1971 (1) TMI 112 - SC - Indian Laws

Exclusive Possession Key in Landlord-Tenant vs. Licensor-Licensee Determination

The Supreme Court affirmed the High Court's decision that the relationship between the parties constituted a landlord and tenant arrangement rather than a ... - Issues:1. Whether the relationship between the parties was that of landlord and tenant or licensee.2. Validity of the certificate granted by the High Court under Art. 133 (1 ) (c) of the Constitution.3. Interpretation of the agreement dated November 3, 1958, as a lease or a licence.4. Determining the intention of the parties based on the terms of the agreement and surrounding circumstances.5. Consideration of exclusive possession as a significant factor in determining lease or licence.Analysis:1. The primary issue in this case was to determine the nature of the relationship between the parties, whether it was that of a landlord and tenant or a licensor and licensee. The plaintiff initiated an action for ejectment against the defendant, who claimed to be a tenant protected under the Bombay Rents Hotel & Lodging House Rates Contract Act 1947. The Trial Court and the High Court both concluded that the relationship was that of landlord and tenant based on the terms of the agreement and surrounding circumstances.2. Another issue arose regarding the validity of the certificate granted by the High Court under Art. 133 (1 ) (c) of the Constitution. The Supreme Court noted that the certificate was defective as it lacked adequate reasons to support it. However, since the Court found no merit in the appeal, the certificate was not vacated.3. The interpretation of the agreement dated November 3, 1958, was crucial in determining whether it constituted a lease or a licence. The terms of the agreement explicitly stated that the defendant had no right as a tenant or sub-tenant and that the owner could terminate the agreement without notice in case of breach. Despite the language used in the agreement, the Court analyzed the intention of the parties and surrounding circumstances to conclude that an interest was created in the loft in favor of the defendant.4. In determining the intention of the parties, the Court emphasized that the description given by the parties in the agreement was not decisive. The crucial test was whether the instrument intended to create an interest in the property. The presence of exclusive possession, although not decisive, was considered significant in this case.5. Both the Trial Court and the High Court considered the exclusive possession granted to the defendant as a key factor in determining the nature of the agreement. The High Court concluded that the agreement operated as a lease due to the intention to confer an interest in the loft based on the exclusive possession given to the defendant. The Supreme Court upheld this finding and dismissed the appeal with costs.In conclusion, the Supreme Court affirmed the decision of the High Court that the agreement between the parties created a lease, and the defendant was considered a tenant rather than a licensee.