LexPRADEEP OIL CORPORATION versus MUNICIPAL CORPORATION OF DELHI AND ANR.
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A B [2011] 4 S.C.R. 764 PRADEEP OIL CORPORATION v. MUNICIPAL CORPORATION OF DELHI AND ANR. (Civil Appeal Nos. 6546-6552 of 2003) APRIL 6, 2011 [DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE JJ.] DELHI MUNICIPAL CORPORATION, 1957: c ss. 2(3), 114 and 120(2) - "Buildings" - Oil tanks - Property tax - Under the Government Grant Act, grantee in terms of the agreement, given possession of certain land and the grantee erected 'petroleum installation buildings' consisting of petroleum tanks, buildings, etc. for receiving and 0 storing therein petroleum in bulk - The constructions were subjected to property tax by MCD - Plea of grantee that it was a licensee and not a tenant and, therefore, not liable to the tax - Held: The grantee being in exclusive possession of the buildings since 1958, there is a strong presumption in favour E of tenancy - It is for the grantee to show that despite the right to possess the demised premises exclusively, a right or interest in the property has not been created - The burden has not been discharged - On the other hand, in the proceedings under the Public Premises Unauthorized Occupants Eviction Act, the grantee has termed the F arrangement as a tenancy by describing the fee as rentals - The document in question constitutes a lease - Oil tanks are buildings for the purposes of tax - Grantee is, therefore, liable to pay tax, which becomes payable from the date of accrual of the liability - Constitution of India, 1950 -Article 285 - G Government Grant Act, 1895 - s.2. TRANSFER OF PROPERTY ACT, 1882 s. 105 -"Lease" - Connotation of- Explained. H 764 • PRADEEP OIL CORPN. v. MUNICIPAL CORPN. OF 765 DELHI EASEMENrs ACT, 1882 s.52 -"License" - Connotation - Explained. DEEDS AND DOCUMENTS A A deed must be read in its entirety - A document if to B be construed a "lease" or "licence" -Determinative factors, summarized. WORDS AND PHRASES "Lease" and "License" - Connotation of. c The appellant was granted, under the Government Grant Act, separate licenses for the purpose of maintaining depot for storage of petroleum products at yearly license fees of Rs. 20,640/- and Rs. 31 ;000/-. In D terms of the grant, the appellant erected 'petroleum installation buildings' consisting of petroleum tanks, buildings and other conveniences for receiving and storage therein petroleum in bulk. The respondent- Municipal Corporation of Delhi by its order dated E 17.8.1984, assessed the said property to property tax, which was challenged before appellate court/MCD Tribunal, which set aside the or~er holding that no property tax could be levied on the · grante~ u/s 20(2) of the Delhi Municipal Corporation Act, 1957.'The writ F petition filed by the MCD was dismissed by the Single Judge of the High Court. The LPA was ultimately heard by the Full Bench of the High Court, which held that the petroleum tanks, were 'building' and the grantee was a lessee and not licensee in the property. Aggrieved, the G grantee filed the appeals. Dismissing the appeals, the Court HELD: 1.1 A license may be created on deal or parole and it would be revocable. However, when it is H 766 SUPREME COURT REPORTS [2011] 4 S.C.R. A accompanied with grant it becomes irrevocable. A mere license does not create interest in the property to which it relates. License may be personal or contractual. A license without the grant creates a right in the licensor to enter into a land and enjoy it. Lease on the other hand, B would amount to transfer of property. It is quite clear that the distinction between lease and license is marked by the last clause of s. 52 of the Easements Act as by reason of a license, no estate or interest in the property is created. [para 13-15] [781-F-G; 782-E-F] c Associated Hotels of India Ltd. v. R.N. Kapoor, [1960] 1 SCR 368; and Qudrat Ullah v. Municipal Board, Bareilly, 1974 ( 2) SCR 530 = (1974) 1 SCC 202 - relied on. Halsbury's Laws of England, 4th Edition, Vol. 27 at D page 21 - referred to. 1.2 A license, inter alia, (a) is not assignable; (b) does not entitle the licensee to sue the stranger in his own name; (c) it is revocable and (d) it is determined when the E grantor makes subsequent assignment. The rights and obligations of the lessor as contained in the Transfer of Property Act, 1882 are also subject to the contract to the contrary. Even the right of assignment of leasehold property may be curtailed by an agreement. [para 16] F [7
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