Case Note & Summary
The dispute in this second appeal arises from a suit filed by the appellant, Prakash Ganesh Lotlikar, against the respondent, Joel Avelino Noronha, seeking a declaration that the respondent was a licensee and not a tenant/lessee of a part of the appellant's premises. The appellant claimed that the respondent occupied the premises under a licence agreement dated 1st March 1977, which was renewed in 1979. The respondent, however, contended that he became a statutory tenant in 1979. The trial court had decreed the suit in favour of the appellant, holding that the respondent was a licensee. The first appellate court reversed this finding and held that the respondent was a lessee. Aggrieved, the appellant filed the present second appeal. The substantial question of law framed was whether the appellate court was justified in concluding that the respondent was a lessee based on the agreement. The High Court examined the clauses of the agreement at Exhibit 25 and noted that the document was titled as a licence, the premises were given for a specific purpose, and there was no fixed term or transfer of exclusive possession. The court also considered the respondent's own written statement where he admitted to being a licensee. The court held that the intention of the parties was to create a licence, not a lease, and that the appellate court had erred in its interpretation. Consequently, the High Court allowed the appeal, set aside the judgment of the first appellate court, and restored the decree of the trial court.
Headnote
A) Property Law - Lease vs. Licence - Interpretation of Agreement - Intention of Parties - Transfer of Property Act, 1882, Section 105; Indian Easements Act, 1882, Section 52 - The core issue was whether the agreement dated 1st March 1977 created a lease or a licence in favour of the respondent. The court examined the clauses of the agreement and the conduct of the parties to determine their intention. Held that the agreement created only a licence and not a lease, as there was no transfer of interest in the property and the respondent's possession was permissive and revocable. (Paras 2-5) B) Property Law - Lease vs. Licence - Burden of Proof - The appellant contended that the respondent's own written statement admitted that he was occupying the premises on leave and licence basis. The court considered this admission as relevant to determine the nature of the relationship. Held that the burden lies on the party claiming a lease to establish the same, and the respondent failed to discharge that burden. (Paras 3-4)
Issue of Consideration
Whether on a proper reading of the agreement dated 1st March, 1977 executed between the parties the Appellate Court was justified to come to the conclusion that the respondent was the lessee of the suit property?
Final Decision
The appeal is allowed. The judgment and decree of the first appellate court are set aside. The decree of the trial court is restored. No order as to costs.
Law Points
- Interpretation of agreement
- lease vs. licence
- intention of parties
- Section 105 Transfer of Property Act
- 1882
- Section 52 Indian Easements Act
