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Aninha D'Costa Vs. Parvatibai M. Thakur (25.11.1964 - BOMHC) - Court Judgment

LegalCrystal Citation
CourtMumbai High Court
Decided On
Case NumberAppeal No. 31 of 1963
Reported inAIR1966Bom113; (1965)67BOMLR452; ILR1965Bom873; 1966MhLJ74
ActsBombay Court Fees Act, 1959 - Sections 6 and 8; Easements Act, 1882 - Sections 52
AppellantAninha D'Costa
RespondentParvatibai M. Thakur
Appellant AdvocateC.P. Pata, Adv.
Respondent AdvocateK.S. Lulla, Adv.
transfer of property act (iv of 1882), section 105 - indian easements act (v of 1882), sections 52, 56, 60--bombay court-fees act (bom. xxxvi of 1959), sections 8, 10--bombay rents, hotel and lodging house rates control act (bom. lvi1 of 1947)--landlord engaging broker and inserting newspaper advertisement offering premises on leave and licence basis--agreement between landlord and person given exclusive possession of premises--agreement stating that licensee to use and occupy premises for eleven months renewable at licensees option and to pay monthly compensation--agreement also stating that license would stand revoked on failure by licensee to observe its terms and licensee not to allow any other person use and occupation of premises--whether such agreement created relationship of.....patel, j. (1) this is an appeal by the defendant who has failed in both the courts is a suit which arose out the occupation of the suit premises by the defendants apparently as licensee. the plaintiff is the owner of the flat in suit situate in the churchgate co - operative housing society ltd. on the 15th of the november 1959, the defendants was let in the possession of the her agreeing to execute a document of leave and license and the document was actually executed between the parties on the 6th november 1959. the documents is at exhibit a. it purported to be for a period of 11 months. in terms of the document an attempt was made to obtain forcible possession without resort to court, but the plaintiff did nonsuccess, with the result that the present suit was filed in the city civil.....

Patel, J.

(1) This is an appeal by the defendant who has failed in both the courts is a suit which arose out the occupation of the suit premises by the defendants apparently as licensee. The plaintiff is the owner of the flat in suit situate in the Churchgate Co - operative Housing Society Ltd. On the 15th of the November 1959, the defendants was let in the possession of the her agreeing to execute a document of leave and license and the document was actually executed between the parties on the 6th November 1959. The documents is at exhibit a. It purported to be for a period of 11 months. In terms of the document an attempt was made to obtain forcible possession without resort to court, but the plaintiff did nonsuccess, with the result that the present suit was filed in the city civil court at the Bombay as short causes suit for recovery of the possession from the defendants on the basis of that the license was ended to terminated. The relieves claimed were endear to the terminated. The relief claimed were those a mandatory inject and court - fee and was paid on the footing that the suit was one for mandatory inject contending that the was tenant, that the premises were let out to her as the tenant and that court has no jurisdiction as the dispute was one between landlord and tenant. She contended that the amount charged for the occupation was excessive and the she had already filled and application an the under the Rent Act for determination of standard rent before the court of small causes at Bombay. She objected to the frame of the suit contending that suit for mandatory injunctions was not maintainable. The learned of trial judge constructed the agreement between the parties a agreement of leave and license. He negative the contentions of the defendants and decreed the suit. Against his judgment the defendants the come in appeal this which was heard by Mr. Justice Naik sitting singly. He agreed with the conclusion of the learned judge of the city civil court and dismissed the appeal. Before him, three point were argued by the Advocate for the defendants viz.., (1) that the frame of the suit was improper and it wasn't therefore maintainable (ii) that on proper valuation of being made the court would have a jurisdiction of the being to deal with the suit was (iii) that the agreement between the suit parities and one of tenancy and therefore the plaintiff and wasn't entitled an to any relief. All these three contentions were negative byte learned judge.

(2) The learned Advocate for the defendants is this appeal has urged the same three contentions before us. His first contention is that the suit for injunction as prayed for by the plaintiff is not maintainable as inasmuch has the defendants was in exclusive possession of the premises and the plaintiff remedy was therefore to ask to plaints possession of the property. I this contention he s supported by a judgment of the Division Bench of this court (in which I was a member) I the case of the Lakhiram v. Vidyut Cable and the Rubber Industries, 65 Bom LR 604, But in the that case we also pointed out that the court would be entitled to contour the plaint and if on a conclusion of the that was really intended the plaint was claim to possession, then the suit ought not to be dismissed only on the ground the court - fee had been paid as on an injunctions. In view of this judgment of Naik j. Constructed the plaint was and directed the plaintiff to pay the court - fee which she would have been bound to pay as on a suit for possession on the basis of the valve of the property affixed by him. In our ,view the learned judge was right in the course that the adopted in the matter. These contention therefore ought to fail.

(3) The next question is about the market value of the property. Mr. .patel for the appellant invited out attention to the decision oft Division Bench consisting of myself and S.M. Shah J., dated 3-4-1963 In L.P.A. No. 3 of 1963 {Bom} Where we held hat ordinarily the market valve of the property could be arrived by taking the licenses fee as the return of the property, and multiplying it by 12 1/2 i.e., at 12 1/2 years purchases. While adopting that rules, we mad some basis assumptions which we thought would be appreciated by most. But it seems necessary to amplify the reasons for our doing so.

(4) Now the court fee act is a finance Act. It requires that proper court fee should be paid on plaint in accordance's with the nature of the subject - matter of the suit. The section which imposes the court - fee is S. 6 and it deals with a large number of the subjects I respect of each of whiteout prescribed different amounts of court = fee. In respite of some of the matters, the court - fee that is required be paid to is proportionate to the market valve of the property depending upon the nature of the relieves claimed the plaintiff. We do not think it is necessary to refer to these sub - section specifically section 8 enables the court, whenever question of valuation of the subject t matter of the suit is raised to decide inquiry as it deems proper'. The languages shows that the mane of inquiry is left to he subjects and the matter oft suit. The reason forth giving of this decoration is property quite under standby. The valuation of the property for the purposes of court - fee is not the real dispute between the parties which halls to the we decided by the court, but is only a collateral matter and he that is why the strict procedure which applied to such and inquiry. I order to the reduce its work not to waster of its time in the reduce its work and not to was to time in this inquiry, S. 9 enable to the court to appoint even as commissioners for certain investigation. Section 10 gives some of the powers if courts under the Civil procedure code to either the court or the commissioners marking the inquiry. This may suggest that the inquiry ma not even be regard strictly as judicial. Thus the section does not prescribe that the court which make the inquiry shall follow a particular procedure such as in done the Bombay rent act and Tenancy Act. An analysis of the provisions of S. 6 of the court = fee and act shows that in the respect of the certain kind of property the method of computing the valve is the laid down and in such case if difficulty arises. It only arises in other cases where market valve of is to be determined.

(5) Now, the words 'market value' mean the price which a willing purchaser would pay to a willing seller for the property on the day when the suit the is filed. The method o the day when the suit Acquistion cases. Two methods are very frequently adopted for determining the market valve. Ones by the production of the sale deeds oft comparable properties in the vicinity of the property in question, during the period near about the date with respect to which the price has to be determined. The is by refer en to the determined. The other is y refine to the net income to the proper the which it earns. One method is used to also check the result arrived at by the other. Whoever , with al the care ,the court cannot determine the exact value. Something's expert, evidence is called testate the value of the property, but the experience has show in many cases that the expert for one party of will say that the value is Rs. 100 and the expert for the other valve will say that the it is Rs. 1,000. Though discretion is duress as to the it deems necessary for making the valuation of the it has to determine the value of the property fairly though, of course, the same exactness as one may expect of under the Land Acquisition of as one may expect of under the therefore, adopted the a ready method for determining the value of the ready method of the for deterring the where it is earning the income of the above cases.

(6) At this stage, it is also desirable to the explain why we took only 12 1/2 years' purchases and not longer. If the market valve of the property is be assessed on the basis oft net income then the number of the years purchase depends of the rate of the interest of the gold = edged securities. Usually in repeat of non - agricultural income it has become of customary to the adopt a rule of the 16 - 2/3 years purchases to unto even 20 years purchases. But then this method is on the hypothesis and the income method normal income and likely to the recovered for are reasonably long period. Now the license fees which the are earned intake present days are very exorbitant and the good or bad days cannot be expected to last for a considerable longtime. We therefore, took only 12 1/2 year's purchase of the license fee.

(7) The learned Judge Says: 'Section 10 of the Bombay Court - fee Act provides the mode and the manner in the which the inquiry is the be conducted for arriving at the market value the property in the question. All that S. 8 of the court - fees act lays down in that the correct valuation of the property is to be arrived at in all cases where the suit has been wrongly valued by the plaintiff. I do not think that the learned judge intended to lay down a rule which will have the effect of the superseding the provisions of the statute.', the underlying suggestion being that the court in L.P.A. No. 13 of 1963 [Bom] laid down a rule contrary to the provision of the court - fee Act, which to say the least is hardly fair to the learned judges. It is almost elementary that the function of the court is to construe an not be provisions of the court fee act, which to say the least is hardly fair to the learned judges. It is almost elementary that the function of the court its construe an not to legislate. With all respect to the leaned Judge, neither S. 8 nor S. 10 lays down any special procedure for the inquiry. As pointed out above, S. 8 only gives discretion of theocrat to hold 'Such inquiry as it deems proper' and S. 10 only confers powers of a court open the court of the commissioners holding the inquiry. The word 'ordinarily' in our judgment is indicative enough. Mr. Lulla for the Respondents practically disowned the arguments.

(8) Now, the present case, it is true that in 1954 the vendor had paid approximately Rs. 10,000 for this property. But then that was six years before the when the question arose. Evidently it the property was being acquired, the plaintiff hirable would not have relied upon the purchases price paid be her in the view of a fact that the prices of properties in Bombay are rising by leaps and bonus. Even Mr. Lulla while addressing us onto reasonableness of the addressing us onto compensation stated that the prices had risen very high during the six years prices fixing the amounts of the compensation the prices of the property, at that date that prices had very high during the six years and in fixing the amount of communization the price of the property at that date was taken into account. If that is so, we do not see what injustice can there by in applying the rule that the we have laid down. It was suggested by Mr. Lulla Before the learned judge that the compensation for the furniture should be assessed at Rs. 75. Before the such figure can reasonable be accepted one must be put as on an inquiry as to what is that value of the furniture, because very often furniture is used as pretext for earning very high compensation and avoiding the payment of the taxes of the municipal corporation. The Rent Act which defines the words 'premises' includes by S. 5 clauses (8) in the words 'any furniture supplied by the landlord for use in such building or part of the building.' It that is so the frames or the act clearly intended that the furniture should earn only reasonable compensation of and not any exaggerated compensation for its use. In the present case, he documents between the parties mentions have five pieces of furniture - a cupboard, 1 kitchen cupboard, 1 ceiling fan 2 chairs and 1 bed - and hang regard to the fact that the we are not valuing the furniture of the a millionaire in palatial flat, the value of the furniture can hardly the be about, Rs. 1,000 even on a liberal basis. As we said however, that the is matter of evidence and this is only a conjecture.

(9) However we do not think that any useful purposes can now be served be going further into this question. After all, in assessing the market valve, one has to some extent enter into the realms the of conjecture. The defendant into the raised the question of valuation in the trial court and raised it for the first time in court of appeal. In order to arrive at the net income, the outgoing such as taxes and other chugs of which there is no evidence, have to be ascertained. I the case decided by the breach the license fee was the net income of the tenant. We do not think, therefore o the whole that we will be justified in holding on the whole, that we will do not think, therefore on the whole, that we will be justified in holding that the mark valve if more than Rs. 15,000 fixed by the learned judge.

(10) Even assuming that the value of the property is Rs. 25,000 or more Mr. Patel in concluded by S. 11 of the suits valuation Act, which requires that before a judgment of can be set aside on the ground of over or under valuation oft property and consequential want of jurisdiction in the court in must be shown that prejudice is caused t the Appellant. None has been out by Mr. Patal and accordingly his contention must fail.

(11) The third and the important contention is whether the agreement between the parties creates relationship of landlord and tenant.

(12) It is well to bear in mind the relevant definitions in our law. Section 105 of the Transfer of property Act defines a lease of the immovable property as a transfer of a rights of the enjoy the property fro a certain time in consideration for price for certain paid or promises. The price paid is called rent. On the other hand under S .52 o the Indian Easements, Act licenses of is 'Where openers grantees another..... a rights to do or continue to do in upon immovable property of the grantor, something's which would, In the absence of such a right be unlawful, and such right does not amount of the easement of the interest in the property., the right it called to the license' the underlying assumption of the in case of license being that the owner continues to be in possession and control of the property but this in not all. The attributes of the licenses can be seen from some to the subsequent provisions in the Easement Act. By S .56 a entertainment's is made non - transferable ,and is not execrable even by the servants or agents. By S. 60 the licenser's transferee to the property is not bound as such by the license. By this section is also made revocable except in certain cases. In the case of the license, therefore, there is something's the less than a right to enjoy the property of the I the licensee., it connote be exercised by servants of the and agents, is terminable and transferee of the property is not as such bound by the license, on the other hand in the case of the lease, there is transfer of the right to enjoy o the property or in other words of the lessee is entitled to enjoy the property. Having regard to the statutory provisions, we think that the case test of the exclusive possession must be regarded as a very important test of the tenancy.

(13) The question has come before courts since very early times and the test than adopted was that if exclusive possession of was given to a party, the agreement of the between the parties must be regarded as a lease. Difficulties were felt in the application of this principles by reason of the stringent provisions of the rent act and in order to meet these, the test has since been modified. In Booker v. Palmer, 1942 2 All ER 674, the owner had allowed as a matte of concession of the Appellant whose home was destroyed to live in one o the cottages belonging to him. The Appellant then claimed right s tenancy. This claim was negative by the court. They learned judge said [at p. 676] : 'Whether or not parties intend to the create between themselves the relationship of landlord in the tenant, under which an estate is created in the tenants and certain mutual obligations arise by implication of law, mutual in the last report be question of the intention.' In was held there that having regard to the all circumstances n tenancy was intended. It is needless in this connection to refer to all the cases, butte may refer to Errington v. Errignton, 1952 1 KB 290, where after referring to decided cases, Denning L.J. Says:

'The result of the all these case is that, although a person who is let into exclusive possession is prima he facie to the very considered a tenant, nevertheless he will not be held to bees if the circumstances negative any intentions to create tenancy. Words alone cannot a suffice. Parties cannot turn a tenancy into a license merely by calling it one. But if the circumstances merely and the conduct of the parties show that all that the was intended was that the occupier should be granted a personal was that the with on interest in the land, he will be held only to be licensee.'

(14) In this connection, we may refer with the advantage to the case of Addisombe Garden Estate Ltd v. Crabbe, 1958 1 QB 513, wherein the observations of Denning L.J., in the Fachini v. Bryson 1952 1 TLR 1386, to the following effect are referred to. He says:

'We have had many cases lately where an occupier has been held to be a license and not attendant. In addition to those which I mentioned in 1952 1 KB 290, we have recently had three more, Gorham [Contractors] Ltd v. Filed 1952 CPL 255, Forman v. Rudd, Unreported, and Cobb v. Lane, 192 1 TLR 1037. In all the cases where an occupier has been held to be licensee there has been something in the circumstances such as a family arrangement, to an act of friendship of generosity, or such like, to negative of any intentions and to create a tenancy. I such circumstances it would be tenancy unjust to saddle the owner with a tenancy., with all the, when there was no intention to create a tenancy, at all. In the present case however there are no special circumstances. It is simply case where the employer s let a man of into occupation of the house employee let main into occupation of the house in consequence of his employment's of at a weekly sum payable by him........'

The court held that the relationship was that the of service tenant and landlord and thither relationship was determined by the law and not by the label which they chose to put on it. After citing the case of the customs of and excise Commrs v. Pools Finance 1952 1 TLR 792, the learned judge proceeds:

'It is not necessary to go so far as to find that document a sham it is simply a matter of finding the true relationship oft parties. It inmost important that we should be and her to this principles or else we might find all landlords gratings licenses and not tenancies, and we should make a hole in the Rent act through which could be driven - I will not in these days say a coach and four, but an articulated vehicles.'

If one has regard to the conditions prevailing in Bombay and also the at some other places, there can be on doubt about the truism of the remarks. In the city of Bombay in the case of new premises, the act particularly in non -existent. There are also unscrupulous tenants in by including what are called out licensees. While, therefore, constructing the terms of a document, the court the would not lose sight to that fact that he ingenious attempts are more made to circumvent the provisions of the statute. Indeed, in such cases ,it may even be possible, to say that the documents is bogus or sham. However, ultimately, astute relationship is determined by the law irrespective of the label attached to it be the parties, one need not go so far. It is possible of that when exclusive possession is given having regard to the special circumstances mentioned by Denning LJ., in can be said that in the given case a right to the enjoy of the property was not intended to be transferred or given.

(15) In the case, of Associated Hotel of the India LTD v. R.N. Kapoor : [1960]1SCR368 the question arose before the our supreme court in respect, of the occupation of two rooms by the respondents which were described as lady's and Gent's Cloak Rooms where he carried o the business of a hair - dresser. S. K. Das and Sarker, JJ held the rooms let, being the rooms in the hotel were excluded from the operation of the ajmer excluded from the operation if the hotel were mercer Rent Control Act, 1947. Subbao Rao J. Dissenting from the above view considered the question of whether the relationship was of landlord and tenant. After the referring to S. 52 of the Easements, act the learned Judge possession., therefore continues with license says: ' The legal possession therefore continues to the with the owners to the property but the licensee of the permitted to the make used to the premises for the particular purpose. But for the permission of the occupation of the would be unlawful.' The learned judge ultimately formulates the test of the intention of the between the party as said be the subba Rao J., were apparently appropriate for license. Yet he was to opinion that the legal relationship was that the landlord and tenant.

(16) The terms of the agreement of in the present case are:

Whereas the Liensor has agreed to grant leave and license, to use and occupy the flat, furniture and fitting for eleven months renewable at the option of the licensee every eleventh month...... and whereas the said leave and license..... does not confer on the Licensee of any rights or title whether as tenants or subtenants on the following terms:

(1) That the Licenses shall pay monthly compensation for use and the occupation.

(2) that the presumes shall be used for the residence and business by her and her family:

(3) that the Licenses shall deposit Rs 675 without any interest of for the due performance of the terms and indemnifying the Licenser for loss or damage.:

(4) that the Licenser, shall pay all taxes except the Chowkindar's charges of Rs. 10 which shall be paid by the Licensee.

(5) that if the Licensee fails to the observe the terms of the agreements or if she commits any nuisances the license of shall stand revoked and the Licensor shall have the rights to eject the licenses forcibly.:

(6) that the licensee shall not allow any other persons to use and occupy the premises except.....

(7) that the Licenses shall not claim any rights as a tenant, and

(8) that the Licensee shall not make any addition and alternations in that flat without the written premises of the Licenser.

(17) In the present case, there are many circumstances connected with the transaction of that have to be considered. The plaintiff had that the inserted an advertisement in the newspaper that a license was intended in the be granted but then it is hardly likely that a person to who wants to circumstances the provisions of the Rent Act would say of that the property is t be leased. The giving of the advertisement in our view, would indicate that she wanted to give out the property to whosoever was prepared to the take and pay the price. Merely from the language employed in the Advertisement, it cannot be inferred that a license was intended. The second circumstances which emerges from the evidence is that admittedly the services of a broker of were employed by the plaintiff. If is obvious therefore that the intention was not to accommodate any person who was known to the plaintiff but to have anyone who was needy enough to agree per force to the terms proposed by the plaintiff. The employment's of the broker to must necessarily suggest that the intention of the was to earn whatever could be earned out the property and no other. The amount paid to the broker is also not less. This circumstances also therefore cannot support the inference if that it was because the plaintiff intended give to licences only that she had employed the broker. A fair reading to the for doubt that the first flat was given in the excluding possession of the defendants for the use of here feels and the members of the her family and issue was intended to be for 11 months. The parties, however did intend that the term was renewable at the end of the 11 months as at option of the license. It was therefore not short-term accommodation. The learned advert for the respondent of say that the which agreements of the not in the subsequent clauses which lay down the terms it should be held that it was not intended to the acted upon the contention of the which found with the learned judge. We cannot agree. As long as the agreement between the parties is cleat place where the terms is to be found cannot matter much. While constructing the documents the court has to consider the whole documents and cannot refuse the ground that their is placed at one place and the not at the other. It specifically says: 'Whereas the said licenser has agreed to grant the leave and license...... for the period of 11 (eleven) months renewable of every eleventh moth at the option of the licenses..... that terms and conditions....... are as follows' ..... The main and the important term was embodied in that paragraph and the details in the were a worked out in the three subsequent paragraphs and it is not wonder, therefore, in that we do not a find repetition of the term in the details. To show that license was intended. A crude attempt is made by adding the rectal that 'the parties had cordial relations:. The evidence of the both the plaintiff and the defendants shows hat the they did not know each the defendants shows that each other prior to that date. In fact, the plaintiff has inserted an advertisement for the finding a person likely to occupy the flat and the defendants was told about the vacancy of the premises by somas who had gone to be unsuitable. This recital is the untrue and it shows the working of the mind of the broker and that of the plaintiff. Indeed, the rest of the terms are such as are to the found in most in must tenancy agreement, the only difference being that instead of there unto the occupational charges are descried as compensation. No circumstances such as toes descried by Denning L.J. in the case hose cited above are disclosed the parties. Why then one must construe the agreement between the parties as license and allow the between evasion of the Rent Act merely because the plaintiff has chosen to apply the label that it is lichen.

(18) Mr. Lulla has very strenuously argued that some of the terms shows an intention of that the license was intended by both parties and also relied upon the decision of the Ramjibhai Virpal v. Gordhandas Maganlal Bhagat : AIR1954Bom370 . Clauses 6 makes possession non - transferable to anyone else, in clauses 5 there is condition that if the defendants commits any act of nuisance the license shall be deemed to have been canceled and it would be lawful for the licenser without prejudice to any other remedy to forcibly remove the defendant from that flat, the defendants would have to pay of deposit of Rs. 675 of which works out compensation of the for 3 months and that the monthly payment is called compensation Evidently, there are, leases between landlords and tenants which may prescribe many such similar conditions, but merely because of the existence of such condition, else are not converted in to license. Calling the occupational price compensation of the does not make it is license. Ramjibhai Virpal case : AIR1954Bom370 has no application. The principles formulated there are the same as in other accuse it have held that circumstances in the case it was held that the tenancy was not intended to be created.

(19) Mr. Lulla tried to take us through the evidence of the parties and relying on certain statement made by the defendants argued that the she also intended that there should be a license and not a tenancy. Now, one cannot forget the circumstances in which the defendants in was. The hardship of finding accommodation of the Bombay are well known. One need not, therefore, wonder at a needy person agreeing to sing whatever document is required to be signed by him the so long as the he get the defendants admitted that she agreed to execute and document as desired by the plaintiff as that the of license, but she said that the was to he tenant. It is true that she was in difficulties. But then this fact cannot be overlooked. Apart from this, as we have stated, oral evidence of the prior communions between the parties cannot be allowed by the influence the judgment of the court in the deciding the relationship between the parties. See Bomanji v. Secy. Of state 31 BLR 256; AIR 1929 PC 34 Now what is to be determined is the legal relationship between the parties and therefore what they called it is not much material. Giving out best consideration to the terms between the parties and the surrounding circumstances we hold that the relationship between the parties was that of the landlord and tenant. In view of this conclusion, we must and hold that the court had no jurisdiction to decide the dispute between the parties.

(20) In the result, the suit was must fail and is dismissed.

(21) The appeal has been filed in the for mapauperis. Looking to the condition of the plaintiff herself., we do not think that we should require her to pay that court - fee which she ought to pay. We also do not think that the circumstances demands that we should make an order for costs in these proceedings. We therefore, direct the parties to bear their own costs throughout.

(22) Such dismissed.

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