JUDGMENT
Mishra, J.
We are satisfied that these appeals do not merit any detailed hearing and are fit to be dismissed in limine. Still we do not propose to dismiss the arguments of the learned counsel for the appellant seeking admission of the appeals dismissively and accordingly propose to deal with the arguments by him.
2. It is not in dispute that the appellant and the respondent entered into an agreement pursuant to which he was, according to the appellant, to be in possession of a property on condition that he should run a hotel tor the service to the passengers at the bus stop of the respondent-Transport Corporation. The period of the agreement has expired long before and the appellant is holding over.
3. According to the appellant, he is a lessee in respect of the said property. According to the respondent, he is a licensee. Petitioner-appellant has been served with a notice by one of the officers of the respondent-Corporation to vacate or else to face eviction. Before, however, the instant suit, the appellant came to this Court with a writ petition in W.P No. 5714 of 1993 seeking interference of the Court to restrain the respondent from auctioning the property for induction of a new incumbent either as a licensee or a lessee. The said writ petition has been dismissed. Before filing the suit and during the pendency, however, the petitioner has not paid the stipulated fee according to the respondent and rent as lessee according to the appellant, for quite sometime and has fallen in arrears, in respect of one property in a sum of Rs. 1,37,647.50 and in respect of another in a sum of more than Rs. 8,00,000/-.
4. The respondent's counter is categoric that the appellant herein was granted licence from 1.2.1988 to 31.3.1991, which was extended from 1.2.1991 to 31.1.1992 and from 1.2.1992 to 31.1.1993 Since the licence has expired, the appellant has no right to move the Court and seek an order of temporary injunction.
5. The learned single judge, who has heard the three applications (1) for ad-interim injunction; (2) for mandatory injunction to direct the respondent to stop the buses at the motel (the property) in possession of the appellant as a lessee) for the passengers to have refreshment and (3) for the tent to be reduced for the period from 25.3.1993 onwards till the respondent permitted the buses to stop at the motel for refreshment, has dismissed them saying,
(1) that the petitioner has suppressed the fact that he had moved this Court in W.P No. 5714 of 1993 which has been dismissed and that he had not been paying rent and had fallen in arrears and thus, has not come with clean hands to seek equity as it is well settled that one who seeks equity must act in equity; and
(2) that it is not a case in which the Court should on the pleadings hold prima facie for the purpose of injunction that the appellant is a lessee and grant any injunction.
5a.) The conclusion recorded by the learned single judge that in case of a licensee whose period of licence has expired, the Court should not grant temporary injunction, cannot be disputed for the simple reason that temporary injunction is granted only in the cases which are covered by the three cardinal principles, namely,
(1) by making out a prima facie case;
(2) on showing the balance of convenience petitioner's in favour, in that the refusal of the injunction would cause greater inconvenience to him; and
(3) where on refusal of the injunction, the petitioner seeking injunction would suffere irrepairable or serious injury.
The Court in such a case also sees that before invoking the jurisdiction of the Court for temporary injunction, the party has shown that it has a legal right and that right has been invaded. The view taken by the learned single judge is the same as taken by a Full Bench of Delhi High Court in the case of Chandu Lal v. Delhi Municipality (AIR 1978 Delhi 174).
6. It is well settled that whether an agreement has created a lease or licence is not left only to the language employed in the document to describe the parties as lessor and lessee or licensor and lincensee. The distinction pointed out by Subba Rao, J. in his minority judgment in the case of Associated Hotels Of India Ltd v. R.N Kapoor (AIR 1959 S.C 1262) has been accepted as correct and full distinction between a lease and a licence in the subsequent judgments of the Supreme Court and the Courts in India are no longer left to work for themselves as to what they may call a lease or what they may call a licence. S. 105 of the Transfer of Property Act has defined a lease of immovable property as a transfer of a right to enjoy such property made for a certain time in consideration or a price paid or promised. Under S. 108 of the said Act, the lessee is entitled to be put in possession of the property. Thus, any lease is therefore a transfer of an interest in land. The interest transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease and it follows from it that the lessee gets that right to the exclusion of the lessor. S. 52 of the Indian Easements Act has defined a licence thus:
“where one person grants to another, or to a definite number of other persons, a right to do or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence.”
Thus,
“…if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property.”
According to the said judgment of the Supreme Court,
“There is, therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in Errington v. Errington (1952)I All E.R 149) wherein Lord Denning reviewing the case law on the subject summarises the result of his discussion thus at p. 155:
“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 tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy.”
The Court of Appeal again in Cobb v. Lane, (1952)I All ER 1199, considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document. At p. 1201. Somervell L.J, stated:
“….the solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties.
Denning L.J, said much to the same effect at p. 1202;
“The question in all these cases is one of intention. Did the circumstances and the 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?”
It has been pointed out by Subba Rao, J. that to ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form and the real test is the intention of the parties — “whether they intended to create a lease or a licence.” If the document creates an interest in the property, it is a lease, but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence and if under the document, a party gets exclusive possession of the property, prima facie he is considered to be a tenant, but circumstances may be established which negative the intention to create a lease. This view is reiterated by the Supreme Court in the case of M.N Clunwala v. Eide Hussain Saheb (AIR 1965 S.C 610), in the case of Sohan Lal Naraindas v. Laxmidas (1971 I S.C.C 276 = 83 L.W (SC)(SN) 5 and in the case of Revenue Board v. A.M Ansari (AIR 1976 S.C 1813).
7. At the instance of the learned counsel for the appellant, we have seen the agreement wherein the parties have been described as licensor and licensee and the document has been called as a licence. The trial Court has noticed some of the conditions as follows:
“The agreement dated 5.11.1989 in respect of the Motel at Thozhudur which describes the respondent as the licensor and the applicant as the licensee, apart from the description the terms and conditions are to be looked into. The first condition is the area licensed out for running the Motel of Thiruvalluvar Transport Corporation at Thozhudur in 3600 Sq. ft. As per second condition the licensed out space shall not be used for any purpose other than for which it is intended. As per condition No. 20, the licensee shall carry out the business from 5.00 am to 2.00 am in a day and as per condition No. 21, the licensor or his agent is at liberty to supervise the licensed premises during working hours. As per the agreement between the applicant and the respondent in so far as Tindivanam Hotel is concerned also the respondent is described as the licensor. The terms and conditions would disclose that the area licensed out to the applicant is for running a hotel in Thiruvalluvar Transport Corporation limit bus stand and that the said place shall not be used for any purpose other than it was intended. The above terms and conditions in both the agreements would disclose that the purpose in question, namely, the Hotel at Tindivanam Bus Stand and the Motel at Thozhudur was given to the applicant only for the purpose of running hotel business and not for any other purposes. Even the said business is subject to the supervision of the respondent and within the specified timings and therefore it cannot be stated that the property as such has been given possession to the applicant to carry on the hotel and the motel business in Tindivanam and Thozhudur respectively. The terms and conditions in respect of both the places would disclose that the intention of the parties to the agreement is only to enable the applicant to carry on the hotel business, the possession of properties were given to him and therefore, it is a licence and not a lease. In a similar case, it has been held by Patna High Court in Prakash Sai v. B.S.R.T Corporation (AIR 1981 Patna, 142) that it is only allience when the State Road Transport Corporation gave permission to the plaintiff to run refreshment room under its controlled authority. Therefore, I am of opinion that the applicant being a licensee being in arrears of licence fee has to vacate and deliver possession of the property in which he is carrying on business, to the respondent to enable them to honour the open tenders of third parties, which they have accepted for subsequent periods and therefore the applicant is not entitled to the injunction as prayed for. I answer the points accordingly.”
8. Learned counsel for the appellant has drawn our attention to a judgment of a single judge of this Court in the case of Chinna v. Govindaswami (AIR 1969 Madras 191) and canvassed before us that contents of such a document cannot be understood as creating an interest of a licensee in the transferee, that is, in the instant case the appellant. The obvious distinction in this behalf, however, is available in the judgment in Chinna's case (AIR 1969 S.C 191 — cited supra) in these words:
“The very fact that the documents were admittedly drawn up pursuant to S. 303(2)(d) of the District Municipalities Act and that it was so done under Cl. (4) of R. 12 of the Municipal Manual appearing at p. 55 of the 1957 Edition, shows that immovable property belonging to the Municipal Council has been transferred by way of lease to the plaintiff and that is why the prescribed Form III(a) in Schedule III appended to these rules was adopted. Though the nomenclature used or adopted by the parties may not be the sole guide to determine the nature and character of the deed, yet to the circumstances of this case, it throws abundant light upon the intention of the parties which is one of the acid tests laid down by the Supreme Court to determine the relationship between the occupant and the owner.”
On the facts as found by the learned judge in Chinna's case (AIR 1969 Madras 191) supra) he has held that the interest involved was that of the-lessee. We are, however, not satisfied on the facts of the instant case that the appellant has made out any case of lease in his favour, particularly for the reason of the conditions that have been noticed by the learned single judge and the nature of the enjoyment conferred upon him and controlled by the respondent — defendant.
9. Learned counsel for the appellant has, however, submitted that the Court should not lend its hand to forcibly dispossess a person in possession, event hough he is a licensee and expanded his argument, however, to submit that in the instant case, the final adjudication as to whether the plaintiff — appellant is a lessess or licensee is yet to be decided in the suit. According to him, unless the respondent - Corporation is restrained and made to seek dispossession of the appellant in accordance with law, the Court shall be failing in enforcing obedience to law. He has drawn our attention to a Bench decision of the Supreme Court in the case of Krishna Ram Mahale v. Shobha Venkat Rao (AIR 1989 S.C 2097), in which the law has been stated as follows:
“It is a well settled law in this country that where a person is in settled possession of property, even on the assumption that he had no right to remain on the property, he cannot be dispossessed by the owner of the property except by recources to law.”
No exception can be taken to the above proposition of law. But it is not a case of a person who has come to the Court to protect his possession in the manner of S. 6 of the Specific Relief Act provides, but as we have prima facie found, it is a case of a licensee who has sought for an injunction against the owner of the property so that he may continue his possessions until the disposal of the suit. Krishna Ram Mahale's case (AIR 1989 S.C 2097 — supra) is a case of licensee who had been forcibly dispossessed while the licence was still in force. The Supreme Court proceeded on the above principles of law and said categorically in paragraph 9, as follows:
“In the present case, we point out that there was no question of the plaintiff entering upon the premises as a trespasser at all, as she had entered into the possession of the restaurant business and the premises where it was conducted as a licensee and in due course of law. Thus, defendant No. 3 was not entitled to dispossess the plaintiff unlawfully and behind her back as has been done by him in the present case. It was pointed out by Mr. Tarkunde that some of the observations referred to above were in connection with a suit filed under S. 6 of the Specific Relief Act, 1963 or analogous provisions in the earlier Specific Relief Act, 1877. To our mind, this makes no difference in this case as the suit has been fined only a few weeks of the plaintiff being unlawfully deprived of possession of the said business and the premises and much before the period of six months expired. In view of the aforesaid conclusions arrived at by us, we do not propose to consider the question whether the agreement between the plaintiff and defendant No. 3 amounted to a licence or a sub-lease.”
10. We are satisfied on the facts of the present case that any order of temporary injunction shall operate in favour of a person who does not have equity on his side for the reasons inter alia of his coming to this Court and loosing his right to prevent any fresh auction for licence or lease of the property in W.P No. 5174 of 1993 and not coming with clean hands in equity by defaulting in honouring the agreement to pay fee or rent for the possession of the property, as the case may be. We are also satisfied that the appellant has not been able to make out a prima facie case that he is a lessee. He, in our opinion, is not entitled to any order of temporary injunction. The learned single Judge has committed no error in dismissing his applications for the said purpose.
11. We have, however, considered how, on the one hand, the interest of revenue is protected and on the other hand, no injury is done to the appellant for the reason of his defaults as above and suggested as a means that the appellant should pay all the arrears for a time frame work and on payment of such arrears by him, the respondent shall make the buses to stop at the stand where the appellant has been running the Hotel, according to the respondent, as a licensee, until such time they hold a fresh bid and enter into a fresh agreement with the highest bidder. The appellant shall have no disqualification if he would pay all the arrears and accordingly, he is entitled to participate in the bid. Learned counsel for the respondent has indicated that the respondent shall honour any such direction of the Court. Learned counsel for the appellant has, however, shown no such desire. In any event, in our opinion, it will be just and equitable if the respondent would allow the appellant to participate in the bid on condition that the appellant would pay all the arrears and the bid and from the date of payment of the arrears and the bid, the respondent shall issue necessary instructions for the stoppage of the buses with passengers at the stand at which the appellant has been given licence. This, however, shall be subject to the parties working out their respective equities in accordance with law. We find no merit in the appeals. The appeals are accordingly dismissed. There will be no order as to costs.
KA/RR/VCS