(Prayer: Second Appeal filed under Section 100 of the Code of Civil Procedure, against the Judgment and Decree of the II Additional District Judge, Tiruchirappalli made in A.S.No.23 of 2015, dated 14.08.2015, confirming the judgment and decree made in O.S.No.704 of 2014 on the file of the Principal Subordinate Court, Tiruchirappalli, dated 30.04.2015.)
1. The appellants, as defendants who lost the legal battle before both the Courts below have come forward with this Second Appeal challenging the Decree and Judgment passed in A.S.No.23 of 2015, dated 14.08.2015, by the II Additional District Judge, Tiruchirappalli by confirming the judgment and decree made in O.S.No.704 of 2014 on the file of the Principal Subordinate Judge, Tiruchirappalli, dated 30.04.2015.
2. Heard the learned counsel for the appellant, the learned Counsel for the respondents and perused the materials available on record.
3. The respondent herein as plaintiff filed a suit for permanent injunction restraining the defendants from interfering with his peaceful possession and enjoyment, except due process of law by stating that the first defendant is the owner of the suit property. The plaintiff is a lessee and the first defendant entered into an agreement dated 28.07.2003 under which the plaintiff is running a restaurant in the suit property. The essential terms of the agreement are as follows:
a. The lease is for a period of 10 years.
b. The franchise fee per year is Rs.5,06,000/-. The plaintiff has to pay the annual escalation of 10% every year for the same.
c. There is a transfer of interest in the suit property in favour of the plaintiff to run the restaurant.
d. The plaintiff should furnish bank guarantee.
e. The plaintiff should pay property tax, fee levied by pollution Control Board, EB Charges, sales tax, Luxury Taxes and all other statutory levies to the last defendant every year on or before the 15th day of July of the succeeding year.
f. The plaintiff is permitted to put up superstructure with permission of the 1st defendant. The plaintiff should not claim title to the superstructure to be put up by him or claim any compensation for the same on his surrendering.
g. The plaintiff should cover his establishment under Employees Provident Fund and Miscellaneous Provision Act, Employees State Insurance Act and all other industrial legislation.
h. The 1st defendant shall reserve the right to renew the agreement at its expiry.
i. Any dispute between the plaintiff and the 1st defendant has to be referred to an Arbitrator in accordance with the provisions of the Arbitration and Conciliation Act 1996.
The plaintiff has complied with all the terms of the agreement. The plaintiff sought permission from the first defendant to provide a sintex tank on the terrace and to convert the non-A/C restaurant to an A/C restaurant and to have an expansion behind the kitchen of the restaurant and after getting permission, he also paid a sum of Rs.2,00,000/- p.a. to utilise the vacant site behind the kitchen. Though the agreement dated 28.07.2003 has been turned as a franchise agreement, it is only lease. The plaintiff has spent more than Rs.50,00,000/- to renovate and to provide amenities to the restaurant with a hope that the lease will be renewed after the expiry of 10 years prescribed in the agreement. Though the period was expired on 30.07.2013, the second defendant by his letter dated 22.07.2013, extended the lease period for six months from 01.08.2013 to 31.01.2014 and for this period, the plaintiff was demanded a sum of Rs.6,30,974/- and the plaintiff paid the same. Again the leased was extended upto 30.04.2014 by letter dated 01.02.2014 by the second defendant and for this period the plaintiff was also paid a sum of Rs.3,07,347/-
4. By letter dated 07.04.2014, the plaintiff requested the first defendant to extend the lease upto finalisation of the tender. However, by letter dated 26.05.2014, the first defendant directed the plaintiff to hand over the vacant possession to the third defendant on 30.05.2014, which was illegal, as the annual lease can be terminated only by giving six months prior notice. The plaintiff filed Arbitration O.P.No.2 of 2014 before the Vacation Civil Court, Tiruchirappalli and obtained injunction and the same was transferred to the Principal District Court, Tiruchirappalli and renumbered as Arbitration O.P.No.11 of 2014 and the same was disposed of on 08.07.2014 by extending the interim order till 30.08.2014. The plaintiff also filed an arbitration O.P. in Ar.O.P.No.504 of 2014 before the High Court and this Court has passed an order stating that there is no dispute to be referred to an Arbitrator and granted liberty to workout the remedy before a competent civil Court. The plaintiff again filed an Arbitration O.P.No.26 of 2014, since the defendants attempted to dispossess the plaintiff after 30.08.2014 and an order of status quo was passed in the said Arbitration O.P. As this Court has passed an order in Ar.O.P.NO.504 of 2014 to work out the remedy before the competent Civil Court, the plaintiff has filed this suit for grant of permanent injunction.
5. Resisting the same, the defendants filed a detailed written statement by stating that when there is an arbitration clause in the agreement between the parties, the civil suit is barred. The plaintiff, having opted for the Arbitration proceedings, he cannot again elect for civil suit and the plaintiff in his arbitration proceedings has categorically admitted that only the arbitration Act will apply and that there is no civil remedy. The plaintiff is only a licensee in respect of the suit property and not a lessee as claimed by him. The defendants have decided to take over the restaurant themselves and it has been intimated to the plaintiff and therefore, the plaintiff has no right to continue in possession. Hence, they prayed for dismissal of the suit.
6. The trial Court, after considering the averments both in the plaint and written statement and the arguments of both sides, has framed the necessary issues and dismissed the suit by stating that the plaintiff only being a licensee, has no right to continue in possession and he cannot ask for an injunction against the owner of the property. Against which, the plaintiff preferred an appeal in A.S.No.23 of 2015, in which the first Appellate Court has allowed the appeal by stating that the appellant/plaintiff is in possession of the property till date and he is making regular payment of rent, which is also accepted by the respondents till date without any objection and it is also held that the transaction is a lease, then the respondents have to proceed under due process of law only. Against which, the appellants/defendants preferred this Second Appeal.
7. At the time of admission of the Second Appeal, the following Substantial Question of Law has been framed:
(i) Whether in law the judgment and decree of the 1st Appellate Court in reversing the well considered judgment of trial Court without setting aside the findings is sustainable?
(ii) Whether in law, the judgment and decree of the 1st Appellate Court in arriving a conclusion that the transaction between the parties is only a lease and not license is sustainable in terms of Exhibit A1 and
(iii) Whether in law the judgment and decree of the 1st appellate Court in granting the relief of injunction against the appellant without arriving a finding that the possession of respondent is lawful or not is sustainable?
8. Mr.K.Chellapandian, learned Senior Counsel appearing for the appellants would submit that the respondent, who is a licensee, had entered into an agreement with the appellants, in which he was given a contract for running a restaurant at Hotel Tamil Nadu, Tiruchirappalli on franchise basis. In that it was specifically mentioned that the restaurant should be run in the name and style of Hotel Tamil Nadu and on franchise basis, that property has been utilised for the purpose of running restaurant and not for any other purpose. The licence of franchisee is renewable every year by paying the franchise fee, three months in advance and the period is ten years. After expiry of franchise period, the franchisee shall surrender all movable and immovable properties of franchise including the superstructure now existing and also been constructed by the franchisee with due consent of franchiser and is not entitled to claim any compensation. After the period of 10 years, the franchiser shall reserve right to renew or handover the franchise to another. The arbitration clause is also there. So, it is a licence and it is not a lease. Once it is a licence, after expiry of licence period, the licensee ought to have surrendered the possession. But here, the respondent as licensee filed a suit as if it is a lease and without any right over the possession, he filed an arbitration O.P. before the Principal Subordinate Court, Trichirappalli and obtained an order of interim injunction and he also filed an arbitration O.P. before this Court for appointment of an arbitrator and that has been withdrawn and he has filed the present suit for injunction restraining the appellants from interfering his peaceful possession and enjoyment except due process of law. The trial Court, after considering this aspect, came to the conclusion and dismissed the suit. However, the first Appellate Court has held that he is only a lessee and he is a tenant in holder, after expiry of lease period. So he ought to have been evicted only due process of law after issuing the termination notice and decreed the suit. Against which, the present Second Appeal has been preferred.
9. So, the learned Senior Counsel appearing for the appellants would submit that the civil Court has no jurisdiction to entertain the suit. He would further submit that whether the deed Ex.A.1 agreement is lease or licence has to be decided after considering the intension of the parties. For that reasons, he relied upon the following decisions:
(i) Chandu Lal Vs. Municipal Corporation of Delhi reported in AIR 1978 DELHI 174;
(ii) T.Sekaran Vs. The Managing Director, Thiruvalluvar Transport Corporation, Madras-2 reported in 1994-1-L.W.463;
(iii) The Madurai City Municipal Corporation Vs. Boominathan and another reported in 1996(II) CTC 727;
(iv) M.Jesian Vs. Thiruvaduthurai Adhinam represented by its Madathipathi, Thiru.Sivaprakasa Pandara Sannithanam, Thiruvaduthurai, Nagapatinam District and Others reported in 2008(2) CTC 587;
(v) P.Muthusamy Vs. State of Tamil Nadu, represented by its Secretary to Government, Municipal Administration and Water Supply Department, Chennai and Another reported in (2014)5 MLJ 129.
10. He would further submit that the intension of the parties is only an agreement for licence and not for lease agreement. He would further submit that the Civil Court has no jurisdiction and the suit itself is not maintainable, since there is an arbitration clause in Ex.A.1 and that factum was not considered by the first appellate Court. Hence, he prayed for setting aside the judgment and decree passed by the first appellate Court.
11. Resisting the same, the learned Counsel appearing for the respondent would submit that as per Clause 32 of the agreement, a renewal clause is there. Clause 33 of the agreement is arbitration. It is true that he filed a petition before the District Court, Tiruchirappalli under Section 9 of the Arbitration and Conciliation Act 1996 and obtained an order of interim injunction. But he has also filed an application before the High Court for appointment of arbitrator, in which the defendants filed a counter affidavit and in paragraph Nos.4, 6 and 7, they have stated that there is no dispute for arbitration and on that basis, he withdrew the same and that that has been evidenced by Ex.A.28 and Ex.A.31. So, he cannot approbate and reprobate and blow hot and cold and that factum was rightly considered by the first appellate Court in its judgment. The findings made in arbitration proceedings is not challenged. Hence, it is not hit by Res Judicata. In support of his contention, he relied upon a decision in M.Mohammed Ismail (died), represented by his L.Rs Vs. K.P.Subbiah (died) represented by his L.Rs. reported in 2015(3) CTC 734.
12. He would further submit that he is only a lessee and not a licensee. Section 52 of the Indian Easements Act deals with license and Section 105 of the Transfer of Property Act deals with lease. The petitioner was permitted to put up semi-permanent structure as per Ex. A.9; as per Ex.A.8, he was permitted to put up sintex tank; as per Ex.A.10, he was permitted to convert the non-A/C restaurant to an A/C restaurant; and as per Ex.A.13, he was permitted to make additional accommodation. So, once a permanent construction has been constructed, as per Section 60 of the Indian Easements Act, it is irrevocable. He would further submit that licence is a personal privilege given to the person to do particular act, but lease is coupled with interest in the immovable property. Here, the immovable property has been given as a lease for running hotel. There is a transfer of immovable property and hence, it is a lease, not a license.
13. He would distinguish the decision relied upon by the learned Senior Counsel appearing for the appellants and would submit that it is only a lease and not a license. He also relied upon a decision of this Court in C.R.Ramamurthy Iyer Vs. The Idol of Arulmighu JambukeswararAkilandeswari Temple, represented by its Executive Officer, Thiruvanaikoil, Trichy reported in (2000)II MLJ 262 wherein it was held that the intention of the parties mandates for considering whether it is a lease or licence.
14. He would also rely upon a judgment in Ram Sarup Gupta (dead) by LRs Vs. Bishun Narain Inter College and Others reported in (1987)2 Supreme Court Cases 555 and stating that one permanent construction is put in and there is no objection on the side of the owner, it is irrevocable.
15. He would also rely upon a judgment in K.M.Mohan Vs. District Collector, Vellore District, Collectorate at Vellore and others reported in 2005(3) MLJ 689 and would submit that even a trespasser cannot be evicted except due process of law. He would also rely upon a judgment in Pradeep Oil Corporation Vs. Municipal Corporation of Delhi and another reported in 2011-5-L.W.57.
16. As per the agreement, he is paying the entire property tax. He would also rely upon a decision in Naramadaben Maganlal Thakker Vs. Pranjivandas Maganlal Thakur reported in 1997(2) SCC 255. He would further submit that admission is best evidence, in some of the communications sent by the appellants, it was mentioned as lease. So, they themselves admitted that it is a lease agreement and not licence. So the respondent/plaintiff is entitled to injunction restraining the defendants to interfere his peaceful possession, unless he was evicted by due process of law. So he prayed for dismissal of the Second Appeal.
17. At this juncture, the learned Senior Counsel appearing for the appellants would submit that as per Section 60(b) of the Indian Easements Act, the revocation of licence is only during the currency of licence, not after the licence period is over. Here, the licence period is over and hence, the respondent is not entitled to agitate the same which is irrevocable. Hence, he prayed for allowing the Second Appeal.
18. Considering the rival submissions made on either side and on a perusal of the typed set of papers and documents, it is an admitted fact that the franchise agreement has been entered into between the appellants and the respondents on 28.07.2003. Tamil Nadu Tourism Development Corporation Limited is one of the important tourism. They want to let out restaurant at Hotel Tamil Nadu on a franchise basis. Ex.A.1 - agreement has been admitted by both parties. But the only point has to be decided is as to whether Ex.A.1 is the lease agreement or licence agreement. After expiry of 10 years mentioned in Ex.A.1, since the respondent herein has not handed over the possession, nine months renewal has been given then and there and thereafter also, he has not handed over the possession. Hence, the appellants issued a notice asked him to hand over the possession. Then the suit has been filed.
19. Before considering the fact as to whether Ex.A.1 is the agreement or licence, it is appropriate to consider the decisions relied upon by both sides.
20. The learned Senior Counsel appearing for the appellants would rely upon a decision in Chandu Lal Vs. Municipal Corporation of Delhi reported in AIR 1978 DELHI 174 wherein in paragraph Nos.15, 16, 21, 22, 24 and 26 it was held as follows:
15. The question accordingly is whether the various clauses of the document in question, when read as a whole, in any manner carve out an interest in the demised property in favor of the petitioners. Although a person who is let into exclusive possession is prima facie to be considered a tenant. Never the less if circumstances negative such a conclusion and show that no tenancy was created. the person in possession would not be held to be a tenant. It is trite saying that the intention of the parties is, the real test for ascertaining the character of a document. It is beyond challenge that it a document gives only a right to use the property in a particular way but its possession and control remains with the owner thereof, it will be a license. In such a case the legal possession remains with the owner of the property, the licensee being permitted to make use of the property for a particular purpose. It would, therefore, be seen that but for the permission the licensee's possession would be unlawful. Exclusive possession does not militate against the concept of a license, if the circumstances negative any intention to create a tenancy (See Associated Hotels of India v. R. N. Kapoor, ).
16. It is also beyond the pale of controversy that if the circumstances and the conduct of the parties show that what was intended was that the occupier should be granted a personal privilege with no interest in the land, he would be held to be a licensee.
21. According to S. 105 of the T. P. Act, 1882, a lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity in consideration of a price paid or promised, or of money, a share of crops service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. It is clear from the above definition that a lease is not a mere contract but envisages and transfers an interest in the demised property creating a right in favor of the lessee in rem,
22. License is defined in S. 52 of the Easements Act and reads as under:
"where one person grants to another, or to a definite number of other persons, a right 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 license".
24. The petitioners in the instant petitions were given the liberty to occupy the Kiosk for 11 months "for purposes of trade." They were forbidden from parting with possession of the Kiosk or allow any other person to occupy the same or to use any part thereof or to enter into partnership with any other person without the written permission of the Commissioner of the Corporation The liberty to occupy the Kiosk was personal to the petitioners alone. Besides, the petitioners were required "faithfully and diligently" to "comply with all the directions, general or special" that may be given by the Commissioner of the Corporation from time to time. The infringement of any of the terms and conditions of the license was to result in the cancellation of the license. the petitioners having, no claim whatsoever on that account. Further, the license was liable to be cancelled at any time by the Commissioner of the Corporation or other authorised officer without assigning any reason. All these conditions militate against "lease", no interest in the premises passed to the petitioners. The Corporation in the circumstances in enforcing its right of re-entry by self help cannot be said to have taken the law into its own hands or that it was in any manner acting without recourse to law in resuming the possession. The underlying assumption in the case of a license is that the owner continues to be in possession and control of the property. In such circumstances the Court cannot throw its protection round the trespasser having no vestige of any right what so ever, and his unlawful act of continuing to occupy the premises, by the issue of a prohibitory order against the lawful owner.
26. There is a catena of authorities in support of the proposition that in the case of a license there is something less than a right to enjoy the property in the licensee; it cannot be exercised by servants and agents and is terminable while on the other hand, in the case of a lease, there is a transfer of a right to enjoy the property or in other words the lessee is entitled to enjoy the property. A bare licensee having no interest in the property cannot maintain an action for its possession. A mere licensee has only a right to use the property. Such a right does not amount to an easement or an interest in the property but is only a personal privilege to the licensee. After the termination of the license, the licensor is entitled to deal with the property as he likes. This right he gets an owner in possession of his property. He need not secure a decree of the Court to obtain this right. He is entitled to resist the defence of his property the attempts of a trespasser to come upon his property by exercising the necessary and reasonable force to expel a trespasser. If, however, the licensor uses excessive force, he may make himself liable to be punished under a prosecution, but he will infringe no right of the licensee. No doubt a person in exclusive possession of the property is prima facie to be considered to be a tenant, nevertheless he would not be held to be so if the circumstances negative any intention to create a tenancy.
21. He would also rely upon a decision in T.Sekaran Vs. The Managing Director, Thiruvalluvar Transport Corporation, Madras-2 reported in 1994-1-L.W.463 and it is appropriate to extract the following paragraph:
5a. The conclusion recorded by the learned single judge that in case of a licensee whose period of licence has expired, the Court should not grant temporary injunction, cannot be disputed for the simple reason that temporary injunction is granted only in the cases which are covered by the three cardinal principles namely,
(1) by making out a prima facie case;
(2) on showing the balance of convenience petitioner's in favour, in that the refusal of the injunction would cause great inconvenience to him; and
(3) where on refusal of the injunction, the petitioner seeking injunction would suffer irreparable or serious injury.
The Court in such a case also sees that before invoking the jurisdiction of the Court for temporary injunction, the party has shown that it has a legal right and that right has been invaded. The view taken by the learned Single Judge is the same as taken by a Full Bench of Delhi High Court in the case of Chandu Lal V. Delhi Municipality (AIR 1978 Delhi 174).
6. ... According to the said judgment of the Supreme Court,
There is, therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thought that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee. But there was a change and the recent trend of judicial opinion is reflected in Erringion V. Erringion (1952)I AII E.R.149) wherein Lord Denning reviewing the case law on the subject summarises the result of his discussion thus at p.155:
The result of all these cases is that, although a person who is let into exclusive possession is, 'prima facie' to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy .
22. He would further rely upon a decision in The Madurai City Municipal Corporation Vs. Boominathan and another reported in 1996(II) CTC 727 wherein in paragraph No. 8 it was held as follows:
8. In Sekaran, T. V. The Managing Director, Thiruvalluvar Transport Corporation, Madras, 1994 (1) LW 463, (D.B), the Division Bench of this Court after referring to various decisions of the Supreme Court and with reference to Section 105 of Transfer of Property Act as well as Section 52 of Easements Act has held that document giving right only to use the property in a particular manner (in that case to run a restaurant) would amount to a licence and not a lease. They also further held that a licensee (plaintiff in the said suit) seeking injunction against the owner of the property so that he may continue his possession until the disposal of the suit would not be entitled to relief. In Arulmighu Ammachi Ayyanar Mandu Koil V. Alagu Karuppannan Ambalam, 1995(II) M.L.J.209 (Srinivasan, J), with regard to continuance even after the expiry of lease-licence, it has been observed thus:-
The Courts below have committed a fundamental error in taking the view that the respondents are entitled to continue in possession even after the expiry of the periods for which leases had been given to them. As it is a property belonging to the temple, the leases are expressly limited for a period of one year and it was only subject to that condition the respondents took part in the auction. Having taken part in the auction continuously for three years viz., 1988, 1989 and 1990, if the respondents did not choose to participate in the auction in 1991 and allow somebody else to become the highest bidder, it is not open to the respondents to contend that they are entitled to be in possession and that they have not surrendered possession actually and on that basis pray for injunction. In fact, the successful auction bidders in the year 1991 have not been impleaded as parties to the suit.
When admittedly the petitioner is the owner of the property, the respondents cannot get an order of injunction unless they prove their right to be in possession. If it is not a lawful possession, they are not entitled to get injunction as against the true owner. In this case, as per the terms of the auction, the respondents were bound to give up possession and they had been doing it in the previous faslis. The courts below ought to have drawn necessary inference therefrom that every successful auction bidder is bound and used to surrender possession after the harvest as contended by the petitioner. In such circumstances, the respondents are not entitled to have the relief of injunction, which is an equitable remedy particularly when they have no right to be in possession. Hence, the orders of the courts below granting injunction in favour of the respondents are unsustainable .
23. He would also rely upon a decision in M.Jesian Vs. Thiruvaduthurai Adhinam represented by its Madathipathi, Thiru.Sivaprakasa Pandara Sannithanam, Thiruvaduthurai, Nagapatinam District and Others reported in 2008(2) CTC 587 wherein in paragraph Nos.14, 22 and 23, it was held as follows:
14. The only point in issue in the present Appeal pertains to the plea of lease as advanced by the appellant and the contrary plea that it was only a licence as urged on the side of the respondents.
22. The fact that the appellant himself took part in the auction and was granted the privilege to take the improvements from the property for the period 1.7.2000 to 30.6.2003 as per Ex.B.18 dated 2.7.2001 clearly shows that the transaction is only a license and whatever right the appellant was having prior to 1.7.2000 has expired and he became the licensee from 1.7.2000 for the Fasli years 1410, 1411 and 1412. In fact, immediately prior to 1.7.1997 the licensee was Michael Nadar for the period from 1.7.1997 to 30.6.2000 as per Ex.B.11 auction notice and if all the circumstances are taken together, it would be clear that the appellant was licensed only to take the improvements from the property and by no stretch of imagination, it could be said that what was given to the appellant was only a lease.
23. The term 'lease and license' is often used to describe a particular transaction. While interpreting the term 'lease or license', with reference to a particular document, it is not the form, but the real substance which has to be taken into account. At times, a document may be described to be one of license, but in a sense, it may be a deed of lease and the intention of the parties also may have to create the relationship of landlord and tenant. While considering a document, it is always necessary to look into the intention of the parties and for the said purpose, the document as a whole has to be considered. It is not sufficient to look into the term used to describe the document. All the surroundings circumstances have to be looked into and an interpretation in accordance with the wishes of the parties to the agreement has to be given. By way of particular document, if an interest is created in favour of the other party, which is often called the lease hold interest, the transaction is only a lease. When there is a transfer of interest in land by way of a document and the intention of the parties are clear from the recitals in the document, the document is only a lease even if the transaction is described to be a license. On the other hand, if only, the right to use the property in a particular manner is given relating the actual possession of the property with the owner, the transaction is only a license and the description of the transaction as a lease does not matter much. In the case of a license, legal possession is always with the owner. The licensee is conferred with the privilege to use the property in the manner indicated in the document. Therefore, the intention of the parties assumes significance, and instead of the form, the sum and substance of the agreement as a whole has to be given paramount consideration.
24. He would further rely upon a decision in P.Muthusamy Vs. State of Tamil Nadu, represented by its Secretary to Government, Municipal Administration and Water Supply Department, Chennai and Another reported in (2014)5 MLJ 129 wherein in paragraph No.20, it was held as follows:
20. The facts narrated above would clearly indicate that the petitioners have been given only a licence to run the shops. Just because the word lease has been mentioned, a licence cannot ipso facto be converted into a lease. Admittedly, the licence issued has a fixed terms. Therefore, the petitioners do not have a legal or a vested right to continue in occupation forever. There is no doubt that the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1961, does not apply to the case on hand. The petitioners can very well participate in the proposed auction. In other words, they cannot claim the right of a statutory tenant.
25. The learned Counsel appearing for the respondent would rely upon a decision in Naramadaben Maganlal Thakker Vs. Pranjivandas Maganlal Thakur reported in 1997(2) SCC 255, wherein in paragraph No.3, it was held as follows:
3. It is now well settled legal position that a document has to be read harmoniously as a whole giving effect to all the clauses contained in the document which manifest the intention of the persons who execute the document. The material part of the gift deed reads as under:-
The said immovable property as described above with the ground floor and with the ways to pass and with the water disposal and with all other concerned rights, titles is gifted to you and the possession whereof is handed over to you under the following conditions to be observed by you and your heirs and legal representatives as long as the Sun and the Moon shine. Therefore, now I or my heirs or legal representatives have no right on the said property. You and your heirs and legal representatives have become the exclusive owners of the same. You and your heirs and legal representatives are entitled to enjoy, to transfer or to use the said property as you like under the conditions mentioned in this deed. Except myself, there is nobody's right, title, interest or share on the said property: I have not mortgaged the same by any document. Yet however anybody comes forward to claim the fight, I shall remove the same.
The said property is gifted to you on such conditions that and you are made owners by the gift deed of the said property on such conditions that there are 15 rooms on the said property at present. I am rightful to receive the rents and the mesne profit whatsoever accrued from the said rooms throughout my life. I am only entitled to receive the mesne profit of the said property till I lice. Therefore, I, the executant, shall be entitled to let out the said buildings (rooms), to receive the rent amount to make all the other arrangement throughout my life. Similarly the said property shall be in my possession till live. Therefore, I have gifted this property to you by reserving permanently my rights to collect the mesne profits of the existing rooms throughout my life. And by this gift deed the limited ownership right will be conferred to you till I live. After my death you are entitled to transfer the said property. I shall not give in any way my right to anybody to collect the mesne profit. You may get transferred the said property in your name in support of ths deed. This gift deed is executed to you under the aforesaid conditions.
The material part of the cancellation deed reads as under:
I have, on 15.5.65, executed a conditional gift deed of Rs.9,000/- in words Rupees nine thousand in favour of you. The said deed has been presented in the office of the Sub Registrar, Baroda at Serial No.2153 of the book No.1 and it is registered on 15.5.65. The description of the property mentioned in the said deed is as under:
I executed to you a conditional gift deed of the property from sky to earth. You had promised me to fulfil the oral conditions between us. But immediately after making the gift accordingly, you denied to fulfil the said conditions. The possession of the gifted property is not handed over to you. So in fact you have not accepted the conditional gift of the property and I am also not willing to act according to the conditional gift. It is also mentioned in the said conditional gift deed that the possession shall be kept with me. And so accordingly my possession is continued. My possession is from the beginning and it is permanent. You are not ready to act according to our conditions. Therefore, I have to execute immediately this deed of cancelling the conditional gift deed between us. Therefore, I hereby cancel the conditional gift deed dated 15.5.65 of Rs.9,000/- in words rupees nine thousand presented at serial No.2153 on 15.5.65 in the office of the Sub- Registrar, Baroda for registration. Therefore, the said conditional gift deed dated 15.5.65 is hereby cancelled and meaningless. The property under the conditional gift has not ben and is not to be transferred in your name. It will be at present and permanently remain in my name.
Section 122 of the Transfer of Property Act (for short, the TP Act ) defines 'gift' to means the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.
Acceptance by or on behalf of the donee must be made during the life time of the donor and while he is still capable of giving.
26. The learned Counsel appearing for the respondent would also rely upon a decision in Ram Sarup Gupta (dead) by LRs Vs. Bishun Narain Inter College and others reported in (1987)2 Supreme Court Cases 555, wherein in paragraph No.9, it was held as follows:
9. Licence as defined by Section 52 of the Act means grant of permission, by a person to the other, 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. Such right does not amount to an easement or any interest in the property. The rights so conferred is licence. The grant of licence may be express or implied which can be inferred from the conduct of the grantor. Section 60 provides that a licence may be revoked by the grantor unless: (a) it is coupled with a transfer of property and such transfer is in force; (b) the licensee, acting upon the licence, has executed a work of permanent character and incurred expenses in the execution. Revocation of licence may be expressed implied. Section 62 enumerates circumstances on the existence of which the licence is deemed to be revoked. One of such conditions contemplates that where licence is granted for a specific purpose and the purpose is attained, or abandoned, or if it becomes impracticable, the licence shall be deemed to be revoked. Section 63 and 64 deal with licensee's right on revocation of the licence to have a reasonable time to leave the property and remove the goods which he may have placed on the property and the licensee is further entitled to compensation if the licence was granted for consideration and the licence was terminated without any fault of his own. These provisions indicate that a licence is revocable at the will of the grantor and the revocation may be expressed or implied. Section 60 enumerates the conditions under which a licence is irrevocable. Firstly, the licence is irrevocable if it is coupled with transfer of property and such right is enforced and secondly, if the licence acting upon the licence executes work of permanent character and incurs expenses in execution. Section 60 is not exhaustive. There may be a case where the grantor of the licence may enter into agreement with the licensee making the licence irrevocable, even though, neither of the two clauses as specified under Section 60 are fulfilled. Similarly, even if the two clauses of Section 60 are fulfilled to render the licence irrevocable yet it may not lie so if the parties agree to the contrary. In Muhammad Ziaul Haque V. Standard Vacuum Oil Co., the Calcutta High Court held that where a licence is prima facie irrevocable either because it is coupled with a grant or interest or because the licensee erected the work of permanent nature there is nothing to prevent the parties from agreeing expressly or by necessary implication that licence nevertheless shall be revocable. On the same reasoning there is nothing to prevent the parties agreeing expressly or impliedly that the licence which may not prima facie fall within either of the two categories of licence (as contemplated by Section 60) should nevertheless be irrevocable. The same view was taken by Das, J. (as he then was ) in Dominion of India V. Sohan Lal. Bombay High Court has also taken the same view in M.F.De Souza V. Childrens Education Uplift Society. The parties may agree expressly or impliedly that a licence which is prima facie revocable not falling within either of the two categories of licence as contemplated by Section 60 of the Act shall be irrevocable. Such agreement may be in writing or otherwise and its terms or conditions may be expressed or implied. A licence may be oral also in that case, terms, conditions and the nature of the licence, can be gathered from the purpose for which the licence is granted coupled with the conduct of the parties and the circumstances which may have led to the grant of the licence.
27. The learned Counsel appearing for the respondent would further rely upon a decision in C.R.Ramamurthy Iyer Vs. The Idol of Arulmighu Jambukeswarar Akilandeswari Temple represented by its Executive Officer, Thiruvanaikoil, Trichy reported in (2000)II M.L.J. 262, wherein in paragraph No.16, it was held as follows:
16. It is admitted by appellant himself that his right is to prepare and sell prasadhams and he obtained that right on the basis of auction. The right conferred on him is to prepare and sell prasadhams only. It is that right he has taken in auction in the year 1967 and subsequently renewed from time to time. Even in the year 1990, he obtained that right by auction. It is true that he has been dealing with that right for the last 25 years. Madapalli is always attached to the temple and used as kitchen for temple use only. Prasadhams is to be prepared only in madapalli and at the fixed time same is offered to the deity. After it is offered to deity, same is sold to the Worshippers for consideration which is also fixed depending on the quantity. Plaintiff was not entitled to prepare neivedhyam in any other place and anything prepared outside the madapalli also could not be sold in the temple premises. When plaintiff was given a right to prepare neivedhyam there is an obligation on the part of temple authorities to permit him to use madapalli also. If that is the part of obligation, the transaction is not with immovable property but part of preparing neivedhyam to the deity. It may also be noted that no rent is realised for the use of madapalli or the shop. For creating lease, there must be payment of rent and transfer of immovable property. Both are absent in the case. It is also admitted by plaintiff that he cannot open madapalli though he retains the key, unless temple is also opened. It is also admitted by him that he cannot continue to retain it opened after the temple closes. If it is a lease he has got right to enjoy the premises. If the right to use is restricted, an inference can be drawn from that, that is a licence and not lease.
28. The learned Counsel appearing for the respondent would also rely upon a decision in Pradeep Oil Corporation Vs. Municipal Corporation of Delhi and another reported in 2011-5-L.W., 57, wherein in paragraph No.19, it was held as follows:
19. A bare perusal of the grant in question reveals that in the grant, the appellant herein ie., grantee has been described as licensee. But in our considered view the mere use of the word licensee would not be sufficient to hold the grant in question as a license. Simply using the word licensee would neither be regarded as conclusive nor determinative. In terms of Clause (1) of the said indenture the licensee was to have the use of a piece of land for maintaining a depot for petroleum goods received through railways but thereby his rights to deal with the property and the goods brought thereon had not been taken away. Clearly, an embargo has been placed as regards the user of the construction made thereon to the extent that the same would be used solely for the storage of petroleum products but such restriction by itself can also be imposed in a case of lease. The grant in question clearly states that the constructions are to be made as per specifications approved by the Chief Inspector of Explosives which condition was also otherwise governed by the provisions of Explosives Act. Further, the pipelines are required to be laid at railway levels or demised in favor of the grantee, where for expenses are to be paid by it. If further states that the pipelines are to be laid underground in such a manner that vehicles can pass over that.
29. Considering the above citations, it is true that the intention of the parties is mandatary to decide whether the term used is licence or lease. But admittedly Ex.A.1 is the franchise agreement. In that it was specifically mentioned that license has been given for running a restaurant in HOTEL TAMIL NADU for a period of ten years. Further it was specifically mentioned that the franchisee had to make an improvement only after obtaining consent and after expiry of ten years, he had to hand over the possession without claiming any compensation for his development. It is true that the respondent has made an additional semi permanent construction as per the documents viz., Exs.A.8, A.9 and A.10.
30. At this juncture it is appropriate to incorporate Section 105 of the Transfer of Property Act and Section 52 of the Indian Easement Act.
Section 105 of the Transfer of Property Act: Lease defined:
A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined. - The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.
Section 52 of the Indian Easement Act
52. License defined - 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 license.
31. So, the intention of the parties has to be considered on the basis of oral and documentary evidences and terms mentioned in the document in Ex.A.1. But in Ex.A.1, it was stated as franchise. So as per Concise Oxford English Dictionary,
a Franchise is an authorisation granted by a Government or Company to an individual Group enabling them to carryout specified commercial activities ;
as per collins Cobuild Advanced Illustrated Dictionary,
a Franchise is an authority that is given by an organisation to someone, allowing them to sell its goods or services or take part in an activity which the organisation controls ;
as per the Chambers Dictionary,
a Franchise is a commercial concession by which a retailer is granted by a company the generally exclusive right of retailing its goods or providing its services in a specified area, with use of the company's expertise, marketing, trademark, etc.,; a similar concession granted by a public authority to a Broadcasting company; a percentage below which the underwriter incurs no responsibility
and as per Dictionary.com.
FRANCHISE means
1. A privilege of a public nature conferred on an individual, group, or company by a Government:
A franchise to operate a bus system.
2. The right or license granted by a company to an individual or group to market its products or services in a specific territory.
3. A store, restaurant, or other business operating under such a license.
4. The territory over which such a license extends.
5. The right to vote: to guarantee the franchise of every citizen.
6. A privilege arising from the grant of a sovereign or Government, or from prescription, which presupposes a grant.
7. Sports.
The right to own or operate a professional sports team as a member of a league.
A professional sports team.
A player of great talent or popular appeal, considered vitally important to a team's success or future.
32. So, it was specifically mentioned that franchise right has been given to do some service. Here, considering the cumulative effect of Ex.A.1 and other documents viz., Exs.A.8, A.9, A.10 and A.13 would show that the franchise has been given only to run a restaurant at Hotel Tamil Nadu. So it shows that it is only a licence. Because, lease means where the transfer of interest of the immovable property, the lessee can do whatever he need and it is not necessary to obtain a permission to each and every act. But here, Ex.A.7 shows that the respondent has sought for permission to put up thatched roofing on the restaurant, on 09.07.2004. He sought for permission to construct a semi permanent structure on the roof of the restaurant at Hotel Tamil Nadu and the administration approval has also been issued. So, the respondent was permitted to construct semi permanent structure at Hotal Tamil Nadu to accommodate more guests and to provide professional catering service, which shows that only franchise came to effect to render service to the people who are utilising the Tamil Nadu Tourism and others. The entire documents would show that for each and every thing, the respondent sought for administration approval, which shows that the administration of the entire building is with the appellant and the respondent is only rendering service and no transfer of interest in the property.
33. Ex.A.8 is another document, which shows that permission has been granted to provide sintex water tank in old block terrace and Ex.A.10 is another letter giving permission to the respondent to modify the first floor of the restaurant at Hotel Tamil Nadu from Non A/C to A/C within the stipulated are allotted by TTDC without any structural alterations at his own costs. So it shows that the entire administration control in respect of the building is within the appellant and this franchise has been cam into effect only provide service to the guests staying in Hotel Tamil Nadu, which means it is only a licence.
34. Considering all the decisions, earlier in that it was stated that licence is a personal privilege given to the person to do particular act. But here, approval has been given to be only the hotel business. But lease means it is coupled with interest in immovable property. Here, no interest in immovable property is transferred to the respondent. If the property has been leased out, they can do whatever things as per their wish. But here, a specification is only to do restaurant to provide service to the inmates and also others.
35. Even though, the learned Counsel appearing for the respondent would submit that there is a transfer of immovable property and hence, it amounts to lease and not amounts to licence, the above argument does not hold good. Because as already stated, the intention of the parties is that only a personal privilege is given to the respondent to do a particular act of running restaurant in that place. Hence, I am of the view that it is only a licence and not a lease.
36. The learned Counsel for the respondent would submit that as per Section 60 of the Indian Easements Act, once the licensee was permitted to make a permanent construction, it is irrevocable.
37. At this juncture, it is appropriate to incorporate Section 60 of the Indian Easements Act:
60. Licence when revocable: - A license may be revoked by the grantor, unless -
(a) it is coupled with a transfer of property and such transfer is in force;
(b) the licensee, acting upon the license, has executed a work of a permanent character and incurred expenses in the execution.
38. The learned Counsel for the respondent would further argue that since the findings of the trial Court in respect of the clause in arbitration is not challenged, it is hit by res judicata. In support of his contention, he would rely upon a decision in M.Mohammed Ismail (died), represented by his L.Rs Vs. K.P.Subbiah (died) represented by his L.Rs. reported in 2015(3) CTC 734.
39. At this juncture, the learned Senior Counsel appearing for the appellants would submit that since there is no decree has been passed, there is no need to file an appeal against the finding in respect of the clause in arbitration. In support of his contention, he would rely upon a decision in Thamilarasi Vs. Selvam reported in 2011(5) CTC 430, in which it has been held as follows:
11. Subsequently, in DevaRam and another V. Ishwar Chand and another, 1995 SCC(6) 733, similar view has been taken by the Hon'ble Supreme Court. The latest one on the said subject from the Hon'ble Supreme Court is in Banarsi and others V. Ram Phal, AIR 2003 SC 1989, wherein after referring to the above judgments, the Hon'ble Supreme Court in paragraphs 8 and 9 of the judgment has held as follows:
8. Sections 96 and 100 C.P.C. make provision for an appeal being preferred from every original decree or from every decree passed in appeal respectively; none of the provisions enumerates the person who can file an appeal. However, it is settled by a long catena of decisions that to be entitled to file an appeal the person must be one aggrieved by the decree. Unless a person is prejudicially or adversely affected by the decree he is entitled to file an appeal. (See Phoolchand V. Gopal Lal, Jatankumar Golcha V. GolchaProperties (P) Ltd. and Ganga Bai V. Vijay Kumar.) No appeal lies against a mere finding. It is significant to note that both Sections 96 and 100 C.P.C. provide for an appeal against decree and not against judgment.
12. A cursory reading of the above judgment of the Hon'ble Supreme Court would make it abundantly clear that it is the settled position of law that as against certain findings recorded in the judgment against the party, who has succeeded in the suit, no appeal at the instance of such succeeding party shall lie because he cannot be termed as an aggrieved person in terms of Sections 96 and 100 of C.P.C. since ultimate decree is in his favour. To put it otherwise, an appeal lies only against the decree and not against any finding recorded by the Court at the instance of the party who has succeeded in the suit. In view of the law laid down by the Hon'ble Supreme Court in the above judgments, with respect, I hold that the judgments of this Court in R.MariaSiluvai's case cited supra, is not a binding precedent.
40. In view of the above, there is no necessary to prefer an appeal as against mere finding. So the argument of the learned Counsel appearing for the respondent that no appeal has been filed against the finding of the trial Court is hit by res judicata does not merit acceptance.
41. The learned Counsel for the respondent would submit that the trespasser shall not be evicted forcibly and he has to be evicted through Court of law. For that reason, he would rely upon a decision in Rame Gowda (D) by Lrs. Vs. Mr.Varadappa Naidu (D) by Lrs. And Another reported in 2004(1)SCC 769, which was relied upon in K.M.Mohan Vs. District Collector, Vellore District, Collectorate at Vellore and Others reported in 2005(3) MLJ 689.
42. The above citations are not applicable to the facts of the present case. Because, here, the respondent is a licensee and as soon as the expiry of the licence, he ought to have handed over the possession to the licensor.
43. The learned Senior Counsel appearing for the appellants would submit that if this Court comes to the conclusion that if it is a license which is irrevocable for making permanent construction in the property, it is only in the currency of licence period and not after the expiry of the period. For that reason, he would rely upon a unreported judgment in S.A.(MD)No.1250 of 2008, dated 07.01.2011 rendered by Hon'ble Mr.Justice R.S.RAMANATHAN, wherein in paragraph Nos.13, 14 and 15, it was held as follows:
13. It is not in dispute that every year, licence is granted by the respondents for various business activities inside the market premises and the appellant was the successful bidder in every year and was doing the business of fruit processing in the said premises. Therefore, when a licence is for a particular period and when a person puts up some construction, even assuming that the same is of a permanent character, he cannot claim that by reason of such construction, the licence became irrevocable. In other words, section 60 of the Easements Act has to be read with section 62 of the Easements Act. As per section 62(c), the licence is deemed to be revoked where it has been granted for a limited period and the period expires. Therefore, as per section 62, the licence shall be deemed to have been revoked after the period for which it was given. Admittedly, the licence was given for a period of one year by conducting auction and therefore, it shall be deemed to have been revoked after the expiry of one year as per the Easements Act. But, under section 60(b), when a licensee acting upon the licence, has constructed a permanent character incurring expenses, the licence becomes irrevocable. Therefore, in such circumstances, it has to be seen whether a licensee can claim any permanent status in the licensed property.
14. Katiyar, the celebrated author, in his book on Easements in the X edition at page 907 dealt with this position as follows:-
"Clause (c) Grant for a limited period or subject to a condition. Where a licence is granted only for a limited period or on condition that it shall become void on the performance or non-performance of a specified act, it shall be deemed to be revoked when the period expires or the condition is fulfilled. If the licence is for a limited period only or subject to a condition the fact that the licensee acting upon such licence has executed work of a permanent character and has incurred expenses thereon, does not affect its revocability on the expiry of such period or on the fulfilment of such condition. The law does not permit a licensee whose licence had been validly revoked to exercise his licence any longer. If he does so he does something wrong. He will be only a trespasser after he had lost his right under the licence and the owner of the land is entitled to deal with him as a trespasser."
15. Therefore, a reading of the above passage would make it clear that even though the licensee has executed a work of permanent character and has incurred expenses, it will not affect the revocability of the licence on the expiry of the period. Further, as held by this Court in the decision reported in 1997 (I) CTC 401, the plea of licence has to be pleaded and proved and in the absence of pleading, it cannot be presumed."
44. Considering the above citations, since the respondent is only a licensee for having restaurant in the Tamil Nadu Hotel, for doing particular service. Licensee has to hand over the possession after the expiry of licence period. Even though, the learned Counsel appearing for the respondent has relied upon a decision in Rame Gowda (D) by Lrs. Vs. Mr.Varadappa Naidu (D) by Lrs. And Another reported in 2004(1)SCC 769 and would submit that the trespasser shall not be evicted forcibly and has to be evicted through Court of law, there is no quarrel over the above proposition. Once, a person sought for injunction, he must prove his legal possession. But after expiry of the licence period, his possession is not a lawful. Hence, he is not entitled to injunction. Once a person sought for injunction, he must prove that he is having a prima facie title, legal possession, balance of convenience and irreparable loss. But here, the respondent would submit that he is a lessee. However, this Court already held that he is only licensee. Admittedly, the licence period has been expired. After the expiry of licence period, his possession is not lawful. The person, who is not having lawful possession, he is not entitled to injunction. That factum was not considered by the first appellate Court. In such circumstances, I am of the view that the respondent is neither a licensee nor a tenant in holding over. Hence, the respondent is not entitled to get any injunction restraining the licnsor to take possession. Hence, that factum was not considered by the first appellate Court, even though the trial Court has considered the same. Hence, the finding of the first appellate Court is perverse and accordingly it is hereby set aside. The Substantial Questions of Law i to iii are answered accordingly. Consequently, the Second Appeal is liable to be allowed.
48. In the result,
(I) the Second Appeal is allowed;
(II) the decree and judgment passed by the first appellate Court in A.S.No.23 of 2015, on the file of II Additional District Judge, Trichirappalli is hereby set aside;
(III) consequently, the suit filed in O.S.No.704 of 2014, on the file of the Principal Subordinate Judge, Trichirappalli is dismissed.
(IV) There shall be no order as to costs. Consequently, the connected Miscellaneous Petition is also dismissed.