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Issues Involved:
1. Whether Respondent No. 2 is entitled under the leave and license agreement to continue to use and occupy the licensed premises till the security deposit and interest thereon is refunded by Respondent No. 1. 2. Whether the leave and license agreement creates a mortgage or a charge or security in respect of the licensed premises to secure the repayment of the security deposit and the interest thereon. Detailed Analysis: 1. Entitlement to Continue Use and Occupation of Licensed Premises: The court examined whether Respondent No. 2 could continue to occupy the premises under the leave and license agreement until the security deposit and interest were refunded. The court referred to Sections 59, 60, and 64 of the Indian Easements Act and relevant case law, including the Supreme Court's judgment in Ram Sarup Gupta v. Bishun Narain Inter College. The court concluded that: - Parties can make a license irrevocable by agreement: The court affirmed that parties can agree to make a license irrevocable or revocable only under specific conditions, as established in M.F. De Souza v. Children's Education Uplift Society and Dominion of India v. Sohan Lal. - Transferee Bound by Agreement: The court held that a transferee of the property is bound by such an agreement, citing Ram Sarup Gupta, which established that a transferee from the licensor could not acquire a better right than the licensor. - Security Deposit Includes Interest: The court interpreted Clause 28 of the agreement to include interest on the security deposit, allowing Respondent No. 2 to continue occupying the premises until both the principal and interest were refunded. 2. Creation of Mortgage or Charge: The court analyzed whether the leave and license agreement created a mortgage or charge on the licensed premises to secure repayment of the security deposit and interest. The court considered the terms of the agreement and relevant legal principles: - No Intention to Create Mortgage or Charge: The court found no evidence of an intention to create a mortgage or charge. The agreement was consistently referred to as a leave and license agreement, and there was no indication that the parties intended to constitute the property as security for the debt. - Agreement's Clauses: Clauses 7, 8, and 10 of the agreement explicitly stated that it was a leave and license agreement, creating no other rights, title, or interest in the licensed premises. - Surrounding Circumstances: The court noted that Respondent No. 2 had never claimed the existence of a mortgage or charge until the hearing, indicating that this was an afterthought rather than a matter of contractual commitment. - No Legal Basis for Lien: The court rejected the argument that the agreement created a lien, as there was no indication that the licensed premises constituted security for repayment of the security deposit. Conclusion: The court dismissed the appeal and made the Chamber Summons absolute in terms of recognizing Respondent No. 2's right to remain in possession of the flat until the security deposit and interest were refunded. The court clarified that the agreement was a leave and license agreement under Section 24 of the Maharashtra Rent Control Act, 1999, and did not create a mortgage, charge, or any other interest in the premises. The document was ordered to be returned to Respondent No. 2 as duly stamped.
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