ORDER
Dr. M.K. Sharma, J.
1. The present suit was filed by the plaintiff for delivery of vacant possession of the suit premises and also for recovery of Rs. 3,60,000/- as damages/mesne profits and for pendentelite and future damages/mesne profits.
2. In order to decide the present suit and to appreciate the issues raised herein, it is necessary to briefly state the case pleaded by the plaintiff in the plaint.
3. The plaintiff is a charitable hospital. The defendant is engaged in business of sale and supply of medicines and drugs. On 17.8.1977 the plaintiff entered into an oral agreement with the defendant whereby the defendant was allowed by leave and license to run the medical store in the suit premises on license fee of Rs.1,500/- per month. The said oral agreement was later on reduced to writing under an agreement dated 18.7.1978. As per the terms of the said agreement the period of license was limited for 3 years expiring on 16.8.1980 and the defendant was to pay a license fee of Rs.1,500/- per month. The said license expired on 16.8.1980 and thereafter the plaintiff and defendant entered into a fresh agreement of license dated 27.10.1980 again for a period of 3 years w.e.f. 17.8.1980 with a clause for extension of the said license period for a further period of 3 years by mutual consent in writing. Under the terms of the said agreement the defendant was to pay to the plaintiff a license fee of Rs. 2,750/- in advance by 10th of every month w.e.f. 17.8.1980 and Rs. 3,250/- per month from the date the second floor of new Nursing Home is brought into use for patients. Clause 6 of the said agreement provided that the firm would use their stationery like purchase orders, cash memos, letter-heads, rubber stamp etc. duly approved by the Hospital in writing. Clause 9 provided that the firm would run the drug store in accordance with the directions and to the satisfaction of the Surgeon in charge of the hospital, and that the defendant was obliged to supply to the plaintiff hospital drugs and pharmaceuticals etc. as requisitioned by the Hospital from time to time.
4. The said license agreement expired on 16.8.1983 but at the request of the defendant the license was extended up to 31.8.1983 on the existing terms and conditions. On expiry of the license agreement on 31.8.1983, the plaintiff by letter dated 16.9.1983 informed the defendant that the agreement dated 27.10.1980 entered into by the defendant with the hospital for running the drug store in the hospital premises came to an end on 16.8.1983 and that it was extended up to 31.8.1983 under the same terms and conditions. The defendant was also informed that if he wanted to continue the license with the hospital he should give 10% discount on all hospital bills and 5% discount on all patients' bills and the defendant was requested to give the reply to the same. The defendant vide his reply dated 30.9.1983 agreed to give 10% discount on the all hospital bills but was reluctant to give 5% discount on the patients' bills. Accordingly, the plaintiff by letter dated 2.12.1983 informed the defendant that since the defendant did not accept the terms and conditions indicated in the letter of the plaintiff dated 16.9.1983 the plaintiff proposed to take over possession of the accommodation in accordance with para 9 of the license agreement. Since the defendant did not vacate the premises the present suit has been filed.
5. The defendant appeared in the suit and filed written statement contending inter alias that the defendant is a lessee and the suit for possession is not maintainable and that plaintiff can take action for vacation of the premises only by recourse to Delhi Rent Control Act, 1958. It was alleged in the written statement that the agreement was one for lease and the rent was fixed and thereforee, the plaintiff could not have described the agreement as a license particularly when the plaintiff could exercise no control over the suit premises or the defendant or his employees.
6. During the pendency of the aforesaid suit an order was passed by the Division Bench of this Court in FAO(OS) 67/1998 directing the defendant to deposit a sum of Rs.75,000/- in Court. However, it is not clear from the records available as to whether such amount was deposited by the defendant or not. However, on 15.3.1989 following issues were framed by the Court and the parties were directed to file additional documents, if any, and the list of witnesses:-
1. Whether the agreement dated 27.10.1980 executed between the parties is of lease or license? If so, to what effect?
2. If issue No.1 is decided in favor of the plaintiff, whether the defendant is in unauthorised occupation of the space allotted to him after revocation of the license?
3. If issue No.1 is decided in favor of the defendant, at what rate he is liable to pay the rent?
4. Is the plaintiff entitled to claim damages/mesne profits for use and occupation of the space allotted to him? If so, at what rate and for which period?
5. Relief.
7. The defendant thereafter failed to appear in the suit. Accordingly, only one witness on behalf of the plaintiff was examined, whose deposition was recorded on 27.4.1995. The said witness examined on behalf of the plaintiff was not cross-examined by the defendant as none represented the defendant as the defendant himself was absent.
8. I have heard the learned counsel for the plaintiff and have given my thoughtful consideration to the issues involved.
ISSUE NO.1:
9. This issue is vital issue and the decision of the suit rests on the findings arrived at in respect of this issue. As to whether an agreement is a license or a lease depends on various factors. In Capt. B.B. D'Souza Vs . Antonio Fausto Fernandes, reported in : [1989]3SCR626 it has been indicated that mere description of a party as a lessee or a licensee does not determine the real status and that the intention of the parties is required to be considered for determining the status. In the decision it was also observed that exclusive possession though not a conclusive evidence but is a relevant factor for determining the dispute as to lease or license. Accordingly, in the present suit it would be necessary to consider the agreement containing the terms and conditions under which the defendant was allowed to run the aforesaid business. The agreement is on record and is an admitted document. The agreement has been described as a license agreement wherein it is also stipulated that the defendant had accepted a license granted to it by the plaintiff to run the drug store for a period of 3 years. I have carefully perused various clauses of the agreement and I find that the said clauses conclusively prove and establish that the plaintiff continued to have control on the running of the business by the defendant and apparently such embargo which has been put by the plaintiff over the running of the business by the defendant in the suit premises cannot arise in the case of a tenancy. If the substance of the agreement is considered as a whole it is crystal clear that the parties intended to create a license under the aforesaid agreement. In D'Souza's case (supra) the Supreme Court indicated that for a consideration as to whether a document creates a license or a lease, the substance of the document must be preferred to the form and the exclusive possession of the party is irrelevant. It was further held that the other test namely - the intention of the parties and whether a document creates any interest in the property or not are important considerations. The pith and substance of the agreement in the present suit when considered for the purpose of finding out the true import of the document conclusively proves that by the said agreement the parties intended to create a license. Although the defendant pleaded in its written statement that the said agreement was a lease and that the defendant was a tenant under the plaintiff the burden to prove the said fact was undoubtedly upon the defendant to establish the said relationship between it and the plaintiff. The defendant failed to lead any evidence in the present case and thereforee, the defendant failed to discharge the obligation cast upon it and thereforee, adverse inference would follow. While answering issue No.1 I hold that the agreement dated 27.10.1980 executed between the plaintiff and the defendant was a license and not a lease.
ISSUE NO.2:
10. Since issue No.1 is decided in favor of the plaintiff, it would now be necessary to decide whether the defendant is in occupation of the space allotted to him after, revocation of the license. Admittedly, the license issued in favor of the defendant was revoked by the plaintiff by its letter dated 2.12.1983 requesting for handing over possession of the said premises to the plaintiff. Since the license granted in favor of the defendant has been revoked by the plaintiff after expiry of the period of license and the period of license having come to an end by the efflux of time, it is held that the defendant is in unauthorised occupation of the suit premises and thereforee, the plaintiff is entitled to be put back into possession of the suit premises.
ISSUES NO. 3 & 4:
11. Counsel for the plaintiff submitted during the course of his submissions that if this court holds in favor of the plaintiff so far issues No.1 & 2 are concerned and the decree is passed for recovery of possession, the plaintiff is not interested to press for a decision on issues No.3 & 4. Since in the present suit I have held both issues No.1 & 2 in favor of the plaintiff, it is thus not necessary for me to enter into the controversy and the issues raised in issues 3 & 4.
RELIEF:
12. In view of my aforesaid findings on issues No.1 & 2 the plaintiff is entitled to a decree of delivery of vacant possession of the suit premises fully described in the plan attached to the plaint and shown in red colour.
Accordingly, the suit stands decreed to the aforesaid extent holding that the plaintiff is entitled to a decree of delivery of vacant possession of the suit premises fully described in the plan attached to the plaint and shown in red colour, with costs.