1. A time-worn question -- whether a document is a lease or a licence --. arises in this second appeal also. The Courts below have concurred to construe Ext. Al dt. 7-9-1959 as a licence. In so doing they have been considerably, if not entirely, influenced by the decision of this Court reported in Velayudhan Kesava Panicker v. Ibrahim is mail Sail, (1963) 1 Ker LR 453. The Courts below could not be found fault with in adopting such a course, when a binding decision interpreting a document with essentially similar provisions had been rendered by this Court. The correctness of the decisions was doubted by one of us (Balakrishna Menon J.), and that led to the case being placed before a Bench of this Court.
2. The document Ext. Al is termed as a 'Vadaka Cheettu', and relates to 1200 sq.ft. The rent stipulated is Rs. 20 per month and the period is one year. There are provisions in the document which enable forfeiture of the arrangement in the event of consecutive defaults in the payment of rent for 3 months. There is a provision enabling the grantee to put up temporary sheds at his expense and remove the shed at the time of the surrender of the building. The grantee agreed not to put up a residential building in the plot or to store easily in-flammable materials. Violation of the provisions of the deed would entitle the owner of the property to evict the grantee from the property. The grantee also has the right to surrender the building at any time and to have the accounts settled. Property taxes, licence fees and other levies imposed by the Municipality in respect of the sheds put up or the materials stored therein have to be borne by the grantee.
3. The Courts below have not chosen to analyse the provisions of the document and to independently apply the legal principles; for, as noted earlier, they felt bound by the decision of this Court in (1963) 1 Ker 453. The decision has, no doubt, referred to the leading decision in Associated Hotels of India Ltd. v. R. N. Kapoor, AIR 1959 SC 1262. Two important decisions of the Supreme Court rendered subsequently are to be noted in this connection namely Qudrat Ullah v. Bereilly Municipality, AIR 1974 SC 396 and Board of Revenue v. A. M, Ansari AIR 1976 SC 1813. The tests as formulated by the Supreme Court itself are:
'1. Principles for determining whether agreement creates leasts or licence. In determining whether an agreement creates between the parties the relationship of landlord and tenant or merely that of licenser and licensee the decisive consideration is the intention of the parties. The parties to an agreement cannot, however, turn a lease into a licence merely by stating that the document is to be deemed a licence or describing it as such; the relationship of the parties is determined by law on a consideration of all relevant provisions of the agreement; nor will the employment; of words appropriate to a lease prevent the agreement from conferring a licence only if from the whole document it appears that it was intended merely to confer a licence. In the absence of any formal document the intention of the parties must be inferred from the circumstances and the conduct of the parties.
2. Nature of grant of exclusive possession. The fact that the agreement grants a right of exclusive possession is not in itself conclusive evidence of the existence of a tenancy, but it is a consideration of the first importance.
In deciding whether a grantee is entitled to exclusive possession regard must be had to the substance of the agreement. To give exclusive possession there need not be express words to that effect; it is sufficient if the nature of the acts to be done by the grantee requires that he should have exclusive possession.
The grant of an exclusive right to a benefit can, however, be inferred only from language which is clear and explicit. If an exclusive right of possession is subject to certain reservations or to a restriction of the purposes for which the premises may be used, the reservations or restriction will not necessarily prevent the grant operating as a lease.
3. When grant conferring exclusive possession operates merely is as licence. A grant which confers the right to exclusive possession may operate as a licence in the following circumstances which negative the intention to create a lease.
4. Instances of agreements creating licences. A licence is normally created where a person is granted the right to use premises without becoming entitled to exclusive possession thereof, or the circumstances and conduct of the parties show that all that was intended was that the grantee should be granted a personal privilege with no interest in the land. If the agreement is merely for the use of the property in a certain way and on certain terms while the property remains in the possession and control of the owner, the agreement will operate as a licence, even though the agreement may employ words appropriate to a lease.'
4. The learned Judge who decided (1963) 1 Ker LR 453 supra has given a dominant influence to the wording of the document suggestive of an attenuated role of the grantee in relation to the enjoyment of the property. Other provisions of the document are not discernible from the judgment A different view is possible as regards the approach in the interpretation of a document in the light of the decisions of the Supreme Court The basis of that decision is to a large extent shaken by the tests propounded by the Supreme Court referred to above.
5. Construing the document as a whole, in the light of the principles which have now been elaborately and exhaustively laid down by the decisions of the Supreme Court, we are of the view that it really amounts to a lease and not a mere licence. An interest in the property has been created in favour of the defendant.. Exclusive possession vests with him. The restrictions imposed on the enjoyment are of a nature and a degree that could be provided in a document of lease with restrictive covenants about the manner of enjoyment of the property. The notices Exts. A2 dt 4-7-1966 and Ext. B2 dt. 4-4-1972 seeking to terminate the tenancy are also indicative of a recognition of the parties that the transaction really amounted to a tenancy and not a mere licence.
6. If the document evidences a lease -- as it has been held to be -- the defendant will be entitled to the protection of Section 106 of the Kerala Land Reforms Act.
7. A question about the necessity of a reference under Section 125(3) was also raised In the present case, the question whether (it) was a lease or not had been decided without a preceding reference by the trial Court to the Land Tribunal No application for a reference appears to have been made before the trial Court Before the appellate Court also, the controversy only related to the actual interpretation of the document. The necessity of a reference to the Land Tribunal before the trial Court could dispose of the suit on the basis of the finding submitted by the Land Tribunal had not been urged in appeal either. A Division Bench of this Court in Parameswaran Thambi v. Podiyan Thomas, 1984 Ker LT 397: (AIR 1984 Ker 135) has taken the view that the Appellate Court does not have any inhibition in relation to the adjudication of a question of tenancy, and that it is not necessary to have a second reference to the Land Tribunal to have a finding on the question of tenancy, after the appellate Court had disposed of the matter. In a recent judgment in C. Mohammed v. Moose Beary, (S. A. 1035/1979 F) we have declined the request for reconsideration of that decision.
8. After the conclusion of the arguments and the reserving of the case for judgment, counsel for the respondent sought permission to present yet another argument. We gave permission to urge the fresh point, and accordingly the case was posted to be spoken to on 16-7-1985.
9. It was contended that the requirements of Section 106 of the Land Reforms Act are not fully satisfied, as the appellant could not claim the, status of a lessee in view of the notices Ext A2 dt. 4-7-1966 and Ext B2 dt 4-4-1972 terminating the tenancy. The position of such a person, it was stated, was only that of a licensee. Consequently it could not be said that a lessee had constructed buildings for commercial or industrial purpose.
10. The contention has no force. Analysingthe scheme of the Act and explaining thevarious concepts contained in the section, aFull Bench of this Court has spoken way backin 1971, in Krishna Pillai v. Sankara Pilial, 1971Ker LT 87 : (AIR 1971 Ker 295) (FB). Thoughon certain aspects there was difference ofopinion, on the question of interpretation ofSection 106, there was total agreement. GopalanNambiar J. stated in para 15 of the judgment. asfollows: '
'On the language of the section, it is quite unnecessary to show that a tenancy should subsist before the section can be availed of. The section opens with the words: 'Notwithstanding any decree etc.'; and it is impossible to envisage a decree for eviction without a termination of the tenancy. The wording of the section itself is thus sufficiently indicative that the tenancy need not subsist before its benefit can be availed of, and that the word 'lessee' there includes a quondam lessee still in possession.'
In para 12 of the judgment Mathew, J. also expressed a similar view. It is only necessary to point out that our learned Brother Narendran J. has also taken the same view in Gopinathan Nair v. Madhavan, ILR (1984) 1 Ker 464.
11. There has not been any dispute that the property was leased for commercial purposes. Nor is there any dispute about the putting up of the buildings before the dates stipulated in the section, namely, 20-5-1967. The evidence in the case is that the building had been put up in 1962. This was at a time even before the service of the first notice terminating the tenancy, which was issued only on 4-2-1966. The buildings were therefore constructed by the appellant at a time when he was a lessee as envisaged in S. 106. The observations of the Supreme Court in M.A. Irani v. M.E Mistry, AIR 1974 SC 2123 do not have any application to the present case, in view of the factual difference as indicated above.
12. In the result, in reversal of the decrees of the Courts below, we hold that Ext. Al amounts to a lease and that the suit fails on that ground.
13. We clarify that the dismissal of the suit will not in any way preclude the parties from agitating other rights they have under the Kerala Land Reforms Act or otherwise in respect of the transaction. The second appeal is disposed of as above. There will be no order as to costs.