ASSOCIATED HOTELS OF INDIA LTD. versus R. N. KAPOOR

Citation: [1960] 1 S.C.R. 368 · Decided: 19-05-1959 · Supreme Court of India · Bench: S.K. DAS · Disposal: Appeal(s) allowed

Cited by 13 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

1959 
ftJay I9• 
368 
SUPREME COURT REPORTS 
[1960(1)] 
ASSOCIATED HOTELS OF INDIA LTD. 
v. 
R. N. KAPOOR 
(S. K. DAs, A. K. SARKAR and K. SuBBA RAo, JJ.) 
Rent Control-Application for standardisation of rent-' Room 
in a hotel', Meaning of-Delhi and Ajmer-Merwara Rent Control 
Act, I947 (I9 of r947), ss. 2(b) and 7(r). 
Section z(b) of the Delhi and Ajmer-Merwara Rent Control 
Act 1947, provided as follows:-
" S. 2. In this Act, unless there is anything repugnant in 
in the subject or context,-
(a) ...................................................................... ; .. ,, 
(b) 'premises' means any building or part of a building 
which is, or is intended to be, let separately for use as a residence 
or for commercial use or for any other purpose ............ but does 
not include a room in a dharamshala, hotel or lodging house." 
The respondent occupied two rooms in the appellant's hotel, 
described as the Ladies' and Gents' Cloak Rooms, where he used 
to carry on his business as a hair-dresser. The document execut-
ed hy the parties purported to be one as between a licensor 
and licensee and provided, inter a!ia, that the respondent was 
to pay an annual rent of Rs. 9,600 in four quarterly instalments, 
which was later reduced to Rs. 8,400 by mutual agreement. The 
respondent made an application for standardisation of rent 
under s. 7(1) of the Delhi and Ajmer-Merwara Rent Control Act, 
1947• and the Rent Controller of Delhi fixed the rent at Rs. 94 
per month. On appeal by the appellant, the District Judge 
reversed the order of the Rent Controller and dismissed the 
application holding that the Act did not apply. The High Court 
in revision set aside the order of the District Judge and restored 
that of the Rent Controller, holding that the agreement created 
a lease and not a license and that s. ;2 of the Act did not exempt 
the two rooms from the operation of the Act. The two questions 
for determination in this appeal were, (1) whether the agreement 
created a lease or a licence and, (2) whether the said rooms were 
rooms in a hotel within the meaning of s. z(b) of the Act. 
Held, (Per S. K. Das and Sarkar, JJ., Subba Rao, J. dissent-
ing), that the rooms let out by the appellant to the respondent 
were rooms in a hotel within the meaning of s. z(b) of the Ajmer-
Merwara Rent Control Act, 1947, and were as such excluded 
from the purview of the Act and the respondent was not entitled 
to claim standardisation of rent under its provisions. 
Per S. K. Das, ].-In order that a room may be 'a room 
in a hotel' within the meaning of the Act, it must fulfil 
two conditions, (1) it must be part of the hotel in the physical 
sense and, (2) its user must be connected with the general purpose 
ol the hotel of which it is a part. 
J 
S.C.R. 
SUPREME COURT REPORTS 
369 
A hair-dresser's business provided one of the amenities of a 
z959 
modern hotel and as such it was connected with the business of 
the note!. 
Associated Hotels of 
There could be no doubt from the terms of the agreement 
India Ltd. 
executed by the parties in the instant case that it was a lease 
v. 
and not a licence. 
R. N. Kapoor 
Per Sarkar, J.-The words "room in a hotel" in s. 2(b) of the . 
Act must be given their plain meaning and a room in a hotel must, 
therefore, mean any room in a building jn the whole of which the 
business of a hotel was carried on. 
· 
Per Subba Rao, ].--Although the document executed by the. 
parties was apparently in a language appropriate to a licence, the 
agreement between them, judged by its substance and real inten-
tion, as it must be, left no manner of doubt that the document 
was a lease. It had all the characteristics that distinguished it 
from a license, namely, (1) that it created an interest in the pro-
perty in favour of the respondent, and, (2) it gave him exclusive 
possession thereof, which, in the absence of any circumstances 
that negatived it, must indicate a clear intention to grant a 
lease. 
Errington v. Errington, [1952] l All E.R. 149 and Cobb,v. 
Lane, [1952] l All E.R. u99, referred to. 
The words 'room in a hotel ', properly construed, must 
mean a room that was part of a hotel and partook of its charac-
ter and did not cease to do so even after it was let out. 
Consequently, where a hotel, as in the instant case, occupied 
the entire building, and rooms were let out for carrying on a 
business different from that of a hotel, such rooms could not fall 
within purview of s. 2 of the Act. 
Ther

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