Dismissed

C.D.Varghese v. Joseph Mani

Kerala HC9 Nov 2023RSA/835/2020

Case brief

AI extract

What is this about?

This common judgment disposed of two second appeals regarding competing suits for rooms. The core dispute was whether the relationship was a lease or a licence. The High Court examined documentary evidence, including clauses explicitly stating the agreement was a licence. Upholding the lower courts, the court concluded there was no transfer of exclusive possession sufficient for a lease, dismissed

What did the court decide?

All interim orders vacated; all interlocutory applications dismissed; second appeals dismissed.

C.D.Varghese Vs Joseph Mani — Property and Title | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE A. BADHARUDEEN

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THURSDAY, THE 9^TH DAY OF NOVEMBER 2023 / 18TH KARTHIKA, 1945

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RSA NO. 835 OF 2020

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AGAINST THE JUDGMENT AND DECREE DATED 10.11.2020 IN AS

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154/2016 OF ADDL.DISTRICT COURT-IV, KOTTAYAM AGAINST THE

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JUDGMENT AND DECREE IN

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OS 565/2014 DATED 10.06.2016 OF PRINCIPAL MUNSIFF COURT,

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KOTTAYAM

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APPELLANT/APPELLANT/2ND DEFENDANT:

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C.D.VARGHESE, AGED 52 YEARS

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S/O.LATE C.D.DAVID, PATTUMADOM CHACKALAYIL, MANGANAM KARA, VIJAYAPURAM VILLAGE, KOTTAYAM TALUK. BY ADV B.KRISHNA MANI

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RESPONDENTS/RESPONDENTS/1ST PLAINTIFF & 1ST DEFENDANT:

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1 JOSEPH MANI, AGED 69 YEARS S/O.MANI, RESIDING AT THADATHIL HOUSE, KOTTAYAM P.O, PANAYAKKAZHIPPU KARA, MUTTAMBALAM VILLAGE, KOTTAYAM TALUK, KOTTAYAM DISTRICT - 686 002. 2 T.K.GEORGE, AGED 55 YEARS S/O.KUNJAPPAN, RESIDING AT THEKKEDATHU HOUSE, ARPOOKKARA P.O., ARPPOKKARA VILLAGE, KOTTAYAM TALUK, KOTTAYAM DISTRICT - 686 008. BY ADVS. SRI.ENOCH DAVID SIMON JOEL SRI.S.SREEDEV SRI.RONY JOSE SHRI.CIMIL CHERIAN KOTTALIL

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THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON

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31.10.2023 ALONG WITH RSA NO.895/2020, THE COURT ON 09.11.2023 DELIVERED THE FOLLOWING:

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R.S.A No s .835/202 0 & 895/2020

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE A. BADHARUDEEN THURSDAY, THE 9^TH DAY OF NOVEMBER 2023 / 18TH KARTHIKA, 1945

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RSA NO. 895 OF 2020

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AGAINST THE JUDGMENT AND DECREE DATED 10.11.2020 IN AS 153/2016 OF ADDL.DISTRICT COURT-IV, KOTTAYAM AGAINST JUDGMENT AND DECREE DATED 10.06.2016 IN OS 520/2014 OF

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PRINCIPAL MUNSIFF COURT, KOTTAYAM

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APPELLANT/APPELLANT/2ND PLAINTIFF:

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C.D.VARGHESE, AGED 52 YEARS, S/O. LATE C.D.DAVID, PATTUMADOM CHACKALAYIL, MANGANAM KARA, VIJAYAPURAM VILLAGE, KOTTAYAM TALUK.

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BY ADV B.KRISHNA MANI

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RESPONDENTS / RESPONDENTS/1ST DEFENDANT AND 1ST PLAINTIFF:

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1 JOSEPH MANI, AGED 69 YEARS S/O. MANI, RESIDING AT THADATHIL HOUSE, KOTTAYAM P.O. PANAYAKKAZHIPPU KARA, MUTTAMBALAM VILLAGE, KOTTAYAM TALUK, KOTTAYAM DISTRICT - 686 002.

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2 T.K. GEORGE, AGED 55 YEARS, S/O. KUNJAPPAN, RESIDING AT THEKKEDATHU HOUSE, ARPOOKKARA P.O. ARPOOKKARA VILLAGE, KOTTAYAM TALUK, KOTTAYAM DISTRICT 686 008.

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THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 31.10.2023 ALONG WITH RSA.NO.835/2020, THE COURT ON 09.11.2023 DELIVERED THE FOLLOWING:

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R.S.A No s .835/202 0 & 895/2020

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"C.R"

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A. BADHARUDEEN, J.

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================================ R.S.A No.835 of 202 0 and R.S.A No.895 of 2020

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================================ Dated this the 9th day of November, 2023

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COMMON JUDGMENT

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R.S.A.No.895 of 2020 has been filed under Order XLII Rule

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1 read with Section 100 of the Code of Civil Procedure, challenging the decree and judgment in A.S.No.153/2016 dated 10.11.2020 on the files of District Court, Kottayam arose out of the judgment and decree in O.S.No.520/2014 dated 10.06.2016 on the files of the Munsiff Court, Kottayam. The appellant herein is Sri C.D.Varghese, the 2 nd plaintiff in O.S.No.520/2014.

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2 . The respondents are the sole defendant as well as the 1 st

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plaintiff.

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R.S.A No s .835/202 0 & 895/2020

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3 . Sri C.D.Varghese, who is the 2 nd defendant in

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O.S.No.565/2014, has filed R.S.A.No.835/2020 challenging the

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decree and judgment in A.S.No.154/2016 dated 10.11.2020 on the

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files of District Court, Kottayam arose out of the judgment and

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decree in O.S.No.5 6 5/2014 dated 10.06.2016 on the files of the

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Munsiff Court, Kottayam.

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4 . Heard the learned counsel for the

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appellant/C.D.Varghese as well as the learned counsel appearing for the 1 st respondent/Joseph Mani.

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5 . I shall refer t as ` he parties in this appeal C.D.Varghese

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& anothe r.’ and `Joseph Mani’ hereafter for convenience .

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6 . Perused the judgments under challenge, the documents

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and precedents placed by the learned counsel for C.D Varghese and a nothe r.

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7 . O.S.No.520/2014 is a suit filed by C.D.Varghese and

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another seeking declaration that they have been running “Olympus

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R.S.A No s .835/202 0 & 895/2020

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Tours and Travels” in the plaint schedule rooms as tenants for the last 18 years; mandatory injunction to unlock the rooms and removing the obstruction in doing the business and prohibitory injunction against forceful removal of them from the rooms, which, a ccording to them, they have been occupying as tenants.

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8 . Resisting the suit, Joseph Mani filed written statement as well as O.S.No.565/2014 seeking the reliefs of mandatory injunction directing C.D.Varghese and another, who are the licensees, to vacate the rooms and also claiming Rs.7,000/- per month as damages for the use and occupation of the plaint schedule

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rooms from 23.07.2014. The learned Munsiff tried both the suits jointly treating O.S.No.520/2014 filed by C.D.Varghese and another as the main case.

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9 . During trial, PW1 and PW2 were examined and Exts.A1 to A 1 5 were marked on the side of . C.D.Varghese and another DW1 was examined and Exts.B1 to B11(b) were marked on the

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R.S.A No s .835/202 0

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& 895/2020

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side of Jospeh Mani . Exts. C1, C1(a) and C2 were marked as court

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exhibits .

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10. The learned Munsiff having scrutinised the evidence

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and after appraising the rival contentions raised by the parties,

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granted decree as under:

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“(a) O.S.No.520/2014 is decreed partly. Decree of permanent prohibitory injunction is passed restraining the defendant from evicting the plaintiff from the plaint scheduled room by force, causing any kind of obstruction to the business therein and disconnecting any amenities to the plaint scheduled rooms.

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(b) The prayer for declaration and mandatory injunction in O.S.520/2014 are disallowed.

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(c ) O.S.565/2014 is decreed partly. Decree of mandatory injunction is passed and the defendants are directed to vacate the plaint scheduled premises and to remove their belongings from there within 3 months from today. On their failure to obey the decree, the plaintiff shall be entitled to get them evicted through the process of the court.

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(d) Plaintiff in O.S.565/2014 shall be entitled to realise Rs.7,000/- towards damages for the occupation of the plaint scheduled premises from 23.07.2014 till the institution of the suit. The plaintiff shall also be entitled to realise future damages @ Rs.266/- per day from 23.07.2014 till they vacate the premises.

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(e ) Defendant in O.S.520/2014 and plaintiff in O.S.565/2014 shall be entitled to the cost in both the suits.”

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R.S.A No s .835/202 0 & 895/2020

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11. Challenging the said common verdict, 2 separate

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appeals were filed as A.S.Nos.153 and 154 of 2016 before the District Court, Kottayam. The learned Additional District Judge heard both the appeals together and finally confirmed the verdict of the trial court and thereby appeals were dismissed.

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12. The specific case of C.D.Varghese and another is that they have obtained the plaint schedule rooms for running the Ol lease’ ympus Tours and Travels and the said arrangement is a and not a licence’. Per contra, the specific case put up by Joseph Mani is that the plaint schedule rooms were given in occupation of s C.D.Varghese and another as licen ee, as per the licence deed executed in between them initially on 01.10.1997 for a period of 11 months, and thereafter the licence deed was periodically extended upto 23.0 7.2014. Ext.B1 is the first licence deed dated 01.10.1997. Thereafter, the licence arrangement was extended by Ext.B2 licence deed dated 07.04.2000; Ext.B3 licence deed dated

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R.S.A No s .835/202 0 & 895/2020

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24.07.2003, Ext.B4 licence deed dated 01.10.2012 and Ext.B5 licence deed dated 23.01.2014. The case put up by Joseph Mani is that as on 24.07.2014, the licence arrangement was terminated and accordingly C.D.Varghese and another left the room. Thereafter, rooms Joseph Mani locked the by using his own key. But later C.D.Varghese and another filed O.S.520/2014 and obtained an rooms . interim mandatory injunction and thereby re-occupied the

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13. The occupation of the rooms is not a matter in dispute. As of now also, C.D.Varghese and another have been in occupation of the building. However, the dispute is confined to the arrangement in between them. The learned counsel for C.D.Varghese and another vehemently argued to contend that the arrangement is not a licence’; but a puccalease’. In this connection, he has placed decisions of the Apex Court reported in [1959 KHC 613 : AIR 1959 SC 1262 : 1960 (1) SCR 368], Associated Hotels of India Ltd. v. R.N.Kapoor ; [1999 KHC 1188 :

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R.S.A No s .835/202 0 & 895/2020

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1999(4) SCC 545 : AIR 1999 SC 2607], Delta International Ltd.

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v. Shyam Sundar Ganeriwalla & anr . as also another decision of the Apex Court reported in [1997 KHC 3582 : 1997 (2) SCC 706], Tulsi v. Paro (Dead) and a Full Bench decision of this Court reported in [1955 KLT 924 (F.B)], Korah Punnen v. Parameswara Kurup Vasudeva Kurup . The decision in Delta International Ltd. . v. Shyam Sundar Ganeriwalla & anr ( supra ) is relied on by the learned counsel for Joseph Mani also by referring to paragraphs 18, 19, 20 and 21 to assert the point that the arrangement is nothing but a licence not a lease.

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14. Before addressing the rival contentions, I am inclined to

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s extract the substantial question of law raised by my learned and the same are as predecessor as per order dated 30.11.2020 under:

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“i ) When it is clear that absolute possession of the scheduled premises have been transferred, the arrangement can only be a lease as envisaged under Section 105 of the Transfer of Property Act? ii ) When a heritable interest has been created, is it not clear that

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the arrangement can only be a lease .”

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Thus the question to be considered is whether the arrangement in between the parties herein is either lease or a licence? Section 105 of the Transfer of Property Act (Hereinafter T.P Act’ for convenience) defines lease’ as under:

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“105. Lease defined:- A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.”

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15. Sect ion 52 of the Law of Easement and Licence s

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(hereinafter Easement Act’ for convenience) defineslicence’ as under:

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“52. “Licence” defined:-- Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence.”

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Thus a plain reading of the definition of `lease’ as provided under

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R.S.A No s .835/202 0

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& 895/2020

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Section 105 of the T.P Act, lease’ is a transfer of a right to enjoy an immovable property for certain period expressly, impliedly or in perpetuity. On the other hand, licence’ as defined under Section 52 of the Enforcement Act is a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property.

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16. In Delta International Ltd. v. Shyam Sundar

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Ganeriwalla & anr . ’s case ( supra ), the Apex Court referred the decision in ’s case Associated Hotels of India Ltd. v. R.N.Kapoor

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( supra) and enunciated 6 parameters to find out the distinction between lease’ and licence’. The same are as under:

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“(1) To find out whether the document creates lease or licence real test is to find out `the intention of the parties’, keeping in mind that in cases where exclusive possession is given, the line between lease and licence is very thin.

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(2) The intention of the parties is to be gathered from

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R.S.A No s .835/202 0

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& 895/2020

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the document itself. Mainly, intention is to be gathered from the meaning and the words used in the document except where it is alleged and proved that document is a camouflage. If the terms of the document evidencing the agreement between the parties are not clear, the surrounding circumstances and the conduct of the parties have also to be borne in mind for ascertaining the real relationship between the parties.

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(3) In the absence of a written document and when somebody is in exclusive possession with no special evidence how he got in, the intention is to be gathered from the other evidence which may be available on record, and in such cases exclusive possession of the property would be most relevant circumstance to arrive at the conclusion that the intention of the parties was to create a lease.

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(4) If the dispute arises between the very parties to the written instrument, the intention is to be gathered from the document read as a whole. But in cases where the landlord alleges that the tenant has sublet the premises and where the tenant in support of his own defence sets up the plea of a mere licensee and relies upon a deed entered into, inter se, between

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& 895/2020

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himself and the alleged licensee, the landlord who is not a party to the deed is not bound by what emanates from the construction of the deed; the tenant and the sub tenant may jointly set up the plea of a license against the landlord which is a camouflage. In such cases, the mask is to be removed or veil is to be lifted and the true intention behind a facade of a self serving conveniently drafted instrument is to be gathered from all the relevant circumstances. Same would be the position where the owner of the premises and the person in need of the premises executes a deed labelling it as a licence deed to avoid the operation of rent legislation.

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(5) Prima facie, in absence of a sufficient title or interest to carve out or to create a similar tenancy by the sitting tenant, in favour of a third person, the person in possession to whom the possession is handed over cannot claim that the sub tenancy was created in his favour, because a person having no right cannot confer any title of tenancy or sub tenancy. A tenant protected under statutory provisions with regard to occupation of the premises having no right to sublet or transfer the premises, cannot confer any better title. But, this question is not required to

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R.S.A No s .835/202 0

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& 895/2020

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be finally determined in this matter.

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(6) Further lease or licence is a matter of contract between the parties. S.107 of the Transfer of Property Act inter alia provides that leases of immovable property may be made either by registered instrument or by oral agreement accompanied by delivery of possession; if it is a registered instrument, it shall be executed by both the lessee and the lessor. This contract between the parties is to be interpreted or construed on the well laid principles for construction of contractual terms, viz. For the purpose of construction of contracts, the intention of the parties is the meaning of the words they have used and there can be no intention independent of that meaning; when the terms of the contract are vague or having double intendment one which is lawful should be preferred; and the construction may be put on the instrument perfectly consistent with his doing only what he had a right to do.”

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17. The principle laid down in Associated Hotels of

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India Ltd. v. R.N.Kapoor ’s case ( supra ) is that the distinct factor to decide upon an arrangement either as licence’ or lease’ is to see

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& 895/2020

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s which was whether any transfer of interest in the premise given for occupation.

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18. It is true that nomenclature of a document is not

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decisive to find out what are the nature and characteristics of the document. On perusal of Exts.B1 to B5, it is emphatically clear that they are documents written with nomenclature as licence’. In a latest decision of the Apex Court reported in [(2023) 7 SCC 227], **_Victory Iron Works Limited v. Jitendra Lohia & anr._** , the Apex Court analysed the difference between lease’ and `licence’ and in paragraphs 49 and 52, the Apex Court, after referring the decision

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reported in [(2020) 13 SCC 208], Guruashish Constructions (P)

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Ltd. (Resolution Professional) v. MHADA , observed as under:

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“49. As a matter of fact, the only decision of this Court which may probably come close to the facts of the present case, is the one in Guruashish Constructions (P) Ltd. (Resolution Professional) v. MHADA . In the said case, there was a tripartite joint development agreement entered into between (i) a society representing a large number of persons occupying 672 tenements in the property; (ii) Maharashtra Housing and Area Development

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Authority (for short `MHADA’), which was the owner of the land; and (iii) the corporate debtor. After initiation of CIRP against the corporate debtor, MHADA issued a notice for the termination of the joint development agreement. NCLAT refused to treat the property as the asset of the corporate debtor. But this Court reversed the said decision, by holding that Section 14(1)(d) stood attracted in the facts and circumstances of the said case and that even a reference to Sections 18 and 25 may not be necessary. Though the said case arose out of a fact situation where the termination of the joint development agreement was hit by Section 14, the said decision clinches the issue on what constitute a property and the distinction between occupation and possession of a property .

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xxxx xxxx xxxx

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52. The fact that there were security guards posted in the property is borne out by records. This is why NCLT as well as NCLAT have done a delicate act of balancing, by protecting the interests of Victory to the extent of the land permitted to be occupied. In fact, Victory does not even have the status of a lessee, but is only a licensee. A licence does not create any interest in the immovable property .”

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19. In the decision reported in [AIR 2002 SC 2051 ],

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Corporation of Calicut v. K.Sreenivas , the Apex Court after ’ s case referring Associated Hotels of India Ltd. v. R.N.Kapoor

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R.S.A No s .835/202 0 & 895/2020

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( supra ) and [AIR 1968 SC 175], B.M.Lall (dead) by his legal representative v. M/s. Dunlop Rubber Co. (India) Ltd. , held as under:

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“9. This Court while dealing with distinction between `licence’

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and `lease’ has enumerated in various decisions as to what are the rights of a licensee. In the case of Associated Hotels of India Ltd. v. R.N.Kapoor [AIR 1959 SC 1262], it was observed at page 1269 thus:-

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“……. 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 licence. 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.”

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20. In view of the above discussions, the cardinal feature s,

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from licence’ are as under : which would distinguish lease’

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` Lease’ is a transfer of a right coupled with exclusive possession with transfer of interest to enjoy an immovable property

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for certain period expressly, impli e dly or in perpetuity. On the

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& 895/2020

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other hand, `licence’ is a right to do, or continue to do, in or upon the immovable property of the grantor, given in occupation of the

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licence e , something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property. To put it otherwise, the lessee of a building/premises, who got exclusive possession coupled with transfer of interest therein, has the right to possess and enjoy the building/premises; whereas a licensee of a building, who got only a mere right of occupation of the premises/building without transfer of any interest therein, does not have such a right of absolute possession and enjoyment of the building/premises and his right is to do or continue to do the specific business or trade only in the building/premises for which permission has been granted by the licensor . as the occupant of the building/premises

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Now the question fa ll s for consideration is; whether as per Exts.B1 to B 5 , exclusive possession of the plaint schedule

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rooms was handed over by transferring interest thereof or else a permission to occupy and use the same alone intended? No doubt, if there is absolute possession coupled with transfer of interest, the arrangement is lease’ and if it is merely an occupation for use of a particular purpose, the same is a licence’. Exts.B1 to B5 would go to show that the parties were referred as licensor’ or licensee’. Coming to Exts.B4 and B5, there is slight modification in regard to the terms eed Exts.B1 to agr upon by the parties in deviation from B3. I am inclined to refer the relevant clauses in Exts.B4 and B5. Clause No.1 in Ext.B5 is as under:

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“1 . In consideration of the periodical payments hereinafter agreed by the Licensees and other Licensee’s undertakings hereinafter set out, the Licensor hereby licenses and authorizes the Licensees and their staff to enter upon and use the stipulated space for the purpose of conducting an office dealing with the trade of travel agency which includes AIR Ticketing, Passport Services, Public Call booth, Faxes, and other allied services in the name and style “Olympus Tours and Travels” (hereinafter called “the authorized purpose”) as per conditions laid hereunder. Any change in the authorized purpose shall be made only with the permission in writing of the Licensor.”

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22. In Clause Nos.5 and 6 of Ext.B5 it has been stated as

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under:

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“5 . The Licensor has the key to the stipulated space and is in possession of the stipulated space and reserves the right to enter upon and inspect and get inspected, the premises at all reasonable times in the presence of the licensee. Both the parties to this agreement, after legal consultations with their advocates, have agreed upon and have understood that this agreement is only a license to use the premises to carry out the authorised purpose as mentioned above and not a lease.

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6 . Now withstanding anything contained hereinbefore the licensor shall have the right to create charges/mortgages as and by way of first charge on its land, buildings in favour of financial institutions and Banks as security for their term loans etc.”

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Similarly in Ext.B4 clause No.6 is as under:

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“It is specifically mentioned and agreed upon that this agreement is only a license to use the stipulated space and carry out the authorized purpose as desired by the second party as mentioned in the preamble to this deed and not a lease.”

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Particularly referring the above clauses, the learned

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counsel for Joseph Mani relied on paragraphs 18 to 21 of Delta

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. ’s case International Ltd. v. Shyam Sundar Ganeriwalla & anr ( supra ) to contend that the arrangement is nothing but a licence and

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the above clauses would fortif the above contentions. y

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Repelling the said contention, the learned counsel for

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C.D.Varghese and another placed a decision reported in [2019 (3) KHC 819 : 2019 (3) KLT 254 : ILR 2019 (3) Ker.158 : AIR 2019 Ker. 164], Central Bank of India and another v. Beena Thiruvenkitam , and argued that statutory provisions cannot be violated by consent. In fact, the said decision is one pertaining to conferment of jurisdiction by consent and the said decision has no direct application to the facts of this case where direct question is whether the arrangement in between C.D.Varghese and another’ and Joseph Mani’ is lease or licence? The learned counsel appearing for C.D.Varghese and another read out the pleadings in the respective plaints and written statements along with commission report to highlight the nature of the business and also availability of 4 telephone connections and office facilities, etc. in one the disputed rooms to point out that the arrangement should be

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of lease’ and not licence’.

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On meticulous evaluation of the evidence of PW1 as

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well as DW1, it could be gathered that as per Exts.B1 to B 5, Joseph Mani agreed to provide mere occupation of the building for the purpose of running Ol ympus Tours and Travels and the parties never intended to create an interest over the same by parting exclusive possession so as to treat the arrangement as a lease’, instead of licence’ .

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Thus it has to be concluded that the arrangement between the parties is not a `lease’, as contended by the learned

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counsel for C.D.Varghese and another and the same is a licence’, as rightly found by the trial court and confirmed by the appellate court. In view of the above finding, it has to be held that in this matter, there is no transfer of absolute possession creating an interest in the rooms, so as to hold the arrangement as lease’ as envisaged under Section 105 of the Transfer of Property Act and no

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& 895/2020

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heritable interest, in fact, is created in this matter to hold that the

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arrangement in between the parties in this li s is a `lease’ instead of

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`licence’.

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In view of the above finding, it has to be held that the trial court as well as the appellate court rightly negatived the said contention and hence the concurrent verdicts do not require interference in the Second Appeal. Accordingly, the Second

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Appeal must fail.

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