Case: Shri Puran Singh Sahni Vs. Smt. Sundrifbhagwandas Kripalani

2. Respondent 2 Shyam Cooperative Housing Society Ltd. was a tenant co-partnership cooperative society (for short, the Society) and Panjumal H. Advani late father of respondent 1 (for short, Advani) was its tenant co-partner member. By an application dated June 10, 1969, Advani obtained permission of the Society to induct the appellant temporarily his flat and accordingly, the appellant took on rent from Advani Flat No. 24, Block No. 1, second floor, Nanik Niwas, situate at Bhulabhai Desai Road, Bombay (for short, the flat) on a monthly rent of Rs. 1000 (Rupees one thousand) on June 10, 1969. On the same date the appellant, under the Societys rules, applied for its nominal membership stating, inter alia, that he intended to take the flat for temporary use and occupation; that he would not claim any right of permanent nature; and that he would vacate the flat on receipt of notice thereof. By an agreement of leave and licence dated June 11, 1969 entered into between the appellant and Advani, the appellant took exclusive possession of the flat. The agreement was for a period of 11 months and was renewable for 2 further periods of 11 months each. Vide Resolution No. 208 dated June 13, 1969, the Managing Committee of the Society granted the permission3. By letter dated January 22, 1972 Advani purported to terminate the licence with effect from March 10, 1972 and asked the appellant vacate the flat and the appellant having not acceded to the request, Advani informed the Society, which, vide letter dated February 22, 1972 required the appellant to vacate the flat and to deliver possession thereof to Advani on or before March 10, 1972. The appellant instead of vacating the flat filed an application in the Court of Small Causes, Bombay on March 13, 1972 for fixation of its standard rent. In April 1972, Advani and the Society raised a dispute under Section 91 of the Maharashtra Cooperative Societies Act to recover possession from the appellant who in turn filed Declaratory Suit No. 989/5305 of 1972 in the Court of Small Causes, Bombay on November 10, 1972 seeking a declaration that he was the tenant of the flat, with an interim application for stay of the proceed till the disposal of his application for fixation of standard rent; but that application was rejected and the appellant was thereafter unsuccessful in his writ petition in the High Court which was dismissed on September 7, 1977. The learned Judge of the II Cooperative Court, Greater Bombay by his judgment dated March 6, 1985 dismissed the suit holding that the appellant was a licensee and not a tenant, but the Society was an idle party and had acted in collusion with Advani to vacate the appellant4. Advani and the Society appealed therefrom to the Maharashtra State Cooperative Appellate Court, Bombay in Appeal No. 397 of 1985 which was allowed and the impugned judgment of the II Cooperative Court was set aside on July 31, 19865. The appellant impugned the appellate order in Writ Petition No. 4118 of 1986 in the High Court of Judicature at Bombay, contending, inter alia, that the agreement between the appellant and Advani, though styled as a leave and licence, was a lease; the Section 91 of the Maharashtra Cooperative Societies Act, 1960 was not attracted and could not have been invoked by Advani and the Society; and that Section 91 itself was ultra vires the Article 14 of the Constitution of India to the extent it tried to reach persons who were not members of cooperative societies6. The High Court, while dismissing the writ petition, inter alia, held that the agreement was of temporary nature and no interest in the flat having been created in favour of the appellant, even though he had exclusive possession, it could not have been a lease; that the alleged collusion between Advani and the Society to evict the appellant was based on conjectures and could not take the matter out of the purview of Section 91 of the Cooperative Societies Act which was not ultra vires

Court's reasoning:
13. In the agreement the intention to create a licence is clear. Positively it speaks of a licence for the use of the flat and negatively that the licensee would not claim any tenancy or sub-tenancy. That the intention of the parties was to create only a licence and not a lease is clear from the tenor of the agreement. True, by mere use of the word lease or licence the correct categorisation of an instrument under law cannot be affected. What was given to the licensee was the use of the flat with furniture, fittings etc., which could not be said to have created any interest in the flat though in effect the use continued for a stipulated period of time. It is true, where the ingredients of a lease are present and the licensee is according to law, a tenant, he ought to be give the benefit of the RentIt has been submitted for the appellant that the very fact of exclusive possession of the flat being given to the appellant was sufficient to make him lessee and Advani his landlord. We do not agree with the submission in an unqualified form. There have been cases where exclusive possession has been given outside the Rent Act. In Isaacv. Hotel De Paris Ltd. ( 1960 (1) All(ER) 348: 1960 (1) WLR 239(PC)), the respondent company owning the Hotel de Paris were the lessees of another building called the P. Hotel, it was held that the respondent company were entitled to an order for possession because the relationship between the parties was not that of landlord and tenant but of licensor and licensee, even though there was exclusive possession by the appellant and the acceptance of the amount of the rent by the respondent company, the circumstances and the conduct of the parties showing that all that was intended was that the appellant should have a personal privilege of running a night bar at the P. Hotel with no interest in the land at all, and this privilege came to an end with the notice of May 1956 and that after the notice the appellant remained in occupation at sufferance and, in the circumstances, the acceptance of rent by the respondent company did not waive their right to immediate possession. It was observed that there were many cases in the books where exclusive possession had been given of premises outside the Rent Restriction Acts and yet there had been held to be no tenancy.In view of licence of the appellant having been cancelled on March 10, 1972, licence as defined by the Rent Act itself, would not apply, to the appellants case. He would, therefore, not be protected under Section 15-A of the RentAct38. Applying the law laid down in the above decisions we are of the view that the instant dispute is one envisaged in Section 91 of the Maharashtra Cooperative Societies Act and the Cooperative Courts rightly exercised jurisdiction39. The next question, namely, Section 91 is ultra vires Article 14 of the Constitution of India to the extent it tries to reach persons who are not members is not tenable, inasmuch as the appellant is involved in a dispute touching the business of the Society and he was a nominal member of the Society by dint of his agreement of leave and licence and he was made so on his application