This is a petition by one of the alleged tenants of a shop arising from proceeding for its release which have been allowed by both the courts below.
Brief Facts and History:
The house situate at Subhash Road, Aligarh, the property of three brothers Chatur Mohan Mathur, Pyare Mohan Mathur and Jitendra Mohan Mathur, all sons of late Lalit Mohan Mathur had fallen down. The aforesaid owners leased out the aforesaid property except part of it which comprised of a house bearing Municipal Number 7/236, in favour of Bishan Dayal and Harish Chandra Gandhi for a period of 10 years vide lease deed dated 30.6.1982 @ Rs. 1,800/- per month. In the said lease, the lessors together were described as first party, one of the lessees Bishan Dayal as the second party and the other lessee Harish Chandra Gandhi as the third party. The lease stipulates that the lessees ie., second and third party shall raise constructions on the ground floor according to map annexed at their own cost and expenses and for that purpose they may utilize the debris of the old fallen house. The lessees shall not assign their rights and shall not mortgage, sell or transfer any part or whole of the demised premises in any manner detrimental to the interest of the lessors but they may permit any person to occupy one of shops each constructed by them over the demised premises as licensee. However, such persons shall not be deemed to be tenants or lessees of the lessors. The lease also envisages that on the expiry of 10 years the lessees by giving 15 days notice in writing may continue with the lease for a further period of 10 years on enhancement of existing rent by 10%.
In pursuance to the aforesaid lease deed, Harish Chandra Gandhi, one of the lessees entered into possession of the demised premises and constructed two shops which are more precisely described as shops no. 2 and 3. He allowed one of the aforesaid shop no. 2 to be occupied by Rakesh Gupta and Sri Mamta Gupta vide license dated 27.3.1985 allegedly in terms of the aforesaid lease deed for a period of 10 years with retrospective effect from 18.11.1982 @ Rs. 800/- per month.
The aforesaid arrangement amongst the parties continued even after expiry of initial period of 10 years.
On 22.7.1999, during the continuation of the above arrangement, Harish Chandra Gandhi respondent no. 1 applied under Section 21 (1) (a) of U.P. Act No. 13 of 1972(hereinafter for short 'Act') for release of the aforesaid shop for the bonafide need of his son Gaurav as against petitioner Rakesh Gupta and respondent no. 2 Smt. Mamta Gupta alleging himself to be the landlord of the shop and the aforesaid Rakesh Gupta and Smt. Mamta Gupta as the tenants.
The release was contested by the petitioner Rakesh Gupta as well as respondent no. 2 Smt. Mamta Gupta by filing a written statement.
The release application was allowed by the prescribed authority vide judgment and order 5.4.2002 and the appeal of the petitioner against the same was dismissed vide judgment and order dated 3.2.2005.
It is against the aforesaid two judgments and orders allowing the release application of the respondent no. 1 under Section 21(1) (a) of the Act that the petitioner alone has invoked the writ jurisdiction of this Court under Article 226/227 of the Constitution of India arraying Smt. Mamta Gupta as respondent no. 2.
One of the owners of the demised premises Jitendra Mohan Mathur applied for his impleadment as one of the respondents. His counsel, Sri Bharat Singh, was given audience without any formal order of impleadment treating him to be the representative of the owners of the property even though he was not a necessary party to the proceedings as he was not even party to the proceedings in the courts below and no relief was claimed against him in the release application. He had nothing material to say except that he was supporting the case of the petitioner and that he had drawn separate proceedings for eviction of respondent no. 1 from the demised premises as his lease stood expired.
I have heard Sri B.B. Jauhari, learned counsel for the petitioner and Sri Ravi Kant, Senior Advocate assisted by Sri Badri Kant, learned counsel appearing for respondent no. 1.
Respondent no. 2 is a formal party and her case is not different from that of the petitioner. Therefore, she need not be heard separately.
Submission of the parties:
The basic contention of Sri Jauhari, learned counsel for the petitioner is that the release application under Section 21 (1) (a) of the Act is not maintainable for the following reasons:-
i) that the lease of the respondent no. 1 has expired and as such he is neither the owner nor the landlord;
ii) respondent no. 1 is atleast not a landlord for the purpose of maintaining an application under Section 21 (1) (a) of the Act; and
iii) in view of license deed petitioner is only a licensee and not a tenant;
Learned counsel for the petitioner has also made a faint effort to dispute the bonafide need set up by respondent no. 1.
Sri Ravi Kant, Senior Advocate in response to the above arguments submitted that respondent no. 1 is a lessee of the demised premises on which he has constructed the shop in dispute. It was let out to the petitioner under a rent deed which has been described as a license. Therefore, relationship of landlord and tenant between the two exists entitling him to maintain the release application under Section 21(1) (a) of the Act. Petitioner has accepted the above relationship and he can not now claim himself to be a mere licensee on the basis of the so called license deed dated 27.3.1975 which in effect is a rent deed.
Points for determination:
In view of the above submissions advanced by the respective parties broadly two points for determination arise in this writ petition:-
1.Whether the deed dated 27.3.1985 described as a deed of license is a license or a rent deed creating relationship of landlord and tenant between the parties to it ? ; and
2.Whether the release application under Section 21 (1) (a) of the Act as filed by the respondent no.1is maintainable in view of contentions raised by the petitioner herein above?
Point No:1.
'Lease' and 'License' are two different terms and things which are conceptually distinct.
Section 52 of the Indian Easements Act, 1882 defines the 'License' whereas 'Lease' has been defined under Section 105 of the Transfer of Property Act, 1882. 'Lease' is basically a transfer of right in an immovable property for its enjoyment on some consideration. 'License' on the other hand is simply a permission to do something in the immovable property not necessarily for consideration without creating an interest in the property.
It is well settled that it is the substance of the instrument and not the nomenclature which is relevant and important for determining its nature.
In the case of Associated Hotel Vs. R.N. Kapoor AIR 1959 SC 1262 which still holds the field, the Supreme Court held that the use of particular words like "license" or "lease" will not be conclusive of the nature of the transaction and it laid down the following tests for distinguishing a 'lease' from a 'license':-
(i) substance of the document must be preferred to the form;
(ii) the real test is the intention of the parties-whether they intended to create a lease or a license;
(iii) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a license;and
(iv) if under the document a party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease.
In the said case it was also observed:-
".... if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a license. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful."
The principles laid down in Associate Hotels India Limited (Supra) were followed and reiterated by the Supreme Court in C.M. Beena and another Vs. P.N. Ramchandra Rao (2004) 3 SCC 595.
In the case of Qudrat Ullah Vs. Municipal Board, Bareilly (1974) 1 SCC 202:AIR 1974 SC 396 it was observed thus:
"... If an interest in immovable property, entitling the transferors to enjoyment is created, it is a lease; if permission to use land without right to exclusive possession is alone granted, a license is the legal result."
In the case of Khalil Ahmad Bashir Ahmad Vs. Tufelhussein Samasbhai Sarangpurwala (1988) 1 SCC 155: AIR 1988 SC 184, as Sabyasachi Mukherji, J..as he then was, observed thus:
"To put it precisely.....if permission to use land without exclusive possession was alone granted, a licence was the legal result."
In The law of Landlord and Tenant (4th Edition) Evans and Smith states as under:-
"A lease, whether fixed-term or periodic, confers a right in property, enabling the tenant to exclude all third parties, including the landlord, from possession, for the duration of the lease, in return for which a rent or periodical payment is reserved out of the land. A contractual licence confers no more than a permission on the occupier to do some act on the owner's land which would otherwise constitute a trespass."
It is in the light of the above decisions that I have to examine the instrument in question irrespective of the title of license given to it, to ascertain whether it is a 'lease' or a 'license'.
The license deed aforesaid in respect of the shop no. 2 states that on the request of the petitioner and respondent no. 2 to use the aforesaid shop for doing cloth business respondent no. 1 agreed and allowed them to occupy it as licensees for a period of 10 years commencing from 18.11.1982.
The salient feature of the aforesaid so called license deed are as under:-
Licensees have agreed to pay Rs. 800/- per month as damages for use and occupation for a term of 10 years commencing from 18.11.1982 to the licensor for shop number 2 only;
Licensees shall pay house tax and other taxes payable to the Municipal Board or to any other local authority;
Licensee shall carry out any trade or business in the shop alone or may accept other members to join business as partner;
Licensor shall have no right to revoke the license for a period of 10 years from 18.11.1982 otherwise in case of breach of any terms and conditions;
The licensees will affix their electric connection in the shop and pay electricity charges to the department;
The licensee shall not claim tenancy in the shop;
The deed shall not be construed as tenancy agreement; and The term of the license is 10 years w.e.f. 18.11.1982 and by giving 15 days notice in writing the licensee may continue for another 10 years with enhanced damages @ 12 ½ % of the existing damages;
A plain reading of the aforesaid deed depicts that it puts the shop in exclusive possession of the petitioner on payment of damages @ Rs. 800/- per month plus liability to pay electric charges and other municipal taxes with no right to interfere in his use and occupation. The licensees have also been permitted to install electric connection enabling them to full enjoyment of the property/shop. The period of license of 10 years with a clause for extension at the will of the petitioner alone for another 10 years with rider upon the power of the respondent no. 1 to revoke it earlier also clearly establishes that it not only puts the licensees in exclusive possession of the shop but also creates an interest in it in their favour.
Generally, the person granting permission has full authority to revoke and rescind the same at his will. Any rider on such a power and putting a licensee in exclusive possession for such a long time with the right to pay Municipal Taxes etc., which otherwise is the responsibility of the owner/landlord or the tenant and not of the mere licensee establishes that it creates an interest of the petitioner and respondent no. 2 in the said property which inevitably leads to a conclusion that the above deed of license is actually not a deed of license but a rent deed in connection with the shop.
In Khalil Ahmad Bashir Ahmad Vs. Tufel Hussain Samas Bhai Sarangpurwala 1988 (1) ARC 16 their Lordships of the Supreme Court laid down that intention of the parties is the decisive factor in determining whether an agreement creates relationship of landlord and tenant or merely that of licensor and licensee. The intention of the parties may be one of the relevant factors but what is equally important is the substance of the instrument and whether it creates an interest in the property. In the instant case the instrument on its simple reading establishes that it creates an interest of the petitioner and respondent no. 2 in the property and though the intention expressed is ex-facie otherwise it is by way of camouflage. The intention is actually of creating tenancy in respect of the shop.
In view of the above, in respect of point no. 1 it is held that the alleged license dated 27.3.1985 in effect is a rent deed.
Once the aforesaid deed dated 27.3.1985 is held to be a rent deed, it obviously gives rise a relationship of Landlord and tenant between the parties.
In addition respondent no. 1 in paragraph 1 of the release application has clearly pleaded that after he had taken on lease the premises in question he had constructed two shops and has become the tenant of the same. In reply to the aforesaid paragraph of the release application the petitioner Rakesh Gupta and respondent no. 2 Smt. Mamta Gupta in their written statement accepted that respondent no. 1 is the landlord and the owner of the shop which is in their tenancy. In paragraph 3 of the written statement it has further been stated that as tenants they pay rent to the respondent no.1 @ Rs. 840/- per month besides water tax and house tax. The aforesaid pleadings in the written statement amounts to a clear admission on their part that they are tenants in the said shop. They are paying rent of Rs. 840/- per month to the respondent no. 1 who is the landlord.
It is well acknowledged that admission is the best piece of evidence. In Nagindas Ramdas Vs. Dalpatram Ichharam AIR 1974 SC 471 the three judges Bench of the Supreme Court observed that "Admission if true and clear, are by far the best proof of the facts admitted and they by themselves can be made the foundation of the rights of the parties". Similarly, in Narain Bhagwantrao Goswami Vs. Gopal Vinayak Goswami AIR 1960 SC 101 it had been observed that an admission is the best evidence on which the party can rely and is decisive of the matter unless successfully withdrawn. Thus, in view of the petitioner's own pleadings it stand proved that there is relationship of landlord and tenant between the parties in respect of the above shop.
Sri Jauhari, had submitted that written statement was subsequently permitted to be amended and therefore the above pleadings can not be taken as admission on part of the petitioner. He has drawn the attention of the Court to paragraphs 19 (a) to (h) which were permitted to be incorporated vide orders dated 13.1.201, 31.82004 and 31.2.2004.
In the aforesaid paragraphs petitioner has pleaded that respondent no. 1 is neither the owner nor the landlord of the shop in question and that there is no relation of landlord and tenant between the parties as petitioner is a mere licensee. It may be noted that no corresponding amendment in the pleadings contained in paragraphs 1 and 3 of the written statement were sought and allowed. Thus, the pleadings of paragraph 19 (a) to (h) are inconsistent to that of paragraphs 1and 3 of the written statement. Therefore, when the admission made on part of the petitioner in paragraphs 1 and 3 has not been withdrawn successfully and the pleadings continued to remain on record, it does not lie in the mouth of the petitioner to deny the existence of relationship of landlord and tenant between the parties. It is important to note that admissions made may be explained or shown to be wrong but the burden of proof to establish that they are wrong is upon the person making them or his representative. In Avadh Kishore Dass Vs. Ram Gopal & Others AIR 1979 SC 861 it has been laid down that admissions made unless shown to be wrong are efficacious proof of the facts admitted. The above burden has not been discharged by the petitioner and the relationship of land lord and tenant stand proved.
Further, there is no dispute that Chatur Mohan Mathur, Pyare Mohan Mathur and Jitendra Mohan Mathur are the owners of the premises in question. It was leased out to the respondent no. 1 along with one Bishan Dayal vide lease deed dated 30.6.1982. The demised premises at that time was in the shape of 'khandahar' or inhabitable house which had fallen down. Thus, it was virtually an open piece of land on which the lessees were permitted to construct shops at their own cost using debris. The shop in question was constructed by respondent no. 1. The said construction was with the consent of the owners. Accordingly, respondent no. 1 not only continued to be the leasee of the premises but acquired tenancy of the shop also which was built by him. As a result, he acquired the status of tenant-in-chief qua the petitioner and the respondent no. 2.
Section 3 (j) of the Act defines 'landlord' to mean a person to whom the rent of a building is payable or would be payable and includes his agent or attorney except those mentioned in clause (g) ie., his family members. Therefore, definition of the landlord is quite wide under the Act and the landlord need not necessarily be the owner of the property.
Section 3(a) of the Act defines a 'tenant' in relation to a building to mean a person by whom rent is payable. The word 'rent' has not been defined under the Act but it means total payment made under an instrument of letting, if any, or mandatory compensation payable by the tenant for consideration for the grant, however, it may be described or allocated vide (1948) 1 King's Bench Division 630 Property Holding Company Limited Vs. Clark. It is not in dispute that the petitioner is paying compensation for the grant made in his favour which makes him a tenant in respect of the shop. It makes no difference whether such a grant has been described as a license or an instrument of letting.
Admittedly, Respondent no. 1 is the lessee of land. The shop had been constructed by him and as such he is the owner of the same. He therefore, acquires tenancy rights in said shop. He is the person to whom monthly rent is being paid by the petitioner and he is one who is realizing the rent. Therefore, he is a landlord of the said shop. In short, he is the tenant- in-chief of the shop wherein petitioner and respondent no. 2 are sub-tenants giving rise to relationship of landlord and tenant between them. The ownership of the land on which exists the shop is not material in so far as the relationship of the landlord and tenant between respondent no. 1 and the petitioner in respect of the shop is concerned.
The respondent no. 1 though owner/tenant-in-chief of the shop but not of the land is nonetheless the landlord vis-a-vis the shop in as much as, he is the person to whom respondent no. 1 is paying rent.
A three judges bench of the Supreme Court in Shyam Babu Vs. District Judge Moradabad and Others AIR 1984 SC 1399 observed that a sub-tenant pays rent to the tenant-in-chief and the tenant-in-chief pays rent to the landlord. Between the sub-tenant and tenant-in-chief, the tenant-in-chief would be the landlord and the sub-tenant would be tenant. Thus, in so far as the shop in question is concerned, respondent no. 1 would be tenant-in-chief and the petitioner or respondent no. 2 would be sub-tenants, if not licensees and as such there would be relationship of landlord and tenant between them.
In Prem Chandra Vs. Smt. Pushpawati Devi and Others, 1977 AWC 410 it was held where a tenant moves an application under Section 21of the Act against his sub tenant application would be clearly maintainable and the sub-tenant will partake the position of a tenant and the tenant would acquire the character of the land lord in relation to the premises occupied by sub-tenant.
The lease permits the respondent no. 1 to allow any person to occupy one shop so constructed as a licensee who shall not be deemed to be a tenant or the lessee of the lessors of the first party to the lease. The occupant of the shop may not be a tenant of the owners /original lessors but there is no rider that he can not be a tenant/lessees of the respondent no. 1 who has not been debarred from recognizing the licensee/occupant as a tenant.
Respondent no. 1 in allowing one of the shops to be occupied by the petitioner and respondent no. 2 vide the aforesaid deed has not assigned any of his rights granted to him by the lease in favour of any person much less the petitioner and Smt. Mamta Gupta. The letting of the shop therefore is not even in contravention of the lease dated 30.6.1982.
The submission that no tenancy could have been created in view of terms and conditions of the lease is of no substance. It may be noted that apparently there is violation of any condition of the lease and in case there is any breach of the conditions of the lease, the cause of auction would lie to the owners and not to the petitioner. As far as the petitioner is concerned, he admits that he is occupying the shop in question for business purposes and is paying monthly damages for its use and occupation and electric charges along with the Municipal dues, all of which makes him a tenant.
In view of the aforesaid facts and circumstances, a relationship of landlord and tenant do exists between respondent no. 1on one part and the petitioner and respondent no. 2on the other in so far as the shop in question is concerned.
Having held as above, both the limbs of the the first point formulated above stands fully answered which leads me to the next point.
Point No.2:
It has been submitted that even if respondent no. 1 is landlord within the meaning of Section 2(j) of the Act he is not the landlord for the purpose Section 21 (1) (a) of the Act.
The submission is wholly devoid of substance for the simple reason that release application under Section 21 (1) (a) of the Act is maintainable on behalf of the landlord for his bonafide need and occupation by himself or any member of his family. The landlord has been defined under Section 2(j) of the Act and respondent no. 1 definitely falls within the meaning of the landlord as discussed above. No different or other meaning or definition of landlord has been provided under the Act. Thus, no distinction can be created between the landlord defined under Section 2 (j) of the Act and the landlord referred to in Section 21 (1) (a) of the Act. The word landlord shall be assigned the same meaning for all purposes of the Act unless any contrary intention is expressed. There is no such provision providing contrary intention.
Shri B.B. Jauhari has placed reliance upon two single Judge decisions of this Court ie. Smt. Sughara Begum Vs. Sri Ram and Others 1983 (2)ARC 143 and 1996 (2) ARC 14 Smt. Ved Rani Diwan and another Vs. 8th ADJ and others.
In Smt. Sughara Begum (Supra) the Court laid emphasis upon the expression "occupation for himself or for family members" and held that a person applying under Section 21 (1) of the Act must be entitled to occupy premises in his own right and it can not be by a mere rent collector. Similarly, in Smt. Ved Rani Diwan (Supra) it was held that a person who has no right to occupy building let out to the tenant in his own right even if landlord has no right to file an application for release.
Both the aforesaid decisions are of no help to the petitioner. In the present case, respondent no. 1is not a landlord simplicitor of the shop in question but is also its owner in a limited sense. The said shop has been constructed by him with the consent of original lessors of the land. Therefore, he is actually a tenant-in-chief of it. He is not a mere rent collector as attorney or agent of any other person. Therefore, he not only acquires ownership rights but also tenancy rights entitling him to occupy it in his own right both as owner and landlord as well as tenant vis-a-vis the original lessors. The petitioner and respondent no. 1 are his sub-tenants. Therefore, in view of Shyam Babu (Supra) and Prem Chandra (Supra) his application under Section 21 (1) (a) of the Act is not only maintainable but well founded.
Ancillary Point No. 1:
Lastly, it has been submitted that the son of respondent no. 1 for whom the need has been set-up is already settled in business. He only wants to shift his existing business to the shop in question.
The tenant is no one to dictate to the landlord as to from where his son should carry his business. It is the choice of the landlord or his son to take a decision in this regard. Once it is decided by them that it is beneficial to carry business from the shop in dispute, the need for the shop for shifting of business can not be held to be fictitious in any manner. The need for shifting business to a better suitable place is also genuine and bonafide. Moreover, it is a finding of fact which is not open for fresh consideration in exercise of writ jurisdiction as the finding is not shown to be perverse or contrary to law.
In the ultimate analysis I am of the view that the writ petition is devoid of merit and needs no indulgence in exercise of extra-ordinary discretionary power of the Court. It is dismissed accordingly.
Dt. July 3, 2012.
SKS