1999 (4) TMI 614 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the document in question creates a lease or a license.
2. Whether the intention of the parties was to create a lease or license.
3. Whether the exclusive possession of the premises indicates a lease or license.
4. Whether the document is a camouflage to evade the provisions of the Rent Act.

Summary:

1. Whether the document in question creates a lease or a license:
The main issue was to determine whether the agreement was a lease or a license. The learned Single Judge of the High Court held that the agreement was a license, while the Division Bench reversed this decision, holding that the agreement constituted a lease based on exclusive possession.

2. Whether the intention of the parties was to create a lease or license:
The intention of the parties is paramount in determining the nature of the agreement. The Court emphasized that the intention should be gathered from the document itself, except where it is alleged and proven that the document is a camouflage. The Court referred to various clauses in the agreement, particularly clause 12, which explicitly stated that the agreement should not be construed as a lease.

3. Whether the exclusive possession of the premises indicates a lease or license:
Exclusive possession, while an important factor, is not decisive in determining whether an agreement is a lease or a license. The Court noted that exclusive possession does not preclude the document from being a license, especially when the grantor does not have the power to grant a lease or is forbidden by law.

4. Whether the document is a camouflage to evade the provisions of the Rent Act:
There was no pleading by the defendants that the document was a camouflage to defeat the rights of the tenant or the owner. The Court held that the agreement was a leave and license and not a lease, as the terms of the document explicitly stated the intention of the parties.

Conclusion:
The appeals were allowed, setting aside the judgment of the Division Bench dated 2.12.1997, and restoring the order passed by the learned Single Judge in Suit No. 491 of 1985. The agreement dated 18th July 1970 was held to be a deed of leave and license and not a lease. There was no order as to costs.