SOHAN LAL NARAINDAS versus LAXMIDAS RAGHUNATH GADIT

Citation: [1971] 3 S.C.R. 319 · Decided: 08-01-1971 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
II 
SORAN LAL NARAINDAS 
v. 
LAXMIDAS RAGHUNATH GADIT 
January 8, 1971 
. 
319 
[J. C. SHAH, C.J., K, S. HEGDE AND A. N. GROVER, JJ.] 
Lease and licence-Difference between-Tes~ of exclusive possession· 
-Language of document must be read wi#l surrounding circumstances. 
The plaintiff commenced an action in the City Civil Court, Bombay 
for a decree in ejectinent against the defendant alleging that the defen-
dant was occupying loft on the upper floor of a building under an agree-
ment of licence and the licence had been duly terminated and withdrawn. 
The defendant contended that he was tenant of the loft, that the tenancy 
had not been duly terminated as required by law; that he was entitled to 
the protection of the Bombay Rents, Hotel and Lodging Rates Contract 
Act, 1947; and \bat the court had no jurisdiction to try the suit. 
The 
trial court dismissed the suit. 
The decree was confirmed in appeal by 
the High Court of BombfU'. The plaintiff applied for certificate under 
Aft. 133(1) (a) of the Constitution and in the alternative under Art. 
133(1) (c) thereof. 
The High Court passed an order certifying the case 
under Art. 133 (I) (c), and the plaintiff appealed. 
HELD : (I) A certific~te granted by the High Court must be sup-
ported by adequate reasons. 
It is obligatory upon the High Court to set 
out the question of public or private importance which in their opinion 
falls to be determined in the proposed appeal. 
In th~ present case since 
there was no merit in the appeal it was not necessary to 
vacate the 
certificate. [318 G] 
(2) A licence confers a right to do or continue. to do something in 
or upon immovable property of grantdr which but for the grant Of the 
right may be unlawful, but it create no estate or interest in the immova-
ble property of the grantor. A lease on the other hand creates an interest 
in the property demised. [322 G] 
Intention of the parties to an instrument must be gathered from the 
terms of the agreement examined in the light of surrounding circumstan· 
ces. 
The description given by the parties may be evidence of the inten-
tion but is not· decisive. The crucial test in each .case 
is 
whether the 
.. instrument is intended to create dr not to create an interest in the pro-· 
pcrty, the subject matter of the agreement. If it is in fact intended to· 
create interest in the property it is a lease, if it does not, it is a licence. 
In determining whether the agreement creates a lease or a licence, the 
test of excrnsive possession though not 
decisive, 
is 
of 
significance. 
[322 H-323 Bl 
Mrs. M. N, Clubwa/a v. Fida Hussain Saheb & Ors., [1964] 6 S.C.R. 
642. relied on. 
In the present case on a carefol consideration of .the covenants and in 
the light of the relevant surroundmg circumstances. 1t must held that the 
exclusive possession given to the defendant was mtended to confer an . 
mterest in the loft and on that account the agreement operated as a 
lease and not as a licence. [323 DJ 
320 
SUPREME COURT REPORT1 
[1971] 3 ;S.C.lt. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2443'of A 
1966. 
. 
Appeal from the judgment and order dated January 21, 25 
of the Bombay High Court in First Appeal No. 769 of 1963. 
F. S. Nariman, P. C. Bhartari a.nd J. B. Dadao,hanji. for the 
appellant. 
B 
D. V. Patel, Ramesh Malik and Ganpat Rai, for the respon-
dent. 
The Judgment of the Court was deliyered by 
Shah, C.J. 
Sohan Lal Naraindas-hereinafter referred to c 
as 'the plaintiff'-commenced an action in the City Civil Court, 
Bombay, for a decree in ejectment against Laxmidas Raghunath-
hereinafter· called 'the defendant'- iilleging that the defendant 
was occupying a loft 19' x 15' on the upper floor of a building 
at Pragraj Galli, Mulji Jetha Market, Bombay under an agreement 
of licence dated November 3, 1958 and tliat the licence had been 
duly terminated and withdrawn but the defendant had failed and 
D 
neglected to vacate the loft notwithstanding the demand. 
The 
defendant contended that he was a tenant of the loft, that the 
tenancy had not been duly' terminated as required hy law, that 
he was entitled to the protection of the Bombay Rents Hotel & 
Lodging House Rates Contract Act 1947 and that the Court had 
no jurisdiction to try the suit. 
E 
The Trial Court dismissed the suit holding that the defendant 
was a tenant of the plaintiff and not his licensee. 
The decree 
was confirmed in appeal, by the High Court of Bombay. The 
High Court held 

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