ORDER
A.K. Sikri, J.
1. This appeal is directed against the judgment and decree dated 7th March, 2000 passed by learned Trial Court in Suit No.239/93. By the impugned judgment and decree, learned Additional District Judge has decreed the suit of the plaintiff/respondent herein for possession of suit premises being Property bearing No.16, Najafgarh Road, New Delhi situated in Najafgarh Industrial Area. Further decree is passed in favor of respondent directing the defendant/appellant herein to pay mesne profit and damages at the rate of Rs.400/- per day from the date of termination of the license till the date of filing of the suit and thereafter at the rate of Rs.300/- per day.
2. Respondent is admittedly the owner of the suit property. license Deed dated 1st April, 1979 was executed between the parties which mentions that at the request of licensee (appellant), licensor (respondent) has agreed to grant the license to use some portion (specifically shown in the attached plan) for running a Steel Rolling Mill. The boundary of the said portion had been marked in the plan. The consideration agreed upon was Rs.30,000/- per six months as license fee and certain other terms and conditions on which the said agreement was to operate were mentioned in the said license Deed. The agreement further mentions that the license was for a period of 5 years only provided licensee agrees to pay Rs.37,500/- per six months after the expiry of first 5 years. After the expiry of period stipulated in the said license Deed, the license was renewed for a further period of 5 years vide letter dated 30th March, 1984. This period also expired on 1st April, 1989. It is the case of the respondent that after the expiry of this period he called upon the appellant to vacate the premise and handover the possession thereof to the respondent and even sent registered notice to this effect claiming damages as well for use and occupation of the suit premises. When the appellant did not vacate, respondent filed the suit which has been decreed as aforesaid.
3. The main dispute between the parties was as to whether the purported license Deed was in fact a license agreement or it created any lease in favor of the appellant. Naturally, the defense of the appellant in the written statement filed was that the agreement in question although termed as license Deed was in substance an agreement to lease out the property to the appellant. Among the issues framed, the first issue related to this controversy, namely, whether the relationship between the parties was that of landlord and tenant or licensor and licensee. The learned Trial Court has held that the agreement in question was in fact a license agreement only and did not create any tenancy/lease in favor of the appellant.
4. In this appeal also the thrust of the appellant's counsel's argument was on this issue alone and findings on other issues were not challenged at the time of the arguments.
5. The submissions of learned counsel for the appellant, on this issue, run as under:
6. It is not the nomenclature of the agreement that would be material and the lower court had to examine the substance of the agreement and not its description and /or form as held in Associated Hotels Vs . R.N.Kapoor : [1960]1SCR368 and Inderjeet Singh Sayal Vs . Karam Chand Thapar : AIR1996SC247 . Although document is described as license Deed, the document in fact created lease in favor of the appellant inasmuch as exclusive possession of the suit premises was given to the appellant on execution of the document dated 1st April, 1979. Right to renewal was also contained in that document. The document further stipulated requirement of prior notice of six months for premature termination. The alleged license was accompanied with transfer of property being the sale of plant and machinery for Rolling Mill installed in the suit premises effected in favor of the appellant by another agreement dated 1st April, 1979. The appellant had his own security guard at the premises. He had the electric and telephone connection in his name and all these factors, would go on to prove that the agreement in substance was that of a lease and not license.
7. The aforesaid arguments do not impress us. Before dealing with these arguments, it would be relevant to point out that there was a previous litigation between the parties in the form of two suits, one Suit No.175/80 and Suit No.144/80. These related to same premises between the same parties. No doubt compromise between the parties was recorded on 18th November, 1980. What is significant and noteworthy is that the appellant at that point of time never took the plea that he was in fact a lessee and not licensee of suit premises. In the cross-examination, PW-1 (respondent) has stated about the previous litigation. Learned Trial Court has recorded that no suggestion is given to PW-1 from the side of the appellant that suit premises were given to the defendant/appellant on lease and not on license. The learned Trial Court has recorded that there is no specific assertion on the part of the defendant/DW-1 that he was a lessee and not licensee. Although in cross-examination, on being asked, he has stated that the document Ex.P-1 although titled as license Deed but is a Lease Deed. He further stated that in order to avoid operation of Delhi Rent Control Act, this agreement was executed. Regarding this document, this is what Trial Court observed:
'This document is on a stamp paper of Re.2 running of three sheets and designated as license Deed at the top and in the end it bears the signatures of the plaintiff as licensor and that of the defendant as licensee. This document Ex.P-1 contained therein 9 conditions in all. In the entire body of this document the words license, licensor and licensee occur repeatedly. There is no dispute with respect to the fact that initially the license was granted for a period of five years which could be extended up to another five years only provided licensee agrees to that and pay a sum of Rs.37,500/- per six months after the expiry of first five years. Ex.P-1 further carries therein that the defendant has been granted license to use some portion of the property specifically shown in the attached plan for running a Steel Rolling Mill for consideration of Rs.30,000/- per six months as license fees on the condition which follow.
Now, let this document be read and examined in the context and perspective of a said letter dated 15-3-1984 Ex.P-2. This letter has been filed by the plaintiff and proved by him through his witness-PW-2. As observed by me, there is no serious dispute with respect to the genuineness of this letter. if at all, there is some dispute that is nominal and formal. Substantially, this letter enjoys its genuineness. This letter was originally marked-A when confronted to the defendant for admission denial. This letter is addressed to the plaintiff by the defendant. The defendant has admitted his signatures at Mark-A on 12-8-1992 but denied its contents. However, now the denial of its contents by the defendant carries no value since it stands amply proved in evidence of the plaintiff. It will be better to refer to another letter Ex.P-3 dated 30.3.84 proved by the plaintiff through the statement of PW-2. By virtue of this letter Ex.P-3 the plaintiff granted extension of the license of the licensed portion for another 5 years ending 30.3.1989 on the terms and conditions of the original license Deed. Undisputedly, the defendant enjoyed this property in question for another five years and he is still in occupation of the same. This document Ex.P-3 also stands amply proved in respect of its genuineness. I do not find any serious dispute from the side of the defendant in respect of this document. If at all, there is some dispute that is only formal and nominal which is meaningless. The present suit of the plaintiff came to be filed only after the expiry of the extended period of another five-year. Further, it will be more appropriate and helpful if these documents Ex.P-1, P-2 and P-3 are seen and examined along with copy of order/judgment dated 21-9-90 in suit No.175/80, application under Section 151 C.P.C. and proceedings, certified copy dated 24.9.90 of suit No.144/80 relating to proceedings and order dated 23.5.80 and 16.9.80 and further application u/s 151 CPC in a suit for mandatory and permanent injunction. These suits were between parties which ultimately ended in compromise vide application Ex.C-1.
As recorded by me above, DW-1 had replied to injunction application of the plaintiff in the aforesaid earlier suit which was later on compromised and that reply is Ex.P-D-1. DW-1 had admitted the contents of this application as being true and correct. DW-1 admitted that he had not made any construction of the permanent nature which could not be removed and were not necessary for running business (as mentioned in Ex.P-/D-1). All these documents, if read together will go to show and establish that in substance also agreement Ex.P-1 was a license and not a lease deed. In previous litigations, as referred above, the defendant went on admitting himself as a licensee and no where he uttered a single word that he was lessee'.
8. Learned Trial Court has further dealt with exclusive possession of the property, documents regarding factory license, electricity connection, telephone connection etc. in the following manner:
'As regards license for running the work, there is nothing wrong in obtaining such license from the concerned department particularly when the premises were given by the plaintiff to run the said business of rolling mill which mill could not be carried out without such license from the MCD. The plaintiff himself had permitted the user of the disputed premises for this purpose.
As regards, the second document which is Agreement dated 1-4-1979 Ex.DW-1/1. It is simple agreement for sale of the plant and machinery to the defendant to be installed at the disputed premises. By virtue of this document the plaintiff is a vendor and defendant is the vendee. Para 13 of this agreement is relevant wherein it has been specifically laid down ' the premises on which the plant and machinery are installed is not being sold and the vendee could take the same, if he so desires, on license/lease and for that the vendee shall have to enter into a separate agreement which does not have any binding on this transaction.
It is significant and material to record here that Ex.P-1 which is the titled as license deed, came to be executed immediately on the same date (1-4-1979) when Ex.DW-1/1 was executed. However, the parties chose to execute the license deed and not the lease in pursuance of para 13 of the said agreement.
The counsel for the defendant has further argued that the factum of exclusive possession of the defendant over the suit property is a strong circumstances to establish and prove that the premises in question were given on lease and not on license basis.
I have given thoughtful consideration to the points of arguments of the counsel for the defendant and this contention the counsel for the defendant has also supported by referring to the judgments particularly : [1971]3SCR319 Sohan Lal Naraindas v. Laxmidas Raghunath Gadit. No doubt exclusive possession is one of the tests to distinguish between lease and license. In license the legal possession remains with the licensor and in other cases such as lease the legal as well as actual possession remains with the transferee. Para 4 of the judgment is relevant and crucial. Hon'ble Supreme Court has examined the disputed agreement by referring to the relevant conditions contained therein. In that agreement, it was mentioned that the loft was given on lease and license basis for use and occupation of the defendant on the terms and conditioned mentions therein. On perusal of the conditions mentioned therein the Hon'ble Supreme Court came to the conclusion that although the test of exclusive possession is not conclusive yet in the perspective of the other conditions contained in the convenant the terms of the agreement create interest in the loft in favor of the defendant, and, thus it was a lease, and not a license. Viewing the facts and circumstances of the present case and weighing the disputed document Ex.P-1 in the scales of the above referred judgment of the Hon'ble Supreme Court, I come to form the considered opinion that those terms and conditions mentioned in that convenant which was before Hon'ble Supreme court for examination are not at all available in Ex.P-1 which is designated as license deed. thereforee, this judgment is not applicable in favor of the defendant'.
9. About the interpretation of license Agreement, the trial Court observed:
'I would like to refer here that as regards substance and form of the document, the necessity to draw inferences and conclusions arises only when the document in question is ambiguous and not clear. Unnecessary mental exercise should not be done when the contents of the document by themselves are like mirror. So, in the case over here in respect of the disputed document Ex.P-1 -this document in substance as well as in form is very clear and reflect itself without any shadow of doubt a license and not a lease'.
10. We do not find any infirmity in the reasoning adopted by the learned Trial Court in concluding that the transaction between the parties in fact amounted to grant of license and not lease in respect of suit property. The approach of the learned Trial Court is in conformity with the law on the subject and keeping in view the definition of `license' contained in Section 52 of the Easement Act and that of 'Lease' contained in Section 105 of the Transfer of Property Act.
11. In a recent judgment, Supreme Court in the case of Delta International Ltd. Vs . Shyam Sunder Ganeriwalla & Anr. : [1999]2SCR541 had occasioned to deal with this aspect after scanning through all relevant pronouncements on this issue from time to time. After analysing of its previous judgment the Supreme Court culled out the following principles:
'(1) To find out whether the document creates a lease or a license the real test is to find out 'the intention of the parties'; keeping in mind that in cases where exclusive possession is given, the line between a lease and a license is very thin.'
(2) The intention of the parties is to be gathered from the document itself. Mainly, the intention is to be gathered from the meaning and the words used in the document except where it is alleged and proved that the document is a camouflage. If the terms of the document evidencing the agreement between the parties are not clear, the surrounding circumstances and the conduct of the parties have also to be borne in mind for ascertaining the relationship between the parties.
(3) In the absence of a written document and when somebody is in exclusive possession with no special evidence how he got in, the intention is to be gathered from the other evidence which may be available on record, and in such cases exclusive possession of the property would be the most relevant circumstances to arrive at the conclusion that the intention of the parties was to create a lease.
(4) If the dispute arises between the very parties to the written instrument, the intention is to be gathered from the document read as a whole. But in cases where the landlord alleges that the tenant has sub-let the premises and where the tenant in support of his own defense sets up the plea of a mere licensee and relies upon a deed entered into, inter se, between himself and the alleged licensee, the landlord who is not a party to the deed is not bound by what emanates from the construction of the deed; the tenant and the sub-tenant may jointly set up the plea of a license against the landlord which is a camouflage; in such cases, the mask is to be removed or the veil is to be lifted and the true intention behind a facade of a self-serving conveniently drafted instrument is to be gathered from all the relevant circumstances. Same would be the position where the owner of the premises and the person in need of the premises executes a deed labelling it as a license deed to avoid the operation of rent legislation.
(5) Prima facie, in the absence of a sufficient title or interest to carve out or to create a similar tenancy by the sitting tenant in favor of a third person, the person in possession to whom the possession is handed over cannot claim that the sub-tenancy was created in his favor; because a person having no right cannot confer any title of tenancy or sub-tenancy. A tenant protected under statutory provisions with regard to occupation of the premises having no right to sub-let or transfer the premises, cannot confer any better title. But, this question is not required to be finally determined in this matter.
(6) Further lease or license is a matter of contract between the parties. Section 107 of the Transfer of Property Act, 1882 inter alias provides that leases of immovable property may be made either by a registered instrument or by an oral agreement accompanied by delivery of possession; if it is a registered instrument, it shall be executed by both the lessee and the Lesser. This contract between the parties is to be interpreted or construed on the well-laid principles for construction of contractual terms, viz., for the purpose of construction of contracts, the intention of the parties is the meaning of the words they have used and there can be no intention independent of that meaning; when the terms of the contract are vague or having double intentment, one which is lawful should be preferred; and the construction may be put on the instrument perfectly consistent with his doing only what he had a right to do.'
12. The approach adopted by learned Trial Court is consistent with the law laid down in the aforesaid judgment. Principle No.6 mentioned above directly applies to the facts and circumstances of the present case. We had also occasion to deal with similar issue in a recent judgment rendered on 19th January, 2000 in R.F.A. No.77 of 1997 Sh.Roop Kumar v. Mohan Thedani & Ors. It is, thereforee, not necessary to restate the proposition in detail again.
13. Apart from the above, there are two more significant aspects, consideration of which would merit dismissal of this appeal. The license Fee of the suit premises is admittedly more than Rs.3,500/-PM and thus even if the agreement is described as lease, the appellant is not protected by the provisions of Delhi Rent Control Act. Agreement in question initially was for a period of 5 years which was extended by another 5 years, which period came to an end by efflux of time. Agreement itself stipulates no further extension. The respondent asked the appellant to vacate the premises on the expiry of this period which was not done and, thereforee, respondent filed the suit out of which present appeal arises. Thus in law, it would make no difference as to whether the agreement in question created lease or license in favor of the appellant.
14. Secondly, the disputed premises are not being occupied by the appellant. On the very first date when this appeal came up for hearing, learned counsel for the respondent pointed out this fact and submitted that the appellant had already abandoned the premises and removed the machinery, Ms.Manpreet Gill, advocate was appointed as a Local Commissioner to inspect the premises and report as to whether or not the appellant has already abandoned the premises and removed the machinery. The Local Commissioner submitted the report and as per the said report Local Commissioner has reported that appellant is not carrying on any business. The relevant portion of the report runs as under:
'As soon as we entered upon the premises, I noticed that there were machines lying in dilapidated condition and the shed was also broken from place to place. In the corner of the plot there were some construction consisting of three rooms. Also the boundary wall was being repaired at one of the corners. Two and three labourers were working and some building material was also lying in the premises.
That upon entering the first room I could see some grinding wheels, steel almirahs, sewing machines and trunks lying in dusty condition. Besides the sewing machines all the other things had dust lying on them. In the second room four workers were working on the sewing machines. The sitting arrangement for the workers was temporary (cardboard boxes) and there was no fan there. Complete lighting system on the site was a temporary arrangement, i.e. by pulling an electric wire from the adjoining plot, though there was a generator lying there. In the third room Mr.B.N.Kejriwal was sitting. The room had telephones, fax machine, typewriter and a safe.
That, thereafter, I spoke to the people working there and also to the panwala in front of the suit premises, teashop owner adjoining the suit premises and the people around the factory. Ram Gopal, Arvind Bhatnagar and Manoj Singh employees of Mr.K.N.Kejriwal said that the factory has been operational for the three-four years and that they have been working at the premises in question. The panwala and the teashop owner though admitted that no work had been going on in the premises for quite some time and that all the machines etc were put there on the same day itself, but refused to sign and give their name and address.
That as per the orders of this Hon'ble Court photographs were clicked and are annexed with the report to ascertain the true position.
That though machines were lying in the premises they were all in dilapidated condition and non-functional. They were not even installed and were lying here and there.
That it appears that the premises in question has not been in use for quite sometime as there was no electricity or water connection and the shed was in a dilapidated condition'.
15. No other point was argued. This appeal, which is without any merit is, accordingly, dismissed.