1964 (2) TMI 80 - SC - Indian Laws

Whether the plaintiffs-respondents are the lessees of the appellants who were defendants 4 and 5 in the trial court or only their licensees? Held that - A further duty which lay upon the landlords was to guard the entrance to the market. These duties could not be effectively carried out by the landlord by parting with possession in favour of the stall-holders by reason of which the performance by the landlords of their duties and obligations could easily be rendered impossible if the stall-holders adopted an unreasonable attitude,. If the landlords failed to perform their obligations they would be exposed to penalties under the Act and also stood in danger of having their licences revoked. Could, in such circumstances, the landlords have ever intended to part with possession in favour of the stall-holders and thus place themselves at the mercy of these people? We are, therefore, of the opinion that the intention of the parties was to bring into existence merely a licence and not a lease and the word rent was used loosely for fee. Upon this view we must allow the appeal, set aside the decree of the High Court and dismiss the suit of the respondents inso far as it relates to reliefs (ii) (e), (f) and (g) granted by the High Court against the appellants are concerned. So far as the remaining reliefs granted by the High Court are concerned, its decree will stand. In the result we allow the appeal to the extent indicated above but in the particular circumstances of the case we order costs throughout will be borne, by the parties as incurred. Appeal partly allowed.

Summary

Issues Involved:
1. Whether the plaintiffs-respondents are lessees or licensees of the appellants.
2. Legality of extra carcass fees and extra fees for Sunday Gutha claimed by the contractors.
3. Injunction against appellants and defendants from realizing extra levies and interfering with possession over stalls.

Issue-wise Detailed Analysis:

1. Whether the plaintiffs-respondents are lessees or licensees of the appellants:
The primary issue revolves around the nature of the relationship between the plaintiffs-respondents and the appellants, specifically whether it constitutes a lease or a license. The appellants own a private market in Madras and have traditionally farmed out the right to collect dues from stall users to contractors. The plaintiffs contended that they were lessees, while the appellants argued that they were merely licensees.

The court noted that the building housing the market requires a municipal license under the Madras City Municipal Act, 1919, which imposes several duties on the market owners, including cleanliness and proper state maintenance. The plaintiffs filed the suit due to disputes over extra fees claimed by the contractors. The trial court and the appellate bench of the City Civil Court found the plaintiffs to be licensees, but the High Court reversed this decision, granting several reliefs to the plaintiffs.

The High Court based its decision on the agreements, noting that the use of the term "rent" and the requirement of notice before eviction suggested a lease. The High Court emphasized continuous possession, the obligation of the landlord for annual repairs, and the provision for 30 days' notice for vacating stalls as indicative of a tenancy.

However, the Supreme Court highlighted that the essence of a license is its revocability and that the requirement of notice does not necessarily indicate a lease. The court stressed the importance of the intention of the parties, inferred from the terms of the agreement and surrounding circumstances. The court found that the agreements, which referred to daily payments and allowed eviction on short notice, suggested a license rather than a lease. The court also noted the landlords' statutory duties under the Act, which required them to maintain control over the market, further supporting the conclusion that the plaintiffs were licensees.

2. Legality of extra carcass fees and extra fees for Sunday Gutha claimed by the contractors:
The plaintiffs challenged the extra fees imposed by the contractors, arguing that they were neither sanctioned by the Municipal Act nor by usage. The trial court found in favor of the plaintiffs on this point, ruling that the extra fees were not authorized. This finding was affirmed by the appellate bench of the City Civil Court and was not contested in the Supreme Court judgment.

3. Injunction against appellants and defendants from realizing extra levies and interfering with possession over stalls:
The plaintiffs sought an injunction to prevent the appellants and the contractors from realizing extra levies and interfering with their possession of the stalls. The High Court granted this relief, restraining the defendants from interfering with the plaintiffs' possession as long as they paid the fixed rents, increasing rents under the written agreements, and evicting or disturbing the plaintiffs.

The Supreme Court, however, disagreed with the High Court's conclusion that the transactions were leases. It held that the plaintiffs were licensees, not lessees, and therefore were not entitled to the protections granted by the High Court. Consequently, the Supreme Court set aside the High Court's decree regarding the injunction against interference with possession, rent increases, and eviction.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's decree concerning reliefs (ii) (e), (f), and (g), and dismissed the plaintiffs' suit regarding these reliefs. The remaining reliefs granted by the High Court were upheld. The appeal was partly allowed, with costs borne by the parties as incurred.