1 S.A.NO.291/2008. IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD. SECOND APPEAL NO.291 OF 2008. 1. Narayan S/o Laxman Alkatwar, Age: 59 years, Occ: Business. 2. Manohar S/o Laxman Alkatwar, Age: 48 years, Occ: Business. 3. Rajesh S/o Laxman Alkatwar, Age: 47 years, Occ: Business. 4. Sahastrabudhe S/o Laxman Alkatwar, Age: 40 years, Occ: Business. 5. Satyendra S/o Laxman Alkatwar, Age: 38 years, Occ: Business. 6. Nandkishor S/o Laxman Alkatwar, Age: 35 years, Occ: Business. 7. Smt.Sonabai W/o Laxman Alkatwar, Age: 72 years, Occ: Household. All R/o: Hotel Manju, Near Prabhat Talkies, Opp. Lahoti Complex, Vazirabad, Nanded. ...Appellants. (Ori.Defendants.) VERSUS 1. Sardar Indramohan Singh S/o Mahel Singh Bhatia, Age: 55 years, Occ: Business. 2. Sardar Rajender Singh S/o Mahel Singh Bhatia, Age: 52 years, Occ: Business. 2 S.A.NO.291/2008. 3. Sardar Gulbeer Singh S/o Mahel Singh Bhatia, Age: 45 years, Occ: Business. 4. Sardar Jaswant Singh S/o Mahel Singh Bhatia, Age: 48 years, Occ: Business. All R/o Bandaghat Road, Nanded. ...Respondents. (Ori.Plaintiffs.) ... Mr.V.J.Dixit.Senior Advocate, with Mr.L.V.Sangit, Advocate for the appellants. Mr.P.V.Mandlik, Senior Advocate, with Mr.U.B. Bilolikar,Advocate, for the respondents. ... CORAM: A.V.NIRGUDE,J. Date : 5th August, 2009. COURT’S ORDER: 1. This second appeal is filed against the judgment and decree passed by the learned 5th Ad hoc District Judge, Nanded in Regular Civil Appeal No.112/2000 directing removal of the appellants from the possession of the suit property and to pay Rs.36,000/- as arrears of rent. 2. The respondents were original plaintiffs, who sued the appellants for recovery of possession of an open plot, the size of which was held to be 60’x 40’ abutting a prominent road of the city 3 S.A.NO.291/2008. and for recovery of arrears of license fee. It was, their case that their predecessor in title had given this open plot of land to the predecessor in title of the appellants in 1974 on leave and license basis. They stated that the license fee then fixed was Rs.250/- per month. They placed reliance on a written agreement of leave and license. Till 1990 there was no dispute between the parties. Apparently, the appellants were paying monthly rent to the respondents. It is also an admitted fact that during 16 years between 1974 to 1990, the rent was also mutually increased to Rs.1000/- per month. It was in 1990 for the first time there arose dispute between the parties. The appellants filed a suit for perpetual injunction alleging that the respondents were trying to dispossess them without following due process of law. Their suit was decreed and the appeal filed by the respondents was dismissed for default. After this litigation, the respondents gave a notice dated 9th of July, 1992 to the appellants terminating the license and demanded vacant possession of the suit plot on 1st of August, 1992. In the notice, it is also mentioned that the respondents in abundant precaution terminated the appellants' right as licensee and/or tenants by the end of July, 1992. The appellants did not vacate the suit plot and so the suit was filed. 4 S.A.NO.291/2008. 3. The appellants resisted the suit saying that the suit plot was given to them exclusively and it was a tenancy. Initially, the appellants admitted that the suit property was an open plot of land but with an amendment in the written statement they took up a stand that in 1969 their predecessor was given the suit plot with a temporary structure standing on it. But the Courts below rejected this contention and held concurrently that the suit property that was given to the appellants' predecessor was an open plot of land. There was little and insignificant controversy between the parties about the size of the plot. Initially, the document showed that the plot size was 50’x 26.5’ but the appellants succeeded in showing that the plot size was 60’x 40’. It is also almost a common ground that since beginning, there was covenant between the parties that the appellants shall not erect a permanent structure on the suit plot and appellants abide by such covenant. Though from time to time, they erected temporary structure of different size as per their requirement (it has come on record that initially the appellants predecessor had small tea stall on the plot of land but by 1990 the business flourished and the appellants were running a restaurant serving non-veg. food). Despite of the progress in the business of the respondents, as said above, they did not erect permanent structure on the suit plot. 5 S.A.NO.291/2008. 4. The only question that arose between the parties while they were before the lower Courts was, whether the transaction between the parties was a leave and license agreement or a tenancy agreement? The trial Court held that it was a tenancy agreement. But the appellate Court was rather ambivalent and rather hesitantly held that the respondents had proved that the transaction was of leave and license. 5. The first question that is required to be decided in this appeal is, whether it was a transaction of lease or leave and license? In my view this was a transaction of a lease. 6. Though, the initial document very prominently and unequivocally announces that the transaction between the parties was a leave and license agreement, the subsequent conduct of the parties establishes that the agreement of 1974 was a camouflage and true nature of the transaction was lease. As said above, the agreement of 1974 was only for a period of 11 months, but after the expiry of the agreement, the respondents did not care to get a new agreement executed. As said above, they allowed exclusive possession of the appellants on the suit plot. They permitted the appellants to have larger temporary structure for the purpose of running the flourishing business 6 S.A.NO.291/2008. of eating house. As said above, they also did not care as to whether the appellants restricted their occupation to the extent of 50’ x 26.5’. Thus, they permitted the appellants' expansion. This shows that the appellants were using it exclusively and these facts certainly prove that the intention of the parties was to create an interest in property in favour of the appellants. 7. In this regard a useful reference can be made to few paragraphs of the judgment of Supreme Court in the case of Sohan Lal Naraindas V/s Laxmidas Raghunath Gadit 1971 (1) Supreme Court 276 as follows. "7. At the trial the elder brother of the defendant was examined as a witness. He stated that the agreement, dated November 3, 1958, was intended to be an agreement of lease, but the plaintiff insisted that the agreement be drafted with the conditions set out therein. Section 52 of the Easements Act defines a "Licence"- "Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence," Section 105 of the Transfer of Property Act defines "Lease"- "A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity , in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value to be rendered periodically or on specified occasions to the transferor or by the transferee, who accepts the transfer on such terms. 7 S.A.NO.291/2008. 8. A licence confers a right to do or continue to do something in or upon immovable property of grantor which but for the grant of the right may be unlawful, but it creates no estate or interest in the immovable property of the grantor. A lease on the other hand creates an interest in the property demised. 9. Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operates as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject-matter of the agreement. If it is in fact intended to create an 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 exclusive possession, though not decisive, is of significance. Mrs. M.N.Clubwala V. Fida Hussain Saheb and Others." 8. Even though, I am holding that the appellants were tenants in respect of the suit plot, the appellants can not succeed in this appeal. The second question that is required to be answered is, whether the notice of 9th July, 1992 was valid notice under Section 106 of the Transfer of Property Act?. Section 106 of the said Act, reads as under: "Sec.106. Duration of certain leases in absences of written contract or local usage.- (1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months' notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee by fifteen days' notice. 8 S.A.NO.291/2008. (2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice. (3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section. (4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or ( if such tender or delivery is not practicable) affixed to a conspicuous part of the property." 9. As said above, notice clearly indicated that if necessary this could be treated as notice under Section 106 of the Transfer of Property Act. It is an admitted fact that the appellants No.1 had received the notice. The assertion of the respondents that notice was served on appellants No.3, 5 and 7 has not been denied. Out of 7 appellants, thus the notice was served on four appellants. I think the notice was lawful and the appellants can not challenge it’s legality. In fact the appellants have not challenged the legality of the notice while they were before the Lower Court. In the lower Court, the parties did not contest the question as to whether the suit notice was the notice under Section 106 of the Transfer of Property Act and whether the notice was lawful as per the provisions of Section 106 of the said Act. Even 9 S.A.NO.291/2008. before me, this aspect has not been argued very seriously. 10. The learned Counsel appearing for the appellants merely objected to the legality of the notice on the ground that it was not served on all the appellants but sub-clause (4) of Section 106 of the said Act does not require service of notice on all the tenants. 11. The second part of the decree directing the appellants to pay Rs.36,000/- as arrears of rent/license fee is not in dispute before me and so there is no need to discuss the same. 12. The appeal, therefore, should fail. The appeal stands dismissed. 13. In view of this, Civil Application No. 4416/2008 does not survive. It stands dismissed. (A.V.NIRGUDE,J.) lkp