C.M. BEENA V. P.N. RAMACHANDRA RAO, AIR 2004 SC 2103
FACTS
The suit property is a shop situated on the ground floor of a building known as 'Woodlands Building' on the M.G. Road, Ernakulam. The respondent filed a civil suit seeking issuance of mandatory injunction directing the appellants to hand over vacant possession over the shop to the respondent on the ground that the license to occupy the suit premises was terminated. The building is a double-storey building. On the upper floor the respondent is conducting hotel business.
According to the respondent the premises in occupation of the appellant is a car parking place. As between the parties there exists a document dated April 1, 1981 executed by the appellant in favour of the respondent which is styled as a deed of licence.
Relevant Clauses of the document:
(7) It is also understood and agreed that if the Licensor desires to have the premises used as a car park or used for any purpose of his Hotel & Lodging Business it is open to the Licensor to terminate this Licence at any time after giving one month's Notice.
(8) It is definitely understood that the Licence creates no estate or interest in the Licensee over the premises and the Licensee shall have only a permission to use the premises for his business.
PROCEDURAL HISTORY
Trial Court: The trial Court directed the suit to be dismissed by recording a finding that one of the two appellants (who are father and son) was a tenant and not a mere licensee.
First Appellate Court: The decree was maintained in first appeal.
Second Appeal in High Court: e High Court has set aside the judgments and decrees of the two Courts below and directed a decree as prayed for being passed.
ISSUE
Whether there is a lease or licence existing between the parties?
JUDGEMENT
Court observed that the difference between a 'lease' and 'licence' is to be determined by finding out the real intention of the parties as decipherable from a complete reading of the document, if any, executed between the parties and the surrounding circumstances. A few principles are well settled. User of the terms like 'lease' or licence', 'lessor' or 'licensor', 'rent' or 'licence fee' are not by themselves decisive of the nature of the right created by the document.
On the facts found by the two Courts below which findings have not been reversed by the High Court it is clear that the nature of the premises is of a shop and not a garage meant and designed exclusively for parking a car. The premises are located in a busy commercial market. The appellant has exclusive possession over the premises and the owner neither can nor does interfere therein. A full-fledged stationery shop and allied business activities have been carried on by the appellant in the premises ever since 1972. The appellant was in possession of the premises for about 20 years before the date of the deed of licence and in spite of the 'deed of license' of 1981 having been executed continued to possess, use and enjoy the occupation of premises as before. Though the so-called licence expired in 1982 the respondent did not insist on the appellant putting back the respondent in possession of the premises but allowed him to remain in occupation and to continue to do so for a period of about seven years till the date of the institution of the suit. It is thus clear that the present one is not a case where the possession or control of the premises was retained by the respondent while the appellant was only permitted to make such use of the premises as would have been unlawful but for the permission given.
Agreeing with the Courts below and disagreeing with the High Court, it was held that the relationship between the parties to be of landlord and tenant and the possession of the appellant over the premises as that of a tenant.
The suit thus, suffers a dismissal and as a result the appellant shall continue in possession but considering all the facts and circumstances of the case the appellant should pay Rs. 2000/- per month by way of rent of the suit premises from 1st April, 2004 till he continues to remain in lawful possession of the premises.