Sunday, 21 September 2014

Whether licensee can set up title in himself or any other person once license is revoked by licensor?



The ruling cited with reference to Section 53A 
of the Transfer of Property Act in respect of right of the 
proposed transferee claiming that his possession ought not 

to be disturbed cannot be attracted in this case as licensee 
is   always   deemed   to   be   a   licensee.   It   is   not   open   for   a 
licensee to set up title in himself or any other person once 
license   is   revoked   by   the   licensor.   It   is   the   duty   of   the 
licensee to hand over possession or surrender possession of 
the property occupied by him  as a licensee and seek his 
remedy   separately   if,   according   to   him,   he   has   acquired 

title   to  the   property   qua   the  licensor.  Licensor   is  always 
entitled   to   proceed   for   recovery   of   possession   when 
licensee   fails   to   deliver   possession   of   the   property   in 
question   after   termination   of   the   licence.     Only   in 
exceptional   cases   wherein   licensee   may   have   claimed 
merger of his title with licensor's title, his possession may 
be protected.  

IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

NAGPUR BENCH, NAGPUR
SECOND APPEAL NO.399 OF 1999

Vatsala wd/o. Bhikaji Kale,

// VERSUS //
Divisional Railway Manager (Works),
  
      CORAM     :  A.P.BHANGALE,  J.
      DATE         :  21.2.2014.
 Citation;2014(5) ALLMR 137,2014(2)ABR725, 2014(4)MhLj864


This   Second   Appeal   was   admitted   on 
30.10.2001   on   the   substantial   question   of   law   as   stated 

below  :
“ Whether the Courts below failed to consider  
the admission in view of Order VIII, Rules 3,  
4 and 5 of the Code of Civil Procedure ? “
2.
This   appeal   arises   out   of   the   Judgment   and 
Order dt.12.7.1999 passed by the learned 6th Additional 
District Judge, Nagpur in Regular Civil Appeal No.192 of 
1992,   which   was   dismissed.   The   Regular   Civil   Appeal 
arose out of the Judgment and Order dt.24.2.1992 passed 
in Regular Civil Suit No.996 of 1987 whereby the suit was 
partly   decreed   granting   refund   of   a   sum   of   Rs.50,050/­ 
along with interest @ 18 % p.a. from the date of deposit 
till realisation of the whole amount. 

The facts, briefly stated, are as under   :
3.

The   original   plaintiff   namely   Bhika   s/o.   Antu 
Kale had filed Regular Civil Suit No.996 of 1987 against 
the Railways for possession and perpetual injunction and 
costs of the suit.  According to the plaintiff, he is a retired 
Railway   servant.   In   the   year   1981,   he   came   across   a 

proposal   from   the   Divisional   Railway   Manager   (Works), 
Central Railway, Nagpur for giving  plots on licence. The 
plots were belonging to the Railways at various places and 
the Railways had invited applications from the members of 
public   desirous   of   taking   such   plots   on   licence.     The 
plaintiff, since he is a retired servant of Railways and as, 
according   to   him,   he   belongs   to   the   Scheduled   Caste 
community, he applied for grant of a plot on the basis of 
licence for yearly charges of Rs.7512.50, which were to be 
deposited before taking possession of the plot in question. 
According   to   the   plaintiff,   he   had   deposited   a   sum   of 
Rs.15,025/­   plus   Rs.25/­   towards   the   process   fee   to   the 
Railways and an agreement dt.31.1.1982 was entered into. 

The plaintiff requested the defendant/Divisional Railways 
Manager (Works), Central Railway, Nagpur to hand over 
possession of plot no.8 to the plaintiff for running a hotel 
pursuant to the agreement.  But, defendant no.1 did not do 
so   despite   issuance   of     letters   to   the   defendant   to   give 
vacant possession of plot no.8 to the plaintiff for running 
hotel business.  According to the plaintiff, after retirement 

from   the   Railways,   the   plaintiff   was   in   a   most   difficult 
situation, but the defendant did not give possession of the 
plot   to   him,   though   the   plaintiff   had   made   payment. 
Thereafter, the plaintiff came to know that plot no.8 was 
unlawfully occupied by defendant no.4 Ramesh Shinde to 
the extent of its 3/4th portion and defendant no.4 refused 
to give possession of plot no.8 to the plaintiff, though the 
plaintiff had signed the agreement for licence and paid the 
sum of Rs.15,000/­ to the defendant. However, defendant 
no.2­Estate   Officer,   Central   Railway,   Nagpur   issued   a 
notice to the plaintiff on 14.9.1982 to vacate plot no.8 on 
the   ground  that  it  was  illegal   occupation  of  the  plaintiff 
although   the   whole   of   plot   no.8   was   not   given   to   the 

plaintiff.   The   plaintiff   who   claimed   possession 
alternatively,   had   prayed   for   return   of   the   sum   of 
Rs.15,050/­   with   interest   from   the   defendant   till   the 
amount of realised. 
4.
The   defendants/Railways   resisted   the   suit 
claim by filing Written Statement (Exh.25). According  to 

the   plaintiff,   though   he   was   not   delivered   vacant 
possession of the entire plot, he had constructed temporary 
shed   of   10   x   8   ft.   on   that   plot.     On   the   pretext   of 
encroachment   detected,   the   plaintiff   was   served   with 
notice by the Railways for eviction of the plaintiff from the 
piece of land which he had occupied on the ground that he 
was an unauthorised occupant. Notice was served by the 
Estate   Officer   of   the   Railways.     The   Railways   had 
contended   that   the   Civil   Court   has   no   jurisdiction   to 
entertain the suit on the ground that the Estate Officer was 
authorised to evict the plaintiff.


The   trial   Court   found   that   there   was   an 
5.

agreement   of   license   between   the   plaintiff   and   the 
defendant   on   24.1.1982   and   the   plaintiff   had   already 
encroached upon the open plot of land admeasuring 10 x 8 
ft. adjacent to plot no.8 in the year 1976.   Thus, the trial 
Court   found   that   possession   of   suit   plot   no.8   was   not 
handed over to the plaintiff, but he had encroached upon it 

to the  extent  of  10  x 8  ft. and  by notice  dt.26.11.1982, 
defendant   no.2/Estate   Officer,   Central   Railway,   Nagpur 
had   directed   the   plaintiff   to   remove   himself   from   the 
encroached   portion   of   the   land   or   otherwise   eviction 
proceedings will have to follow.  Thus, on the finding that 
the plaintiff did not vacate the encroached portion of plot 
no.8, the suit of the plaintiff for recovery of possession was 
dismissed.  However, the suit for refund of amount in the 
sum of Rs.15,050/­ was decreed with interest @ 18 % p.a. 
from   the   date   of   deposit   till   realisation   of   the   whole 
amount.  


The unsuccessful plaintiff approached the first 
6.

Appellate   Court.   But,   the   6th   Additional   District   Judge, 
Nagpur by Judgment and Order dt.12.7.1999 was pleased 
to   dismiss   the   appeal   finding   that   the   plaintiff,   who 
continued   the   suit   through   his   legal   representatives   and 
heirs,   was   not   entitled   to   possession   of   plot   no.8   or 
perpetual injunction, as prayed for. Thus, R.C.A. No.192 of 
7.

1992 came to be dismissed.   
The   learned   Counsel   for   the   appellants   has 
made a reference to the ruling in the case of Piru Charan 
Pal and another .vs. Minor Sunilmoy Nemo and another 
reported in  AIR 1973 Calcutta 1  (Full Bench) in order to 
rely upon the principle under Section 53A of the Transfer 
of   Property   Act,   1882   to   argue   that   possession   of   the 
plaintiff over the suit plot of land needs to be protected on 
the   ground  that  it  was  given  pursuant to  the  agreement 
between the plaintiff and the Railway Administration. 

Reference is also made to the case of  Krishna 
8.

Kishore   Firm   .vs.   Government   of   A.P.   and   Others 
reported   in  (1991)   SCC   184  to   argue   that   where   lessee 
purchases interest of a co­lessor in undivided property in 
lessee's possession prior to expiry of the lease, possession 
by the lessee after expiry of the lease is held to be lawful. 
He made a reference to para 4 to argue that, in view of the 

provisions   of   Specific   Relief   Act,   possession   of   a   person 
The learned Counsel also made a reference to 
9.
over the suit  property needs to be protected.
the case of Sambhaji Laxmanrao Pawar .vs. Abdul Wahed 
s/o. Rahmatullah reported in 1995(1) Mh.L.J. 22 to argue 
that, in the case of specific performance, presumption that 
damages are not adequate relief for breach of contract in 
respect   of   immovable   property   is   not   absolute.   He   also 
argued that when in a suit denial of a fact by the defendant 
in the Written Statement is not specific but evasive, said 
fact shall be taken to be admitted. In such cases, admission 

10.
VIII, Rules 3, 4 and 5 of the Code of Civil Procedure.
itself being proof, no other proof is necessary under Order 
As   against   these   submissions,   the   learned 
Counsel Mr.N.P.Lambat has submitted that, since the year 
1971, the appellant is in possession of adjacent land to plot 
no.8.     According   to   the   learned   Counsel   Mr.Lambat,   the 

appellant   as   a   formal   Railway   employee   has   prayed   for 
allotment   of   land   on   licence   basis   and   at   the   time   of 
agreement   dt.21.1.1982,   the   appellant   knew   that 
defendant  no.4  was  in  actual   physical  possession  of  plot 
no.8.  My attention is invited to Exh.44 which is an order 
under   sub­section   1   of   Section   5   of   the   Public   Premises 
(Eviction of Unauthorised Occupants) Act, 1971 from the 
Office of Estate Officer, Central Railway, Nagpur holding 
the   original   plaintiff   Bhiku   Antu   as   an   unauthorised 
occupant   and   calling   upon   him   by   order   under   Section 
5(1)   of   the   Public   Premises   (Eviction   of   Unauthorised 
Occupants)   Act,   1971   and   all   persons   who   may   be   in 
occupation of suit land or any part thereof to vacate the 

said land within 45 days from the date of publication of the 
order dt.8.12.1982 indicating that original plaintiff Bhikaji 
Antu Kale by reply dt.8.10.l1982 to the notice dt.14.9.1982 
received from the Estate Officer refused to vacate the suit 
land in question till he gets certificate from the Railways to 
hand over plot no.8. Under these circumstances, it appears 
that   the   plaintiff   chose   to   file   Civil   Suit.   In   the   Written 

Statement, which was filed on behalf of defendant nos. 1 
to 3, it was contended that, in the year 1981, the Divisional 
Railway Manager (Works) proposed to him to have license 
of plots belonging to Railways at various sites in Nagpur 
and   invited   applications   for   the   same   and   the   plaintiff 
being a retired Railway servant, had applied for plot no.8 
near S.T. stand at Nagpur. The application of the plaintiff 
for plot no.8 along with the license fee of Rs.7512.50 and 
water charges separately was decided by defendant no.1, 
but possession of plot no.8 could not be delivered to the 
plaintiff.   Agreement of license was dt.24.1.1982. Though 
plaintiff was not delivered possession of the plot; however, 
the plaintiff encroached upon the area of 10 x 8 ft. which 

was open land belonging to the Railways in the year 1976 
and   for   which   notices   were   served   upon   him   since 
February, 1979 which the plaintiff did not reply.  Thus, the 
Estate   Officer   was   approached   by   the   first   defendant   to 
recover possession of the plaintiff and notices were served 
by the Estate Officer accordingly in respect of encroached 
portion in the neighbouring land of plot no.8. It is under 

these circumstances that the trial Court dismissed the main 
relief   of   possession   and   injunction   and   instead   directed 
refund of amount  to the plaintiff which was lying with the 
Railway Administration.  
11.
The   proposed   license   at   Exh.39   in   the   trial 
Court would indicate that it was to be granted on yearly 
basis   along   with   security   deposit   with   restriction   as   to 
nature of articles to be sold from the licensed premises and 
permission to be obtained by the licensee for his business 
under   local   laws.     The   proposed   agreement   (Exh.39) 
requires  licensee   to   execute   the   necessary  agreement   for 
one   year   and   requires   the   licensee   to   abide   by   all   the 

conditions   mentioned   in   the   said   agreement   with 
reservation of the Railways to either accept or reject the 
same.   The yearly rent or license fee was not paid by the 
licensee and he was given notice dt.1.10.1981 to deposit 
the same within  85 days or else ­ informing the plaintiff 
Coming   to   the   substantial   question   of   law 

12.
that the plot allotted will be treated as cancelled.  
raised   by   the   appellant   as   to   whether   the   Courts   below 
failed to consider the admission in the Written Statement, 
this Court cannot ignore the findings recorded by both the 
Courts   below   and   the   legal   position   in   respect   of   the 
license.  The agreement which was contemplated for grant 
of   license   on   behalf   of   the   Railways   in   favour   of   the 
original   plaintiff   must   be   read   in   its   entirety   to   gather 
intention of the parties thereof. 
13.
The ruling cited with reference to Section 53A 
of the Transfer of Property Act in respect of right of the 
proposed transferee claiming that his possession ought not 

to be disturbed cannot be attracted in this case as licensee 
is   always   deemed   to   be   a   licensee.   It   is   not   open   for   a 
licensee to set up title in himself or any other person once 
license   is   revoked   by   the   licensor.   It   is   the   duty   of   the 
licensee to hand over possession or surrender possession of 
the property occupied by him  as a licensee and seek his 
remedy   separately   if,   according   to   him,   he   has   acquired 

title   to  the   property   qua   the  licensor.  Licensor   is  always 
entitled   to   proceed   for   recovery   of   possession   when 
licensee   fails   to   deliver   possession   of   the   property   in 
question   after   termination   of   the   licence.     Only   in 
exceptional   cases   wherein   licensee   may   have   claimed 
merger of his title with licensor's title, his possession may 
be protected.   It is not the case here as the licensee here 
cannot   have   right   to   claim   possession   to   the   Railways 
premises.   Merely   because   the   original   plaintiff   had 
occupied 10 x 8 ft. portion of plot no.8 or adjacent to it, it 
cannot be inferred that the act was done acting upon the 
licence   with   the   Railway   Administration   or   within 
permissible terms of licence.  Protection, as claimed by the 

appellant, therefore, cannot be available to him merely on 
the basis of stray admission here or there in the Written 
Statement   filed   by   the   Railway   Administration.   Having 
considered the evidence led, the trial Court as well as the 
first   Appellate   Court   by   concurrent   findings   of   facts 
decided   to   return   the   amount   deposited   by   the   original 
plaintiff along with interest. The original licensee (original 

plaintiff)   expired   during   pendency   of   this   proceedings. 
Under   these   circumstances,   considering   that   the   right   of 
Second   Appeal   is   neither   natural   nor   inherent,   but   is   a 
substantive   statutory   right   regulated   by   law   and   when 
conclusion by both the Courts below appear in conformity 
with   the   legal   position  as   to  leave  and  license  discussed 
above, I do not see any reason  to consider the admission 
in the Written Statement so as to overturn the findings of 
facts recorded by both the Courts below in the facts and 
circumstances   of   the   case   in   favour   of   legal   heirs   of 
licensee expired long back. Hence, I do not find any merit 
in the appeal. The appeal is, therefore, dismissed. No order 
as to costs.

16
Mr.M.R.Joharapurkar, learned Counsel for the 
14.

appellants   states   that   an   interim   order   of   status   quo   is 
existing and that may be continued for a period of eight 
weeks   since   the   appellants   are   desirous   to   have   their 
remedy according to law.  
The   parties   shall   maintain   status­quo 
accordingly for a period of eight weeks from today.


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