Allowed

P.a.Abdurahiman v. a.P.Rahmath

Kerala HC9 Dec 2019RFA/413/2005

Case brief

AI extract

What is this about?

The High Court allowed the appeal setting aside a trial court decree. It held the trial court failed to strictly follow earlier remand directions requiring a fresh determination of whether the transaction was a lease or licence based on substantive rights rather than document labels.

What did the court decide?

Judgment dated 31.03.2005 set aside; suit remanded to trial court for fresh adjudication within five months.

P.a.Abdurahiman Vs a.P.Rahmath — Landlord and Tenant | Kerala HC (2019)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE MARY JOSEPH

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MONDAY, THE 09TH DAY OF DECEMBER 2019 / 18TH AGRAHAYANA, 1941

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RFA.No.413 OF 2005

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AGAINST THE JUDGMENT AND DECREE IN OS 66/2001 DATED 31-03-2005 OF II ADDITIONAL SUB COURT, KOZHIKODE

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APPELLANT/1ST DEFENDANT:

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P.A.ABDURAHIMAN S/O. N.AHAMMED HAJI, RESIDING AT 'ROULA', POST ERANHIKKAL, ELATHUR,, ELATHUR AMSOM AND DESOM, KOZHIKODE TALUK.

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BY ADVS.

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SRI.MOHAMMED RAFIQ SRI.M.P.SREEKRISHNAN SRI.A.MUHAMMED MUSTHAFA

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RESPONDENTS/PLAINTIFFS:

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1 A.P.RAHMATH, W/O.U.K.SHARAFUDDEEN, SHARARA BANGLOW, KUYYALI ROAD, TALASSERY,, TALASSERY TALUK.

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2 U.K.SHARAFUDEEN, AGED 48 YEARS, RESIDING AT -DO- -DO-

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R1-2 BY ADV. SRI.A.A.ABUL HASSAN

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THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 07-11-2019, THE COURT ON 09-12-2019 DELIVERED THE FOLLOWING:

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R.F.A. No. 413 of 2005

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MARY JOSEPH, J.

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Dated this the 9^th day of December, 2019

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JUDGMENT

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This appeal is filed by the 1^st defendant in O.S.No.66 of 2001 on the files of Sub Court, Kozhikode (for short 'the trial court') challenging the judgment dated 31.03.2005. The respondents are plaintiffs therein. The suit was filed by the respondents before the trial court seeking for a decree of mandatory and perpetual injunction and for realisation of arrears of licence fee and damages for use and occupation of the premises. It is stated in the appeal memorandum that the 2^nd defendant is not impleaded in this appeal, since no decree was passed against him by the trial court. 2. Before the trial court, plaintiffs have adduced oral as well as documentary evidence. The evidence adduced by the parties originally before the trial court consists of the testimony of PW1, DW1, Exts.A1 to A11 and Ext.B1. The trial court has appreciated the above evidence and decreed the suit holding that

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R.F.A. No. 413 of 2005

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the nature of the entrustment was purely a licence and directed the 1^st defendant to vacate the plaint schedule premises within 2 months and to pay a sum of Rs.2,27,500/- as arrears of licence fee with interest at the rate of 6% from September 2000 till 15.12.2000 and to pay damages at the rate of Rs.65,000/- per month with 6% interest together with costs to plaintiffs for continued use and occupation until the actual date of surrender. The relief of perpetual injunction sought by plaintiffs was disallowed. The defeated 1^st defendant challenged the judgment and decree as stated above in R.F.A.No.260 of 2004 filed before this Court. By judgment dated 07.12.2004 in R.F.A, this Court allowed the appeal and remanded the case to the trial court after setting aside the judgment and decree under challenge, directing it to permit the 1^st defendant to cross examine PW1 and also to adduce evidence, oral as well as documentary, in support of his contentions. Plaintiffs were also permitted to adduce evidence if they so desire and produce documents. The case was directed to be disposed of in accordance with law and the dictums and the guidelines laid down regarding lease and licence, before the trial court closes for summer vacation in 2005.

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After the remand of the case to the trial court, the 1^st defendant preferred an application as I.A.No.478 of 2005 seeking to amend the written statement by incorporating an additional paragraph as 11(a). The I.A. was allowed permitting the 1^st defendant to amend the written statement and accordingly Paragraph 11(a) was incorporated in the original written statement. In the newly introduced paragraph 11 (a), the execution of the agreement by the defendants with the plaintiffs to enhance rent of the premises to Rs.65,000/- per month, issuance of post-dated cheques for Rs.65,000/- in advance, payment of Rs.65,000/- by the defendants to the plaintiffs at any point of time as licence fee for 'A' schedule building and acceptance of numerous blank signed cheque leaves by the 2^nd defendant from the 1^st defendant in the suit were denied. Contentions that numerous blank signed cheque leaves were collected by the 2^nd defendant from the 1^st defendant as security to ensure the payment of rent of Rs.25,000/- per month, that the cheque leaves handed over as security were never returned and kept by the plaintiffs and therefore, 7 cheque leaves are still with the plaintiffs, that the cheques presented for payment were filled

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up by the plaintiffs or their men with malafide intentions, that the plaintiffs have apparently misused the cheque leaves handed over to them with self serving and malafide motives, that the cheque leaves presented in court were filled up by the plaintiffs so as to create an impression that the defendant had agreed to pay enhanced rent at the rate of Rs.65,000/- per month, that the documents produced by the plaintiffs to sustain the claim for enhancement are fabricated with malicious and mala fide motives and that the plaintiffs are entitled to claim rent of the premises only at the rate of Rs.25,000/- per month and not at the rate of Rs.65,000/- per month, were also taken. It was also contended that the reasons set forth in the plaint to claim enhanced rent at the rate of Rs.65,000/- per month are untenable and unsustainable both in law, facts and circumstances of the case. Based on the additional pleadings raised as above, the trial court framed an additional issue, which is extracted herein below:

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“Addl.Issue No:1:- Whether the cheques were issued by D1 by way of security as blank cheques as contended?”

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After the remand, the 2^nd plaintiff (PW1) was subjected to cross examination by the 1^st defendant. Exts.A12 series and Ext.A13 were marked on the side of the plaintiffs. The 1^st

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defendant got himself examined as DW2 and marked Exts.B2 to B9. No fresh evidence was adduced by the 2^nd defendant. Therefore, the evidence available for consideration of the trial court after remand were the oral testimonies of PW1, DW1 and DW2 and documentary evidence of Exts.A1 to A13 and Exts.B1 to B9.

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In the order of remand, the trial court was directed to adjudicate afresh, whether the arrangement that existed among plaintiffs and the 1^st defendant was licence or lease. The trial

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court during consideration of the suit had originally framed the issues to the following effect:

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“1. Whether the plaintiffs are entitled to a mandatory injunction as prayed for?

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Whether the plaintiff is entitled to prohibitory injunction as prayed for?

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Is the plaintiff entitled to a decree for the amount as arrears of licence fee?

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Whether the transaction is a lease or licence?

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Reliefs and costs?”

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Since the issue now directed to be adjudicated by order

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of remand being the 4^th one originally framed, the trial court considered the same first and answered the arrangement as a

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licence and not lease. However, issue No.4 was found afresh in favour of the plaintiffs. Consequently, issue Nos.1, 3, additional issue No.1 were also answered in favour of plaintiffs and issue No.2, against them. In the result, the suit was decreed issuing a mandatory injunction, directing the 1^st defendant to vacate the plaint schedule premises, to surrender its vacant possession to the plaintiffs within two months to pay the arrears of licence fee from 2000 September till 15.12.2000 at the rate of Rs.65,000/per month and to pay damages for continuous use and occupation

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by the plaintiffs at the said rate till actual surrender of the premises. Aggrieved by the judgment, the 1^st defendant has approached this Court by filing the appeal on hand.

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The contention of Sri.M.P.Sreekrishnan, the learned counsel for the appellant/1^st defendant was that the trial court has thoroughly failed to appreciate the evidence on record to reach a conclusion that the arrangement among the plaintiffs and the defendant is a licence and to grant the relief on its basis. According to him, the trial court failed to act in accordance with the directions of this Court in judgment passed in R.F.A.No.260 of 2004 while adjudicating the issue, whether the arrangement is

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licence or lease. According to him, the original judgment of the trial court was set aside by this Court in R.F.A.No.260 of 2004 and the suit was remanded to the trial court for passing a judgment, the same was done by the court without consideration of the issues afresh.

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Per contra , Sri.A.A Abul Hassan, the learned counsel for the respondents/plaintiffs have contended that the trial court has dealt with issue No.4 afresh strictly in accordance with the directions of this Court in judgment dated 7.12.2004 in R.F.A.No.260 of 2004 and the trial court cannot be condemned. According to him, the trial court has appreciated the evidence in its correct perspective and arrived at a correct finding that the arrangement based on Ext.A1 is nothing but licence and based on the finding, the reliefs sought by the plaintiffs were granted in his favour. According to him, the prayer of the appellant to set aside the judgment is devoid of merits and the appeal deserves dismissal.

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Since the attack of the appellant on the judgment under challenge was mainly on the manner in which the trial court has dealt with the case after remand and in view of the specific

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contention raised that the directions in the judgment dated 07.12.2004 of this Court in R.F.A No.260 of 2004 were not complied with, it is incumbent upon this Court to see whether the finding on the issue was a reiteration of the original finding without revisiting the same after independent appreciation of the evidence on record.

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Paragraph 8 of the judgment in R.F.A No.260 of

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2004 being precise on the directions issued by this Court while remanding the case, is extracted hereunder:-

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“8. The result of the suits depends upon the finding whether the entrustment covered by Ext.A1 is a licence or lease. If it is a licence the plaintiffs are entitled to the decree prayed for and if held otherwise they are not entitled for any relief in this case. Ext.A1 is an agreement entered into between the plaintiffs and defendants on 20.3.1999. it is styled as licence agreement. The recitals in paras 1 and 2 are to the effect that it is a simple licence and the plaintiffs are in possession of the premises. Other clauses deal with the licence fee. The period of licence, the restriction to transfer, repair and renovate. According to the plaintiffs at the request of the defendants, the plaintiffs had spent a huge sum for doing interior decoration, partition and had purchased furniture described in B schedule so as to enable them to run a restaurant. It was agreed to increase the licence fee to Rs.65,000/- per month. On the other hand, the defendants would contend that the entrustment was a lease on 15.3.1999 and on 20.3.1999. the plaintiffs brought an agreement and making the defendants to believe it as a lease document and got it signed. Subsequently the appellant had spent huge sum for interior decoration and purchase of B schedule movables and it is reported that the entrustment is only a lease and not a licence.”

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The circumstances that necessitated the passing of the

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judgment directing remand of the case are also narrated in Paragraph 11 and that is extracted hereunder:-

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“11. The records would reveal that on 9.12.2000 the counsel for 1^st defendant reported no instruction and did not cross examine the plaintiffs, similarly he did not enter the box to give evidence in support of his contention. It is seen that I.A No.5598/2003 was filed on 9.12.2003 to remove the case from the list by the counsel for the 1^st defendant. It was moved on the ground that the 1^st defendant was suffering from 'Rakthavatham' from 4.12.2003 and he needs rest upto 30.12.2003. It was dismissed stating that it was only a dilatory tactics. Thereafter the trial court proceeded with trial. Meanwhile is the appellant moved I.A 79/2004 for reopening the case. The lower court by its order dated 9.10.2004 allowed the application on the condition that he should deposit the admitted rate from October, 2000 till date on or before 17.1.2004. As the appellant did not deposit the amount it was dismissed on 17.1.2004. Even calculating at the rate of Rs.25,000/- the amount to be deposited was Rs.9,75,000/-. The learned counsel for the appellant would submit that if the contention of lease set up by him is accepted he will not be liable to deposit any amount in this case and it was very harsh on the part of the lower court to have given such a direction. It is to be noted that on 10.4.2001, the plaintiffs moved IA 2001/2001 for a direction to deposit the licence fee from 15.2.2000 to 16.2.2001. the court by its order dated 22.1.2002 dismissed the application. It was stated by the lower court that whether the transaction is a lease or a licence can be decided only after trial and it is premature to decide the status. When the lower court was fully conscious of the said fact, it was not correct to direct the 1^st defendant to deposit the amount. The 1^st defendant had never been so callous or grossly negligent in prosecuting the case. He had moved the court in time for adjournment and again for reopening. The question to be resolved requires evidence and shutting out of evidence

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has resulted in injustice. Therefore we are of the view that an opportunity has to be given to the 1^st defendant to adduce evidence in the case. Similarly in para 15 of the judgment the lower court held that the plaintiffs are not entitled to claim B schedule movables. At that stage there was no contra evidence even. It is a crucial factor in this case to consider whether the transaction is a lease or licence. The appellant counsel would urge there are documents to show that he had purchased it. We feel that the said finding has also to be set aside and both parties be give opportunity to prove the ownership over B schedule. The finding that the plaintiffs are entitled to mandatory injunction and that they are entitled to the licence fee are also set aside for the reason that the matter has to be considered afresh in the light of the evidence and materials to be furnished by both parties.”

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Therefore, for the reason that the 1^st defendant failed to

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cross examine the plaintiffs and in view of that a vaccum has been created in the evidence to arrive at a proper finding on the nature

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of the arrangement, that this Court considered it expedient in the interest of justice to remand the case to the trial court for reconsideration after affording opportunities to the parties to the suit to adduce appropriate evidence. This Court has also directed the trial court to decide the issue bearing in mind the dictum of

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the Apex Court in Beena V. Ramachandra Rao [2004 (2) KLT 336(SC)]. The directions contained in the dictum precisely are:-

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To find out whether the deed confers a right to posses exclusively, coupled with transfer of a right to enjoy the property.

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To Consider the conduct of the parties before and after the creation of relationship.

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Regard must be had to the substance rather than to the form of the agreement.

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To see whether the instrument by which the arrangement is created, is to give the holder, the exclusive right of occupation of the land subject to certain reservations on the purpose for which it may be used.

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Therefore, the direction to the trial court at the time of

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remand of the case was to conduct an indepth analysis of the recitals in Ext.A1 to identify, whether it confers a right on the grantee to possess the property described therein exclusively coupled with a transfer of right to enjoy the same. This Court has also directed the trial court to find out from the conduct of the parties to Ext.A1 agreement, the intention of the parties, prior to and after the creation of the arrangement as per Ext.A1. Accordingly, this Court has directed the trial court not to arrive at a finding by merely looking into the nomenclature of the document or the reference of the words 'lease' or ' licence', 'lessor' or

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'licensor', 'rent' or 'licence fee' recited therein, rather to delve on its spirit to see what was really intended by the parties while executing Ext.A1. The court has opined that the relationship between the parties is determined by the law dealing with the same and not by the label which they chooses to put on it. Therefore, an interpretation of the recitals in the instrument in the context of it's execution was required by this Court to be considered by the trial court while remanding the case.

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In the backdrop of the argument of the learned counsel for the appellant this Court has resorted to a thorough scrutiny of the evidence on record and the manner of appreciation of those by the trial court and found that despite the direction of this Court to consider the nature of Ext.A1 without simply referring to the nomenclature given to it and the usage of the words 'license and license fee' thereunder, the trial court has given undue importance to the words referred to as above, as it has done originally. Similarly at the time when the issue regarding the enhanced rate of money payable towards the disputed arrangement was considered, the trial court has jumped into a conclusion relying on Exts.B6 to B9 that the expenses for the modification of the rooms

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in question was spent by the 1^st defendant himself. The trial court has not gone into the relevancy of Exts.B6 to B9, in the correct perspective which it ought to have done prior to placing reliance upon those.

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Since for reaching a conclusion on the nature of Ext.A1 and the money payable monthly, the trial court undoubtedly has committed an error by appreciating the evidence before it improperly. For the reason that the directions in the order of remand was not strictly complied with by the trial court which it ought to have been complied with strictly while passing the impugned judgment, this Court is constrained to set aside the judgment under challenge and to send the case back to the trial court, with a direction to consider it strictly in accordance with the directions issued by this Court in judgment dated 7.12.2004. Paragraph Nos.25, 28 and 34 to 42 in the impugned judgment to which attention is drawn by the learned counsel for the appellant are indicative and supportive of the contention raised by him that the trial court failed to delve upon the issues properly in accordance with the directions.

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In the result, appeal is allowed, the judgment dated 31.03.2005 of Subordinate Judges Court, Kozhikode in O.S. No.66/2001 is set aside. O.S. No.66/2001 is remanded to the trial court for consideration afresh in the light of the evidence on record strictly in accordance with the directions in the judgment dated 7.12.2004 of this Court in R.F.A No.260/2004 and disposal within a period of five months from the date of receipt of a copy of this judgment, duly bearing in mind the factum that the suit was of the year 2001.

Sd/-

MARY JOSEPH,

JUDGE

NAB/ttb

P.a.Abdurahiman v. a.P.Rahmath

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P.a.Abdurahiman v. a.P.Rahmath

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