Case: M. C. Chockalingam &amp; Ors Vs. V. Manickavasagam &amp; Ors

1. This appeal by special leave is directed against the judgment of the Madras High Court*by which it set aside the judgment of a single Judge of that court in a writ proceeding under Article 226 of the Constitution. The facts may briefly be stated*Reported in 86 Mad LW 661-Ed2. The first respondent obtained a registered lease of a cinema theatre known as Kapali Talkies, Madras, for a period of three years from 19th August, 1969. The lease was a composite lease consisting of the land, buildings and the cinematographic equipment in it. The monthly rental was Rs. 9,125/-. Among other terms, the lease was to expire on 18th August, 1972. It is not necessary for our purpose to refer to the condition of an earlier termination of the lease under certain circumstances. The lessors (the appellants herein) are the sole and absolute owners of the Kapali Talkies, Madras-28, described in Schedule A to the lease3. It may be appropriate to extract some material portions of the lease executed between the parties, which run as follows:Schedule A describes the land, buildings, other constructions and immovable things and properties therein with all the appurtenances known as the cinema theatre, Kapali Talkies, situated in No. 52, Ramakrishna Mutt Road, Raja Annamalaipuram, Madras 28, excluding the room in front side of the main building of the cinema theatre, which is retained by the lessors exclusively for their occupation and use. The other leased properties are mentioned in Schedules B C and D to the lease. Schedule B describes the projectors and machineries installed in the building. Schedule C describes the seats and furniture. Schedule D describe the fixtures and fittings and installations, equipments and other articles and things and materials. Having so described the leased properties, "the lessors hereby grant unto the lessee......by way of lease the land and buildings with other immovable properties and things therein known as Kapali Talkies, Madras 28 ...... more particularly described in Schedule A hereunder that all the projectors, machineries, seats, furniture and other articles and things stated above and more fully described in Schedules B, C and D hereunder ......in a composite manner as a cinema theatre functionable, and known as Kapali Talkies, Madras-28, above mentioned with the rights to exhibit films as cinema shows therein........ for a specific use of the same as cinema theatre to exhibit films as cinema shows only, for a specific period of three years only commencing from 19-8-1969 and ending with 18-8-1972 on a monthly rent of Rs. 9125/- payable by the lessee to the lessors for and throughout the said period of three years......subject to the covenants and terms and conditions hereinafter contained""Cl. 6. The sole feature of the lease is sheer exhibition of films as cinema shows at the said cinema theatre, Kapali Talkies, Madras-28 and not for utilising the said cinema theatre and other things taken on lease for any other purpose of any kind other than the exhibition of films as cinema shows. The lessee shall strictly observe this""Cl. 9. In all transactions, advertisements and banners the lessee shall style himself as lessee of Kapali Talkies, Madras-28 and on no account the name Kapali Talkies shall be changed""Cl. 27. The lessee shall make his own arrangements at his own costs and responsibilities for the running of the said cinema theatre, such as taking out the licence, permits, certificates, and other necessary things......""Cl. 35. The lessee shall, on the termination of the lease or on an earlier termination of the lease at any earlier period under any circumstances return back to the lessors forthwith the properties taken on lease in good, proper and functionable conditions and state in which he has received them from the lessors"4. The above lease admittedly expired on 18th August, 1972, There was a notice dated 15th May, 1972, to the first respondent to deliver back possession on the expiry of the lease. On 17th June, 1972, the first respondent made an application to the Commissioner of Police (briefly the Commissioner) which is admittedly the competent authority under the Madras Cinemas (Regulation) Act, 1955 (Act No. 9 of 1955) (briefly the Act) to renew the licence. On 12th July, 1972, the appellants also made an application to the Commissioner to grant the licence in their favour. In August, 1972, the Commissioner by a common order in both the petitions renewed licence of the respondent and rejected the application of the appellants. On 14th August, 1972, the appellants preferred an appeal to the Board of Revenue which set aside the order of the Commissioner on 16th September, 1972. The first respondent then lodged an application under Article 226 of the Constitution in the Madras High Court on 18th September, 1972 and the learned single Judge dismissed the same on 8th February, 1973. The respondent thereafter preferred a Letters Patent Appeal to the Division Bench which by the impugned judgment allowed the same on 4th July, 1973. The High Court refused to grant leave to appeal to this Court and hence this appeal by special leave5. The Board of Revenue (briefly the Board) accepted the appellants contention that the respondent was not in lawful possession of the leased property. The learned single Judge of the High Court also held to the same effect while interpreting rule 13 of the Madras Cinemas (Regulation) Rules, 1957 (briefly the Rules) made under the Act. The Division Bench of the High Court, however, relying upon a decision of this Court in Lalu Yeshwant Singh v. Rao Jagdish Singh, 1968 (2) SCR 203   = (AIR 1968 SC 620  ) held that the respondents possession after expiry of the lease was lawful possession within the meaning of Rule 13 of the Rules. The learned single Judge repelled a contention of the respondents to the effect that the appellants could not be said to be aggrieved persons under Section 5 (7) of the Act, which was amended by the Madras Act No. IV of 1961. This does not appear to have been pressed by the respondents before the Division Bench.

Reasoning:
In the context of R. 13, we are clearly of opinion that a tenant on the expiry of the lease cannot be said to continue in lawful possession of the property against the wishes of the landlord if such a possession is not otherwise statutorily protected under the law against even lawful eviction through court process, such as under the Rent Control Act. Section 6 of the Specific Relief Act does not offer such protection, but only, as stated earlier, forbids forcible dispossession, even with the best of title15. Turning to Rule 13, even in the first part if the applicant for the licence is the owner of the property he has to produce before the licensing authority the necessary records not only relating to his ownership but also regarding his possession. It is implicit, that the owner having a title to the property, if he can satisfy the licensing authority with regard to his possession also, will indeed be in lawful possession, although the word lawful is not used in the first part. It is in that context that the word possession is even not necessary to be qualified by lawful in the first part of Rule 13. If, however, the applicant for the licence is not the owner, there is no question of his showing title to the property and the only requirement of the law is to produce to the satisfaction of the authority documentary evidence with regard to his lawful possession of the property. The word lawful, therefore, naturally assumes significance in the second part while it was not even necessary in the first part. The fact that after expiry of the lease the tenant will be able to continue in possession of the property by resisting a suit for eviction, does not establish a case in law to answer the requirement of lawful possession of the property within the meaning of Rule 13. Lawful possession cannot be established without the concomitant existence of a lawful relationship between the landlord and the tenant. This relationship cannot be established against the consent of the landlord unless, however, in view of a special law, his consent becomes irrelevant. Lawful possession is not litigious possession and must have some foundation in a legal right to possess the property which cannot be equated with a temporary right to enforce recovery of the property in case a person is wrongfully or forcibly dispossessed from it16. Law in general prescribes and insists upon a specified conduct in human relationship or even otherwise. Within the limits of the law, courts strive to take not of the moral fabric of the law. In the instant case, under the terms of the lease, the property had to be handed over to the lessor. Besides under Section 108 (q) of the Transfer of Property Act, on the determination of the lease, the lessee is bound to put the lessor into possession of the property. Since the landlord has not assented to the lessees continuance in possession of the property, the lessee will be liable to mesne profits which can again be recovered only in terms of his wrongful possession. Under Section 5 (1) of the Act, the licensing authority in deciding whether to grant or refuse a licence has regard, amongst others, to the interest of the public generally. Public interest is, therefore, also involved in granting or refusing a licence. That being the position. the expression lawful possession in Rule 13 assumes a peculiar significance of its own in the context of the provisions of the Act. Hence in any view of the matter possession of the respondents on the expiry of the lease is not lawful possession within the meaning of Rule 13. The High Court is, therefore, not correct in its interpretation of Rule 13. The Board of Revenue in appeal was, on the other hand, right in interfering with the order of the licensing authority and the learned single Judge of the High Court rightly refused to interfere with the order of the Board under Article 226 of the Constitution17. We are also unable to accept the submission of Mr. Setalved that the case of renewal of a licence of this type is different from that of a grant. Rule 13 finds place in Part I-A of the Rules with the title General. Under Section 5 (2) (a) of the Act, the licensing authority shall not grant a licence unless it is satisfied that the rules made under this Act have been substantially complied with. We, therefore, do not find any justification in making a distinction between grant and renewal of a licence under the provisions of the Act read with the Rules. Rule 13 is, therefore, clearly applicable to grant as well as to renewal of a licence18. With regard to the last submission of Mr. Setalvad, in our view, there is no manifest error of law in the order of the Board and there was no scope for interference by the High Court with the order under Article 226 of the Constitution.