C.M. BEENA AND ANR. versus P.N. RAMACHANDRA RAO

Citation: [2004] 3 S.C.R. 306 · Decided: 22-03-2004 · Supreme Court of India · Bench: R.C. LAHOTI · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
C.M. BEENA AND ANR. 
v. 
P.N. RAMACHANDRA RAO 
MARCH 22, 2004 
B 
[R.C. LAHOTl AND DR. AR. LAKSHMANAN, JJ.] 
Rent Control and Eviction: 
lease and licence-Distinction between-Tests to determine-Held: Real 
C intention of the parties as decipherable from a complete reading of the 
document, if any, executed between the parties and the surrounding 
circumstances as also their conduct before and after creation of the relationship 
is of relevance to determine whether it is lease or licence-If the owner retained 
control or possession over the property, then it was a licence-User of the 
D terms like "/ease" or "licence" not by itself decisive-Indian Easements Act, 
1882, s. 52. 
Constitution of India, 1950: 
Article l 42--Relief-Grant of-Rent paid in respect of a property lease 
E was found to be very meagre-Said property located in a busy commercial 
locality of a city bustling with business and commercial activity-Hence, 
considering oil facts and circumstances of the case, relief of enhanced rent 
granted 
The respondent filed a civil suit seeking issuance of mandatory 
F injunction directing the appellants to hand over vacant possession of the 
suit premises to the respondent on the ground that the licence to occupy 
the suit premises was terminated. The trial Court directed the suit to be 
dismissed by recording a finding that one of the two appellants was a 
tenant and not a mere licensee. The decree was maintained in the first 
G 
H 
appeal. In the appeal preferred by the landlord-respondent, the High 
Court had set aside the judgments and decrees of the two Courts below 
and directed a decree as prayed for being passed. Hence the appeal by 
the defendant-appellant. 
Allowing the appeal, the Court 
306 
, 
4-- ' 
' 
C.M. BEEN Av. P.N. RAMACHANDRA RAO 
307 
HELD: I. I. Though a deed of licence may have been executed it is A 
open for the parties to the documents to show that the relationship which 
was agreed upon by the parties and was really intended to be brought into 
existence was that of a landlord and tenant though it was outwardly styled 
as a deed of licence to act as a camouflage on the Rent Control Legislation. 
(311-C-D( B 
1.2. Generally speaking the difference between a 'lease' and 'licence' 
is to be determined by finding out the real intention of the parties as 
• 4 
decipherable from a complete reading of the document, if any, executed 
between the parties and the surrounding circumstance. Only a right to 
use the property in a particular way or under certain terms given to the C 
occupant while the owner retains the control or possession over the 
premises results in a licence being created; for the owner retains legal 
possession while all that the licensee gets is a permission to use the premises 
for a particular purpose or in a particular manner and but for the 
permission so given the occupation would have been unlawful. (311-E-Fl 
Associated Hotels of India Ltd. v. R.N. Kapoor, AIR (1959) SC 1262 
and Corporation o(Ca/ic111 v. K. Sreenivasan, (2002( 5 SCC 361, relied on. 
Evans and Smith: "The law of landlord and Tenant" 4th Edn. and 
Hill and Redman: "law of landlord and Tenant" 17th Edn., Vol. I, referred 
to. 
D 
E 
2. A few principles are well settled. User of the terms like 'lease' or 
licence', 'lessor' or 'licensor', 'rent' or 'licence fee' are not by themselves 
decisive of the nature of the right created by the document. An effort 
should be made to find out whether the deed confers a right to possess 
exclusively coupled with transfer of a right to enjoy the property, or what F 
has been parted with is merely a right to use the property while the 
possession is retained by the owner. The conduct of the parties before and 
after the creation of relationship is of relevance for finding out their 
intention. (311-G-H; 312-A( 
3. On the facts found by the two Courts below which findings have 
not been reversed by the High Court it is clear that the nature of the 
premises is of a shop and not a garage meant and designed exclusively 
for parking a car. The premises are located in a busy commercial market. 
G 
The appellant has exclusive possession over the premises and the owner 
neither can nor does interfere therein. A full fledged stationery shop and H 
308 
SUPREME COURT REPORTS 
[2004] 3 S.C.R. 
A allied business activities have been carried on by the appellant in the 
~ 
B 
premises ever since 1972. The appellant was in possession of the premises 
for about 20 years before the

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