- 1 - VPH IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CONTEMPT PETITION No. 72 OF 2007 IN SUIT No. 2470 OF 1994 WITH SHOW CAUSE NOTICE No. 1575 OF 2007 IN CONTEMPT PETITION No. 72 OF 2007 IN SUIT No. 2470 OF 1994 Divyakant Ranjitsingh Khatau ... Petitioner Vs. Mrs. Krishnadbbai Abhay Khatau & Ors. ... Respondents *** Mr. A. V. Anturkar with Mohd. Akram Bastivi i/b Harilal Thakkar & Co., for the Petitioner. Mr. D. D. Madan, Sr. counsel with Mr.Cyrus Ardeshir i/b Desai & Desai Carrimjee for respondent Nos. 1, 2, 3 & 5. Ms. Ethel Partvana i/b N. N. Amin & Co. for respondent No.4. *** CORAM : V. M. KANADE, J. DATE : AUGUST 31, 2009. PC :- 1. The present contempt petition is taken out by the original plaintiff for non non-compliance of the order passed on 17th January, 1995 by the Division Bench of this Court [Coram : A. M. Bhattacharjee, C.J. & M. S. Rane, J.] and the order dated 30th - 2 - January 1999 [Coram : S. S. Nijjar, J.]. The petitioner/plaintiff filed the suit against the respondents/defendants for a declaration that the petitioner is an owner, having 1/80th undivided share in the suit property and for injunction and other consequential reliefs. An ad- interim order was sought by the plaintiff by taking out Notice of Motion No.2394 of 1994. However, no ad-interim order was passed in favour of the plaintiffs by the learned Single Judge. Against the said order, the plaintiff preferred an Appeal No. 858 of 1994 before the Division Bench. The said appeal was disposed by an order dated 17th January 1995 and ad-interim order in terms of prayer Clause (a), and (b) was passed deleting the words “or in any manner dealing with” appearing in (a-i) and (a-ii) of the prayer in the Notice of Motion. 2. It is a case of the plaintiff that despite the said order which was passed by the Division Bench, respondents gave flats of the 1st, 2nd and 3rd floor of the new building to the various parties on leave & license” basis. Thereafter, the plaintiff took out the second Notice of Motion No. 1804 of 1996 wherein the learned Single Judge by an order dated 23rd April 1996 was pleased to grant ad- interim injunction in terms of prayers II(i) and (ii) of the Notice of Motion. Said prayers read as under- “II. That such Court Receiver, be directed to recover- (i) All amounts of deposits obtained by the Trustees/ Defendants or one or more of them on leave and license basis or lease; (ii) to collect the amount of compensation payable by - 3 - the occupants in respect of each of the flats in their occupation.” 3. Against this order, the plaintiff preferred an appeal vide Appeal No. 820 of 1996 and the Division Bench of this Court by an order dated 27th August 1996 was pleased to pass an order in terms of the consent minutes of the order, which was tendered in the Court. In the said consent minutes of order, liberty was granted to the defendants to seek various and/or modifications of the order dated 23rd April 1996, so as to enable the respondents herein to live on leave & license basis in the flats at 1st, 2nd and 3rd floors of the new constructions of Walkeshwar property. The respondents herein took out Notice of Motion No. 2391 of 1997 seeking permission to give said flats on “leave & license” basis. Both the motions which were taken out by the petitioner and the Notice of Motion No.2391 of 1997 which was taken out by the defendants/respondents came up for hearing before Mr. S. S. Nijjar, J. and by an order dated 30th January 1999 all the three Notice of Motions were disposed of. In paragraph 18 of the said order, which is operative part of the order, allowed the Notice of Motion which was taken out by the respondents herein in terms of prayer clauses (a) except the bracketed portion, and (b). The operative part of prayer (b) is - “... the defendant Nos. 9 to 12 be permitted to give the three flats on the 1st, 2nd and 3rd floors in new construction on leave and license basis (or such other basis) and on the terms and conditions viz. - (i) that 1/6th share of the net income on the interest free deposit received/that may be received from the - 4 - prospective licensees calculated on the basis of return at the rate of 10% per annum received or to be received from the Licensees of the said flats, shall be deposited by Defendant Nos. 1 and 9 to 12 in the Hon’ble Court during the subsistence of the License Agreements with the respective Licensees; (ii)that the members of the Morarji Mulraj Khatau Branch shall on furnishing Bank Guarantees of Nationalized Banks in favour of the Prothonotary and Sr. Master, High Court, Mumbai and subject to final outcome of the said Suit No.1733 of 1984 and the present suit, be permitted to withdraw the proportionate amount deposited pursuant to clause (i) above.” 4. Thereafter the plaintiffs entered into “leave & license” agreement sometime in February 2006 in respect of flats on the 5th and 6th floor of the newly constructed building. The petitioner / plaintiff therefore, has taken out this contempt petition alleging that the defendants have committed willful breach of the orders passed by the Division Bench and the learned Single Bench of this Court and are liable to be punished for having committed contempt under the provisions of the Contempt of Courts Act. 5. Mr. Anturkar, learned counsel appearing on behalf of the plaintiff invited my attention to the orders passed by this Court from time to time. He submitted that defendants were restrained from executing and/or entering into an agreement of sale or deed of - 5 - conveyance or any other documents and/or writings, transferring (or alienating or in any manner dealing with) or disposing of or creating any third party rights. He submitted that therefore, the plaintiffs by executing the “leave & license” agreement had executed and had created a third party interest by handing over possession of the suit flats. He submitted that in the ordinary parlance though the “leave & license” agreement do not create any third party interest under the provisions of Easement Act, in view of the provisions of the Bombay Rent Act, the licensee had a right to be in possession of the property during the period of license, and therefore, any effect by executing the “leave & license” agreement had parted with possession and had created third party interest. He further submitted that both the parties had understood the said order which was passed by the Division Bench to mean that no “leave & license” agreement could be executed. The learned Single Bench [Coram: N. D. Vyas, J.] had also granted an ad-interim relief in similar terms which was finally confirmed by Mr. Justice S. S. Nijjar by an order dated 30th January 1999. He therefore, submitted the defendants having accepted this position, had therefore, sought permission of the Court by filing Notice of Motion to grant those 3 flats on “leave & license” basis. He submitted that therefore, the defendants were very well aware that it is necessary to obtain permission of the Court and in spite of that they had committed breach of the aforesaid orders by entering into “leave & license agreement” in respect of the flats on 5th & 6th floor. - 6 - 6. The learned counsel for the respondents on the other hand submitted that – firstly the view which was taken by Justice Vyas was prima-facie and it was not binding on any party by virtue of the subsequent orders which were passed. Secondly, he further submitted that so far as orders passed by the Division Bench are concerned, minutes of order were filed and there was no modification of the order passed by the learned Single Judge. Thirdly, he submitted that in fact this Court by an order dated 30th January 1999 [Coram : S.S. Nijjar, J.], had accepted the contention of the defendants and had allowed the Notice of Motion filed by the defendant/respondent herein. He then submitted that it is well settled position in law that “leave & license agreement” does not create any third party interest, even if it is required to be read in terms of the Bombay Rent Act. He invited my attention to th decisions in the case of – (i) Puran Singh Sahni Vs. Sundari Bhagwandas Kipalani (SMT) & Anr. [(1991)2 Supreme Court Cases 180]; and (ii)Indrakant Shankar Mambro Vs. Rosario Boventura Fernandes [ 2006(3) Bom.C.R. 820 ]. 7. He then submitted that the word “or any other document” in the order of the Division Bench had to be construed in its proper context. He submitted that the words “any other document” therefore, have to be read in the context of the preceding observations namely “from entering into agreement for sale or deed of conveyance”, and therefore, it could not be - 7 - interpreted to mean a document in respect of which the defendants had right of dealing with the property in question. Lastly, it was submitted that in any event there was no willful disobedience on the part of the defendants and they had acted as per the advise given by their attorney and therefore, the said action of the defendants would not amount a civil contempt within the meaning of section 2(d) of the said Act. He relied on the observations made in a decision in the case of – Indian Airports Employees’ Union Vs. Ranjan Chatterjee & Anr. [(1999) 2 Supreme Court Cases 537] and more particularly in paragraph 11 of the said judgment. 8. After having heard the learned counsel appearing on behalf of the petitioner and the respondents at length, I am of the view that there has been no willful contempt committed by the respondents either of the order passed by the Division Bench or the Single Bench of this Court dated 17th January 1995 and 30th January 1999 respectively. So far as the legal position in respect of the effect of “leave & license agreement” is concerned, it has been held in Catina of cases that it does not create third party right. Even with reference to the provisions of the Bombay Rent Act, the Apex Court has held that it does not create any third party interest, in Puran Singh Sahani (supra). In paragraph 24 of the said judgment, it is held that “license passes no interest, and does not amount to a demise, nor does it give the licensee an exclusive right to use of the property”. The Apex Court in the said judgment also took into consideration the provisions of Section 15-A of the Rent Act while making the aforesaid observation. Therefore, the first contention of - 8 - the learned counsel appearing on behalf of the petitioner that by entering into “leave & license agreement”, defendants/respondents herein had created third party interest, cannot be accepted. 9. The learned Single Judge of this Court in the case of Indrakant Shankar Mambro (supra) has also taken a similar view which can be seen from the observations made in paragraph 10 of said judgment as under- “10. There can be no dispute that there is always a marked distinction between a lease and a license. A lease is a transfer of a right to enjoy the property made for a certain time in consideration for a price paid or promised and a lessee is entitled to be put in possession of a property and as such a lease is a transfer of land; a license gives only a right to use a property in a particular way or under certain terms while it remains in possession of the owner thereof as the Licensee is permitted to make use of the premises but for the permission, his occupancy would be unlawful and it does not create in his favour any interest in the property and there is always a clear distinction between the two concepts though the dividing line between the two at times is very thin or even blurred and the dominant test always being the intention of the parties. A reference to the authorities cited on behalf of the defendant will not be out of context. In case of [ Tulsi Vs. Paro (Dead), 1997(2) S.C.C. 706] what has been stated by the Apex Court is that it is not necessary that - 9 - the lease should always be reduced to writing. In (Achintya Kumar Saha V. Nane Printers and Ors ), 2004(12) S.C.C.368, it has been stated by the Apex Court that where the Courts are required to consider the nature of transactions and the status of parties thereto, one cannot go by mere nomenclatures such as, licence, licensee, etc. and in order to ascertain the substances of the transaction, the Court has to ascertain the purpose or substance of the agreement and, in such cases, the intention of the parties is the deciding factor and in order to ascertain the intention, the Court has to examine the surrounding circumstances including the conduct of the parties. The Apex Court also held that when the core issue is not adjudicated upon, it results in a substantial question of law under section 100 C.P.C.” Therefore, the first contention of Mr. Anturkar, learned counsel appearing for the petitioner cannot be accepted. 10. So far as second contention raised on behalf of the petitioner that the defendants/respondents by executing a document namely “leave & license agreement” committed breach of orders of this Court, also cannot be accepted since the words “any other document” as rightly submitted by the learned counsel appearing on behalf of the respondents have to be construed in the context in which they were made. 11. Lastly, the contention of the learned counsel appearing on - 10 - behalf of the respondents also has to be accepted and it cannot be said that the action on the part of the respondents amounted the “willful disobedience”. The Apex Court in the case of Indian Airports Employees’ Union (supra) in paragraph 11 has made following observations- “12. In our view, these rival contentions involve an interpretation of the order of this Court, the notification and other relevant documents. We are not deciding in this contempt case whether the interpretation put forward by the respondents or the petitioners is correct. That question has to be decided in appropriate proceedings. For the purpose of this contempt case, it is sufficient to say that the non-absorption of these six sweepers was bona fide and was based on an interpretation of the above orders and the notification etc. and cannot be said to amount to “willful disobedience” of the orders of this Court.” In my view, the said observations would also clearly apply to the facts of the present case and therefore, it cannot be said that the acts of the respondents amount to “willful disobedience” of the orders of this Court. In the circumstances, no contempt has been committed by the respondents. The contempt petition is accordingly dismissed. The show-cause notice is discharged. However, liberty is given to the plaintiff to take appropriate steps. Sd/- [ V. M. KANADE, J.]