Case Note & Summary
The Supreme Court considered whether a cinema licensee whose written lease had expired could obtain renewal of a cinematograph exhibition licence under the A.P. Cinemas (Regulation) Rules, 1970. The appellant had taken a 20-year lease of Shaensha Mahal theatre from the third respondent landlady on January 1, 1964, and the lease expired by efflux of time on December 31, 1983. When the appellant sought renewal of the licence, the landlady objected. The licensing authority and appellate authority granted renewal, but the High Court in a writ petition held that the appellant was not in lawful possession and quashed the renewal. The Division Bench affirmed that decision, leading to the appeal by special leave.
The appellant argued that the 1983 amendment to the Rules bifurcated initial grant and renewal, and Rule 12(B) expressly omitted the requirement of lawful possession. He contended that his possession after lease expiry was juridical possession and not unlawful, relying on decisions of this Court. The respondent landlady argued that the lease required vacant possession on expiry, she had filed a suit for eviction, and she had never acquiesced in continued possession; therefore, possession was unlawful and renewal could not be granted.
The Court examined Rule 11(B)(2) and Rule 12(B)(1) of the Rules. It noted that although initial grant and renewal were now dealt with separately, the second proviso to Rule 12(B)(1) required that not only the conditions in clauses (a) and (b) but also all provisions of the Rules be satisfied. Since Rule 11(B)(2) requires lawful possession for grant of licence, the requirement of lawful possession applied equally to renewal. The Court then analysed the Transfer of Property Act, 1882, particularly Sections 105, 111 and 116. It held that after the lease determined by efflux of time, and without the landlord's assent or acceptance of rent, the appellant became a tenant at sufferance. A tenant at sufferance has no lawful title and is little different from a trespasser. Therefore, the appellant's possession was not lawful possession for the purpose of licence renewal. The High Court's view that the appellant was not in lawful possession was correct, and the appeals were dismissed.
Headnote
A) Cinema Regulation - Renewal of Licence - Requirement of Lawful Possession - A.P. Cinemas (Regulation) Rules, 1970, Rule 11(B) and Rule 12(B) - The 1983 amendment separated initial grant and renewal, but the second proviso to Rule 12(B)(1) requires satisfaction of all provisions of the Rules, including the lawful possession requirement in Rule 11(B)(2) - The Court held that a licensee seeking renewal must establish lawful possession of the site, building and equipment.
B) Property Law - Tenancy at Sufferance - Transfer of Property Act, 1882, Sections 105, 111, 116 - A lessee continuing in possession after determination of lease by efflux of time without landlord's consent is a tenant at sufferance, whose possession is not lawful - The Court held that such possession does not amount to lawful possession for purposes of licence renewal under the Cinema Rules.
Issue of Consideration
Whether the appellant's possession after expiry of the lease was lawful possession for renewal of cinema licence under A.P. Cinemas (Regulation) Rules, 1970
Final Decision
The Supreme Court held that lawful possession is a precondition for renewal of a cinema licence because the second proviso to Rule 12(B)(1) of the A.P. Cinemas (Regulation) Rules, 1970 requires satisfaction of all provisions of the Rules, including Rule 11(B)(2) which requires lawful possession of the site, building and equipment. The Court found that the appellant's possession after the expiry of the lease without the landlord's consent was that of a tenant at sufferance, not lawful possession, and therefore he was not entitled to renewal. The High Court's view was upheld.
Law Points
- Lawful possession required for renewal under second proviso to Rule 12(B)
- tenant at sufferance not lawful possession
- Rule 11(B)(2) applies to renewal
- Transfer of Property Act Sections 105
- 111
- 116
- holding over requires landlord's consent
Case Details
1995 LawText (SC) (08) 83
K. Ramaswamy, B.L. Hansaria
1996 AIR 140, 1995 SCC (5) 698, JT 1995 (6) 258, 1995 SCALE (5) 41
State of Andhra Pradesh & Ors.
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Nature of Litigation
Appeal by special leave against the High Court's refusal to uphold renewal of a cinematograph exhibition licence on the ground that the licensee was not in lawful possession of the theatre.
Remedy Sought
The appellant sought renewal of his cinema licence under the A.P. Cinemas (Regulation) Rules, 1970 after expiry of his lease, and challenged the High Court's decision quashing the renewal.
Filing Reason
The landlady objected to the renewal of licence after the lease of the theatre expired on December 31, 1983; the licensing authority and appellate authority granted renewal, but the High Court set aside the renewal, holding that the appellant was not in lawful possession.
Previous Decisions
Licensing authority and appellate authority granted renewal; learned single judge of the High Court held that the appellant was not in lawful possession and that renewal was not justified; this was affirmed by the Division Bench in W.A. Nos. 1118 and 1183 of 1992 dated September 3, 1993.
Issues
Whether the possession of the appellant after expiry of the lease was lawful possession for the purpose of renewal of cinema licence under Rule 12(B) read with Rule 11(B) of the A.P. Cinemas (Regulation) Rules, 1970.
Whether the second proviso to Rule 12(B)(1) requires the licensing authority to satisfy itself that the applicant has complied with all provisions of the Rules, including the requirement of lawful possession.
Submissions/Arguments
Appellant argued that the 1983 amendment to the Rules bifurcated initial grant and renewal, and Rule 12(B) expressly omitted the requirement of lawful possession; therefore, the Full Bench in Smt. Y. Anasuya v. Government of A.P. wrongly imported that requirement.
Appellant contended that his possession after lease expiry was juridical possession, not unlawful, and he could not be treated as a rank trespasser until duly ejected.
Respondent No.3 (landlady) argued that under the lease conditions the appellant had to deliver vacant possession on expiry; she had filed O.S. No. 538/85 for eviction, showing she never acquiesced; therefore, possession was unlawful and renewal could not be granted.
Respondent No.3 submitted that the Full Bench correctly held that licence renewal is subject to the lessor's willingness, and when the lessor objected, the licensee's possession could not be considered lawful.
Ratio Decidendi
Under the A.P. Cinemas (Regulation) Rules, 1970, the second proviso to Rule 12(B)(1) incorporates all provisions of the Rules, including the requirement of lawful possession under Rule 11(B)(2), for renewal of a cinema licence. A lessee whose lease has expired and who continues in possession without the landlord's consent is merely a tenant at sufferance, which is not lawful possession and disentitles the licensee from obtaining renewal.
Judgment Excerpts
The tenant at sufferance is, therefore, one who wrongfully continues in possession after the extinction of a lawful title. There is little difference between him and a trespasser.
The second proviso provides clearly that not only the conditions enumerated in clauses (a) and (b) of sub-rule (1), but also all the provisions of the Rules should be satisfied for the grant of the renewal.
A tenancy at sufferance is merely a fiction to avoid continuance in possession operating as a trespass.
Procedural History
Lease deed dated January 1, 1964 granted 20-year lease of Shaensha Mahal theatre to the appellant; lease expired December 31, 1983. Appellant sought renewal of cinema licence under A.P. Cinemas (Regulation) Rules, 1970; landlady objected. Licensing authority and appellate authority granted renewal. Landlady filed writ petition; learned single judge held appellant not in lawful possession and quashed renewal. Division Bench of High Court affirmed in W.A. Nos. 1118 and 1183 of 1992 on September 3, 1993. Appellant filed special leave petition in Supreme Court.
Acts & Sections
- A.P. Cinemas (Regulation) Rules, 1970: Rule 11(B), Rule 12(B), Rule 9(B), Rule 11-A
- Transfer of Property Act, 1882: Section 105, Section 111, Section 116, Section 106
