M. Sankaranarayanan v. S.A. Mohammed Noor and A. Rahmathulla

## IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.RAMKUMAR THURSDAY, THE 27TH NOVEMBER 2008 / 6TH AGRAHAYANA 1930 RSA.No. 1137 of 2008() ---------------------- AS.143/2006 ON THE FILE OF THE I ADDL.SUB JUDGE, KOZHIKODE (A.S.NO.243/2006 OF DISTRICT COURT) OS.320/2006 of ADDL.M.C-I,KOZHIKODE .................... ## APPELLANT/APPELLANT/DEFENDANT ------------------------------------------------- M.SANKARANARAYANAN, AGED 62 S/O.P.A.MADHAVA MENOKU, RESIDING AT MANNIL HOUSE IN BEYPORE AMSOM DESOM, L KOZHIKODE TALUK. BY ADV. SRI.C.P.MOHAMMED NIAS ## RESPONDENTS/PLAINTIFF -------------------------------------------------- 1. S.A.MOHAMMED NOOR, AGED 70 YEARS, S/O.K.N.S.ABDUL RAHMAN, RESIDING AT PANNIYANKARA AMSOM DESOM OF KOZHIKODE TALUK. 2. A.RAHMATHULLA, S/O.K.N.S.ABDUL RAHMAN, HAVING PERMANENT RESIDENCE AT PANNIYANKARA AMSOM DESOM OF KOZHIKODE TALUK,NOW RESIDING AT JIDDAH IN SAUDI ARABIA,(THE R2 IS REPRESENTED BY HIS DULY CONSTITUTED P/A HOLDER, HIS BROTHER, SA MOHAMMED NOOR, THE 1ST RESPONDENT) THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 27/11/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **V. RAMKUMAR, J.** **= = = = = = = = = = = = =** ## **R.S.A.No.1137 of 2008** **= = = = = = = = = = = = = = Dated this the 27th day of November, 2008** ## **ORDER** The defendant in O.S.No.320 of 2006 on the file of the Additional Munsiff's Court-I, Kozhikode is the appellant in this second appeal. The said suit instituted by the respondent herein was one for a mandatory injunction directing the defendant to remove all the articles from the plaint schedule bunk and for a prohibitory injunction restraining him from entering the said bunk thereafter. At the stage of trial the plaintiffs did not press for the relief of prohibitory injunction. 2. The case of the plaintiffs can be summarised as follows:The plaint schedule bunk, made of iron sheets and having a measurement of 8x8 feet, has been installed at the front portion of the ground floor of a commercial building by name 'City Gate' belonging to the plaintiffs. The bunk along with the remaining portion of the property also belongs to the plaintiffs. The defendant approached the plaintiffs with a request to grant a licence in his favour temporarily for the use of the plaint **R.S.A.No.1137 of 2008** 2 schedule bunk. Accordingly, as per Ext.A1 licence agreement dated 1.10.2000, the defendant was permitted to use the bunk as a licensee for a period of one year. After the expiry of the term of one year the defendant again requested the plaintiff to grant a fresh licence for a further period of one year. Accordingly, Ext.A3 licence agreement dated 1.10.2001 was executed between the plaintiffs and the defendant fixing a licence fee of Rs.1,000/- per month. The defendant also paid a security deposit of Rs.40,000/-. At the request of the defendant, he was permitted to use one electric bulb in the bunk for which connection had been taken from a plug point in the main building. In violation of the agreement, the defendant by prevailing upon some of the officials of the KSEB had managed to get electricity supply in his name to the bunk. This was in violation of the provisions in the licence agreement and without the knowledge of the plaintiffs. As per the provisions of the agreement of licence if the defendant failed to pay licence fee on the due date the plaintiffs are entitled to terminate the licence agreement notwithstanding the period stipulated in the licence agreement. The defendant had failed to pay the licence fee from **R.S.A.No.1137 of 2008** 3 the month of October 2001 onwards. Accordingly, a lawyer notice dated 1.1.2002 was sent to the defendant terminating the licence. The suit has been filed thereafter. 3. The suit was resisted by the defendant contending inter alia as follows:- This defendant wanted a permanent place to set up a small business in sales of snacks, cool drinks, milma milk and fruits. Accordingly this defendant approached the plaintiffs who entrusted the site to this defendant. Since the intention of this defendant was to start a business on a permanent basis, the entrustment was treated as a lease. This defendant paid rent of Rs.750/- per month during the first year. The amount was enhanced to Rs.1,000/- during the second year. The building tax was also paid by this defendant. The electric connection to the bunk was arranged from the main building by looping. Since it was illegal, the KSEB disconnected the line. As it was practically impossible for this defendant to carry on his business without electricity, he obtained an electric connection with the permission of the plaintiffs. It was not in violation of the licence agreement between the parties. This defendant has not kept the **R.S.A.No.1137 of 2008** 4 rent in arrears. When the rent for the month of October was tendered the first plaintiff refused to accept the same. Consequently, rent for the months of October, November and December was remitted by Demand Draft. The plaintiffs refused to accept the Demand Draft and returned the same to this defendant. There is no violation of any stipulation contained in the agreement. The Calicut Corporation had issued a notice asking this defendant to remove the bunk stating that it was constructed without a licence. This defendant is willing to transfer the electric connection in the name of the plaintiffs. Acting upon the entrustment, which amounts to lease and which was treated as such, intended, desired and understood by the parties this defendant had incurred an expenditure of more than Rs.1 lakh for furnishing the bunk. Since this defendant is a tenant he is entitled to get the protection of the Kerala Building (Lease and Rent Control Act , 1965. This suit is therefore not maintainable and the same may be dismissed. 4. The trial court framed the following issues for trial:- 1. Whether the transaction is lease or licence? 2. Whether the plaintiffs are entitled for decree for mandatory injunction as prayed ? **R.S.A.No.1137 of 2008** 5 3. Whether the plaintiffs are entitled for a decree for permanent prohibitory injunction as prayed? 4. Whether the plaintiffs are entitled for arrears of licence fee as prayed? 5. Whether plaintiffs are entitled for decree for damages for user and occupation? 6. Relief and cost? Since the relief of prohibitory injunction was not pressed, issue No.3 was struck off. 5. On the side of the plaintiffs Exts.A1 and A6 were marked and 1[st] plaintiff was examined as PW1. On the side of the defendant Ext.B1 to B10 were marked and the defendant was examined as DW1. 6. The learned Munsiff after trial as per judgment and decree dated 28.7.06 came to the conclusion that Exts. A 1 to A3 were agreements of licence and not lease and that in the absence of a plea by the defendant in the written statement that Exts.A1 to A3 were camouflage with a view to get over the provisions of the Rent Control Act, it was not open to the defendant to raise such a contention, that the defendant had kept the licence fee in arrears to the tune of Rs.325/-, that the **R.S.A.No.1137 of 2008** 6 defendant was liable to pay damages for user and occupation at the rate of Rs.1,000/- per month from 1.2.02 till he vacated the premises and that the plaintiffs could adjust the arrears of licence fee and damages from the security deposit of Rs.40,000/and balance, if any, shall be refunded to the defendant before the plaintiffs took possession of the plaint schedule room. The plaintiffs were also held entitled to costs. 7. On appeal preferred by the defendant as A.S.No.143 of 2006 before the Sub Court, Kozhikode, the learned Subordinate Judge as per the decree and judgment dated 29.7.08 dismissed the appeal confirming the decree and judgment passed by the trial court. Hence this second appeal. 8. The following are the substantial questions of law formulated in the memorandum of second appeal. - A) Were the courts below justified not considering the question of intention of parties which was a jurisdictional aspect as the very maintainability of the suit was dependant on that? - B) Were the Courts below justified in relying on the mere nomenclature of the document of entrustment when the conduct of the parties before and after the entrustment clearly proved a case of lease and not a licence.? 7 ## **R.S.A.No.1137 of 2008** - C) Were the courts below justified in holding that the pleadings were insufficient when it was specifically pleased at paragraphs 2 and 7 of the written statement that the transaction was lease and the intention of the parties was to create a lease? - D) Whether the Courts below justified in not considering the fact that in any view of the matter the appellant was entitled to the benefit of Section 60(b) of the Easement Act? - E) Were the courts below justified in not considering the important aspects like exclusive possession of the appellant and the facts that he had obtained electricity connection, paid advance amounting to 3 years' rent clauses for renewal, increase in rent and the conduct of parties before and after the entrustment? - F) Were the courts below justified in not holding that the intention in the instant case was to create a lease and not a licence? 9. I heard the learned counsel for the appellant-defendant. The learned counsel for the appellant made the following submissions before me in support of the appeal:- Eventhough Exts.A1 and A3 were styled as licence dees the real intention of the parties was to enter into a transaction of lease. There was a transfer of interest in favour of the appellant **R.S.A.No.1137 of 2008** 8 who was put in exclusive possession of the bunk in question. Infact, the bunk in the present form was constructed by him and not by the plaintiffs. The defendant had obtained a separate electric connection to the bunk. The plea in the written statement to the effect that the entrustment which amounts to lease and which was treated as such, intended, desired and understood by the parties is sufficient to make out a case that the transaction was a camouflage to get over the provisions of the Kerala Building (Lease and Rent Control) Act. Hence the decision of the Apex Court in (AIR 2004 SC 2103) **C.M.Beena** **and another v. P.N.Ramachandra Rao** applies on all fourts to the facts of this case. Since it was the appellant who put up the bunk which is of a permanent nature, he is entitled to the protection of Section 60(b) of the Easements Act. 10. I am afraid that I cannot agree with the above submissions. A perusal of Exts.A1 and A3 documents will clearly reveal that they are agreements creating a licence by all definitions. The document recites that the licensors are the owners in possession of the iron bunk described in the Schedule and the licensee (the defendant) is permitted to use the premises **R.S.A.No.1137 of 2008** 9 for doing a business in bakery items and the licensee is not to use the premises for any other purpose without the written consent of the licensor. It is made explicitly clear that no possession has been given to the licensee. Clause 7 of the document makes the position further clear that the licensee is to use the premises as a licensee and that the parties have never intended the transaction to be a lease or any other mode of transfer of interest or of possession of the premises. Apart from the nomenclature of the document the terms and conditions stipulated thereunder also unequivocally indicate that the transaction which the parties had in their contemplation was a licence is pure and simple. 11. Both the courts below have rightly held that the defendant/appellant did not specifically plead in the written statement that eventhough Ext.A1 is styled as a licence it was a camouflage or a subterfuge conceived by the plaintiff to circumvent the provisions of the Kerala Building (Lease and Rent Control) Act, 1965. Hence reliance placed on the decision of the Apex Court in (AIR 2004 SC 2103) **C.M.Beena and another v. P.N.Ramachandra Rao** is of no avail to the **R.S.A.No.1137 of 2008** 10 appellant . Paragraph 4 of the said decision clearly shows that the written statement in that case had specifically pleaded that the document was a camouflage for evading the Rent Control legislation which was in force. 12. Equally misconceived is the contention based on Section 60(b) of the Easements Act. First of all, Ext.A1 licence itself shows that what is given on licence is the bunk and not the site thereof. The bunk was not put up by the defendant. Secondly, no plea was taken in the written statement with regard to the protection under Section 60(b) of the Easements Act (See **Kesavan Nair v. Narayanan Nair** (1988(2) KLT 1006) and **Saraswathi v.Bharat Textiles** (1992(1)KLT 863). Hence the said contention is not available to the appellant. Such being the position I do not see any good ground to interfere with the concurrent decrees passed by the courts below. No question of law, much less any substantial question of law arises for consideration in this second appeal. The questions of law formulated in the memorandum of appeal also do not arise for consideration in this second appeal which is accordingly dismissed in limine. 11 ## **R.S.A.No.1137 of 2008** The learned counsel for the appellant made a fervent request for time. I am inclined to grant six months' time to the appellant. Accordingly the appellant shall remove all his articles from the plaint schedule bunk and surrender the vacant possession of the same on or before 26.5.2009 on condition that he files an affidavit before the Executing Court within two weeks from today undertaking to abide by the above condition and also undertaking that he shall not induct strangers in the bunk nor shall he commit any act of waste thereon and shall pay the damages for use and occupation at the rate of Rs.1,000/- per month without fail. Dated this the 27th day of November, 2008. ## **V. RAMKUMAR, JUDGE** sj