Shri Madan Mohan Saraswat Alias ... vs Shri Santosh Kumar Agarwal & Anr.
2010 Latest Caselaw 5695 Del

 *          IN THE HIGH COURT OF DELHI AT NEW DELHI

 +                     RFA No.137/1997

 %                                             14th December, 2010

SHRI MADAN MOHAN SARASWAT ALIAS SHARMA                   ...... Appellant


                                   Through:    Ms. Maninder Acharya and
                                               Mr. Yashish Chandra,
                                               Advocates.

                       VERSUS

 SHRI SANTOSH KUMAR AGARWAL & ANR.                           .... Respondents

                                   Through:    Mr. Sunil Malhotra and
                                               Ms. Sonali Malhotra,
                                               Advocates.
 CORAM:
 HON'BLE MR. JUSTICE VALMIKI J.MEHTA


 1.   Whether the Reporters of local papers may be
      allowed to see the judgment?
 2.   To be referred to the Reporter or not?

3. Whether the judgment should be reported in the Digest?

VALMIKI J. MEHTA, J (ORAL)

1. By the present appeal filed under Section 96 of the Code of Civil

Procedure, 1908, the appellant challenges the impugned judgment and

decree of the trial court decreeing the suit of the respondent/plaintiff for

possession and damages against the appellant on the ground that the

appellant was a licensee of the premises and not a tenant.

2. The property in question is the first and second floor of premises no.

1407/2, Gurdwara Road, Kotla Mubarakpur, New Delhi. The case of the

respondent/plaintiff was that the premises were given on license to the

appellant/defendant at a license fee of Rs.2,000/- per month around

20.1.1987 and which license was to continue till 31.3.1990. The case of the

plaintiff further is that on failure of the appellant/defendant to vacate the

premises given on license basis, the plaintiff served a notice dated

29.12.1992 and when the appellant failed to comply with the same, the

subject suit for possession and damages was filed.

3. The case of the appellant/defendant in the written statement was that

he was a tenant and not a licensee. The rent was, however, said to be

Rs.300/- and not Rs.2,000/- per month. After completion of the pleadings,

the Trial Court framed the issues on 6.12.1993 and issues No.1 and 2 are the

relevant issues with respect to whether the relationship between the parties

is of a landlord and a tenant or a licensor and a licensee. These two issues

read as under:-

"i. Whether the suit is barred u/s 50 of Delhi Rental Control Act? OPD

ii. Whether the Plaintiff have no cause of action alleged in para 5 of the preliminary objection? OPD.

4. This is a fact which has admittedly emerged on record that the

relationship between the parties was a commercial relationship because

after all, it was against payment of consideration. There is no written

document/ agreement between the parties which was entered into at the

time of commencement of the relationship. The appellant contends that he

is a tenant and the respondent took up the stand that the appellant was only

a licensee.

5. Whether the person is a tenant or a licensee in a premises is a

question which has now been addressed by various Courts including this

Court and the Supreme Court on thousands of occasions. In the absence of a

written document, the facts and circumstances of each case have to be seen

to determine whether the relationship is of a landlord and tenant or a

licensor or a licensee. There is no one single litmus test. Various aspects

have to be seen including exclusive possession of the property, the nature of

the transaction in question, whether the claimed licensor has unrestricted

ingress and egress in the property and so on. In this regard, reference may

be invited to the following decisions:

6. In the case of Mrs. M.N. Clubwala Vs Fida Hussain Sarab reported as

AIR 1965 SC 610, the Apex Court emphasized that if there is exclusive

possession to which a person was entitled in the property, the agreement

would be considered not as the mere licence but as a lease.

7. Again the Hon‟ble Supreme Court in the case of Qudrat Ullah Vs

Municipal Board, Bareilly, reported as AIR 1994 SC 396 observed that:

"There is no simple litmus to distinguish a lease as defined u/s 105

Transfer of Property Act from a licence as defined in section 52 of the

Easement Act. But the character of the transaction turns on the operative

interest of the parties. To put it pithily, an interest in immovable property,

on titling the transferors to enjoyment, is created, it is a lease if permission

to use land without right to exclusive possession is alone granted, a licence

is the legal result. Marginal variations to the broad statement are possible

and Nos.1 and 4 fall in the grey area of unclear recitals."

8. In the case of B.M. Lal Vs. M/s. Dunlop Rubber Company, reported as

AIR 1968 SC 175, it has been held that a lease is a transfer of a right to enjoy

the premises whereas the licence is a privilege to do something on the

premises which otherwise would be unlawful. In the absence of any written

document or formal deed, the intention of the parties must be inferred from

the circumstances and the conduct of the parties. The test of exclusive

possession is not conclusive, though it is a very important induction in favour

of the tenancy. The question is not of the language used by the parties but of

substance and the label which the parties chose to put upon the transaction

is not decisive. The salutary test in determining whether an agreement between

the parties created the relationship of landlord and tenant or merely that of

licencer and licencee is the intention of the parties. To put precisely if an

interest in immovable property entitling the transferee to enjoyment is

created, it is a lease, if permission to use the land without exclusive

possession is also granted, a licence is a legal result. Mere use of word

„tenant‟ or „licencee‟ is immaterial.

9. Applying the tests as laid down aforesaid, it is quite clear that the

appellant is a tenant in the premises and not a licensee. The appellant has

exclusive possession of the premises with him and there is no unrestricted

ingress, egress or interference by the respondent with respect to the subject

premises. It is not even the case of the respondent that he has any duplicate

set of keys with him of the premises, and it has come in evidence, that the

keys of the premises are only with the appellant. Of course, the trial court

has disbelieved the receipts relied upon by the appellant being Exb.DW-5/1

and 2, however, even if the same are ignored that does not take away from

the fact that why should after all in a commercial relationship where

consideration is paid, and where exclusive possession of a property is with

the appellant, the relationship would not be of a landlord and tenant. It is

well-known that to avoid rigours of the rent control legislation devices are

adopted by landlords, to defeat the rights of the tenants, and in that context,

the Supreme Court has laid down the tests to distinguish a tenant from a

licensee as given above.

10. I am also of the opinion that the trial court has gravely erred in

ignoring the proved document and compromise entered into between the

parties being Exb.DW-1/3. A reference to this document shows that the

appellant is described as a tenant at two places in this document. This

document has been duly proved and exhibited in the court below as

evidence and the same is signed by both the appellant and the respondent.

This document also clearly proves that the appellant was a tenant and not a

licensee.

11. In my opinion, there is a clear cut illegality and a perversity in the

impugned judgment and decree which persuades this Court to interfere with

the impugned judgment and decree and the same is set aside. The trial

court has failed to discuss the most relevant aspect with respect to the

exclusive possession of the premises being with the appellant and the

respondent not having any keys of the premises as also the fact that no

unrestricted right of ingress and egress existed in favour of the respondent

and against the appellant with respect to the premises. The document

Exb.DW-1/3 has also been illegally and perversely ignored by the trial court.

12. In view of the above, the appeal is allowed. The impugned judgment

and decree is set aside. Since the suit for possession fails, the claim for

damages also fails. However, the appellant shall be liable to pay charges at

the rate of Rs.2,000/- per month with respect to the suit premises in terms of

the impugned judgment from the date from which the said charges have

been found to be payable by the trial court. Let a decree be drawn up. Trial

court record be sent back.

DECEMBER 14, 2010                                VALMIKI J. MEHTA,J
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