Appeals Nos 2253 and 2254 of 1966
Appeals from the judgment and decree dated July 5 1965 of the Calcutta High Court in Appeals from Original Decrees Nos 490 and 489 of 1960 respectively
Sarjoo Prasad and R Ganapathy Iyer for the appellant in C A No 2253 of 1966
Devaprasad Chaudhury and Sukumar Ghove for the appellant In C A No 2254 of 1966
AK Sen section K Gambhir and D N Gupta for the respon dents in both the appeals
The Judgment of the Court was delivered by Bachawat J
The respondents are limited companies having their head offices in Calcutta
On May 15 1953 the two Companies jointly purchased the premises known as King s Court  at No 46B Chowringhee Road Calcutta for the purpose of providing residential accommodation for their staff
They instituted a suit against one B M Lall since deceased predecessor of the appellants in C A No 225366 for recovery of possession of flat No 8 in the aforesaid premises in his occupation as a tenant and another suit against the appellant in C A No 225466 for recovery of possession of flat No 9 in his occupation as a tenant on the ground that they reasonably required the flats for the occupation of their staff
By Sec
131 of the West Bengal Premises Tenancy Act 1956 West Bengal Act XII of 1956 the tenants are protected from eviction except on one or more of the grounds specified in the sub section
The grounds mentioned in clause f of section 131 are Where the premises are reasonably required by the landlord either for purposes of building or re building or for making thereto substantial additions or alterations or for his own occupation if he is the owner or for the occupation of any person for whose benefit the premises are held 
The respondents claim that they reasonably require the flats for their own occupation
The trial court dismissed the suits
From these decrees the respondents filed appeals in the High Court at Calcutta
The High Court set aside the decrees passed by the trial court and decreed the suits
The present appeals have been filed under certificates granted by the High Court
25 The High Court held that 1 a limited company can be a landlord within the meaning of section 131f and can reasonably require the premises for its own occupation and 2 where there are several landlords the requirement of the premises by the landlords for the occupation of one or more of them is sufficient to bring the case within Sec
131f
These findings are not challenged in this Court
Before us it is also conceded by all the appearing parties that the respondents are entitled to a decree for recovery of possession of the two flats under sec
131f if they establish that they reasonably require the flats for the occupation of respondent No 2 Guest Keen and Williams Ltd only
The two courts concurrently found that respondent No 2 reasonably requires the flats for the occupation of its staff
The Company is under an obligation to provide free residential accommodation for its officers in properties either rented or owned by it
In view of the acute scarcity of accommodation in the city it is not possible to find other convenient flats for officers who were transferred to the city from other stations
Suitable provision for the accommodation of officers visiting Calcutta on tour is a matter of necessity
The sole question is whether the occupation by its staff officers would be the company s own occupation
The point of dispute on which the two courts differed is whether the officer to whom the flat would be allotted would occupy it as a tenant or as a licensee
It is common case before us that if he is a licensee his occu pation would be on behalf of the company and its requirement would be for its own occupation
On the other hand if he is a tenant his occupation would be on his own account and the company s requirement would not be for its own occupation
It appears that the officers provided with accommodation by the Company are required to execute agreements in a standard form
The terms and conditions of the agreement are as follows 1 
The Licensee whilst in the employment of the Company at Calcutta and for the sole purpose of the Licensee being more conveniently situated in such employment is hereby permitted by the Company to occupy as a Licensee during the term of his employment at Calcutta Flat No 25 situated in the Company s property known as Kings Court Calcutta or such other flat as may be allotted to the Licensee at the company s discretion hereinafter referred to as the said permises subject to the terms and conditions hereinafter contained
In the event of the Company deciding to levy License fees and the Company reserves the right to do so without prior notice the Licensee shall pay to the Company each month such License fees which may be varied by the Company from time to time at its discretion and the Company shall be entitled to deduct such License fees from the emoluments or to become due to the Licensee from Company
The occupation of the said premises by the Licensee is a condition of his employment at Calcutta with the company and such right of occupation shall forthwith cease upon his employment being terminated by the company or on his leaving such employment or on his transfer away from Calcutta or on his death whichever is earlier
Notice given by the Company to the Licensee of termination of employment or of transfer away from Calcutta shall be deemed to be sufficient notice of revocation of the licence
The Company shall be entitled to determine forthwith the licence hereby granted if the licensee shall fail to comply with any of the terms and conditions herein contained and on his part to be observed and non compliance with the terms and conditions herein contained may be deemed by the company to be misconduct
These presents shall not or shall not be deemed to create any relationship of landlord and tenant between the company and the licensee in respect of the said premises
The company shall pay all present and future revenue and municipal taxes payable in respect of the said premises and keep the said premises in repair during the continuance of these presents
Conditions to be complied with by the licensee 1
The Licensee shall pay the cost of electricity and gas consumed within the said premises and the company may at its discretion deduct such charges from the emoluments due or to become due to the Licensee from the company
The Licensee shall not cause or permit to be cause any disturbance or nuisance in or in the vicinity of the said premises
No structure or alteration temporary or permanent other than common ornaments shall be erected fixed or carried out by the Licensee in the said premises or garden without prior written permission from the company
The Licensee shall not do or permit to be done any act or thing which causes damage or is liable to cause damage to the said premises
The cost of rectification of such damage will be recoverable in accordance with condition 1
Alterations of or extensions to the installed electrical circuit are strictly prohibited
No notice advertisement or placard other than the Licensee s own name which may be fixed to the main door of the said premises shall be fixed or permitted to be fixed to any portion of the said premises
The said premises shall be used entirely as a dwelling place and no business or trade shall be carried out on the said premises or any part thereof without prior written permission from the company
The Licensee will not permit any persons other than his own personal servants to occupy the servants  quarters allotted to him by the company and will not permit the garage allotted to him by the company to be used for residential purpose
The Licensee shall not take in any paying guest without prior written permission from the company and such permission shall be deemed to have been withdrawn when the paying guest ceases to reside
The Licensee shall not let or part with possession of the whole or any part of the said premises to any person firm or company
During periods when the Licensee is absent from Calcutta the Company may assign the premises to any other employee or suitable person at its sole discretion
The question is whether the occupier under this agreement is a tenant or a licensee
The distinction between a lease and a license is well known
105 of the Transfer of Property Act defines a lease
52 of the Indian Easements Act defines a license
A lease is the transfer of a right to enjoy the premises whereas a license is a privilege to do something on the premises which otherwise would be unlawful
If the agreement is in writ ing it is a question of construction of the agreement having regard to its terms and where its language is ambiguous having regard to its object and the circumstances under which it was executed whether the rights of the occupier are those of a lessee or a licen see
The transaction is a lease if it grants an interest in the land it is a license if it gives a personal privilege with no interest in the land
The question is not of words but of substance and the label which the parties choose to put upon the transaction though relevant is not decisive
The test of exclusive possession is not decisive see Errington vs Errington and Woods1 Associated Hotels of India Ltd vs R N Kapoor2 though it is a very important indication in favour of tenancy
See Addiscombe Garden Estates Ltd and Anr
vs Crabbe and Ors3
A servant in occupation of premises belonging to his master may be a tenant or a licensee see Halsbury s Laws of England Third Edition Vol
23 article 990
p 411
A service occupation is a particular kind of license whereby a servant is required to live in the premises for the better performance of his duties
Formerly the occupation of the servant was regarded as a tenancy unless it was a service occu 11952 1 KB 290 298
2 1260 368 381 5
3 525
28 pation see Nippon Menkwa Kalmshiki vs F Portlock1
Now it is settled law that a servant may be a licensee though he may not be in service occupation
In Torbett vs Faulkner2 Denning L J said A service occupation is in truth only one form of licence
It is a particular kind of licence whereby a servant is required to live in the house in order the better to do his work
But it is now settled that there are other kinds of licence which a servant may have
A servant may in some circumstances be a licensee even though he is not required to live in the house but is only permitted to do so because of its convenience for his work see Ford vs Langford 11949 65 The Times LR 1381 per Lord Justice Asquith and Webb Ltd vs Webb unreported October 24 1951 and even though he pays the rates Gorham Contractors Ltd vs Field unreported March 26 1952 and even though he has exclusive possession Cobb vs Lane 1952 1 The Times LR 1037
The Lord Justice then continued If a servant is given a personal privilege to stay in a house for the greater convenience of his work and it is treated as part and parcel of his remuneration then he is a licensee even though the value of the house is quan tified in money but if he is given an interest in the land separate and distinct from his contract of service at a sum properly to be regarded as a rent then he is a tenant and none the less a tenant because he is also a servant
The distinction depends on the truth of the relationship and not on the label which the parties choose to put upon it see Facchini vs Bryson 1952  The Times LR 1386
 The last observation covers the present case
Under the standard form of agreement of respondent No 2 the occupation of the officer ceases not only on the termination of his employment but also on his transfer from Calcutta and on his death
The company is at liberty to allot any other flat to the officer
During the absence of the servant from Calcutta the company is at liberty to assign the premises to any other employee or other person
The accommodation is free but the Company reserves the right to levy license fees
All the terms of the agreement are consistent with the expressed intention that the officer is permitted to occupy the flat as a licensee and nothing in the agreement shall be deemed to create the relationship of landlord and tenant
The agreement on its true construction read in the light of the surrounding circumstances operates as a license and not as a tenancy
It creates no interest in the land
It gives only a personal privilege or license 1AIR 1922 Botm
2 19522 TLR 659660 29 of the servant to occupy the premises for the greater convenience of his work
The High Court rightly held that the respondents reasonably require the flats for respondent No 2 s own occupation through officers holding the flats on its behalf as licensee
If so it is conceded that it is not necessary for the respondents to establish the reasonable requirement by respondent No 1 also for its own Occupation
The High Court decided this issue also in favour of the respondents
As the decision on this issue is not necessary for the disposal of this appeal we express no opinion on it
The High Court rightly decreed the suits
In the result the appeals are dismissed
There will be no order is to costs
RKPS Appeals dismissed


Summary:
The respondent limited companies purchased certain premises in Calcutta for the purpose of providing residential accommodation for their staff
They instituted suits against the appellants for the recovery of possession of two flats on the ground that as these flats were required for housing their officers they were reasonably required for the occupation of the respondents within the meaning of section 131 f of the West Bengal Premises Tenancy Act 1956
The Trial Court dismissed the suits but the High Court allowed an appeal and held that a limited company can be a landlord within the meaning of section 131 f and can reasonably require the premises for its own occupation and that where there are several landlords the requirement of the premises by the landlords for the occupation of one or more of them is sufficient to bring the case within section 131 f
In the appeal before the Supreme Court the only question for determination was whether on the construction of the terms of an agreement which was normally signed between each of the respondents and any officer who was allotted a flat the officer occupied the flat as a tenant or a licensee and therefore whether the officer s occupa tion would be the company s own occupation within the meaning of clause f
HeldDismissing the appeal The High Court nightly held that the respondent reasonably required the flats for the second respondent company s own occupation through officers holding flats on its behalf as licensees
29B Under the standard form of agreement the occupation of the officer ceased on the termination of his employment upon his death or on his transfer and the company was at liberty to allot him any other flat or to assign the premises to any other employee or other person during his absence
In view of these and its other terms the agreement operated as a license and not as a tenancy
It created no interest in the land and gave only a personal privilege or license to the servant to occupy the premises for the greater convenience of his work
28F H Under section 105 of the Transfer of Property Act a lease is the transfer of a right to enjoy the premises whereas under section 52 of the Indian Easements Act a license is a privilege to do something on the premises which otherwise would be unlawful
The transaction is a lease if it grants an interest in the land it is a license if it gives a personal privilege with no interest in the land
27E F Errington vs Errington and Woods   298 Associated Hotels of India Ltd vs R N Kapoor   3815
Addiscombe Garden Estates Ltd and Anr V Crabe and Ors  525 referred to
24 A service occupation is a particular kind of license whereby a servant is required to live in the premises for the better performance of his duties
Now it is also settled law that a servant may be a licensee though he may not be in service occupation
27H Nippon Menkwa Kalmshiki vs F Portlock A1R  and Torbett vs Faulkner  560 referred to