The Apex Court reversing the concurrent judgments, observed thus:
10. It is however not possible to accept that services in lieu of the right of occupation would amount to receipt of rent under the Rent Act to create sub tenancy .This frustrates and defeats the purpose of the rent Act. Take for instance a case where a person renders services to the landlord in lieu of rent but this will completely erode the provisions of Rent Act and defeat the claims for services. Work performed by subtenants and the wages paid by doing certain kind of services may be in lieu of rent as in the case of agricultural tenancies. But in urban area in civilized times that cannot be so. The Rent Act, 1956 cannot be fitted into a position where the services can be rendered in exchange of the right of occupation.
12. The structure of the Rent Act in the instant case, as indicated above would also indicate that. We hold therefore that second ingredient, viz. rent agreed, was not there. And as such on the case pleaded and proved there could not have been any sub tenancy.
It can clearly be seen that the Apex Court in clear terms has held that insofar as tenancy in urban area is concerned, for creating sub tenancy, an agreed rent is an essential ingredient.
IN THE HIGH COURT OF BOMBAY
Writ Petition No. 6215 of 2008
Decided On: 04.05.2011
Shashikant G. Mehta Vs. Soonoo Minoo Khajotia and Ors.
Hon'ble Judges/Coram:
B.R. Gavai, J.
Citation: 2011(4) MHLJ 247
1. Rule. Rule made returnable forthwith.
2. Heard. By consent of the parties taken up for final hearing.
3. The petition takes exception to the judgment and decree dated 3rd July, 2008 passed in Appeal No. 527/2003 by the Appellate Bench of the Small Causes Court, thereby reversing the judgment and order dated 25th February, 2003 passed in L.E.& C. Suit No. 135/145/1995.
4. The facts in brief giving rise to the present petition are as under:
It is the case of the Plaintiff that the Petitioner-Defendant had approached him in the first week of June 1970 requesting him to grant permission to occupy the suit garage on certain terms and conditions. It is the case of the Plaintiff that the said garage was purchased by him from one Shri I.S. Johar. According to the Plaintiff the Plaintiff permitted the Defendant to use the said garage, initially without payment of any compensation, as the relations between them were friendly and the agreement of leave and license dated 3rd June, 1970 was entered into between the parties. It is further the case of the Plaintiff, that the Defendant had given friendly loan of Rs. 9000/-free of interest to the Plaintiff. As per the leave and license agreement the Defendant was to pay the municipal taxes and electricity charges initially for a period of five years which expired in June 1975. In the meantime according to the Plaintiff he had paid the amount of Rs. 7000/-, Rs. 4000/-by cheque and Rs. 3000/-in cash to the Defendant. In 1975, the Defendant again requested for extension of leave and licence which was extended for a further period of five years. As per the agreement between the Plaintiff and the Defendant the Defendant was to pay the licence charges of Rs. 550/-per month. It is further the case of the Plaintiff that it was agreed that balance amount of Rs. 2000/-payable by the Plaintiff to the Defendant was to be adjusted against the municipal charges. It is the case of the Plaintiff, that though the Plaintiff insisted the Defendant to enter into the written agreement, the Defendant avoided to do so. It is his further case, that the Defendant has paid monthly compensation of Rs. 550/- upto December 1999.
5. It is the case of the Plaintiff that in and around the year 1999, the Plaintiff requested the Defendant to enhance the compensation charges. However, for the first time, the Defendant vide letter dated 31st April, 1990 raised a claim that he was owner of the suit garage and the Plaintiff was Benamidar. It appears that there was exchange of letters between the Plaintiff and Defendant regarding the claim of the Defendant of the ownership of the suit garage and denial of the same by the Plaintiff. In these premises, a suit for eviction and possession came to be filed by the Plaintiff.
6. The suit was resisted by the Defendant, by filing a written-statement. According to the Defendant, the Defendant had purchased garage No. 11 and garage No. 15 from Shri I.S. Johar, who was owner of said garage under prevailing rate of Rs. 5000/-and Rs. 4000/-respectively. In a nutshell, the case of the Defendant is that since the Defendant at the relevant time was not a member of the Society, he could not get the garages transferred in his name and as the Plaintiff was on friendly terms with the Defendant, the Plaintiff was requested by the Defendant to be a Benamee holder of the said garages on the condition that Defendant would pay the outgoings of the Society and electricity charges. It is further the case that thereafter garage No. 15 was sold for Rs. 4000/-to Mr. Malkani. It is the case of the Defendant, that said amount was initially paid in the name of the Plaintiff which was in turn paid by the Plaintiff to the Defendant. It is the case of the Defendant, that in May 1970, the Plaintiff had recorded the fact about the Benamee transaction in his writing dated 5th May 1970 addressed to the Defendant. It is thus the case of the Defendant, that since then the Defendant had been paying only electricity charges and maintenance of the Society. In the alternative, it was the case of the Defendant that the suit garage was held by the Plaintiff in trust and that the Plaintiff was paying outgoings in respect of the suit garage to the Society on behalf of the Defendant, as the same was paid by the Defendant to the Plaintiff. It is also the case of the Defendant, that in view of leave and licence vide agreement dated 1st April, 1970 and since it was subsisting on 1st February 1973, the Defendant had become a deemed tenant. The rest of the contentions raised by the Plaintiff regarding the payment and agreement in 1975 to pay monthly compensation of Rs. 550/- are denied by the Defendant.
7. The learned Judge of the Small Causes Court vide judgment and order dated 25th February, 2003 held that the unpaid interest on the loan amount and payment made by the Defendant towards municipal taxes and electricity charges formed the consideration paid by the Defendant for user of the suit premises and as such the Defendant was a deemed tenant in view of provisions of Section 15A of The Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 ("said Act" for short). The learned trial Court, therefore, held that Plaintiff was not entitled for relief of eviction and, therefore, dismissed the suit.
8. Being aggrieved thereby, the appeal was carried to the Division Bench of the said Court. The learned Appellate Court held that Plaintiff had proved that Defendant was gratuitous licensee. It further held that Defendant failed to prove that on 1st February, 1973 he had become deemed tenant and, therefore, set aside the judgment and decree of the learned trial Court and decreed the suit as prayed for.
9. Shri Godbole, the learned Counsel appearing on behalf of the Petitioner submits that the payment of municipal taxes of garages would amount to consideration and as such since on 1st February, 1973 the Petitioner was a licensee paying consideration to the licensor, he was a deemed tenant in view of provisions of Section 15A. of the said Act and as such the learned Appellate Court ought to have dismissed the Appeal. The learned Counsel further submits that, Plaintiff has himself in his letter dated 5th May, 1970 admitted that the Plaintiff was a benamee holder of the suit premises and that he had no right or interest in the suit property. The learned Counsel relies on the judgment of the learned Single Judge of this Court, in the case of Fili (Firose) B. Elavia v. F.R. Engineer in support of his contention, that the payment of electricity charges and corporation taxes would be covered by the term 'charge or fee' in Sub-Section 4(A) of Section 5 of the said Act. The learned Counsel also relies on the judgment of the Apex Court in the case of Gajanan Motors Transport Company v. State of Karnataka reported in MANU/SC/0334/1976 : AIR 1977 SC 418 in support of the proposition that charge would mean any amount which may be demanded as a price for rendering some service as a price of some goods and that the said term charge cannot be given a narrow meaning.
10. Shri Godbole further contends that assuming without admitting that the Petitioner was a gratuitous licensee, the suit before the learned Small Causes Court itself was not tenable.
11. Shri Dani, the learned Counsel appearing on behalf of Respondent-Plaintiff on the contrary submits that, perusal of the agreement of leave and license entered between the parties on 3rd June, 1970 would clearly show that the license was without payment of any rent or compensation and as such the Petitioner was a gratuitous licensee and not entitled to protection under Section 15A of the said Act. He submits that the Plaintiff himself has shown Rs. 9000/-as an interest free loan to the Respondent-Plaintiff in his tax-returns. He submits that the amount of Rs. 9000/-is paid prior to execution of the leave and license agreement. He further submits that in the Agreement of Leave and Licence, there is no stipulation that the unpaid interest of Rs. 9000/-was to be treated as a compensation. It is, therefore, submitted that the contention in that regard is without substance. The learned Counsel submits that, unless fees or charges were paid to the Plaintiff by the Respondent in monetary terms, it cannot be said that he was licensee for consideration and as such it is submitted that the learned Appellate Court has rightly held that the Petitioner was not entitled for protection under Section 15A. The learned Counsel relies on the Judgments of this Court in the case of Punnakatu Chery Joseph Thankappan v. Pyarali Hirji Hamid reported in MANU/MH/0964/2004 : 2005 (2) ALL MR 11, Bhupal Tatoba Kumbhare and Ors. v. Ganpatrao S. Sangave and Ors. reported in 1995 (1) ALL MR 304, in the case of Kaikhusru Nusserwanji Bahadurji v. Namdar A. Khoramshahi reported in 1998 (3) LJ 249, Haitmbhai Khurshid Hussein Bohari (deceased) v. Chandanmal R. Sakhale and Ors. Reported in 2003 B.C.I. 770, of the learned Single Judge of the Madras High Court in the case of S.E. Abdul Ghafoor Sahib v. A.M. Abdul Salam Sahib and Ors. reported in AIR 1955 Mad and the judgment of the Apex Court in the case of Hotel Kings and Ors. v. Sara Farhan Lukmani and Ors. reported in MANU/SC/8661/2006 : (2007) 1 SCC 202 and in the case of Dipak Banerjee v. Lilabati Chakraborty reported in MANU/SC/0752/1987 : (1987) 4 SCC 161. The learned Counsel also relies on the judgment of the Single Bench of this Court in the case of Chinnupashabi W/o. Hasan Jahagirdar and Ors. v. Fatesingh Shikshan Sanstha & its trustees reported in MANU/MH/0229/2000 : 1999 (4) ALL MR 405.
12. Insofar as contention of Shri Godbole regarding the tenability of the suit before the Small Causes Court is concerned, the contention in that regard is without any merit in view of the judgment of the Full Bench of this Court in the case of Prabhudas Damodar Kotecha and Anr. v. Smt. Manharbala Jeram Damodar and Ors. Reported in MANU/MH/0692/2007 : 2007 (4) ALL MR 651.
13. In the background of rival submissions, the short question that would be required to be considered is as to whether the payment of municipal taxes and electricity charges by the Defendant, would be covered in the term 'licence fee or charge' as used in Sub-Section 4A of Section 5 of the said Act. If the answer to the same is 'yes' then it will have to be held that the Defendant was a licensee as defined under the said Act and, therefore, entitled to protection under Section 15A of the said Act. If the answer is in the negative, it will have to be held that the Defendant was not a licensee and as such not entitled to protection under Section 15A.
14. Insofar as contention of Shri Godbole, regarding the alleged letter by the Plaintiff dated 5th May, 1970 admitting that the Plaintiff was a benamee holder and that the Defendant was the real owner of the suit garages concerned, both the Courts have concurrently on the basis of evidence of the hand-writing expert, disbelieved the said document and as such it will not be permissible for this Court, while sitting in the extraordinary jurisdiction under Article 227 of the Constitution of India to interfere with the same. Insofar as the findings of the learned trial Court, that the unpaid interest on the loan advanced by the Defendant to the Plaintiff also form the part of the consideration is concerned, there is no pleading to that effect by the Defendant and as such the finding in that respect by the learned Appellate Bench also warrants no interference.
15. In that view of the matter, only questions that falls for consideration is as to whether the payment of corporation taxes and electricity charges would be covered by the term "license fee or charge" under Sub-Section 4 A of Section 5 of the said Act. Undisputedly, for bringing a license under the ambit of licensee as defined under Section Sub-Section 4(A) of Section 5 of the said Act, a person who is in occupation of the premises has to be so under a subsisting agreement for a license given for a license fee or charge. Only in that event, the licensee who is in occupation of the premises on 1st February, 1973 would be deemed to have become tenant for the purposes of the said Act.
16. The learned Single Judge of this Court in the case of Bhupal Tatoba Kumbhare (supra) has held that the payment of tax on the property cannot be termed as a consideration towards a licensee. A similar view has been taken by two other learned Judges of this Court in the case of Haitmbhai Khurshid Hussein Bohari (supra) and Kaikhusru Nusserwanji Bahadurji (supra). Similarly, the learned Single Judge of Madras High Court in the case of S.E. Abdul Ghafoor Sahib has also held that rent does not include charges for electricity by the landlord. It has been held that "rent is a recompense paid by the tenant to the landlord for the transfer of a right to enjoy the premises." In the case of Chinnupashabi (supra) the contention was raised before this Court that rent need not be paid in money but it could also be paid in kind. In the said case a teacher working in the Respondent's school was given a room by the school to reside and he was also to look after the hostel. It was, therefore, contended that service rendered by him of looking after the hostel would fall within the term rent. The contention was negated by this Court holding that rent was required to be paid in money per month. In case of Hotel Kings and Ors. (supra) the contention was raised before the Apex Court that since in the lease deed the lessee was required to pay rates and taxes, it was a part of the rent payable and since the said rates and taxes were required to be paid annually or after every six months, the rent was required to be paid annually or after every six months. The said contention was specifically negated by the Apex Court. In paragraph 26 of the said judgment the Apex Court has clearly rejected the contention regarding the rates and taxes being a part of the rent. In the case of Dipak Banerjee v. Llilabati Chakraborty (supra), the Respondent landlady had let out residential premises to the Appellant-tenant on monthly rent of Rs. 200/-+ service charges of Rs. 50/-. An eviction suit was filed by the landlady contending that the tenant had without his written consent sub-let or parted with possession of two out of four rooms to sub-tenant who had established the tailoring business. The trial Court had decreed the suit which was upheld upto the High Court. The Apex Court reversing the concurrent judgments, observed thus:
10. It is however not possible to accept that services in lieu of the right of occupation would amount to receipt of rent under the Rent Act to create sub tenancy .This frustrates and defeats the purpose of the rent Act. Take for instance a case where a person renders services to the landlord in lieu of rent but this will completely erode the provisions of Rent Act and defeat the claims for services. Work performed by subtenants and the wages paid by doing certain kind of services may be in lieu of rent as in the case of agricultural tenancies. But in urban area in civilized times that cannot be so. The Rent Act, 1956 cannot be fitted into a position where the services can be rendered in exchange of the right of occupation.
12. The structure of the Rent Act in the instant case, as indicated above would also indicate that. We hold therefore that second ingredient, viz. rent agreed, was not there. And as such on the case pleaded and proved there could not have been any sub tenancy.
It can clearly be seen that the Apex Court in clear terms has held that insofar as tenancy in urban area is concerned, for creating sub tenancy, an agreed rent is an essential ingredient.
17. If the words used in Sub-Section 4(A) of Section 5 are given its plain and simple meaning, the words used 'licence fee or charge' in my view will have to be given a meaning that the said license fee or charge has to be in the monetary terms. Insofar as the reliance placed by the learned Counsel on the judgment of the learned Single Judge in the case of Fili (Firose) B. Elavia is concerned, the reliance on the said judgment is totally misplaced. In the said case the consideration for leave and license was not only payment of taxes or electricity charges. It will be relevant to refer to certain observations from the said judgment which reads thus:
Next, it is not that the Petitioners are to live free of cost. Certain obligations are imposed upon them and these are physical, moral and material in content. Physically, Petitioners are enjoined -"to serve me as long as I live". Materially, the Petitioners are to reimburse Amrolia for Rs. 1800/-spent by him in the litigation to evict Jamshed. Next, they are to pay the rent payable on the premises, the charges for the consumption of electricity and the wages of the house-maid. Additionally, Amrolia is to get Rs. 25/-per month towards pocket expenses. This is besides the liability to supply him tea, breakfast, lunch and dinner that the Petitioners are to cook or get cooked for the consumption of themselves and their children. In case Amrolia fell ill, the entire expense for the treatment was to be borne by the Petitioners. Alterations, cleaning, fitting of bulbs etc. was to be attended to by the Petitioners.
18. It is thus clear that licensee was not only required to pay the electricity charges or the tax. He was to reimburse an amount of Rs. 1800/ to the licensor spent by him in the litigation. He was also to pay rent in addition to the charges of electricity and he was to pay wages of the house maid. He was further to pay an amount of Rs. 25/-per month towards pocket expenses. This was in addition to the liability to supply the licensor tea, breakfast, lunch and dinner and many other things. It can thus clearly be seen that in the said case there was much more in material considerations including payment of money which was a recurring liability imposed upon a licensee by the licensor. Such is not the case here. In that view of the matter, reliance on the said judgment is without any substance. Insofar as the judgment of the Apex Court in the case of Gajanan Motors (supra) is concerned, the same would also not be of any assistance to the case of the Petitioner. In fact it holds that the charge as per its ordinary dictionary meaning means that amount which may be demanded as a price for rendering of some service or as price of some goods.
19. In the present case the perusal of the relevant clause of the agreement dated 3rd July, 1970 would be material, which reads thus
It is agreed that the said Khajotia has allowed the said Mehta to use garage No. 11 in the aforesaid premises for a period of five years without payment of any rent of compensation by the said Mehta.
20. It can thus clearly be seen that license from 3rd June, 1970 for a further period of five years was without payment of any rent or compensation by the Petitioner. It can thus clearly be seen that on 1st February, 1973 the Petitioner was not a "licensee" as defined under Sub-Section 4(A) of Section 5 of the said Act.
21. In that view of the matter, no error could be found with the order passed by the Appellate Bench of the Small Causes Court to warrant interference.
22. Petition is dismissed. Rule is discharged.
23. At this stage, the learned Counsel for the Petitioner requests for extension of the interim protection, which was granted by this Court for a further period of ten weeks from today.
24. Ms. Punita Soni, the learned Counsel for the Respondents makes a statement that though the Respondents-Plaintiffs would file an application for execution of the decree, they would not actually execute the decree for a period of eight weeks from today.
25. In that view of the matter, no orders are necessary.
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