited to explain the legal test for distinguishing lease and licence; the Court applied this principle in evaluating the 4-2-1986 instrument.
East India Hotels Ltd. v. Syndicate Bank (1992) Supp 2 SCC 29 Cited among authorities on construction of agreements (specific principle not elaborated in the opinion). The Court observed that facts of that case were different and stated it was not necessary to refer to it in detail for present decision.
Lilawati H. Hiranandani v. Usha Tandon (1995) Supp 4 SCC 158 Where an agreement is unambiguous and clearly creates only a licence, label and contents conclude the matter; no need to look further. Referenced to support the proposition that a clear document styled as licence and unambiguous on its face should be treated as such; the Court used this as part of the body of authority guiding construction.
Suhas Yeshwant Chopde v. Sachhidanand D. Purekar (1999) 5 SCC 721 Mere use of the word "rent" in a document or receipts does not by itself convert a licence into a lease; terminology alone is not decisive. Cited to caution against over-emphasis on isolated words (such as "rent") and to support the Court's approach of examining the document's substance.
Delta International Ltd. v. Shyam Sundar Ganetiwalla (1999) 4 SCC 545 Comprehensive guidance: primary test is intention of parties; intention is to be gathered from document read as a whole unless camouflage is alleged; where a literate party enters into a licence and does not allege camouflage, the document's terms generally govern; exclusive possession is relevant but not conclusive (see enumerated principles in paragraph 15 of that judgment). Held by the Court to be squarely applicable to the present facts; the Court relied heavily on Delta to conclude that because the defendant did not plead camouflage and was a literate person who entered into documented licences, the 4-2-1986 instrument should be treated as a licence.
C.M. Beena v. P.N. Ramachandra Rao (2004) 5 ALL MR 460 (S.C.) Parties to a document may demonstrate that the true intention was to create a landlord-tenant relationship even if the deed is styled as a licence. Cited as authority that labels are not conclusive where evidence shows a contrary intention; used by the Court as part of the doctrinal context though the Court ultimately found the evidence here did not show such contrary intention.
Bento de Souza Egypsy (Dr.) v. Yvetter Alvares Colaco 2006 (2) Bom.C.R 465 Case on point in local jurisprudence (specific principle not elaborated in this opinion). The Court noted the case but stated the facts were different and did not rely upon it for the present decision.
Maria Manuela Piedade v. Vassant Shet Shirodkar 2006 (5) Bom.C.R 38 Where multiple agreements exist, the last agreement may be decisive for determining the nature of the relationship; applied where facts were comparable. Referred to as a local precedent where the last agreement determined the relationship; the Court noted it but found the Delta line of authority directly applicable to the facts here.
V. Muhammadkutty v. Illikkal Moosakutty (1996) 9 SCC 382 Clauses such as sub-letting or other isolated terms do not, by themselves, convert a licence into a lease; pith and substance of the document must be considered. Cited to support the proposition that particular clauses (e.g., sub-letting) are not decisive and that the instrument must be read as a whole; used by the Court in its construction analysis.
Pradeep Oil Corporation v. Municipal Corporation of Delhi (2011) 5 SCC 270 Where continuous possession has been exercised and exclusive possession is present, there may be a strong presumption of tenancy; the burden then shifts to show that no interest was created. Relied upon by respondent counsel; the Court distinguished the case on its facts and held that its ratio did not advance the respondent's case in the present matter.

Court's Reasoning and Analysis

The Court identified the central question as whether the 4-2-1986 instrument created a lease or a licence. It proceeded as follows, using only materials and observations appearing in the opinion:

  1. The Court reviewed the rival submissions of counsel for the parties and the evidence and documents on record, including the written agreements and the trial sketch produced by PW1.
  2. The Court surveyed pertinent authorities governing the lease-versus-licence question, emphasizing that the test is the intention of the parties, that the substance of the document must be preferred to form, and that exclusive possession, while relevant, is not conclusive (drawing upon Capt. B.V. D'Souza, Lilawati Hiranandani, Suhas Chopde, V. Muhammadkutty and Delta International).
  3. The Court summarized the principles set out in Delta International Ltd., observing that where a literate person has entered into a leave-and-licence agreement and does not plead that the document is a camouflage to evade rent legislation, the clear terms of the document should prevail.
  4. The Court examined the text of the 4-2-1986 agreement and quoted key clauses (clauses 1–9), noting that the instrument expressly grants a licence to use and occupy specified rooms, states the licence fee, makes the licence personal, disclaims any legal right of tenancy or interest except a temporary right of occupation "at the pleasure and will of the licensor," and provides for termination by notice.
  5. The Court addressed respondent's reliance on clauses (such as responsibility for electricity and repair) and on PW1's evidence suggesting broader occupation, observing that such clauses alone do not convert a licence into a lease and that evidence dehors the pleadings cannot be relied upon to override the written instrument. The Court also noted that PW1 was not a party to the 4-2-1986 agreement and that the defendant did not plead camouflage in his written statement.
  6. The Court rejected the lower Appellate Court's emphasis on gaps/breaks between earlier agreements as determinative of a tenancy. It held that the Appellate Court misdirected itself by treating the breaks as converting the relationship to lessor-lessee without properly construing the terms of the 4-2-1986 agreement itself.
  7. Applying the Delta International ratio and related precedents to the literal terms of the 4-2-1986 instrument and the evidence (including the sketch showing limited rooms occupied by the defendant and shared access), the Court concluded the parties' intention as evidenced by the agreement was to create a licence, not a lease.
  8. On that basis the Court answered the substantial question of law in favour of the appellants/plaintiffs and restored the trial Court's judgment and decree which had decreed eviction and demolition/restoration.

Holding and Implications

CORE RULING: The appeal is allowed; the impugned judgment and decree dated 20-10-2004 passed by the IIIrd Additional District Judge, South Goa, Margao in Regular Civil Appeal No. 176/2001 is quashed and set aside, and the judgment and decree dated 31-10-2001 passed by the Civil Judge, Junior Division, Margao in Regular Civil Suit No. 59/1990.D is restored.

Direct consequences and practical effects on the parties (as stated in the opinion):

  • The trial Court's decree in favour of the plaintiff is restored — the defendant must be evicted and the garage/fence demolished and the land restored as per the trial decree.
  • The appeal is allowed with costs in favour of the appellants.
  • Respondent No.1 (defendant) is granted two months' time to vacate the suit premises.

No broader or new legal precedent is asserted by the Court beyond application of established authorities; the opinion applies existing tests (particularly Delta International and related Supreme Court decisions) to the facts and emphasizes that no plea of camouflage was made by the defendant, which was determinative under the cited authorities.

Disposition: Appeal allowed; lower Appellate Court's judgment quashed; trial Court's decree restored; two months granted to respondent to vacate; costs awarded.

    Joao Necessidade Roque Antonio As (Deceased); By His Lrs. Smt. Queeniee T. Vas And Another v. Vaman Govind Lotlikar And Others

    1. By this Second Appeal, the appellants challenge the judgment and decree dated 20-10-2004 passed by IIIrd Additional District Judge, South Goa, Margao in Regular Civil Appeal No. 176/2001 by which the judgment and decree dated 31-10-2001 passed by Civil Judge, Junior Division, Margao in Regular Civil Suit No. 59/1990.D has been set aside.

    2. The appellant is the original plaintiff in the above suit filed by the Mr. Joao Necessidade Roque, Antonio Vas seeking reliefs of eviction of the respondent No. 1.defendant from the suit premises and for demolition of the garage and the fence constructed by the defendant and to restore the land to its original condition. Mr. Joao Necessidade Roque, Antonio Vas expired during the pendency of the suit and his legal representatives namely the appellants and respondent Nos. 2 and 3 were brought on record.

    3. The parties shall hereinafter be referred to as per their status before the trial Court.

    4. The plaintiff filed the above suit against the defendant alleging that the defendant was licensee in respect of the southern portion of the house bearing No. 115 situated at Loutulim in the property belonging to the plaintiff and his sister (hereinafter referred to as “the suit house”). According to the plaintiff, southern portion of the suit house consisting of two rooms was allowed to be used by leave and licence agreement dated 2-2-1979. There were further agreements of leave and licence with breaks and last agreement was executed on 4-2-1986. Although in the first agreement reference is made to only two rooms, the last agreement dated 4-2-1986 refers to three rooms which hereinafter be referred to as “the suit premises”. According to the plaintiffs, the defendant was liable to vacate the suit premises on 1-10-1987. However, he did not vacate the same and sought further time which was extended to 31-1-1990. However, the defendant did not vacate the suit premises even on 1-2-1990. The plaintiff received communication dated 6-12-1989 from the defendant in which he claimed to be tenant of the suit premises wherein he claimed for purchase of suit premises and suit property. The plaintiff filed the suit against the defendant seeking recovery of possession from the defendant and also mandatory injunction to demolish the garage and the fence constructed by the defendant in the suit premises.

    5. The suit was contested by the defendant by filing written statement. The defendant claimed that he was tenant in respect of the suit premises and as such protected under Goa Daman and Diu Building (Lease, Rent and Eviction), Control Act, 1968. As such, the suit filed by the plaintiff, was not maintainable.

    6. In the suit, learned trial Court framed the following issues:—

    “1. Whether the plaintiff proves that by a leave and licence agreement, executed on 2-2-1979, the plaintiff granted a licence to the defendant to occupy the southern part of the suit house consisting of two rooms (suit premises)?

    2. Whether the plaintiff proves that although the said licence was renewed from time to time the said licence was finally terminated on 30-9-1987?

    3. Whether the defendant proves that although the said agreement is styled as “leave and licence agreement' in fact it is lease agreement since both the plaintiff and the defendant intended to create a lease in respect of the suit premises?

    4. Whether the defendant proves that the defendant hold the suit premises as a tenant and is protected under the Goa Daman and Diu Building (Lease, Rent and Eviction) Control Act, 1968?

    5. What relief? What order?”

    7. During the pendency of the suit the original plaintiff expired and appellants and respondent Nos. 2 and 3 herein were brought on record as his legal representatives. In the suit, the plaintiff examined Joe Agnelo Vaz, respondent No. 2 (PW1) and produced several documents including a sketch showing the respective portions in possession of the plaintiff and the defendant in respect of the suit house, Joquim Valadares (PW2) and Fatima Noronha (PW3). The defendant examined himself (DW1), Peter Alvares (DW2) and Krishna Dessai (DW3).

    8. Learned trial Court by judgment and decree dated 30-10-2001 decreed the suit and directed eviction and also demolition of fencing and garage constructed in the property of the plaintiff and restoration of the land to its original condition.

    9. Aggrieved by the said judgment and decree, the defendant preferred Regular Civil Appeal No. 176/2001 to the District and Sessions Court, Margao, which was made over to IIIrd Additional District Judge, Margao.

    10. The lower Appellate Court formulated the following points for determination:—

    “1. Had the plaintiff proved that the defendant was the licensee of the suit house since 2-3-1979?

    2. Had the defendant proved that he is the tenant of the suit premises?

    3. Had the plaintiff proved that the defendant has encroached in the property by erecting the garage?”

    The lower Appellate Court answered them against the plaintiff and in favour of defendant and consequently allowed the appeal.

    11. Aggrieved by the judgment and decree passed by lower appellate Court, some of the legal representatives of original plaintiff filed the present Second appeal.

    12. The appeal was admitted on the following substantial question of law:—

    “Whether the document titled leave and licence agreement dated 4-2-1986 was rightly construed by the Appellate Court as a document of lease?”

    13. Mr. Usgaonkar, learned counsel for the appellants submitted that the lower Appellate Court has not exercised jurisdiction in accordance with settled principles laid down by the Apex Court governing interference by first Appellate Court in the case of Santosh Hazari v. Purushottam Tiwari (Deceased) By Lrs., 2001(2) Mh.L.J (S.C) 786 : (2001) 3 SCC 179.

    14. Learned counsel further submitted that the findings recorded by the lower Appellate Court are patently perverse and the lower Appellate Court has totally misconstrued the documents produced on record. Mr. Usgaonkar further submitted that the lower Appellate Court did not formulate the appropriate point for determination in terms of Order XLI, Rule 31 of Civil Procedure Code, inasmuch as the main issue before the lower Appellate Court was whether the agreement dated 4-2-1986 created licence or lease between the parties. The lower Appellate Court did not frame any point for determination in that regard and, therefore, totally misdirected itself in law. Learned counsel further submitted that having regard to the agreement dated 4-2-1986 and the evidence led by the parties, the finding recorded by lower Appellate Court that the relationship between the plaintiff and the defendant was that of landlord and tenant is patently illegal and unsustainable in law. Learned counsel further submitted that the lower Appellate Court has not taken into consideration the substance of the agreement dated 4-2-1986 which it was bound to do for the purpose of finding out intention of the parties which is of primary importance in a case where plaintiff alleges licence and defendant alleges tenancy. Learned counsel further submitted that the defendant in his written statement nowhere pleaded that the agreement dated 4-2-1986 was a camouflage to get out of the provisions of the rent act which are applicable in Goa and, therefore, in the absence of any ambiguity the lower Appellate Court ought to have gone by the documents produced and consequently ought not to have dismissed the appeal. Learned counsel further submitted that the defendant was a doctor and as such, was qualified and with open eyes had entered into several agreements of leave and licence and in the absence of any pleadings that the agreements were entered into as a camouflage to get out of the provisions of the rent act or under coercion, the lower Appellate Court ought to have construed the agreement dated 4-2-1986 as a leave and licence agreement and not as a deed of lease. Learned counsel further submitted that learned trial Court upon proper appreciation of the evidence led by the parties had correctly taken a view that the relationship between the parties in terms of the agreement dated 4-2-1986 was that of licensor and licensee and this finding by no stretch of imagination can be said to be perverse or illegal warranting interference in first appeal. Learned counsel further submitted that the sketch produced by PW1 which was not even disputed, clearly establishes that the plaintiff was entitled to pass through the property in respect of which licence was created and as such, it cannot be said that the defendant was in exclusive possession of the suit premises. Learned counsel further submitted that the lower Appellate Court has misconstrued and misinterpreted the evidence led by the parties and has reversed the well reasoned judgment of learned trial Court. Learned counsel further submitted that merely because there was break in the period of licence starting from 1979 by itself would not be a ground to hold that the relationship between the plaintiff and the defendant was of lessor and lessee. According to learned counsel, in view of the clear terms of the agreement dated 4-2-1986 it was for the defendant to lead evidence to contradict the same, the burden of which has not been discharged by the defendant. Learned counsel further submitted that having regard to the defence taken by the defendant and the evidence led by the parties, the findings recorded by learned trial Court were not liable to be interfered with by the lower Appellate Court and as such, the judgment and decree passed by the lower Appellate Court deserves to be quashed and set aside.

    15. In support of his submissions, Mr. Usgaonkar placed reliance upon following judgments:—

    i. Capt. B.V D'Souza v. Antonio Fausto Fernandes, (1989) 3 SCC 574 : AIR 1989 SC 1816,

    ii. East India Hotels Ltd. v. Syndicate Bank, 1992 Supp (2) SCC 29,

    iii. Lilawati H. Hiranandani v. Usha Tandon, 1995 Supp (4) SCC 158,

    iv. Suhas Yeshwant Chopde v. Sachhidanand D. Purekar, (1999) 5 SCC 721,

    v. Delta International Ltd v. Shyam Sundar Ganetiwalla, (1999) 4 SCC 545 : AIR 1999 SC 2607,

    vi. C.M Beena v. P.N Ramachandra Rao, 2004(5) ALL MR 460 (S.C),

    vii. Bento de Souza Egypsy (Dr.) v. Yvetter Alvares Colaco, 2006(2) Bom.C.R 465,

    viii. Maria Manuela Piedade… v. Vassant Shet Shirodkar…., 2006(5) Bom.C.R 38 and

    ix. V. Muhammadkutty v. Illikkal Moosakutty, (1996) 9 SCC 382 : AIR 1996 SC 3288.

    16. Per contra, Mr. Bhobe, learned counsel appearing for respondent No. 1.defendant supported the impugned judgment and decree and submitted that the terms of agreement dated 4-2-1986 clearly suggest that the intention of the parties in entering into the said agreement was to create lease and not leave and licence. Mr. Bhobe placed reliance upon clauses 3 and 9 of the agreement dated 4-2-1986. Clause 3 stipulates that charges for electricity consumed by the licensee were to be paid by the licensee. Learned counsel further submitted that the evidence of PW1-Joe Vaz clearly supports the case of the defendant inasmuch as in his evidence he has stated that four to five rooms were given to the defendant and also a toilet and bath room were also there in a portion given to the defendant. Learned counsel, therefore, submitted that the evidence of the plaintiff itself supports the defence taken by the defendant. Learned counsel further submitted that clauses which are to be found in agreement dated 4-2-1986 are also in earlier agreement which normally found in lease deed and therefore no fault can be found with the finding given by the lower appellate Court. Learned counsel also submitted that having regard to the letter dated 29-5-1987 addressed by the plaintiff to the defendant, it is evident that the relationship between the parties was that of lessor and lessee and not licensor and licensee. Mr. Bhobe further submitted that the fact that the defendant was in possession right from 02-2-1979 till filing of the suit clearly indicates that the occupation of the defendant was that of tenant and not as licensee.

    17. In support of his submissions, learned counsel placed reliance upon following judgment of Apex Court in the case of Pradeep Oil Corporation v. Municipal Corporation of Delhi, (2011) 5 SCC 270.

    18. I have carefully considered the rival submissions, perused the record and judgments relied upon by both the parties,

    19. The moot question which arises for consideration in this appeal is whether the document dated 4-2-1986 is a document of lease or licence.

    20. I deem it appropriate to deal with the judgments cited by both sides.

    21. In the case of Captain B.V D'Souza (supra), the Apex Court held that in order to ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form. Exclusive possession of the party is relevant but at the same time it is not conclusive. The intention of the parties and whether the document creates any interest in the property or not, are important considerations. In the facts of the case the Apex Court held that document created lease and not leave and licence as has been held by three Courts below.

    22. In the case of Lillawati Hiranandani (supra), the Apex Court after considering the facts of that case observed that the agreement was unambiguous and it was only a licence. The appellant sought permission of the original applicant to occupy the portion of the flat belonging to the original applicant. No right, or interest whatsoever in the said premises or any part thereof was created in favour of the original respondent. The appellant also undertook to vacate the building and to give quiet possession to the applicant at any time when required to do so. The only condition was that notice of one month was to be given. The Apex Court held that document was clear and as such it was not necessary to look further. Both the parties were aware as to what was the prevailing state of law and entered into the agreement. In this background, the Apex Court held that the label or nomenclature of the agreement and the contents of the communication should conclude the matter. Consequently, the Supreme Court dismissed the appeal.

    23. In the case of Suhas Chopde (supra), the Apex Court held that mere use of word “rent” in a document executed by the licensor by itself would not mean that the relationship between the parties was that of lessor and lessee. The Apex Court held that undue importance could not have been given to the word “rent” in the agreement and also in some receipts. Consequently, the Supreme Court set aside the judgment of this Court holding that the relationship between the parties was that of landlord and tenant.

    24. In the case of Vayallakath Muhammadkutty (supra), the Apex Court, after referring to the judgment in the case of Captain B.V D Souza (supra), held that normally in a case of licence the question of sub-letting does not arise but simply on the ground that there is such a clause in the agreement, the agreement cannot be held to be an agreement for lease. Pith and substance of document are required to be considered for the purpose of finding out true import of a document, namely whether the document creates a lease or licence. In the fact of the case, the Apex Court upheld the finding of the High Court that defendant was not inducted in the premises as lessee and consequently, dismissed the appeal.

    25. In the case of Delta International Ltd. (supra), after considering several judgments, the Apex Court in paragraph 15 has observed as follows:—

    From the aforesaid discussion what emerges is:

    (1) To find out whether the document creates lease or license, the real test is to find out ‘the intention of the parties’; keeping in mind that in cases where exclusive possession is given, the line between lease and licence is very thin.

    (2) The intention of the parties is to be gathered from the document itself. Mainly, intention is to be gathered from the meaning and the words used in the document except where it is alleged and proved that document is a camouflage. If the terms of the document evidencing the agreement between the parties are not clear, the surrounding circumstances and the conduct of the parties have also to be borne in mind for ascertaining the real relationship between the parties.

    (3) In the absence of a written document and when somebody is in exclusive possession with no special evidence how he got in, the intention is to be gathered from the other evidence which may be available on record, and in such cases exclusive possession of the property would be most relevant circumstance to arrive at the conclusion that the intention of the parties was to create a lease.

    (4) If the dispute arises between the very parties to the written instrument, the intention is to be gathered from the document read as a whole. But in cases where the landlord alleges that the tenant has sublet the premises and where the tenant in support of his own defence sets up the plea of a mere licensee and relies upon a deed enter into inter se, between himself and the alleged licensee, the landlord who is not a party to the deed is not bound by what emanates from the construction of the deed; the tenant and the subtenant may jointly set up the plea of a licensee against the landlord which is a camouflage. In such cases, the mask is to be removed or veil is to be lifted and the true intention behind a facade of a self-serving conveniently drafted instrument is to be gathered from all the relevant circumstances. Same would be the position where the owner of the premises and the person in need of the premises executes a deed labelling it as a licence deed to avoid the operation of rent legislation.

    (5) Prima facie, in absence of a sufficient title or interest to carve out or to create a similar tenancy by the sitting tenant, in favour of a third person, the person in possession to whom the possession is handed over cannot claim that the sub-tenancy was created in his favour; because a person having no right cannot confer any title of tenancy or sub-tenancy. A tenant protected under statutory provisions with regard to occupation of the premises having no right to sublet or transfer the premises, cannot confer any better title. But, this question is not required to be finally determined in this matter.

    (6) Further lease or licence is a matter of contract between the parties. Section 107 of the Transfer of Property Act inter alia provides that leases of immoveable property may be made either by registered instrument or by oral agreement accompanied by delivery of possession; if it is a registered instrument, it shall be executed by both the lessee and the lessor. This contract between the parties is to be interpreted or construed on the well laid principles for construction of contractual terms, viz. for the purpose of construction of contracts, the intention of the parties is the meaning of the words they have used and there can be no intention independent of that meaning; when the terms of the contract are vague or having double intendment one which is lawful should be preferred; and the construction may be put on the instrument perfectly consistent with his doing only what he had a right to do.

    In the said case the Apex Court has further observed that the agreement was not entered into by illiterate layman or poor person in need of some premises for his residence or business, but it was executed by two companies and as such, it could be presumed that the terms were incorporated after full understanding and to avoid any wrong inference or intention. The agreement had specifically mentioned that only licence was created and not lease. The said clause was in positive and negative forms providing that the agreement was a licence and should not be treated or used or dealt with or construed by the parties in any way as lease or to confer any relationship as landlord or tenant between the parties. The Apex Court further held that when the parties are capable of understanding their rights fully agreed and declared that the document should not be construed in any manner creating any relationship between the landlord and the tenant, it would be impermissible to conjecture or infer that their relations should be construed as that of landlord and tenant because of certain terms mentioned in the deed and can have double intentment. The intention of the parties is the meaning of the words they have used and there could be no intention independent of that meaning. In this factual background, the Apex Court held that the learned Single Judge of Calcutta High Court was right in holding that relationship between the parties was that of licensor and licensee.

    The Apex Court further observed that mere use of words “demised premises” would not mean that relationship of landlord was accepted. Exclusive possession was not sole inditia to establish the relationship of landlord and tenant between the parties. The Apex Court further held that mere fact that the agreement provided for giving notice to a licensee requiring him to vacate the licensed premises would not indicate that the transaction was a lease. Heavy reliance has been rightly placed by Mr. Usgaonkar upon this judgment.

    26. In the case of C.M Beena (supra), the Apex Court held that the parties to a document can show that what was intended was to create landlord and tenant relationship, although the deed was styled as deed of licence. In the facts of the case, the Apex Court held that the relationship of the parties was of landlord and tenant.

    27. In the case of Maria Piedade (supra), learned Single Judge of this Court after considering several judgments of the Apex Court and also several agreements entered into between the parties, held that last agreement dated 1-9-1990 entered into between the parties created relationship of licensor and licensee and not lessor and lessee as held by the First Appellate Court and consequently, allowed Second Appeal. In the said case also there was a break in between the agreements and the first agreement was drawn on 1-6-1981 whereas last agreement was drawn on 1-9-1990. Learned Single Judge held that what was required to be considered was the last agreement for the purpose of finding out the relationship between the parties. I do not deem it necessary to refer to the judgments of the Apex Court in the case of East India Hotels (supra) and the Division Bench judgment of this Court in the case of Bento de souza (supra), since the facts in both these cases are clearly different.

    28. Coming to the judgment of the Apex Court in the case of Pradeep Oil Corporation (supra) relied upon by Mr. Bhobe, in said case the Apex Court held that the appellant had been continuously carrying on their business in their quarter since 1962 and there was no exclusive possession and as such there was strong presumption of tenancy. In this factual background, the Apex Court held that it was for the appellant to show that despite his right to possess the demised premises exclusively, a right or interest in the property has not been created. In the said case, the appellant was claiming to be licensee and not lessee. The ratio of the said judgment does not advance the case of respondent No. 1.

    29. Perusal of the written statement filed by the defendant discloses that the defendant had simply taken a plea that he was the tenant in respect of suit premises. Nowhere in the written statement there is even a whisper that the agreement dated 4-2-1986 or for that matter the earlier agreements were entered into by way of camouflage or under coercion. In this factual background, I am of the opinion that the ratio of the judgment in the case of Delta International Ltd. (supra) is squarely applicable to the present case. In the said case, the Apex Court has clearly held that if a literate person with open eyes enters into an agreement of leave and licence and does not take a plea that the agreement was entered into by way of camouflage to get out of the provisions of the rent act and in case terms of agreement are clear and suggestive of creation of licence between the parties, that is the end of the matter and in such a situation, the question of referring to surrounding circumstances to find out intention of the parties, does not arise.

    30. In my view, ratio in Delta International Ltd. (supra) in which several judgments of the Apex Court have been considered squarely applies to the present case. At this stage, it would be pertinent to quote clauses of agreement dated 4-2-1986 which read thus:—

    1. That the licensor doth hereby grant and the licensee doth hereby accept the licence to use and occupy the part southern side of the said house, consistent of two rooms and the items of furniture which are in the said two rooms for residential purposes.

    2. As consideration for the licence hereby granted to use and occupy the said part, the Licensee doth hereby agree and covenant that he shall every month during the continuance of this agreement or while the licence shall remain to use and occupy the said two rooms or any part thereof, pay to the licensor a sum of Rs. 75/- (Rupees seventy five only), as licence fee or compensation per month on or before the fifth day of every month in advance.

    3. That the licensee shall be responsible for payment of charges for electricity consumed by the licensee.

    4. That the licensee shall be entitled to use the common access room to the well, bath-room and W.C during the term of this license.

    5. That the licensee cannot pluck or remove the fruits of the fruit bearing trees existing around the house.

    6. It is hereby understood and agreed between the parties that the liecence hereby granted is personal to the licensee and that nothing in these presents shall be construed to confer any legal right of tenancy upon the licensee or any interest whatsoever nature in the premises except the right of occupation temporarily only at the pleasure and will of the licensor subject to the terms and conditions of this agreement.

    7. That the period of this licence is eleven months from 3-2-1980 to 3-1-1981 but the licensor can terminate earlier the licencees given with two months' notice given by the licensor to vacate.

    8. In the event of any breach of the term and conditions of this agreement by the licensee, the licensor shall be entitled to revoke and cancel the licence hereby granted by giving two months notice in writing and thereupon the licensee shall remove himself from the said part with all his goods and belongings.

    9. The licensee shall keep the house in good state of repair and condition.

    31. Insofar as clause (3) is concerned, no doubt the same provides that for payment of electricity charges consumed, licensee shall be responsible for payment of electricity charges. Clause (9) provides that licensee shall keep the house in good state of repair and condition.

    32. Having regard to the other clauses of the said agreement, in my view, these clauses by themselves cannot be construed as creating the relationship of lease between the parties. It is pertinent to note that the defendant was a doctor who wanted to carry on practice while occupying the suit premises and had approached the plaintiff. Admittedly, remaining portion of the suit house was in possession of the plaintiff and the same was not occupied regularly by the plaintiff though the plaintiff and his representatives were visiting the suit property occasionally. Moreover, the sketch produced by PW1 corroborates the agreement dated 4-2-1986 inasmuch as in terms of the said sketch only three rooms are shown to be in possession of the defendant. It is very pertinent to note that entry to the store room and access to WC and bathroom to the plaintiff was provided through the suit premises which were given to the defendant. Therefore, in my view, the exclusive possession of the entire suit premises was not parted with by the plaintiff in favour of the defendant. Mere fact that the defendant used the store room, by itself would not be sufficient to hold that the same created an interest in favour of the defendant in respect of the store room. This fact assumes importance in the light of the fact that the plaintiff was not staying in the said premises. Therefore, in this factual background, permissive use of the store room by the defendant at the instance of the plaintiff would not be sufficient to hold that the store room was also part of the suit premises.

    33. The lower Appellate Court was also impressed by the fact that there were breaks in execution of agreements for the period from 4-1-1981 to 2-3-1981 and from 4-2-1984 upto 3-2-1986.

    34. In my view, the lower Appellate Court totally misdirected itself in proceeding on the footing that since there were breaks for certain periods the relationship between the parties was that of lessor and lessee. In view of the settled law, the lower Appellate Court ought to have found out whether in terms of agreement dated 4-2-1986 the relationship of lessor and lessee or licensor and licensee was created, but this exercise has not been undertaken by the lower Appellate Court.

    35. Mr. Bhobe, placed heavy reliance upon the evidence led by plaintiff through PW1-Joe Vaz who stated in examination-in-chief that about four to five rooms were given to the defendant and also toilet and bathroom were there in the portion given to the defendant. In my view, no much reliance can be placed on the said statement in support of the plea of the defendant inasmuch as it is not even the case of the defendant in the written statement that he was in occupation of the premises which did not form part of the agreement dated 4-2-1986. It is well settled that no evidence dehors the pleadings can be looked into by the Court. Moreover, it is pertinent to note that PW1-Joe Vaz was not a party to the agreement dated 4-2-1986 which was executed by his father during his lifetime. Therefore, no much credence can be given to the statement made by PW1 in his examination-in-chief to conclude that in view of the said statement the relationship between the parties was that of lessor and lessee. It is pertinent to note that it is not the case of the defendant that the agreement dated 4-2-1986 or for that matter earlier agreements were entered into as a camouflage to get out of the provisions of rent act as applicable in Goa. As stated above, defendant was a literate person and had entered into several agreements with the original plaintiff and, therefore, in my view, the ratio of the judgment of the Apex Court in the case of Delta International Ltd. (supra) is squarely applicable to the facts in the present case. In my view, the lower Appellate Court was clearly in error in holding that the relationship between the parties was that of lessor and lessee.

    36. In my view, the evidence oral and documentary led by the parties clearly establishes that the intention of the parties in entering into an agreement dated 4-2-1986 was to create licence and not lease in favour of the defendant. In my view, learned trial Court upon appreciation of the evidence led by the parties had correctly come to the conclusion that the relationship between the parties was that of licensor and licensee.

    37. In the result therefore, the substantial question of law is answered in favour of the appellants/plaintiffs. Consequently, the impugned judgment and decree dated 20-10-2004 passed by IIIrd Additional District Judge, South Goa, Margao in Regular Civil Appeal No. 176/2001 is quashed and set aside and the judgment and decree dated 31-10-2001 passed by Civil Judge, Junior Division, Margao in Regular Civil Suit No. 59/1990.D is restored.

    38. The appeal stands allowed with costs.

    39. Respondent No. 1.defendant is granted time of two months to vacate the suit premises.

    Appeal allowed.
    Use AI to get other relevant cases.

    Comments

    Joao Necessidade Roq... v. Vaman Govind Lotlika...
    (Dec 21, 2012)