P. & S. (India) Corporation And ... vs Premier Tools And Ors.
1997 Latest Caselaw 668 Del

JUDGMENT

J.B. Goel, J.

(1) By this Order Ia No. 5579/96 filed by the plaintiff under Order 39, Rules 1 & 2 read with Section 151 of the Code of Civil Procedure (for short Code) for ad-interim injunction is being disposed of.

(2) This application has been filed in a suit. Briefly the facts are that late Shri V.N. Sarna as sole proprietor of M/s. P & S (India) Corporation was the lessee of the premises bearing No. 59, Okhla Industrial Estate, Phase Iii, New Delhi under the Directorate of Industries (now Commissioner of Industries). He had entered into an agreement dated 1.10.1975 with Shri K.C. Bajaj, defendant as sole proprietor of the concern M/s. Premier Tools, defendant No.1, for manufacturing purpose, on the terms and conditions mentioned therein.

(3) The said Shri Sarna died on 22.3.1986 leaving behind his widow (plaintiff No. 2), besides a son and daughter. Plaintiff No. 2 claiming right, title and interest in the said concern M/S.P&S (India) Corpn. as well as in the said factory premises by virtue of the will of her deceased husband has filed this suit. It is inter alia alleged that said Shri K.C. Bajaj has denied the plaintiff access to the premises, and also information about the quantum of goods manufactured in the premises to which they are entitled under the agreement. It is also alleged that defendant has committed various breaches of the agreement and, inter alia, is making illegal constructions, has broken a wall in the premises and wants to install illegally a generator for running the machinery etc. which he is not entitled to do without the prior sanction of the Municipal Corporation of Delhi. Moreover, such generator will cause noise and air pollution and disturbance to the functioning of the plaintiff. The plaintiff by means of notice dated 3.4.1996 had called upon the defendants to remove the unauthorised construction raised in the premises and also to hand over the possession thereof to her which he has not done. Plaintiff in the suit has claimed the reliefs of (i) possession; (ii) misuse charges; (iii) use and occupation charges; (iv) mandatory injunction and (v) permanent injunction. By a separate application for amendment in the plaint she also seeks an injunction against installation of a generator.

(4) In the interim application ad-interim relief is claimed seeking for restraining defendant from installing a generator, from carrying out any unauthorised construction and from preventing the plaintiff ingress and egress to the premises.

(5) Shri K.C. Bajaj on behalf of defendants 1 to 5 has filed written statement and reply to the application, contesting the suit and also the application. Inter alia it is alleged that he is a tenant in the premises @ Rs. 1200.00 per month, which rent he has been paying from the beginning and rent receipts were also issued; that the agreement executed between the parties though labelled as commission agency agreement in fact and in substance is a lease agreement. It is denied that he has made any illegal construction in the premises. It is also denied that the plaintiff or late Shri Sarna had ever visited the premises or made any enquiry about business being carried on by the defendant there or the plaintiff is entitled to do so. It is denied that the defendant has committed any breach of the terms of agreement dated 1.10.1975. It is also alleged that the suit of the plaintiff is malafide and the plaintiff has been trying to dispossess the defendant illegally. As regards the installation of a generator, it is alleged that there has been frequent breakdowns in electricity supply and to meet such requirements in that case, he wanted to install a 15KVA capacity generator which is not illegal and other industrial units in the locality have also installed generators some upto 75 Kva capacity; the generator is to be used only when regular electricity supply is not available.

(6) I have heard the learned Counsel for the parties. Learned Counsel for the plaintiff has contended that the defendant was a licensee and his license has been terminated and as such he is not entitled to the use and occupation of the premises, or to power, electricity and water. It is also contended that the generator cannot be installed without the permission of the Municipal Corporation of Delhi under Section 282 of the Delhi Municipal Corporation Act (for short the Act). This is disputed by the learned Counsel for the defendant who has contended that he is a tenant and as such is entitled to the use and possession of the premises with supply of electricity and to install his own generator.

(7) There is a dispute between the parties about the nature of the document dated 1.10.1975 entered into between them. Plaintiff claims it to be a licence whereas defendant claims it to be a lease. Section 52 of the Easements Act, 1882 defines "licence" whereas Section 105 of the Transfer of Property Act defines a "lease". The distinction between the two terms is well known. A lease is transfer of right to enjoy premises, whereas a licence is a privilege to do something on other's premises which otherwise would be unlawful. In Board of Revenue etc. v. A.M. Ansari this distinction has been explained as under : "It is the creation of an interest in immovable property or a right to possess it that distinguishes a lease from a licence. A licence does not create an interest in the property to which it relates while a lease does. There in other words transfer of a right in lease. As to whether a particular transaction creates a lease or a licence is always a question of intention of the parties which is to be inferred from the circumstances of each case. For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential, therefore, to look to the substance and essence of the agreement and not to its form." And the following guiding principles have been reiterated : (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form; (2) the real test is the intention of the parties - whether they intended to create a lease or a licence; (3) 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 (4) 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."

(8) In the agreement deceased Shri V.N. Sarna is described as "manufacturing agent" whereas defendant is described as 'principal' and it is contended that it is an agreement of agency. However, the nomenclature of the document is not always conclusive. Clause 2 of the agreement provides that the manufacturing agents shall provide the necessary space i.e. the factory premises No.59, Okhla Industrial Area, New Delhi held by him as lessee (as shown in the plan attached) alongwith power, electricity and water provided therein; by Clauses 1 and 5, Principal shall provide at his own cost the machinery, its parts, other accessories, raw material and the labour required for manufacture of the Principal's products, charges for water, electricity and power are also his liability. Under Clauses 3 and 4 the manufacturing agent is to give technical skill, guidances, assistance and know-how etc. and shall supervise the manufacturing of the products of the Principals personally or through his representative but under the guidance, desire and directions of the Principals; Clause 8 provides that the manufacturing agents shall get commission @ 10% of the value of goods manufactured but subject to maximum of Rs.1200 per month. In Clause 9 it is provided that the Principal shall pay Rs.12,500.00 as security deposit which shall bear interest of Rs. 100.00 per month. There is no specific period of duration agreed in the agreement. However, the agreement is revocable in the event the Principal fails to pay the commission as envisaged in Clause 8.

(9) Defendant has also placed on record some documents issued on behalf of the plaintiff showing receipt of Rs. 1200.00 monthly. Obviously, this agreement has been in operation for over 20 years and throughout the defendant has been paying a fixed amount of Rs. 1200.00 per month and also taking credit of Rs. 100.00 on account of interest against security deposit of Rs. 12,500.00 . It is not the case of the plaintiff that deceased Shri V.N. Sarna or the plaintiff had ever before claimed the inspection of the accounts of the defendants to find out what was the value of the total goods manufactured in the premises or that commission was ever demanded and paid as was provided in the agreement. It is also not alleged nor shown on the record that any control and supervision had ever been exercised by them in the business at any time or they have knowledge and experience in that business for that purpose. The defendant has installed his own machinery and has been doing manufacturing business of his own without any sort of control by the plaintiff or late Shri V.N. Sarna. Defendant has control over the business and the possession of the premises to the exclusion of the plaintiff. Without expressing any final opinion prima facie it appears that the defendant has been in exclusive possession of the premises and has been doing his business without any interference of the plaintiff and her husband and hence as at present it cannot be said that the defendant is a licensee and is not a lessee. So long as the defendant is in possession of the premises he is entitled to the supply of water, power, electricity etc. The defendant has been doing manufacturing business and has installed machinery which are being operated by electricity provided by the plaintiff. Obviously, he has been using electricity and power as a matter of right by virtue of this agreement throughout. Defendant is entitled to carry on his manufacturing activities till he is dispossessed from the premises in accordance with law. For the purpose of his business he would need uninterrupted supply of electricity. It is a notorious fact that supply of electricity is very erratic, uncertain and unsatisfactory due to frequent load shedding or breakdowns of supply of electricity. This necessarily would bring to stop the manufacturing business in normal working hours and results in idle workers, loss of working hours, loss of production and consequently, loss in business to the defendant. The defendant wants to install his own 15 Kva generator to fall back upon when there is no electricity supply due to breakdown of grid or load shedding etc. This is a necessity for the defendant. This is his legitimate and reasonable need. This is not going to put the plaintiff to any financial burden. Defendant has alleged and it is not denied by the plaintiff that other manufacturers in that area have installed generators upto 75 Kva capacity to meet such situations.

(10) The grievance of the plaintiff is that the generator will cause noise and air pollution as it is operated by diesel oil. Defendant has stated that he will be using such generator only in case and during the time the normal electricity supply is not available. The defendant can be bound down to that extent. Other manufacturers are using generator and the plaintiff has no grievance against those persons. Moreover, it is also alleged by the defendant that the plaintiff has also got installed his own generator for his own purpose. This is not disputed by the plaintiff. Defendant cannot be discriminated on that ground. Moreover, the premises are situated in an industrial area and not in residential locality. As such the defendant cannot be deprived of the benefit which others are enjoying in the area. Plaintiff's grievance to this effect is not justified.

(11) Learned Counsel for the plaintiff has then contended that a generator cannot be installed without the permission of the Municipal Corporation of Delhi as provided under Section 282 of the Act. It is, however, disputed by the defendant that Section 282 is attracted in the case, and contended that any order requiring such permission, if issued, is not valid . However, it is also volunteered that the defendant is prepared to obtain such permission, if required. Section 282 of the Act reads as under : "Restriction on establishment of new generating stations or major additions to or replacement of plant in generating stations (1) Notwithstanding anything contained in any other law for the time- being in force or in any licence, it shall not be lawful for a licensee or any other person, except with the permission in writing of the Corporation granted on application made in this behalf, to establish or acquire a new generating station or to extend or replace any major unit of plant or works pertaining to the generation of electricity in a generating station. (2) There shall be stated in every application for permission under this section such particulars as the Corporation may reasonably require of the station, plant or works, as the case may be, in respect of which it is made, and where permission is given thereto, in acting in pursuance of such permission the applicant shall not, without the further permission of the Corporation, make any material variation in the particulars so stated."

(12) It clearly provides that a licensee, (and a licensee by virtue of Section 274 of the Act is as defined, under the Electricity Act, 1910), or any other person cannot install a generating station without the permission of the Corporation. The expression "generating station" by virtue of Section 274 of the Act has the same meaning as in Section 2(5) of the Electricity (Supply) Act, 1948 which reads as under: "Generating station" or "station" means any station for generating electricity, including any building and plant with step-up transformer, switch-gear, cables or other appurtenant equipment, if any, used for that purpose and the site thereof, a site intended-to be used for a generating station, and any buildings used for housing the operating staff of a generating station, and where electricity is generated by water- power, includes penstocks, head and tail works, main and regulating reservoirs, dams and other hydraulic works, but does not in any case include any sub-section;"

(13) This term is wide enough and includes any plant used for generating electricity. It is not shown on behalf of the defendant that the generating set proposed to be installed by him is not a plant as contemplated under this definition.

(14) It thus needs the permission of the Corporation to install a generating set by the defendant.

(15) It appears that the Corporation has also issued instructions for this purpose which are contained in Section Xxvii of the "Hand Book of Commercial Practices (1992)" published by them.

(16) The defendant thus is not entitled to install the generating set without such permission. He would thus be entitled to install the proposed generating set after obtaining the requisite permission of the competent authority.

(17) Plaintiff also seeks an injunction for restraining the defendant from carrying out any construction in the premises. Defendant has denied that he has made or wants to make any unauthorised construction in the premises. No details or particulars of the alleged constructions have been given in the plaint or in the application nor any material has been placed on record to show what steps, if any, had been taken by the defendant for raising any unauthorised construction. So it cannot be said that the defendant has made or intends to make any unauthorised construction. As such no injunction can be issued to this effect.

(18) Plaintiff has also sought an injunction to allow ingress or egress to the factory premises of the defendant. Defendant has disputed that the plaintiff is so entitled. In para 10 of the plaint the plaintiff has pleaded as under : 10. That the defendants have now denied the access to the plaintiff in the aforesaid premises whereby also denying the plaintiffs the information regarding the quantum of the goods manufactured in the premises which forms the basis of the commission in pursuance of the agreement dated 1.10.1975."

(19) The defendant has denied the contents of this para and has pleaded that the plaintiff had no right to visit the premises or to make any inquiry about the quantum of goods being manufactured in the premises and that since 1.10.1975 neither late Shri V.N. Sarna nor the plaintiff had ever visited the premises or made any inquiries about the quantum of the goods being manufactured there nor they have ever claimed any such right before.

(20) Obviously the plaintiff wants to take benefit of some clauses of the agreement dated 1.10.1975 which provided for payment of commission at the rate of 10% of the goods manufactured. But this clause has never been acted upon earlier. The effect of this clause in the agreement is to be determined after trial but the fact remains that the plaintiff, or deceased Shri V.N. Sarna had never claimed any commission out of the value of the goods manufactured as provided in the agreement and on the other hand Rs.1200.00 , the maximum amount agreed in this agreement, only had been paid throughout. Obviously, the plaintiff or her husband had never exercised such a right at any time after the agreement dated 1.10.1975 was entered into. In the circumstances, the plaintiff has not made out a case to entitle her to claim inspection of accounts or for that purpose to interfere in the use and occupation of the premises or the business of the defendant being carried on in the premises.

(21) For the reasons given above, the defendant will be entitled to install the proposed generator only after obtaining the requisite permission from the Municipal Corporation of Delhi or other competent authority as may be prescribed under the law.

(22) Except to this extent, the application of the plaintiff has no merit and the same is hereby dismissed and the interim injunction granted on 21.6.1996 is vacated.