TaxTMI 
TaxTMI 
1991 (2) TMI 407
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....ond floor, Nanik Niwas, situate at Bhulabhai Desai Road, Bombay (for short, `the flat') on a monthly rent of Rs. 1,000 (Rupees one thousand) on 10.6.1969. On the same date the appellant, under the Society's rules, applied for its nominal membership stating, inter alia, that he intended to take the flat for temporary use and occupation; that he would not claim any right of permanent nature; and that he would vacate the flat on receipt of notice thereof. By an agreement of leave and licence dated 11.6.1969 entered into between the appellant and Advani, the appellant took exclusive possession of the flat. The agreement was for a period of 11 months and was renewable for 2 further periods of 11 months each. Vide Resolution No. 208 dated 13.6.1969, the Managing Committee of the Society granted the permission. By letter dated 22.1.1972 Advani purported to terminate the licence with effect from 10.3.1972 and asked the appellant to vacate the flat and the appellant having not acceded to the request, Advani informed the Society, which, vide letter dated 22.2.1972 required the appellant to vacate the flat and to deliver possession thereof to Advani on or before the 10th March, 197....
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....ed 11.6.1969 between Advani and the appellant was one of lease with all its ingredients and not one of leave and licence; that the agreement having been a lease the cooperative Court had no jurisdiction in respect thereof and it was the Civil Court envisaged under the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 that would have jurisdiction in the matter; and that even assuming that the Cooperative Court had jurisdiction in respect of a leave and licence created under the provisions of the Act, that Court would not have jurisdiction in this matter, the appellant being only a nominal member and not a tenant member of the Society. Mr. L.A. Kripalani, the learned counsel for the respondents, submits that the agreement was one of leave and licence and not of lease; that in the matter of the agreement the Cooperative Court alone has jurisdiction and no other court; and that being a nominal member of the Society in view of his application for such a membership the appellant would come within the jurisdiction of the Cooperative Court. The first question to be decided in this appeal, therefore, is whether the agreement dated 11.6.1969 was one of lease or of leave a....
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....sp; xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx 22. That the `Licensee' will not surrender their rights under this agreement in favour of anyone else except the `Licensors'. That the `Licensees' shall observe all rules, regulations, and by-laws of the Shyam Cooperative Society as nominal members during the period of this licence. From the above recitals and the terms and conditions there is no doubt that ex facie it is one of leave and licence for use of the flat and fixtures, fittings, furniture etc. and that the licensee would at no time claim tenancy or sub-tenancy in respect of the flat. There is also no doubt t....
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.... to occupy the flat as man and wife and since that intention was known to the respondent, the true nature of the arrangement was to create a joint tenancy and the purported retention by the respondent of the right to share the occupation of the small flat with the appellants or to introduce an indefinite number of third parties to do so was clearly a pretence to deprive them of the protection of the Rent Acts. It followed that the agreements created a joint tenancy and not a licence, and the appeal would therefore be allowed. It may be noted that in the above case there was no obligation of or relation to any cooperative society and laws governing members thereof, whereas in the instant case admittedly Advanai was a tenant co-partner member of the Society and the appellant by virtue of the agreement of licence was also admitted to nominal membership accepting his statement in his application. While interpreting the agreement we have also to see what transpired before and after the agreement. Ex praecedentibus et consequentibus optima bit interpretation. The best interpretation is made from the context. "It is a true rule of construction that the sense and meaning of the parties in ....
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....s Raghunath Gadit, [1971] 1 SCC 276, we reiterate that the intention of the parties to an agreement has to be gathered from the terms of the agreement construed in the context of the surrounding, antecedent and consequent circumstances. The crucial test would be what the parties intended. If infact it was intended to create an interest in the property, it would be a lease, if it did not, it would be a licence. In determining whether the agreement was a lease or licence, the test of exclusive possession, though of significance, is not decisive. Interest for this purpose means a right to have the advantage accruing from the premises or a right in the nature of property in the premises but less than title. Lease has been defined in section 105 of the Transfer of Property Act as under: "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." The essen....
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....rs that it was intended merely to confer a licence. Primarily the court is concerned to see whether the parties to the agreement intend to create an arrangement personal in its nature or not, so that the assignability of the grantee's interest, the nature of the land and the grantor's capacity to grant a lease will all be relevant considerations in assessing what is the nature of the interest created by the transaction. In the absence of any formal document the parties' intention must be inferred from the circumstances and the parties' conduct." It has been submitted for the appellant that the very fact of exclusive possession of the flat being given to the appellant was sufficient to make him lessee and Advani his landlord. We do not agree with the submission in an unqualified form. There have been cases where exclusive possession has been given outside the Rent Act. In Isaac v. Hotel De Paris, Ltd., [1960] (1) All E.R.348, the respondent company owning the hotel de Paris where the lessees of another building called the P.Hotel, it was held that the respondent company were entitled to an order for possession because the relationships between the parties was not ....
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....ed only from language which is clear and explicit. If an exclusive right of possession is subject to certain reservations or to a restriction of the purposes for which the premises may be used, the reservations or restriction will not necessarily prevent the grant operating as a lease." We may now examine the position of the appellant under the Rent Act. The Rent Act has not defined a `lease'. As defined in section 5(11) `tenant' means any person by whom or on whose account rent is payable for any premises and includes- (a) such sub-tenants and other persons as have derived title under a tenant before the 1st day of February, 1973; (aa) any person to whom interest in premises has been assigned or transferred as permitted or deemed to be permitted, under section 15; (b) any person remaining, after the determination of the lease, in possession, with or without the assent of the landlord, of the premises leased to such person or his predecessor who has derived title before the 1st day of February, 1973; (bb) such licensees as are deemed to be tenants for the purpose of this Act by section 15A; (c) xxx xxx xxx xxx xxx xxx" Thus the above sub-section (bb) read ....
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....teen, creche,dispensary or other services as amenities by any undertaking or institution; and the expressions `licence', `licensor' and `premises given on licence' shall be construed accordingly." The above definition is comprehensive one. A licence is a power or authority to do some act which, without such authority, could not lawfully be done. In the context of an immovable property a licence is an authority to do an act which would otherwise be a trespass. It passes no interest, and does not amount to a demise, nor does it give the licensee an exclusive right to the use of the property. The definition in the Rent Act includes any person in occupation under a subsisting agreement for licence given for a licence fee or charge of any premises or part thereof in a building vesting in or lease to a cooperative housing society registered or deemed to be registered under the Maharashtra Cooperative Societies Act, 1960. The appellant would, otherwise, be included within this definition. But he has no subsisting licence, the same having been cancelled on 10.3.72. Section 15A of the Rent Act which was inserted by Maharashtra Act 17 of 1973 provides: "Certain licensee in ....
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....hold that the appellant should not be bound by the expressed intention in the agreement. In Chandavarkar Sita Ratna Rao v. Ashalata S.Guram, [1986] 4 SCC 447, this Court held that licence was a privilege and not an interest in property. A tenant, whose interest in the tenancy is determined for any reason but who is protected by the statute, was entitled to create a licence in favour of another person until a decree of eviction has been passed against him. A statutory tenant was in the same position as a contractual tenant until a decree for eviction is passed against him and the rights of contractual tenant including the right to create licence even if he was transferor of an interest which was not in fact the transfer of interest. If the licence have been created before February 1, 1973, the licensee must, by the express terms of section 15A of the Rent Act be deemed to be a tenant and he should, subject to provisions of the said Act be deemed tenant of the landlord on the terms and conditions of the agreement consistent with the provisions of the Act. At paragraph 58 of the report it was observed that there was no reason and there was nothing in the Rent Act or the Statement o....
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.... the constitution, elections of the committee or its officers other than the elections of committees of the specified societies including its officers, conduct of general meetings, management of business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated or by a creditor of the society, to a cooperative Court if both the parties thereto are one or other of the following:- (a) a society its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the Liquidator of the society; (b) a member, past member or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society or a person who claims to be a member of the society. xxx xxx xxx xxx xxx xxx Under the above provision the matter of eviction of the appellant by the tenant co-partner member of the society can be said to be touching the business of the society. In Deccan Merchants Cooperative Bank Ltd. v.....
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.... stand in the jural relationship of landlord and tenant, as their dispute would be governed by section 91(1) of the Societies Act and that the appellant by virtue of his being a nominal member, acquired a right to occupy the flat as a licensee, but his rights were inchoate,. In the facts of the instant case upon the terms of sections 5(4A) and 15A of the Rent Act, it is clear that the appellant was not entitled to the protection of section 15A. The sine qua non for the applicability of s. 15A of the Rent Act was that a licensee must be in occupation as on February 1, 1973 under a subsisting licence. It is not disputed that the appellant did not answer that description since the agreement of leave and licence in his favour admittedly stood terminated by the notice of the respondent No. 1 on 10.3.1972. That being so, the appellant was nothing but a rank trespasser and was not entitled to the protection of section 15A of the Rent Act and could not, therefore, plead the bar of section 28(1) thereof. In Hindustan Petroleum Corporation Ltd. & Anr. v. Shyam Cooperative Housing Society & Ors., [1988] 4 SCC 747, at paragraph 14 it was held under the facts of that case that the petitioner....