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1997 (2) TMI 601 - HC - Indian Laws

Issues Involved:

1. Whether the appellant was precluded from contending that the agreement was one of tenancy and not of agency, or that the deed is a sham or camouflage as between parties but was implemented so far as third parties were concerned.
2. Whether on a proper construction of the agreement, the deed was in substance a lease and not an agency agreement.
3. Whether the learned Single Judge had powers to allow the application filed by the defendant directing the appellant to remove the goods, furniture, and decorative material, and whether this amounted to passing a decree for possession in favor of the defendant and against the appellant without the defendant filing a separate suit.

Detailed Analysis:

Point 1:

The appellant contended that the agreement, though labeled as an "agency," was in fact a tenancy agreement and that it was a sham document. The court examined whether the document was intended to be a sham and found that the parties were conducting business in a public place, maintaining accounts, and filing returns with statutory authorities, which indicated that the agreement was implemented both between the parties and with third parties. The court held that the appellant was precluded from contending that the agreement was a sham or a tenancy agreement, as the facts showed the agreement was implemented as an agency agreement. The Local Commissioner's report, which suggested the appellant's partner was in possession, was not significant in light of the documented business records. Thus, this point was held against the appellant.

Point 2:

The court examined whether the agreement was a lease or an agency by analyzing the clauses of the agreement. Clause 22 explicitly stated that the respondent (agent) would remain in exclusive possession and control of the premises, which precluded any inference of tenancy in favor of the appellant. The agreement specified that the respondent would receive a commission, not a fixed rent, and that the respondent was primarily liable for expenses, which were reimbursed by the appellant. The court concluded that the agreement was indeed an agency agreement and not a tenancy, as the terms and the nature of the business conducted were consistent with an agency relationship. Therefore, this point was also held against the appellant.

Point 3:

The court addressed whether the learned Single Judge had the authority to allow the defendant's application for the removal of the appellant's goods. It was noted that the agreement had expired, and the appellant had obtained various interim orders to maintain possession. The court found that the order directing the removal of goods was in the nature of restitution under Section 151 of the Civil Procedure Code, as the appellant could not retain benefits obtained through interim orders once the main suit was dismissed. The court referenced legal precedents allowing a defendant to obtain relief against a plaintiff in certain circumstances, without the need for a counter-claim or separate suit, if the relief sought arises out of the plaintiff's cause of action or is incidental to it. The court held that the relief claimed by the defendant was incidental to the refusal of the plaintiff's injunction and was rightly granted. Thus, this point was also held against the appellant.

In conclusion, the appeal was dismissed, with all points decided against the appellant.

 

 

 

 

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