Dr. Ramchandra Vishnu Paranjape vs Smt. Sharayu Jugalkishore Gupta
2003 Latest Caselaw 619 Bom

JUDGMENT

Ranjana Desai, J.

1. Being aggrieved by the judgment and order dated 17th October, 1989 passed by the VI Additional District Judge, Pune, in Civil Revision Application No. 59 of 1987 from the order dated 26th June, 1987 passed by the IV Additional Small Cause Judge, Pune, in Misc. Application No. 387 of 1984, the original applicant has approached this court. Initially the petition was filed against Smt. Shailaja Pant, Smt. Sharavu Gupta and Smt. Vijaya Ghaisas (respondents 1 to 3 respectively). By order dated 26th July, 2001, the name of respondent 2 Smt. Sharayu Jugalkishore Gupta was retained as the respondent and the names of respondents 1 and 3 have been deleted from the array of the parties.

2. The petitioner preferred an application in the Small Causes Court at Pune for fixation of standard rent of the premises being ground floor of House No. 200, Narayan Peth, Pune - 30 (for short the suit premises). In the said application, one Dr. Smt. Chaplabai R. Khadilkar was opponent 1 and her 3 daughters, viz. Smt. Shailaja Prakash Pant, Smt. Sharayu Jugalkishore Gupta and Smt. Vijaya Suresh Ghaisas were opponents 2, 3 and 4, respectively. It was the case of the petitioner that Dr. Smt. Khadilkar was carrying on medical practice in the suit premises. Due to her advanced age and as her husband was working at Delhi, she stopped her practice in or about 1971-72 and since then the aid premises were kept vacant by the opponents. In or about 1973, the petitioner who has done his M.D. in Radiology was in dire need of some premises to start his x-ray clinic. He, therefore, approached Dr. Smt. Khadilkar for letting out the said premises to him. She agreed. She insisted that the petitioner will have to pay monthly rent of Rs. 1,000/- plus education cess plus electrical charges of Rs. 30/-. In order to circumvent the provisions of the Bombay Rent Act, Dr. Smt. Khadilkar insisted that the suit premises will be given to him only if he entered into an agreement of leave and licence. The petitioner had no other alternative but to sign the leave and license agreement though the actual relationship between the petitioner and Dr. Smt. Khadilkar was that of tenant and landlady. It was further stated in the application that the petitioner has carried out additions and alterations as stipulated by Dr. Smt. Khadilkar and incurred expenditure of Rs. 20,000/- and that he was put in exclusive possession of the suit premises and since the rent was excessive, the application for standard rent was being preferred.

3. To this application, Dr. Smt. Khadilkar filed her written statement denying the contentions of the petitioner. Her case, inter alia, was that she was conducting her medical profession in the suit premises since 1947 and had contributed substantial amount for development of the said premises. In the year 1973, the said property was gifted by her husband Shri R.K. Khadilkar to her daughters, who were opponents 2, 3 and 4 in the said application. Her daughters allowed her to continue her practice. They gave her General Power of Attorney to manage the property. It was further stated that as Dr. Smt. Khadilkar was required to go to Delhi, on and off, she intended to entrust her flourishing business to a promising young person. The petitioner after coming to know this fact, met Dr. Smt. Khadilkar at Delhi and on recommendation of Dr. Mrs. Coyaji, a close friend of hers. Dr. Smt. Khadilkar entrusted the aid business to the petitioner for conducting it. Dr. Smt. Khadilkar had not stopped her medical practice but she was actively carrying on the same. The place had acquired a reputation and goodwill due to her 30 years flourishing practice and with this goodwill, the petitioner obtained better business. she contended that the agreement of leave and licence was executed by the petitioner with full knowledge of its meaning and consequences. She maintained that there was no relationship of landlord and tenant between her and the petitioner.

4. ON these pleadings, the evidence was led. The trial court by its order dated 26th June, 1987 dismissed the application. The petitioner filed Revision Application being Civil Revisions Application No. 59 of 1987 before the District Court, Pune. That revision too came to be dismissed and hence, the petitioner has approached this court.

5. I have heard at some length Mr. Dalvi, learned counsel appearing for the petitioner and Mr. Anturkar, learned counsel appearing for the respondent. Mr. Dalvi contended that the primary duty of the court in such matters is to find out the intention of the parties and whether Dr. Smt. Khadilkar intended to crate tenancy or wanted to give premises on leave and licence could only be ascertained from the terms of the agreement executed by the parties. Mr. Dalvi contended that the terms of the agreement establish beyond doubt that the agreement in question is not a leave and licence agreement. He submitted that the petitioner was in exclusive possession of the suit premises. Moreover, the petitioner being a Radiologist was allowed to install machinery in the suit premises. Intention of the parties, therefore, could not have been to allow the petitioner to use the suit premises for a limited period on leave and licence basis. he further submitted that no power is reserved by Dr. Smt. Khadilkar for termination of the agreement before expiry of the period. Mr. Dalvi also contended that significantly the agreement does not stipulate any lump sum deposit. It is only mentioned that three months rent was to be given by the petitioner to Dr. Smt. Khadilkar. He further submitted that payment of education cess by the petitioner also militates against any argument that what was sought to be created was a relationship of a licensor and licensees. Under the agreement, the petitioner was permitted to construct another staircase at the rear of the suit premises. The front staircase was closed so that the entire premises could be used by him. This is also indicative of creation of tenancy rights. Mr. Dalvi further contended that it was the case of Dr. Smt. Khadilkar that her daughters have given power of attorney to her. Though called upon by the petitioner, the said power of attorney was not produced on record and, therefore, adverse inference needs to be drawn. Mr. Dalvi also submitted that one of the daughters viz. Mrs. Vijaya Suresh Ghaisas, has supported the petitioner. There circumstances must lead this Court to come to a conclusion that the petitioner is in possession of the suit premises as a tenant.

6. Mr. Daldvi relied upon Puran Singh Sahini v. Sundari Bhagwandas Kriplani. and submitted that what is necessary for this Court is to ascertain the intention of the parties to be gathered from the terms and conditions of the agreement construed in the context of surrounding, antecedent and consequent circumstances, and if the terms of the agreement in the case on hand are construed in the context of the surrounding, antecedent and consequent circumstances the only conclusion which can be drawn is that the agreement in question is of leave and licence and not of lease.

7. As against this, Mr. Anturkar, learned counsel appearing for the respondent submitted that there is no dispute about the fact that Shri R.K. Khadilkar was the owner of the property and he has gifted the suit premises to his daughters. He submitted that if the property was gifted to the daughters then in the nature of things. Dr. Smt. Khadilkar could not have created any lease or tenancy. She had no right to do so. Secondly, Mr. Anturkar submitted that both the courts have concurrently held that the agreement in question is an agreement of leave and licence. Once there is a concurrent finding of fact, no interference is called for with it in writ jurisdiction, unless the court comes to a conclusion that it is a perverse finding. In this connection, Mr. Anturkar relied on Union Bank of India v. Chandrakant Gordhandas Shah, . Mr. Anturkar also relied upon the Supreme Court's judgment in Khalil Bashir Ahmed v. Tufelhussein Samasbhai Sarangpurwala, which states how a document is to be construed to ascertain whether it is an agreement of leave and licence or of lease. He did not dispute that to ascertain the nature of the agreement, the intention of the parties has to be ascertained from the terms of the agreement. According to him, the terms of the agreement in question are so clear that there is no scope to argue that it creates lease. The attendant circumstances also establish that the parties intended to create a relationship of licensor and licensee. He submitted that in the circumstances this court should endorse the view taken by both the courts that the agreement in question is a leave and licence agreement.

8. Before dealing with the basis issue involved in this petition, it will have to be borne in mind that the petitioner has challenged concurrent findings of facts. In Chandrakant Shah's case (supra) the trial court as well as the appellate court has recorded concurrent finding that there was an unauthorized subletting. On examination of the terms of the agreement in the light of surrounding circumstances both the courts held that the respondent therein was a lessee and not a licensee. When the matter reached the High Court, the High Court discussed the evidence afresh and set aside the concurrent findings of fact. The Supreme Court disapproved the High Court's approach and observed:

"If the trial court and the appellate court, who are entrusted with the duty of investigating into questions of facts recorded concurrent findings thereon on a proper discussion and appreciation of the materials placed before them, the High Court should not interfere with or disturb those findings while sitting in judgment over the same in its writ jurisdiction. Therefore, the judgment of the High Court is liable to be set aside."

Therefore, unless concurrent finding of fact is perverse, it cannot be interfered with in writ jurisdiction. The court has therefore to see whether there is any perversity in the impugned judgments.

9. The controversy revolves round the agreement dated 9th March, 1975. The question is whether it is an agreement of leave and licence or of lease. The Supreme Court has dealt with this issue in several judgments. The test to be applied has now been clearly stated.

10. In Puran Singh's case (supra), the Supreme Court was dealing with the same question.

It observed:

"The intention of the parties in making the agreement is determinative of the question whether it was a lease or licence. The test of exclusive possession, though of significance, is not decisive. By mere use of the word lease or licence the correct categorization of an instrument under law cannot be affected. While interpreting the agreement court has also to see what transpired before and after the agreement. Ex praecedentibus et consequentibus optima bit interpretatio. The best interpretation is made from the context. The intention of the parties to an agreement has to be gathered from the terms of the agreement construed in the context of the surrounding, antecedent and consequent circumstances. The crucial test would be what the parties intended. If in fact it was intended to create an interest in the property, it would be a lease, if it did not, it would be a licence. Interest for this purpose means a right to have the advantage accruing from the premises or a right in the nature of property in the premises but less than title. In this case the intention to create a only a licence and not a lease is clear from the tenor of the agreement. Positively it speaks of a licence for the use of the flat and negatively that the licensee would not claim any tenancy or sub-tenancy. What was given to the licensee was the use of the flat with furniture, fittings. etc., which could not be said to have created any interest in the flat though in effect the use continued for a stipulated period of time."

11. In Delta International Ltd. v. Shyam Sunder Ganeriwalla and Anr., , the Supreme Court was dealing with the same question. After referring to the relevant judgments on the point, the Supreme Court again reiterated that dominant intention of the parties has to be gathered from the terms of the document irrespective of the labels that parties may put upon it. While recognizing that all throughout the question had remained a vexed on,e having no easy solution and precise mathematical test, the Supreme Court restated that to find out whether the document creates lease or licence, the real test is to find out the intention of the parties and the intention is to be gathered from the terms of the agreement except where it is alleged and proved that the 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 of the parties.

12. In Peter Alex D'Souza v. Prithi Paul Singh. 2002(3) MLJ 437, a Division Bench of this Court considered the same question in the light of several judgments of the Supreme Court and held that dominant intention of the parties is to be gathered from the terms of the documents.

13. The legal position is therefore clear. While deciding whether a document is of leave and licence or of lease, the court has to ascertain the intention of the parties from its terms. The way parties choose to describe it is not always determinative of its nature. Exclusive possession of the premises is not the conclusive test. Though it is an important circumstance in certain cases, other circumstance may disprove the existence of lease. There is no simple litmus test to distinguish agreement of lease from that of leave and licence. The intention has to be gathered from the terms of the agreement except where it is proved that the document is a camouflage. If it is alleged that the document is a camouflage, the mask or veil is required to be removed for determining the true intent and purpose of the document. If the terms of the document 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.

14. If these principles are applied to the present case, the inevitable conclusion that has to be drawn is that the parties intended to enter into a leave and licence agreement. The terms of the agreement are very clear and admit of no confusion.

15. Paragraphs 1 to 4 of the agreement are very important. It is stated therein that Dr.(Smt.) Khadilkar has been practicing medical profession for about 29 years in the suit premises as a consultant and Gynaecologist and had acquired goodwill and reputation in the profession. She was required to remain out of Pune off and on and hence she was looking out for a young and competent doctor who would be willing to carry on the medical profession in the suit premises in a spirit of devotion and dedication. The petitioner offered to do so. Dr.(Smt.) Khadilkar accepted the offer and entered into an agreement with him.

16. These clauses can never disclose an intention to create a lease. On the contrary they indicate that because Dr.(Smt.) Khadilkar was required to be in Delhi off and on, she wanted somebody to carry on medical profession in the suit premises in her absence by making use of her goodwill, with a spirit of devotion and dedication. Obviously, she did not want to stop her practice. This conclusion of mine is fortified by Clause 'K' of the agreement whereunder Dr.(Smt.) Khadilkar has reserved her right to use her consulting room whenever she happened to be in Pune. The timing was to be adjusted between the parties according to mutual understanding, convenience and cooperation. She obviously wanted to ensure that in the suit premises only medical profession is carried out in her absence and she could continue her practice when she was in Pune. If she had any other intention, she would have given the premises to any businessman and perhaps would have made more money.

17. Under clause 5(a), the petitioner is allowed to install x-ray machine and other fixtures at his cost. But for that, and for other minor alterations and additions prior written permission of Dr. (Smt.) Khadilkar was necessary. this is destructive of any intention to create a lease.

18. Clause 5(b) enables Dr.(Smt.) Khadilkar to terminate the agreement in case the petitioner fails to pay the arrears if any after four days notice and in that event the petitioner has to remove his belongings and stop the use of the premises. Clause 5(g) stipulates that during the currency of the agreement, Dr.(Smt.) Khadilkar shall pay all rates and taxes, except the education cess and in case the petitioner is required to pay the taxes which Dr.(Smt.) Khadilkar is required to pay he shall be given credit for the same amount. From these clauses, not tenancy can be spelt out.

19. Clause "I" does permit the petitioner to construct another staircase at the rear of the suit premises and further permits him to close the front staircase but it is clearly stated that this is done to remove the feeling of great insecurity created in the mind of the petitioner by reason of the fact that any person coming to the ground floor could go straight to the upper floors. Therefore, these alterations are only allowed to facilitate the petitioner to carry out his profession without any disturbance from outsiders during the subsistence of the agreement. This cannot be construed to mean that the intention was to create tenancy. That there was no intention to create tenancy is clear from Clause "L" under which Dr.(Smt.) Khadilkar had a right to enter upon the suit premises at all reasonable hours of the day for the purpose of inspection.

20. Clause 'N' categorically states that on the expiry of the terms of the agreement, the petitioner shall immediately stop the use of the suit premises and he shall forthwith remove all his belongings to another place. Clause 'O' gives option to the petitioner to use the suit premises for a further period of five years on the same terms and conditions. If this option is exercised by him and if the extended period is also about to expire, then if Dr.(Smt.) Khadilkar so desires then the petitioner may be permitted to use the suit premises for his practice for further period on terms and conditions mutually settled between the petitioner and her.

21. Therefore, the specific period of the agreement, clause pertaining to its extension at the desire of Dr.(Smt.) Khadilkar, the clause regarding termination of the agreement at her instance and the clause requiring the petitioner to leave the premises and remove his belongings after termination, the retention of the right of entry and the right to use the consulting room, clear provision requiring Dr.(Smt.) Khadilkar to pay all municipal taxes excluding education cess, requirement of obtaining permission of Dr.(Smt.) Khadilkar before carrying out alterations are all circumstances which establish that the agreement in question is a leave and licence agreement.

22. I am of the opinion that terms of the agreement are clear and the intention to give the premises on leave and licence is clearly discernible. However, the petitioner has contended that in order to evade the provisions of the Rent Act, Dr.(Smt.) Khadilkar forced him to enter into a leave and licence agreement. Once it is contended that the agreement is a camouflage, then surrounding circumstances will also have to be taken into consideration to find out the intent of the parties.

23. In this case, the surrounding antecedent circumstances clearly establish that the premises were to be given on leave and licence basis. An important fact which is to be noted is that husband of Dr.(Smt.) Khadilkar, Mr. R.K. Khadilkar had become a Union Minister. He was required to be in Delhi. Therefore, Dr.(Smt.) Khadilkar had to frequent Delhi. But that does not obviously mean that she had permanently shifted to Delhi. That is the reason why in the agreement it is stated that she was required to be out of Pune off and on. The clause of the agreement that she wanted some young promising doctor to carry on medical practice in the suit premises has to be read against this background. She had not left Pune for good. Therefore, the agreement is not a camouflage as alleged by the petitioner.

24. Reference to Khalid Ahmed's case (supra) is also necessary because in that case, terms and conditions of the agreement with which the Supreme Court was dealing were almost similar to the terms of the agreement in question. In that case, agreement provided that the premises were given for the use of workshop only. Permission was given to the licensee to construct loft. It was provided that in case the licensee commits any default of any terms and conditions or fails to pay the compensation for two months, the agreement could be terminated. It was further provided that the licensee should pay electric charges in respect of consumption of electricity and the rent of the said premises and that the licensee shall not allow any other person to use and occupy the said premises and that the licensor shall have right to inspect the premises at any time. Upon proper consideration of these terms and conditions of the agreement, the Supreme Court came to a conclusion that the agreement in question was an agreement of leave and license. In my opinion, this judgment squarely applies to the facts of the present case.

25. It was strenuously contended by Mr. Dalvi that the power of attorney which is supposed to have been given by the daughters to Dr.Smt. Khadilkar is not produced on record though the petitioner had called upon the respondents to produce the same and, therefore, adverse inference needs to be drawn. In my opinion, whether power of attorney is there on record or note makes no difference to the merits of the case. Once it is admitted that the husband of Dr.Smt.Khadilkar had gifted the suit premises to her daughters then Dr.Smt. Khadilkar could not have created tenancy. Everything therefore depends on the interpretation of the agreement in question and if the document is read in its proper perspective and surrounding circumstances are considered, it must be held that it is a leave and licence agreement.

26. In an attempt to persuade me to hold that the impugned orders are perverse, Mr. Dalvi tried to draw my attention to certain portions of evidence. Having gone through the evidence, I am unable to come to a conclusion that the appreciation of evidence is improper or the findings of both the courts are perverse. As held by the Supreme Court in Chandrakant Shah's case (supra), reappreciation of evidence in writ jurisdiction is not permissible in such circumstances.

27. The fact that one of the daughters, i.e Smt. Ghaisas, had to some extent supported the petitioner is also not significant. Once the execution of the agreement is admitted and its terms establish it to be a leave licence agreement and attendant circumstances also support this, the stand taken by one of the daughters does not change the picture. Moreover, it appears that Smt.Ghaisas and Smt.Pant, the two other daughters have relinquished their share in the suit property in favour of the respondent, Smt. Sharayu Gupta and names of Smt. Ghaisas and Smt. Pant have been ordered to be deleted by this court by its order 26th July, 2001.

28. In the view that I have taken, the petition will have to be rejected. The petitioner is rejected.