Irrevocable licence and fiduciary duty principles bar a director from defeating company possession rights through unilateral trust and tenancy creation.

SC held that a licence under section 60(b) of the Indian Easements Act cannot be invoked beyond the purpose for which it was granted, and revocation follows where that purpose is abandoned or becomes impracticable. The appellant had permission only to construct a building and transfer it as trust property, not to create a different trust or convert the trust into a tenant of the company's land, so the plea of irrevocable licence failed. The Court also held that a director in a fiduciary position cannot unilaterally alter the agreed arrangement and prejudice the company's property rights. The self-created trust and tenancy deed was therefore ineffective, and the company remained entitled to recover possession.

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Issues: (i) whether the appellant could resist the suit by claiming an irrevocable licence under section 60(b) of the Indian Easements Act, 1882; (ii) whether the trust and tenancy arrangement unilaterally created by the appellant could override the company's rights and bar recovery of possession.

Issue (i): whether the appellant could resist the suit by claiming an irrevocable licence under section 60(b) of the Indian Easements Act, 1882.

Analysis: The claim of licence was not the case originally pleaded and, even otherwise, the permission relied upon was only to construct the building and hand it over as trust property in accordance with the accepted arrangement. There was no licence to create a different trust or to constitute the trust as a tenant of the company's land. A licence under section 60(b) must answer the purpose for which it was granted, and section 62(f) recognises revocation where that purpose is abandoned or becomes impracticable.

Conclusion: The plea of irrevocable licence failed and did not bar the respondent's claim.

Issue (ii): whether the trust and tenancy arrangement unilaterally created by the appellant could override the company's rights and bar recovery of possession.

Analysis: The appellant, while acting as a director, stood in a fiduciary position towards the company and could not act so as to prejudice its rights in the property. The transaction originally agreed upon was limited to completion of the building and its transfer as trust property on the stated terms, but the appellant executed a materially different deed and attempted to appropriate the land by creating a new trust and putting the trust in the position of a tenant without the company's assent. Such unilateral action was inconsistent with the accepted terms and could not be enforced in equity against the company.

Conclusion: The unilateral trust and tenancy arrangement was ineffective against the respondent, and the company remained entitled to possession.

Final Conclusion: The appeal failed because the appellant could not set up either an irrevocable licence or a self-created trust arrangement to defeat the company's right to recover possession.

Ratio Decidendi: A licence cannot be used beyond the purpose for which it was granted, and a director in a fiduciary position cannot unilaterally create a trust or tenancy that prejudicially alters the company's rights in its property.

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