PETITIONER:
D.H. MANIAR & ORS.
Vs.
RESPONDENT:
WAMAN LAXMAN KUDAV
DATE OF JUDGMENT24/08/1976
BENCH:
UNTWALIA, N.L.
BHAGWATI, P.N.
FAZALALI, SYED MURTAZA
CITATION:
1976 AIR 2340 1977 SCR (1) 403
1976 SCC (4) 118
ACT
Bombay Rents Hotel and Lodging House Rates Control Act
1947--Sec. 15A--Sec. 5(4A)--Indian Easements Act 1882--Sec.
52--62(c)--Revocation of licence by efflux of time--Presi-
dency Small Causes Courts Act 1882--Sec. 47--Effect of
filing of application for eviction--Meaning of licence under
a subsisting agreement--Interpretation of Statutes--Prac-
tice.
HEADNOTE
The appellants granted a licence in respect of certain
shop premises in Bombay to the respondent under a Leave and
Licence Agreement which expired on 31st March 1966. There-
after the appellants served a notice upon the respondent
calling upon him to remove himself from the premises. The
respondent refused to do so. In July 1967 the appellants
filed on application for eviction under Section 41 of the
Presidency Small Causes Court Act. The contention of the
respondent that he was a tenant was negatived by the Small
Causes Court, Bombay. The respondent approached the High
Court under Article 227 of the Constitution. The High Court
refused to interfere with the finding of the Small Causes
Court that the respondent was a licensee and not a tenant.
The Bombay Rent Act was amended by Maharashtra Act 17 of
1973. By the amending Act, section 5(4A) and Section 15A
were introduced in the parent Act to confer on the licensee,
who had a subsisting agreement on February 1, 1973, the
status and protection of a tenant under the Bombay Rent Act.
The respondent by an amendment took the plea of protec-
tion under the Maharashtra Amendment Act 17 of 1973 on the
ground that he was in occupation of the premises on 1st
February 1973 under a subsisting agreement for licence. The
Small Causes Court, Bombay, negatived the plea on the ground
that there was no subsisting agreement for licence on the
1st of February, 1973 as there was nothing on record to show
that after 31st March 1966 the leave and licence agreement
between the parties was renewed or any fresh agreement was
entered into.
The respondent filed a revision petition under section
115 of C.P.C. in the High Court. The High Court allowed the
revision on the ground that the licence was not put an end
to by the appellants and that in any event by filing the
application for eviction the appellant licensor had granted
an implied licence to the respondent licensee to continue in
possession till a decree of eviction was passed in his
favour.
Allowing the appeal,
HELD: (a) In order to get the advantage of section 15A
of the Bombay Rent Act, the occupant must be in occupation
of the premises as a licensee as defined in section 5(4A) on
the 1st of February 1973. If he be such a licensee, the
non-obstante clause of section 15A(1) gives him the status
and protection of a tenant in spite of there being anything
to the contrary in any other law or in any contract. But if
he is not a licensee under a subsisting agreement on the 1st
of February 1973, then he does not get the advantange of the
amended provision of the Bombay Rent Act. [407 H, 408 A]
(b) A person continuing in possession of the premises
after termination, withdrawal or revocation of the licence
continues to occupy it is a trespasser or as a person who
has no semblance of any right to continue in occupation of
the premises. Such a person cannot be called a licensee at
all. [408 B]
(c) A person continuing in occupation of such premises
after revocation of the licence is still liable to pay
compensation, or damages for their use and occupation. [408
E]
404
(d) Filing an application under section 41 of the Presi-
dency Small Causes Court Act may in certain circumstances
have the effect of putting an end to the licence if it was
subsisting on the date of its filing. But, that cannot
possibly have the effect of reviving the licence as opined
by the learned Judge. Such a proposition of law is both
novel and incomprehensible. [408H, 409 G]
(e) It is right that the Court should act in consonance
with the spirit of the Maharashtra Amending Act 17 of 1973.
But the Court cannot and should not cast the law to the
winds or twist or stretch it to a breaking point amounting
to almost an absurdity. [410 C]
(f) The finding of the High Court that the respondent
was in occupation of the premises under a subsisting licence
was wholly wrong and suffered from serious infirmities of
law and fact and deserved to be.set aside. [410 G]
[The Supreme Court is loathe to pass any harsh or unpal-
atable remarks concerning the judgment of the High Court and
ought to act with restraint. But sometimes constraint
outweighs restraint and compels this Court in discharge of
its duty to make strong observations when it finds the
judgment of the High Court running galore with the gross and
palpable mistakes of law almost amounting to judicial imbal-
ance in the approach to the case].
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 212 of 1976.
(From the Judgment and Order dated 18-2-1975 of the
Bombay High Court in Civil Revision Appln. No. 741/74).
Soli J. Sorabji, P.H. Parekh, Miss Manju letly and M/s
Dharia & D.D. Kapadia’ for the appellant.
B.K. Desai, S.S. Khanduja and Vijay Gandotra for the
respondent.
P.H. Parekh for the Intervener.
The Judgment of the Court was delivered by
UNTWALIA, J. The appellants in this appeal by special
leave had filed an application under section 41 of The
Presidency Small Cause Courts Act, 1882--hereinafter re-
ferred to as the S.C.C. Act, against the respondent to
compel him to quit and deliver up the possession of the
premises in question. The Small Cause Court made an order
in favour’ of the appellants under section 43 of the S.C.C.
Act. On the filing of an application in revision by the
respondent in the Bombay High Court, a learned single Judge
of that Court has set aside the order of the Small Cause
Court and dismissed the appellants’ application for
eviction of the respondent. Hence this appeal.
This Court does, as it ought to, act with restraint and is
loathe to pass any harsh or unpalatable remark concerning
the judgment of a High Court. But sometimes constraint
outweighs restraint and compels this Court in discharge of
its duty to make some strong observations when it finds
the judgment of the High Court running galore with gross
and palpable mistakes of law almost amounting to judicial
imbalance in the approach to the case. We regret to say
that this is one such case.
The appellants had allowed the respondents to occupy the
shop premises in question which are situated outside Swa-
deshi Market,
405
Kalbadevi Road in Bombay under certain agreements of leave
and licence which were renewed from time to time. The last
agreement was dated April 30, 1965. Duration of the period
of licence mentioned in this agreement was in the following
terms:
"(1) This agreement shall be deemed to
have commenced from 1st May 1965 and shall remain
in force for 11 months and will automatically come
to an end on 31st March, 1966 on which day the
Party of the Second Part shall remove himself from
the premises of his own accord with all his arti-
cles and belongings and in event of the Party of
the Second Part not clearing out of the premises on
the said day viz., 31st March, 1966 the parties of
the First Part shall be at liberty to remove the
goods and articles of the party of the Second Part
by themselves, by employment of labour at the cost
and on account of the party of the Second Part and
shall be entitled to stop and prevent the, Party of
the Second Part from entering the premises and
making use of the same by himself or his agent."
The respondent did not vacate and remove himself from the
premises as per the aforesaid term of the agreement. He
purported to claim to be a tenant of the premises and with
that end in view his Advocate wrote a letter to appellant
No. 1 on May 23, 1966 stating therein that the respondent
was a tenant of the shop premises and had remitted the
rent for the months of March and April, 1976. A reply to
the letter aforesaid of the respondent’s advocate was given
on behalf of the appellants on June 14, 1966 refuting there-
in the respondent’s claim of being a tenant of the shop
premises and asserting that he was a mere licensee. It was
also said that the said licence had automatically come to an
end on March 31, 1966 and thereafter he was "no better than
a trespasser". Subsequent correspondence followed between
the parties in which the appellants showed their readiness
and willingness to accept money from the respondent by way
of compensation for the use and occupation of the shop
premises without prejudice to their rights and threatening
to take legal action for getting the possession of the prem-
ises.
On the 10th July, 1967 the appellants filed an applica-
tion under section 41 of the S.C.C. Act. The respondent
contested that application, inter-alia, on the ground that
he was a tenant of the shop premises and was, therefore,
protected against the eviction under The Bombay Rents,
Hotel .and Lodging House Rates Control Act, 1947 (for
brevity, the Bombay Rent Act). As per the requirement of
section 42A of the S.C.C. Act, the question whether the
respondent was a tenant of the appellants was tried as a
preliminary issue by the Small Cause Court, Bombay. A
single Judge of that Court by his Judgment and order dated
June 30, 1972 held against the respondent and found that
he was not a tenant of the appellants in respect of the
shop premises. An appeal was taken by the respondent to a
Bench of two judges of the Small Cause Court under section
406
42A(2) of the S.C.C. Act. By a reasoned order dated Decem-
ber 11, 1972 the appellate Bench upheld the finding of the
single Judge and summarily dismissed the appeal. The re-
spondent filed a writ application in the High Court which
after hearing the appellants was dismissed on July 3, 1973.
The Bombay Rent Act was amended by Maharashtra Act 17 of
1973. By the amending Act, section 5(4A) and Section 15A
were introduced in the parent Act to confer on the licensee,
who had a subsisting agreement on February 1, 1973 the
status and protection of a tenant under the Bombay Rent Act.
The respondent, thereafter, by an amendment of his written
defence filed in the Small Cause Court proceeded to take
the additional plea of protection under Maharashtra Act
17 of 1973. Although the amendment was not fully and effec-
tively allowed by the Small Cause Court Judge, the parties
had proceeded on the footing that such a plea became avail-
able to the respondent.
A learned single Judge of the Small Cause Court held
that there was no subsisting agreement for licence on the
1st of February, 1973 as there was nothing on record to show
that after 31st March, 1966 the leave and licence agreement
between the parties was renewed or any fresh agreement was
entered into. In that view of the matter the Trial Court
held that the respondent was not entitled to the protec-
tion of the Bombay Rent Act conferred on a licensee by
Maharashtra Act 17 of 1973. The Court allowed the appel-
lants’ application and made an order under section 43 of the
S.C.C. Act directing the respondent to vacate and hand over
peaceful possession of the premises to the appellants within
one month from the date of the order i.e. the 11th Octo-
ber, 1974. This order was not appealable. Hence respondent
filed a revision before the High Court. A learned single
Judge of the High Court by his judgment and order dated
February 18, 1975 allowed the revision and, as stated
above, set aside the order of the Small Cause Court and
dismissed the appellants’ application for eviction of the
respondent.
Mr. Sorabji, learned counsel for the appellants after
drawing our attention to the relevant facts and the law
involved in the case placed the judgment of the High Court
to point out the glaring errors committed by it which were
writ large on its face. Mr. Desai appearing for the re-
spondent made a strenuous effect to persuade us to uphold
the judgment of the High Court. But in the circumstances
of the case he could do no better than what has been said in
the judgment.
Section 52 of The Indian Easements Act, 1882 defines
"licence" thus:
"Where one person grants to another, or to a
definite number of other persons, a right to do, or
continue to do, in or upon the immovable property
of the grantor, something which would, in the
absence of such right, be unlawful, and such right
does not amount to an easement or an interest in
the property, the right is called a licence."
407
It was no longer open to debate that the respondent was a
mere licensee of the shop premises of which the appellants
were the licensors. Section 62(c) of the Easements Act
says:
"A license is deemed to be revoked-
(c) where it has been granted for a limited
period, or acquired on condition that it shall
become void on the performance or non-perform-
ance of a specified act, and the period expires, or
the condition is fulfilled;"
By efflux of time, therefore, the licence stood
revoked on the 1st of April, 1966. Yet the licen-
see under section 63 of the Easements Act was
entitled to a reasonable time to leave the property
and to remove his goods which he had been allowed
to place on such property. In spite of being asked
by the appellants to do so the respondent did not
pay any heed. Hence the appellants took recourse
to section 41 of the S.C.C. Act. The remedy of
section 41 is available only after the permission
or the licence granted to the licensee to go on the
property has been withdrawn or revoked. If the
occupant of the property is not able to show any
sufficient cause then order for possession follows
under section 43.
We now proceed to quote the relevant words of
section 5(4A) of the Bombay Rent Act:
""Licensee", in respect of any premises or
any part thereof, means the person who is in
occupation of the premises or such part, as the
case may be, under a subsisting agreement for
licence given for a licence fee or
charge ........ "
The inclusive clauses thereafter in the definition
of the ’licensee’ do not include a licensee in
occupation of the premises whose licence already
come to an end and in such a case the occupant
would not be a licensee under a subsisting agree-
ment. We now proceed to read section 15A:
"( 1 ) Notwithstanding anything contained
elsewhere in this Act or anything contrary in any
other law for the time being in force, or in any
contract, where any person is on the 1st day of
February 1973 in occupation of any premises, or any
part thereof which is not less than a room, as a
licensee, he shall on that date be deemed to have
become, for the purposes of this Act, the tenant of
the landlord, in respect of the premises or part
thereof, in his occupation.
(2) ......................................"
It is thus clear beyond doubt that in order to get the
advantage of section 15A of the Bombay Rent Act, the occu-
pant must be in occupation of the premises as a licensee as
defined in section 5(4A) on the 1st of February, 1973. If he
be such a licensee, the non-obstante clause
10-1104SCI/76
408
of section 15A(1) gives him the status and protection of a
tenant in spite’ of there being anything to the contrary in
any other law or in any contract. In other words, even as
against the express terms of the subsisting contract of
licence the licensee would enjoy the benefits of section
15A. But if he is not a licensee under a subsisting agree-
ment on the 1st of February, 1973, then he does not get the
advantage of the amended provision of the Bombay Rent Act.
A person continuing in possession of the premises after
termination, withdrawal or revocation of the licence contin-
ues to occupy it as a trespasser or as a person who has no
semblance of any right to continue in occupation of the
premises. Such a person by no stretch of imagination can be
called a licensee. If therefore, the respondent was not a
licensee under a subsisting agreement in occupation of the
premises on the 1st of February, 1973 he could not take
shelter under section 15A of, the Bombay Rent Act. The Trial
Judge found against him. Apart from the position that this
was essentially a question of fact and a finding on which
could not be interfered with by the High Court in exercise
of its revisional power under section 115 of the Code of
Civil Procedure, the High Court has done so, as we shall
point out, by committing such gross errors of law and fact
that we were constrained in the beginning of our judgment,
though very reluctantly, to make some strong observations
against the judgment of the High Court.
While reciting the facts of the case the learned Judge
of the High Court states a fact in paragraph three of the
judgment that the respondent was ordered to deposit in Court
Rs. 29/- per month which he did. We are happy to note that
the learned Judge has rightly not rested his judgment on
this ground of deposit of rent by the respondent. There was
nothing to show in the records of this case that the appel-
lants had ever accepted any money either in or outside court
from the respondent after 31st of March, 1966 by way of any
rent of the licenced premises. A person continuing in occu-
pation of such premises after revocation of the licence is
still liable to pay compensation or damages for their use
and occupation. If at any time such compensation had been
paid or accepted it could not undo the effect of the revoca-
tion of the licence.
In the seventh paragraph of the judgment the
learned Judge says:
"In my judgment the filing of the proceeding
under section 41 without terminating the licence
and/or the permission granted to the petitioner
does not automatically put an end to the licence
which the petitioner had to occupy the premises."
There are two infirmities in the said observation.
Firstly, according to the appellants’ case the
licence stood revoked and withdrawn and then they
filed the application under section 41 of the
S.C.C. Act. Secondly, the filing of the application
itself may in certain circumstances have the effect
of putting an end to the licence if it was subsist-
ing on the date of its filing. But in any event,
one thing is certain, that cannot have’ the effect
of reviving the licence as opined by the learned
Judge in the subsequent part of his judgment.
409
In the tenth paragraph of his judgment the learned
Judge says:
"The respondents have not relied on any
notice served on the petitioner to show that they
would treat the petitioner as a trespasser from
March 31, 1966. The respondents did not even
describe the petitioner as a trespasser in proceed-
ings. It must be therefore presumed that the re-
spondents voluntarily or involuntarily permitted
the petitioner to occupy the premises till they
filed their application under section 41 of the
Presidency Small Cause Courts Act."
In the next paragraph the learned Judge
quotes the words: "position not better than that of
a trespasser" from the appellants’ letter written
so the respondent. The contradiction in the
judgment is apparent. It is difficult to understand
the significance of the observation "that the
respondents voluntarily or involuntarily permitted
the petitioner to occupy the premises". Voluntary
permission may amount to a fresh licence. The use
of the expression involuntarily permitted’ is a
contradiction in terms.
We are distressed to find the learned Judge
repeatedly expressing a view in his judgment that
the conduct on the part of the appellants in allow-
ing the respondent to continue in the occupation of
the premises until the filing of the application
under section 41 of the S.C.C. Act on July 10, 1967
amounted to a grant of fresh licence. It is not
necessary to extract all the strange passages from
the judgment of the High Court. But we shah do a
few more. In the fifteenth paragraph while refer-
ring to the expression "deemed to be revoked"
occurring in section 62(c) of the Easements Act it
is said that "it does not necessarily mean that it
is in fact revoked." The mistake is so obvious in
this observation that it does not require any
elaboration. In the same fifteenth paragraph occurs
a passage which we exercised in vain to understand.
It runs thus:
"The fact that the respondents did not take
any steps till they filed the application under
section 41 which also would not automatically make
the petitioner’s occupation unlawful means that the
respondents impliedly granted a licence to the
petitioner to continue to occupy the premises."
Later on the learned Judge has said in his judgment that
by adopting the procedure of filing the application under
section 41 of the S.C.C. Act, the appellants impliedly
granted to the respondent "a right to continue to occupy the
premises till he was evicted by an order under section 43."
Such a novel proposition of law is beyond our comprehension.
If the filing of the application under section 41 gives a
fight to the occupant of the premises to continue to occupy
it, then how can the Court pass an order of eviction under
Section 43 in derogation or destruction of such a right ?
The resulting position is too anomalous and illogical to
merit any detailed discussion.
In the eighteenth paragraph of the judgment the learned
Judge persuaded himself to say:
410
"The fact that the earlier agreement of licence ex-
pired on March 31, 1966, does not necessarily mean that
there was no subsisting agreement on the date on which the
application under section 41 was made or on February 1,
1973."
It is difficult to understand what further act, conduct or
writing of the appellants led to the undoing of the effect
of the expiration of the earlier agreement of licence and
bring about any subsisting agreement either on the date of
the application under section 41 or on February 1, 1973. We
admit that if any such agreement could be culled out, in
writing or oral, expressly or impliedly, by the action or
the conduct of the appellants the Court would have been
happy to cull out such agreement and give protection to the
licensee in consonance with the spirit of the Amending Act
viz. Maharashtra Act 17 of 1973. But the Court cannot and
should not cast the law to the winds or twist or stretch it
to a breaking point amounting to almost an absurdity. Our
observation is amply demonstrated by the following passage
in the judgment of the High Court.
"Relying on the amendment of the Bombay Rent
Act the respondents no doubt had withdrawn their
permission under the agreements but by filing the
proceedings under section 41 they permitted the
petitioner to continue as the licensee as stated
above; and this itself is a different kind of
agreement of licence as defined under section 52 of
the Easement Act."
The learned Judge also seems to be making a difference
between the filing of a suit against a licensee whose li-
cence has been terminated treating him as a trespasser and
an application under section 41 of the S.C.C. Act. For the
purpose of the point at issue the distinction is more illu-
sory than real. Two remedies, previously, were available to
the licensor. He could avail the one or the other. The
scope of the trial, disposal and further remedies in the two
proceedings were different. But it is wholly wrong to say
that if a licensor filed an application under section 41 of
the S.C.C. Act instead of filing a regular civil suit by
implication treated the occupant of the premises against
whom the S.C.C. application was filed as a subsisting.licen-
see.
In our opinion the judgment of the High Court is wholly
wrong and suffers from serious infirmities of law and facts.
We accordingly allow this appeal, set aside the judgment and
order of the High Court and restore that of the Small Cause
Court. The respondent must pay the costs to the appellants
in this Court as also in the High Court.
P.H.P. Appeal
allowed.
1
?411