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Virji Lavji Makwana Vs. Partners of Business Running in the Name of Rainbow Screen Shades and ors. - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtGujarat High Court
Decided On
Case NumberFirst Appeal No. 256 of 1973
Judge
Reported inAIR1979Guj178; (1979)0GLR352
ActsTransfer of Property Act, 1882 - Sections 105; Code of Civil Procedure (CPC), 1908 - Sections 9
AppellantVirji Lavji Makwana
RespondentPartners of Business Running in the Name of Rainbow Screen Shades and ors.
Appellant Advocate S.M. Shah, Adv.
Respondent Advocate K.L. Abichandani, Adv.
Cases ReferredErrington v. Errington
Excerpt:
.....physical possession of the concerned rooms was in fact exclusively with the respondents-defendants. in our opinion the learned trial judge was perfectly right in taking the view that the real nature of the transaction was one of 'lease' and not of 'licence'.there is, therefore, no substance in the appeal, which fails and is dismissed with costs. cross-objections fail and are dismissed with costs......1959 sc 1262 wherein it has been laid down that where the question is whether the document is a lease or licence it is the substance of the agreement that matters and not the form, for otherwise clever drafting can camouflage the real intention of the parties. reliance has been also rightly placed by him on errington v. errington, 1952 all er 149 wherein the view has been taken that a preson who is let into exclusive possession, is prima facie to be considered as tenant subject to the rider that attendant circumstances may negative any intention to create a tenancy. in the present case the real nature of the transaction appears to us to be of lease and not of licence. the owner of the property cannot be permitted to set at naught the provisions of the rent act and to bypass the.....
Judgment:

Thakkar, J.

1. A 'Cauli-flower' remains a 'Cauli-flower' even if you pack it in a box labelled 'roses', and so also, a lease in truth, does not become a license merely by calling it license. This contention of the respondents-defendants having been accepted by the trial court, which dismissed the suit, the unsuccessful plaintiff has preferred the present appeal.

2. The appellant instituted a suit for possession of the suit premises consisting of four rooms on the first floor of a newly constructed building from respondents on the premise that the respondents were licensees in respect of these premises as per an agreement of Leave and License, dated May 1, 1970 (Exh. 16) which provided for payment of license fee at the rate of Rs. 50/- per month per room. According to the appellant, as per the agreement there was a stipulation to restore possession on the expiry of eleven months.

3. The defence of the respondents was that it was in reality a transaction of lease and the relationship of landlord and tenant existed between the parties.

4. The trial Court on appreciation of evidence and in view of the attendant circumstances as also the probabilities of the matter came to the conclusion that the transaction was one of lease and the relationship was of landlord and tenant and not of licensor and licensee. In this view of the matter the learned trial Judge dismissed the suit for possession. The unsuccessful plaintiff has there upon preferred the present appeal and has contended that the trial court ought to have passed a decree for eviction and possession as the real relationship was that of licensor and licensee and the period of license had expired.

5. A genuine relationship of licensor and licensee can conceivably arise in the following circumstances: -

(1) A property owner may have an occasion to oblige a relation or friend in need of accommodation and in view of the special relationship may grant the premises for temporary use without intending to create a lease so that the premises not needed by him at the moment may not remain idle whilst his needy friend or relative suffers avoidable hardship;

(2) An owner of property may suddenly have an occasion to go to some other place for a temporary period and instead of allowing the premises to remain idle he permits some one in whom he has trust to occupy the same to meet the temporary need of the latter which may coincide with his own temporary period of absence;

(3) A property owner may accept some one as a paying guest while he himself retains possession of the property as the principal occupant:

(4) In such cases even if some occupation fees are charged it would not matter as in essence the relationship of licensor and licensee can be spelled out in view of the backdrop.

6. A rider must however be added. The mere fact that the relationship is unmasked by the label of 'license' is not decisive. The make up has to be removed and the real profile of the relationship has to be identified. The device of changing the name-plates and fixing the name-plate of 'license' cannot be countenanced for in that case it would tantamount to virtual, repeal of the Rent Act (the social shield provided by the legislature) for it is not possible to conceive of a landlord who cannot apply the label of 'license, and who cannot give the name of 'fee' to the 'rent' charged by him. It requires no enterprise or ingenuity to do so.

7. It is an admitted position in the present matter that there is no special relationship between the appellant on one hand and respondents on the other. They are not related to each other. Nor is there a relationship of friendship. It is also an admitted position that this is not a case where the premises had suddenly fallen vacant and in view of some special circumstances the plaintiff being unable to use it himself had given the same for temporary occupation to the respondents in order that the premises may not have to be kept vacant. It is also not in dispute that before the expiry of the period of eleven months provided in agreement. 16, the plaintiff had served a notice on the defendants through his advocate wherein reference was made to a proposal for executing a fresh agreement of leave and license for a further period of eleven months, and it was stated therein that as the defendants had refused to sign the fresh agreement, the plaintiff was obliged to revoke the license. It is, therefore, clear that the plaintiff was prepared to make the shop available to the defendants even for a further period. The plaintiff has also produced Exh. 34, which are a carbon copy of a receipt, issued in favour of the defendants in the month of March, 1971. This receipt is a printed receipt in a bound book containing about 100 printed pages. There is a reference to an agreement of leave and licence in -the printed text of the receipt and the caption reads as receipt to be given to the licensee'. It is, therefore, clear that a systematic activity of giving the premises under an agreement bearing the caption of leave and licence is being carried on by the plaintiff. In the agreement, the expression 'leave and licence' is used and in the printed receipt book also the same expression 'leave and licence' is used. The learned Counsel for the plaintiff does not dispute that such a systematic activity is being carried on and that compensation is being collected under the name and style of 'license fees' from the occupants. It appears that in all there are 10 shops on the ground floor and 8 rooms on the first floor. And the same modus operandi is adopted in respect of the occupants of all these shops and rooms. The evidence further shows that before this ostensible transaction of license was created a sign-board was put up on the premises with an invitation to the intending lessees to contact the plaintiff for the purpose of taking the rooms on lease. A photograph of this sign-board has been placed on record at Exh 73. The evidence of photographer - Dhirajlal Jerambhai - shows that the photograph was taken in April, 1970 before the transaction evidenced by Exh. 16 was entered into. The evidence of Dhirajlal has been rightly believed by the trial Court and Counsel for the appellant is not able to point out any infirmity in his testimony. This evidence must be accepted and it must be held that such a sign-board was put up at the site. If a cumulative view of all these circumstances is taken there is no room for doubt that the transaction is one of lease and the relationship is one of landlord and tenant, though in order to extricate from the clutches of the Rent Act the expression 'leave and licence' has been disingenuously used and it has been given the appearance of a transaction of 'leave and licence.'

8. Reliance however is placed by the learned Counsel for the appellant-plaintiff on the sole circumstance that the expression 'leave and license' has been employed with open eyes and the defendants do not say that they did not understand the meaning of the said expression. He has also called our attention to a clause contained in the document of alleged 'leave and licence' Exh. 16 which embodies a stipulation to the effect that the plaintiff will be 'deemed to be in possession' of the room concerned. Of course the evidence clearly shows, and the learned trial Judge has rightly found, that physical possession of the concerned rooms was in fact exclusively with the respondents-defendants. The mere fact that the expression 'leave and license' has been used and that the mere fact that a recital to the effect that possession is deemed to be with the plaintiff is contained in Exh. 16 will not alter the real nature of the transaction. The learned trial Judge has rightly relied upon Associated Hotels of India v. R.N. Kapoor, AIR 1959 SC 1262 wherein it has been laid down that where the question is whether the document is a lease or licence it is the substance of the agreement that matters and not the form, for otherwise clever drafting can camouflage the real intention of the parties. Reliance has been also rightly placed by him on Errington v. Errington, 1952 All ER 149 wherein the view has been taken that a preson who is let into exclusive possession, is prima facie to be considered as tenant subject to the rider that attendant circumstances may negative any intention to create a tenancy. In the present case the real nature of the transaction appears to us to be of lease and not of licence. The owner of the property cannot be permitted to set at naught the provisions of the Rent Act and to bypass the legislation by the device of entering into an agreement wherein the expression 'leave and licence' has been employed. In the present case it is established beyond any doubt that the defendants were in exclusive possession, they were paying compensation, and that the intention of the plaintiff as disclosed by the sign board put up before the transaction was entered into, was to create a lease. It would have been a different matter if one of the relations or friends was being permitted to occupy the premises for a temporary period during which the owner himself was not in a position to use the premises himself. In such a case the owner may or may not charge any fees for occupation. Even if he charges any fees it would not necessarily mean, it was a transaction of lease. But in the present case in view of the circumstances recounted earlier there is no escape from the conclusion that the real nature of the transaction is that 'lease' and not of 'licence' and that the plaintiff has resorted to a device to eschew the Rent Act. It is the real nature of the transaction, which matters, and it is the substance, which has to be taken into account after removing the make-up. In our opinion the learned trial Judge was perfectly right in taking the view that the real nature of the transaction was one of 'lease' and not of 'licence'. There is, therefore, no substance in the appeal, which fails and is dismissed with costs. There is no substance in the cross-objections because the civil court cannot while dismissing the suit instituted by a plaintiff on the premise that the defendants are licensees determine the standard rent of the premises, which is the function of the Rent Court. Cross-objections fail and are dismissed with costs.

9. The appeal is dismissed with costs. The cross-objections are dismissed with costs.

10. Appeal and cross-objections dismissed.


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