vil Appeal No 6 184 of 1983
From the Judgment and Order dated 2871983 of the Bombay High Court in SCA No 5B1982
SK Mehta Dhruv Mehta Aman Vachher and Atul Nanda for the Appellant
SK Dholakia and Praveen Kumar for the Respondents
The Judgment of the Court was delivered by SHARMA J
The only point involved in this appeal is whether the document Ext 20 executed by the parties at the time the appellant was inducted in the disputed premises is an agreement of leave and licence or a deed of lease
The building belongs to the respondent and the appellant claims to be in its occupation as a month to month tenant
The respondent instituted the suit in the civil court out of which this appeal by special leave arises for a decree for eviction of the appellant alleging that he has been in occupation of the building as a licensee and has illegally refused to vacate in spite of service of notice
The appel lant s defence is that he is a tenant protected by the provisions of the Goa Daman and Diu Buildings Lease Rent and Eviction Control Act 1968 and in view of section 56 there of the suit in the civil court is not maintainable
Agreeing with the plaintiff respondent the trial court passed a decree which was confirmed on appeal by the District Judge
The High Court dismissed the second appeal filed by the appellant observing that it was concluded by concurrent findings of fact
We do not agree with the High Court that the findings of the courts below were those of fact so as to be binding on the High Court under section 100 of the Code of Civil Proce dure
The case has to be decided on the nature of possession of appellant which is dependent on a correct interpretation of the document Ext
20 3
The document Ext
20 has been described as an agreement of 629 leave and licence and the parties as the Licensor and the Licensee
But it is significant to note that in the very first sentence of the document the respondent is described as Landlord hereinafter called the Licensor
However this cannot answer the disputed issue as it is firmly established that for ascertaining whether a document creates a licence or lease the substance of the document must be preferred to the form
As was observed by this Court in Associated Hotels of India Ltd v RN
Kapoor   the real test is the intention of the parties whether they intended to create a lease or licence
If an interest in the property is created by the deed it is a lease but if the document only permits another person to make use of the property of which the legal possession continues with the owner it is a licence
If the party in whose favour the document is executed gets exclusive possession of the property prima facie he must be considered to be a tenant although this factor by it self will not be decisive
Judged in this light there does not appear to be any scope for interpret ing Ext
20 as an agreement of leave and licence
The document has been placed before us by the learned counsel for the appellant
Although as stated earlier it has been described as an agreement of leave and licence and the parties as the Licensor and the Licensee its provi sions unmistakably indicate that theappellant was being let in as a tenant on the monthly rental of Rs350 besides water and electricity charges to be paid regularly on or before the 5th day of each consecutive month
By clause 5 it was agreed that the appellant shall not sub let under let or part possession of the premises to any stranger nor shall he keep the premises vacant for more than 3 months without the consent of the Licensor that is the respond ent
The question of executing a sub lease or subletting can arise only by a tenant
If a licensee inducts any person in the property as his tenant it cannot be described as sub letting
In clause 15 it is stated that on the expiry of the period the deed shall be renewable thereafter at the will of the licensee and in the event of the licensee not desiring to renew shall give one month s notice in writ ing
These terms are not consistent with the respondent s case of licence and indicate that an interest in the property was created in favour of the appellant in pursuance of which he was put in possession with a right of renewal
When compared with the terms of the documents set out in the judgments in Associated Hotels of India Ltd vs RN Kapoor  and Sohan Lal Naraindas vs Laxmidas Raghu nath Gadit  relied upon by the learned counsel for the appellant which were construed by this Court as creating lease inspite of their description as licence deeds the appellant s 630 case stands out as stronger
If the approach adopted by the courts below in interpreting the document is accepted it shall defeat the object of the Rent Acts by permitting the parties to camouflage the real nature of the transaction by resorting to skilful drafting
Mr Dholakia learned counsel for the respondent streneously contended that the test of exclusive possession is an out dated one which should not now be taken into account for the purpose of deciding the nature of posses sion
Reliance was placed on the observations of Lord Den ning MR in Shell Mex and BP Ltd vs Manchester Garages Ltd We do not agree that exclusive pos session of a party is irrelevant as is suggested but at the same time as has been observed in the earlier cases of this Court referred to above it is not conclusive
The other tests namely intention of the parties and whether the document creates any interest in the property or not are important considerations
The observations in the English case relied upon by the learned counsel for the respondent cannot be understood to suggest that the test of exclusive possession has been now rendered irrelevant and redundant as they are immediately followed by the statement As I have said manytimes exclusive posses sion is no longer decisive The position stands further clarified by the following statement in the concurring judgment of Buckley L J The only clause which points one way or the other I think is cl 19 in Sch 1 which Lord Denning MR has already read which clearly recognises that notwithstanding the bargain between the parties the plaintiffs retained rights of possession and control over the property in question
That seems to me to be consistent only with the fact that this trans action was in truth a licence transaction and not a tenancy under which the defendants would obtain an exclusive right to possession of the property during the term of the tenancy subject of course to any rights reserved by the plaintiffs
 We are also not in a position to agree with Mr Dholakia when he says that if the parties themselves have chosen to describe the transaction as a licence we cannot make out a different case for them
It is well settled that the main purpose of enacting the Rent statutes is to protect 631 the tenant from the exploitation of the landlord who being in the dominating position is capable of dictating his terms at the inception of the tenancy and the Rent Acts must receive that interpretation which may advance the object and suppress the mischief
By adopting a different approach the Rent laws are likely to be defeated altogether
The surrounding circumstances are also consistent with the deed being one of lease
The notice to vacate the premises was served on the appellant after several years of expiry of the term of the agreement
It is not suggested on behalf of the respondent that there is any relationship between the parties or that they were friends which induced him to allow the appellant to occupy the building
Realisa tion of rent which has been described in the document Ext 20 as compensation reserved for use and occupation was the sole consideration of the transaction
In this back ground the description of the parties as lessor and lessee or the rent as compensation does not carry much weight
For the reasons mentioned above we hold that Ext
20 was in reality a document of lease and the appellant has been enjoying the exclusive possession thereof in the capac ity of month to month tenant
As a result the suit was in view of the provisions of the Goa Daman and Diu Buildings Lease Rent and Eviction Control Act not maintainable
The appeal is accordingly allowed but without costs the decree passed by the courts below is set aside and the suit is dismissed
TNA Appeal allowed


Summary:
Bansi Lal Sharma respondent in one appeal was appoint ed as Male Nurse in 1941 and was officiating as Sister Tutor in March 1966 when the Rajasthan Medical and Health subordi nate Service Rules 1965 came into force
Shanti Lal Jain respondent in the second appeal was appointed as Compounder Grade I in the year 1959 and was holding the post of Sister Tutor in March 1966
In their separate petitions fried in the Rajasthan High Court the respondents challenged the creation of two separate cadres Nursing Cadre and Compound ers Cadre under the Rules as arbitrary and as such viola tive of Articles 14 15 and 16 of the Constitution of India
It was pleaded that hitherto there was combined channel of promotion for compounders and nurses but the Rules had arbitrarily deprived Compounders Grade I of their right to promotion to higher posts of Assistant Nursing Superintend ent and Nursing Superintendent Grade IIGrade I
It was further urged that recruitment to the Nursing Cadre was confined to females alone which resulted in discrimination on the ground of sex
The writ petitions were dismissed by the learned Single Judges who held that creation of two separate cadres was not arbitrary did not infringe the equality clause and was not discriminatory on the ground of sex The Division Bench on appeal upheld the findings of the learned Single Judges on Article 5 but set aside their judgments and found that there was no justification for creating separate cadres and deny ing channel of promotion to Compounders Grade I to the higher posts in the Nursing Cadre
The Division Bench ac cordingly held the Rules to be arbitrary and violative of Articles 14 and 16 of the Constitution
Allowing the appeals filed by the State this Court 671 HELD 1
Prior to 1966 there was no statutory Rules pertaining to the service
No executive order creating cadres in the department or a joint seniority list indicat ing common cadre for nurses and compounders have been pro duced
673F 2
Even assuming that prior to coming into force of the Rules there was a combined cadre of nurses and compounders Articles 14 and 16 of the Constitution do not forbid the State Government from creating new cadres bifurcating one cadre into two or more or uniting two or more cadres into one
The creation of cadres in the service of the State is a matter which has to be left entirely to the State Govern ment
673G H Reserve Bank of India vs NC Paliwal  Ors   referred to
A bare reading of the Rules show that the composition of the two cadres including designations qualifications and methods of appointment to various posts is entirely differ ent
This Court does not agree with the High Court that Nurses and Compounders belong to one class and as such must be encadred together
678B 4
It is not for the High Court to assume the extent of maternity cases which are treated in the hospitals or to lay down that compounders though not qualified to treat maternity cases must be equated with nurses because they can treat other type of cases
678G 5
By amending the Rules in 1978 an opening has been provided for compounders Grade II to enter the Nursing cadre by competing with the staff nurses for promotion to the post of SisterNursing Tutor
The Compounders Grade II have thus been provided with two channels of promotion one in their own cadre and the other to the Nursing Cadre
Thus the grievance of the Compounders that they were denied channel of promotion to the higher posts in Nursing Cadre has also been removed
679B C