LexANNAYA KOCHA SHETTY (DEAD) THROUGH LRS versus LAXMIBAI NARAYAN SATOSE SINCE DECEASED THROUGH LRS & OTHERS
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[2025] 5 S.C.R. 58 : 2025 INSC 466 Annaya Kocha Shetty (Dead) through LRs v. Laxmibai Narayan Satose since Deceased through LRs & Others (Civil Appeal No. 84 of 2019) 08 April 2025 [Pankaj Mithal and S.V.N. Bhatti,* JJ.] Issue for Consideration Issue arose as regards the correctness of the order passed by the High Court in revision application confirming the judgment of the appellate bench whereby decree of the trial court was reversed; and whether the ‘agreement of conducting’ between parties was in nature of licensor and licensee of the suit premises or merely for conducting the hotel business of the first defendant by the plaintiff. Headnotes Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 – ss.15A, 28 – Evidence Act, 1972 – ss.91, 92 – Plaintiff and the first defendant-owner of the property, entered into an agreement styled for conducting hotel business on the said property – Subsequently, first defendant served notice to the plaintiff to vacate and hand over the business – Plaintiff filed suit for declaration that plaintiff is the deemed tenant, and a restraint order against the defendants from interfering with or dispossessing the plaintiff from the plaint schedule which was allowed – Appellate court set aside the decree passed by the trial court, and the High Court upheld the same – Correctness: Held: Agreement is one for conducting the business of the first defendant – Oral evidence is excluded from consideration as none of the exceptions is attracted – Plaintiff adduced oral and documentary evidence either to dilute the obligation/standing of the plaintiff in the agreement, or to claim the status of a deemed tenants – On facts, the photocopy of the registration certificate would not change the status of the plaintiff from the conductor of the business to a sub-tenant and, by operation of law, a deemed * Author [2025] 5 S.C.R. 59 Annaya Kocha Shetty (Dead) through LRs v. Laxmibai Narayan Satose since Deceased through LRs & Others tenant – Receipts evidencing payment of royalty would militate against the status of deemed tenancy claimed by the plaintiff – Unless and until the case falls under one or the other exceptions enabling receipt of oral evidence on a written document, the court is precluded from entertaining oral evidence – Document or deed interpreted in a particular case is not relied upon, but the subject deed is construed on well-established principles – Law recognises both ownership and possession of an owner of a property – Lease recognises the outcome of a rightful separation of ownership and possession between lessor and lessee – Admittedly, defendant no. 1 is in possession of the property from defendant no. 2 – Agreement of conducting business does not deal with the possession so enjoyed by defendant no. 1 in favour of the plaintiff – Absence of such a crucial clause in the agreement is a vital circumstance in construing the subject matter of the said agreement – Thus, what has been entrusted is to run the business in the plaint schedule but not occupying the plaint schedule under leave and licence – Terms of the agreement are clear that the entrustment to the plaintiff is the ownership of the hotel business of the first defendant and not the tenancy right of the first defendant in favour of the plaintiff – View taken by the first appellate court and the impugned order of the High Court, upheld. [Paras 18.1, 18.2, 22, 23, 24] Deeds and documents – Rules of construction – Construction of the Contract: Held: Contract is first constructed in its plain, ordinary and literal meaning, which is known as the literal rule of construction – If there is an absurdity created by literally reading the contract, a shift from literal rule may be allowed which is called the golden rule of construction – Contract may be purposively constructed in light of its object and context to determine the purpose of the contract – This approach must be used cautiously – Furthermore, the construction of a deed is generally speaking, a matter of law – However, when there is an ambiguity in the deed, determining its meaning is a mixed question of fact and law – This concept is encapsulated by ss.91 and 92 of the 1872 Act – Evidence Act, 1872 – ss.91 and 92. [Paras 17.1-17.3, 18] Code of Civil Procedure, 1908 – Ord.6 r.16 – Pleadings – Lengthy pleadings and judgments – AI/computer-generated statements – Meandering pleadings lead to discursive ju
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