Lease versus licence turns on substance and intention; hotel-room exemption applies only when the space remains functionally tied to the hotel.

An occupation arrangement is characterised by its substance and the parties' intention, not by the label used in the document; exclusive possession for consideration, rent-like periodic payments, restrictions on alterations, and a transferable interest with consent indicate a lease rather than a licence. The exemption for a "room in a hotel" under the Delhi and Ajmer-Merwara Rent Control Act, 1947 applies only where the space retains a real functional connection with the hotel business. On the facts described, the cloak-room spaces were treated as part of the hotel's amenities and were therefore outside the Act.

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Issues: (i) whether the written arrangement created a lease or a licence; (ii) whether the spaces occupied in the hotel cloak rooms were "rooms in a hotel" within the exemption in section 2(b) of the Delhi and Ajmer-Merwara Rent Control Act, 1947.

Issue (i): whether the written arrangement created a lease or a licence.

Analysis: The decisive test is the substance of the transaction and the intention of the parties, not the label used in the document. Where the occupier is put in exclusive possession for consideration and the terms confer rights and obligations typical of a tenancy, the arrangement is not a mere personal privilege. The document here transferred possession of the rooms for carrying on business, fixed rent-like periodic payments, restricted alterations, and recognised a transferable interest with consent, all of which pointed away from a bare licence.

Conclusion: The arrangement created a lease and not a licence.

Issue (ii): whether the spaces occupied in the hotel cloak rooms were "rooms in a hotel" within the exemption in section 2(b) of the Delhi and Ajmer-Merwara Rent Control Act, 1947.

Analysis: The exemption is confined to rooms that remain part of the hotel in a real and functional sense. The words "room in a hotel" are not exhausted by mere physical location within a hotel building; the room must continue to bear a connection with the hotel business or provide an amenity integrated with that business. Where the space is let for an independent commercial use, the exemption does not apply merely because the room is situated in hotel premises. On the facts, the spaces were used for a hair-dressing business and were treated by the majority as part of the hotel's amenities, so they fell within the exemption.

Conclusion: The spaces were rooms in a hotel and were outside the Rent Control Act.

Final Conclusion: The dispute turned on the legal character of the occupation and the scope of the hotel-room exemption under the rent control statute. The majority held that the transaction was a lease, but that the rooms were nevertheless excluded from the Act as rooms in a hotel, and the appeal succeeded.

Ratio Decidendi: In construing an occupation arrangement, the real nature of the transaction is determined by its substance and the parties' intention, and the statutory exemption for a room in a hotel applies only where the room retains a functional connection with the hotel business rather than being merely located within hotel premises.

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