Full Judgment Text
[REPORTABLE]
IN THE SUPREME COURT OF INDIA
2025 INSC 466
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.84 OF 2019
ANNAYA KOCHA SHETTY (DEAD)
THROUGH LRS … APPELLANT(S)
VERSUS
LAXMIBAI NARAYAN SATOSE SINCE
DECEASED THROUGH LRS & OTHERS … RESPONDENT(S)
J U D G M E N T
S.V.N. BHATTI, J.
1. The Civil Appeal arises from the Order dated 16.07.2018 in Civil
Revision Application No. 247 of 2016 in the High Court of Judicature at
Bombay (“Impugned Order”), confirming the Judgment dated 17.08.2015 in
appeal No. 547 of 2004 of the appellate bench . The Judgment dated
17.08.2015 reversed the judgment and decree dated 20/22.03.2004 in R.A.D.
Suit No. 1860 of 1997 before the Small Causes Court at Mumbai. The LRs of
the plaintiff are appellant nos. 1.1 to 1.4 in the Civil Appeal.
2. The plaintiff filed the suit for declaration that the plaintiff is the deemed
tenant/protected licensee of the first defendant in terms of section 15A of the
Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, as enforced
from 01.02.1973 (“Bombay Rent Act”), for shop nos. 5 and 6, Shri
Samarthashraya Vishranti Graha, Nanabhai Court, Dr. Babasahib
Ambdedkar Marg, Hindmata Junction, Dadar, Bombay-400014 (for short,
Signature Not Verified
‘the Plaint Schedule’). The plaintiff also prayed for a restraint order against
Digitally signed by
SNEHA DAS
Date: 2025.04.08
17:20:07 IST
Reason:
the defendants from interfering with or dispossessing the plaintiff from the
1
Plaint Schedule. The suit was filed against Laxmibai Narayan
Satose/defendant no.1, and M.S. Nanabhoy/defendant no.2. The plaintiff
pleads that the first defendant is the landlady, and through her, the plaintiff
claims a right of declaration as noted above. Admittedly, the second defendant
is the owner of the Plaint Schedule. The Plaint Schedule was under a lease
with the husband of the first defendant, and after the original tenant’s demise,
the first defendant continued as lessee of the Plaint Schedule. The first
defendant was running a hotel under the name and style of “Shri
Samarthashraya Vishranti Graha” (“the Hotel”). The first defendant, after the
demise of her husband, ran the business for some time. But she was unable
to run it successfully, so she allowed her brother ‘Namdev Morye’, to continue
running the Hotel. The said arrangement did not prove to be advantageous to
the first defendant. With this background, the plaintiff claims to have stepped
in the Plaint Schedule and that, on 16.08.1967, an agreement styled for
conducting hotel business was entered into between the plaintiff and the first
defendant. The said arrangement was continued under subsequent
agreements between the plaintiff and the first defendant. On 28.02.1997, the
first defendant served notice to the plaintiff to vacate and hand over the
business being run in the Plaint Schedule. With the above development, the
plaintiff filed the suit for the reliefs noted above.
3. The averments in the plaint are elaborate; commensurate to the detailed
plaint, the written statement is equally elaborate. To wit, the plaint runs into
eight pages, and the written statement is sixteen pages long. The resultant
consequence is that, in the trial, much oral evidence is brought on record,
resulting in a lengthy judgment by the trial court. The judgment of the
appellate bench is equally lengthy, even though the core issue for
consideration could have been captured in a nutshell by the appellate bench.
2
A judgment should be coherent, systematic, and logically organised. It should
enable the reader to trace the facts to a logical conclusion on the basis of legal
1
principles. Lately, this Court has been experiencing meandering pleadings
irrespective of the nature of the dispute. We are reminded of Abraham
Lincoln’s ode to a lawyer friend – “[h]e can compress the most words into the
smallest ideas of any man I ever met.” Such lengthy pleadings would even
upset Polonius from Shakespeare’s Hamlet. Every word that is not a help is a
hindrance because it distracts. A reader who realizes that a brief is wordy will
2
skim it; one who finds a brief terse and concise will read every word. The
parties to a suit ought not to compel the court to exercise its jurisdiction
under Order 6 Rule 16 of the Code of Civil Procedure, 1908 and strike out
unnecessary or frivolous pleadings. The effort of pleading and evidence should
be to be concise to the cause and must not confuse the cause. The lengthy
pleadings and avoidable evidence are well within the scrutiny of trial courts,
and, at the right stage, must be regulated within four corners of the law. Such
an approach by trial courts would like a stitch in time, save nine. Long and
drawn-out pleadings will run the risk of having a cascading effect on the
appellate and revisional courts. Meandering pleadings will land up with laden
weight in SLPs, making the narrative difficult. The time has come for courts
to invoke the jurisdiction under Order 6 Rule 16 and make litigation workable.
Courts are also confronted with AI-generated or computer-generated
statements. While technology is useful in enhancing efficiency and efficacy,
the placid pleadings will disorient the cause in a case. It is time that the
approach to pleadings is re-invented and re-introduced to be brief and precise.
1
, (2021) 20 SCC 818
Shakuntala Shukla v. State of Uttar Pradesh
2
Scalia & B. Garner, Making Your Case: The Art of Persuading Judges, pp. 81 (2008) Ch-35.
3
Having remarked on the need for brevity, we have a task on hand to deliver a
brief judgment.
4. The solace to this Court in deciding the Civil Appeal is that all the
learned Counsel appearing for the parties have presented the core of
controversy alone for adjudication in the Civil Appeal. The prelude to the
plaintiff’s narrative is needed in as much as meandering pleadings lead to
discursive judgments.
5. The plaintiff was in the business of conducting hotels in Mumbai. On
mutually agreed terms and conditions, the first defendant granted a leave and
license of the suit premises to augment her income. In unequivocal terms, the
plaint refers to the prohibition of law prevailing then, and that the deed was
devised to circumvent such prohibition. Therefore, it is alleged that the
agreement dated 16.08.1967 is captioned as an ‘agreement of conducting’,
and the parties are referred to as owner and conductor. The agreement dated
16.08.1967 is one in the nature of the licensor and licensee of the premises
of the Plaint Schedule, but not a mere agreement for conducting the hotel
business of the first defendant by the plaintiff. The arrangement initially
lasted for eleven months and has been extended from time to time. The Plaint
Schedule falls within section 28 of the Bombay Rent Act. Section 15A has
been inserted into the Bombay Rent Act vide amendment of 1963, which was
later enforced from 01.02.1973, whereunder deemed tenancy and consequent
protection to the tenant has been granted by the legislature. The plaintiff, by
the existing arrangement of leave and license with the first defendant, is a
deemed tenant and hence prayed for the reliefs referred to above. The first
defendant contested the suit and denied the existence of a landlord-tenant
relationship between the plaintiff and the defendant. The agreement dated
16.08.1967, in letter and spirit, was entered into between the first defendant
4
and the plaintiff for the conduct of hotel business being carried on by the first
defendant. The agreement dated 16.08.1967 is a contemporaneous document
evidencing the agreement between the parties, and the clauses have been
appropriately incorporated and adhered to by the parties till the present suit
was filed. By serving the notice to hand over the business, the first defendant
terminated the arrangement. Section 15A of the Bombay Rent Act is not
attracted to the subject arrangement, and the plaintiff cannot claim the status
of a deemed tenant of the Plaint Schedule.
6. The trial court answered the substantial issues in favour of the plaintiff
and against the first defendant. The gist of the reasoning and findings is that
the plaintiff is a licensee and not a mere conductor of the business of the first
defendant. The trial court held that it depends on the nature and quality of
the plaintiff’s occupation of the suit premises and not on the mere
nomenclature of the agreement dated 16.08.1967. The trial court, while
referring to various clauses of the agreement dated 16.08.1967, held that:
6.1 Clause I of this agreement denotes that the owner has granted the
plaintiff leave and licence to use and occupy the hotel premises.
6.2 Clause III of the agreement indicates that in consideration of the leave
and licence, the conductor shall pay the owner for the first 5 periods each of
th
11 months royalty at the rate of Rs. 1000/- per month before the 5 of
subsequent months.
6.3 Clauses I and III of the agreement clearly show that in consideration of
Rs. 1000/- per month, defendant no. 1 granted leave and licence in favour of
the plaintiff to use and occupy the hotel premises.
6.4 Clause IV of the said agreement fastens liability upon the plaintiff to
bear and pay regularly all the electric bills, water charges, workman wage,
5
license fee, etc. The trial court held that if it were defendant no. 1, who was
running the business, she would have been expected to bear all these charges.
6.5 Clause VI of the agreement shifts the risk to bear all the costs regarding
the business on the plaintiff.
6.6 Clause VII imposes restrictions on the plaintiff to use the suit premises
for carrying on hotel business only and not to change the nature of the
business. Hence, no running business was given to him.
6.7 Clause XIV of this agreement makes the plaintiff fully responsible for
paying the workers their wages and exempts defendant no. 1 regarding the
same. None of the servants initially employed by the deceased defendant no.
1 were there after the execution of the said agreement.
6.8 The trial court was of the view that all the various clauses of the
agreement indicate that the deceased defendant no. 1 did not retain any
dominant control in the hotel business being run by the plaintiff in the suit
premises. Hence, if the plaintiff carried on the business, defendant no. 1 ought
not to have discontinued paying sales tax. Merely mentioning the word
“royalty” in receipts is not sufficient to conclude that there was an agreement
of conducting the Hotel between the parties. Considering the nature of
exclusive use, occupation, and possession of the plaintiff with respect to the
suit premises from 1967 to date, the nomenclature of the agreement has no
wider significance in determining the relationship.
6.9 Relying on oral evidence, the trial court notes that the law in force at
the time did not allow for a tenant-landlord arrangement in the factual matrix
at hand. Consequently, the agreement dated 16.08.1967 was styled as an
agreement of conducting, but the contents pointed towards an agreement of
leave and license. This is also buttressed, the trial court held, by the fact that
the plaintiff was paying rent of Rs. 1000/- per month. The trial court held
6
that the evidence of the witnesses deserves to be relied upon, especially
because during cross-examination, the said oral and documentary evidence
was not seriously challenged. Thus, it was held that the plaintiff is a deemed
tenant under section 15A of the Act.
7. The appellate bench examined and interpreted the agreement dated
16.08.1967 in its entirety and reversed the judgement and decree of the trial
court. The appellate bench examined the scope and object of sections 91 and
92 of the Evidence Act, 1872 and the bar on parties to an agreement to adduce
oral evidence contrary to the clauses in a written agreement. The appellate
bench held that the contemporaneous agreement through which the plaintiff
secured permission to enter into the Plaint Schedule is a plain agreement to
conduct the business of the first defendant and not a leave and license of
premises in favour of the plaintiff. The appellate bench found that the trial
court failed to interpret relevant clauses in the agreement that pointed to the
arrangement as one of leave and license. The appellate bench appreciated the
consideration received by the first defendant between March 1967 and
September 1973, i.e. , 99 receipts evidencing receipt and payment of royalty
for conducting the business. The appellate bench heavily relied on these
royalty receipts as evidence supporting the existence of conducting
agreements for running the hotel business rather than a simple leave and
license arrangement. Further, it pointed out that the trial court should have
carefully considered the tenor of these receipts. The consistent payment of
royalties every month indicated that the arrangement was merely to conduct
a business and not to be a licensee of the Plaint Schedule. Electricity bills,
sales tax registration, BMC permission, etc., were part of the evidence
considered by the appellate bench in assessing the nature of the plaintiff's
7
occupation and business operations. By relying on the applicable clauses in
the agreement dated 16.08.1967 and the contemporaneous situation, the
agreement was styled as an agreement for conducting business. The appeal
of defendant no.1 was hence allowed.
8. Aggrieved by the reversal of the trial court order by the appellate bench,
the plaintiff filed Civil Revision Application No. 247 of 2016. The High Court,
through the Impugned Order, confirmed the view of the appellate bench. It
was held by the High Court that sections 91 and 115 of the Evidence Act,
1872 point to the finding that the Plaint Schedule was given for running the
Hotel on a conducting basis and not on a leave and license basis.
9. The High Court held that the intention of defendant no. 1 and her LRs
was to give the hotel business on a conducting basis to the plaintiff and that
there was no intention to execute a leave and license agreement regarding the
said premises. The Impugned Order looked into the agreement dated
16.08.1967 in detail and stated that –
• The “recital” notes the conducting basis nature of the agreement.
• Clause III refers to the payment of royalty at Rs. 1000 pm.
•
Clause IV requires the plaintiff to incur and pay electricity charges.
• Clause V requires the rent of the premises to be borne by defendant
no. 1 to the landlord defendant no. 2.
• Clause VII and X point towards conducting of the hotel business.
• Utensils and furniture were annexed.
10. The High Court held that all the subsequent agreements formed a part
of the conducting agreements. Moreover, the plaintiff cannot deny the
execution of the conducting agreement on the premise that he was not well-
conversant with the English language. Thus, the High Court held that the
8
appellate bench was correct in noting that the agreement was for the conduct
of business.
11. Shri B.H. Marlapalle, learned Senior Counsel, placed reliance on the
reasoning adopted by the trial court and contrasted the interpretation
adopted by the appellate bench and High Court, on a plain reading of
agreement dated 16.08.1967, as erroneous. It is argued that the
nomenclature of a deed is not the determinative circumstance of the status,
rights, duties, or obligations undertaken by the parties to a deed. From the
evidence on record, with considerable force, it is argued that the entrustment
of the Plaint Schedule to the plaintiff is not that of an ongoing business, but
that of a lessee-licensee. The agreement must be understood in its letter and
spirit, as well as the right with which the plaintiff is enjoying the Plaint
Schedule. The learned Senior Counsel places reliance on Provash Chandra
3
Dalui and another v. Biswanath Banerjee and another for the proposition that
the best interpretation of the contract is to be made from the context, and it
is to be construed with reference to its object and the whole of its terms.
4
Further, he relies on Chandavarka Sita Ratna Rao v. Ashalata S. Guaram to
interpret Section 15A of the Bombay Rent Act to contend that a valid pre-
1973 license converts the plaintiff into a tenant entitled for protection under
the Bombay Rent Act.
12. The learned Senior Counsel fairly argues that the standing of the
plaintiff is dependent on the interpretation of the agreement dated 16.08.1967
and also the subsequent documents evidencing the nature of enjoyment of
the plaintiff. He relies on the test in Varisalli Mohd. Ilias v. Abdul Sattar Gulam
3
(1989) Suppl 1 SCC 487
4
(1986) 4 SCC 447
9
5
for determining whether under an agreement, leave and license are
Hussain
created or authorised to conduct business to interpret the subject agreement,
and the decision in all fours is applicable to the facts of the case.
13. Mr. Chinmoy Khaladkar, learned Counsel appearing for defendant no.
1, argues that the plaintiff, both in law and fact, is estopped from resiling from
the clauses under the agreement dated 16.08.1967. It is axiomatic and not
disputed by defendant no. 1 that a deed is not constructed by the
nomenclature of the document but by the text and the tenor of all the clauses
governing the relationship between the parties. By relying on Provash
Chandra Dalui (supra) , he commends this Court to interpret the suit
agreement. Sections 91 and 92 of the Evidence Act, 1872 are attracted to the
case on hand and do not fall within any of the exceptions for adducing oral
evidence, either contrary to the agreed clauses or to explain the clauses agreed
to between the parties. He has invited our attention to the agreement in its
entirety, particularly the preface determining the standing of the plaintiff as
conductor and the first defendant as owner of the business. The agreement
deals with conveying authority to the plaintiff. Defendant no. 1, under the
agreement, declares to have been carrying on the business of hotel and tea
catering and desired to give the right to conduct the business in favour of the
plaintiff. Clause 1 further reinforces the relationship. Clauses 7, 8, 10, 12,
14, 15, and 16 abundantly make it plain and clear that considering the
contemporaneous circumstances in 1967, the plaintiff could deal with the
business being run by the first defendant, and not the occupancy right of the
Plaint Schedule. The certificate of registration under the Bombay Sales Tax
Act, 1959, is rightly excluded by the appellate and revisional courts. Further,
5
(1991) Mah LJ 1523
10
the photocopy of the certificate cannot be relied upon in evidence for any
purpose. To appreciate the crux of the agreement dated 16.08.1967, the
schedule of items entrusted to the plaintiff for running the business would be
important.
13.1 Mr. Chinmoy Khaladkar also relies on Mangala Vaman Karandikar vs.
6
Prakash Damodar Ranadeon to delineate the scope and ambit of sections 91
and 92 of the Evidence Act, 1872. According to him, the Three-Judge Bench
judgement in Mangala Vaman Karandikar (supra) squarely governs the
situation, and oral evidence ought not to be examined to interpret the
agreement dated 16.08.1967 and the subsequent agreements.
14. Shri Vinay Navare, learned Senior Counsel, appears for respondent no.
3, a subsequent purchaser from defendant no. 2, and supports the plaintiff.
The arguments of Shri Vinay Navare are not adverted to as the second
defendant did not participate before the trial court or the appellate bench. In
the subject Civil Appeal, we are not enquiring into or adverting to the stance
of respondent no. 3 vis-à-vis the other parties to the litigation. The available
contentions of respondent no. 3 are left open for consideration in an
appropriate proceeding.
15. We have taken note of the arguments addressed by the learned Counsel
appearing for the parties.
16. The circumstances dealing with the dispute between the parties are
stated in required detail in the preceding paragraphs. At the outset, let us
refer to the ratio of this Court in Provash Chandra Dalui (supra) on the
construction of the basic agreement between the plaintiff and the defendant.
This Court held that the court must look at the words used in the contract
6
(2021) 6 SCC 139
11
unless they are such that one may suspect that they do not covey the
intention correctly. If the words are clear, there is very little the court can do
about it. In constructing a deed, looking at the surrounding circumstances
and subject matter is legitimate only if the words used are doubtful.
17. The guide to the construction of deeds and tools adopted can broadly
be summarised as follows:
17.1 The contract is first constructed in its plain, ordinary and literal
meaning. This is also known as the literal rule of construction.
17.2 If there is an absurdity created by literally reading the contract, a shift
from literal rule may be allowed. This construction is generally called the
golden rule of construction.
17.3 Lastly, the contract may be purposively constructed in light of its object
and context to determine the purpose of the contract. This approach must be
used cautiously.
18. The construction of a deed is “generally speaking, a matter of law.”
However, when there is an ambiguity in the deed, determining its meaning is
7
a mixed question of fact and law. This concept is encapsulated by sections
91 and 92 of the Evidence Act, 1872.
18.1 Section 91 of the Evidence Act, 1872 denotes that a deed constitutes
the primary evidence of the terms to which the parties are to adhere. Whereas
section 92 of the Evidence Act, 1872 forbids any contradictions or variations
8
in a written document by extrinsic evidence. However, there are exceptions
outlined in the proviso to section 92, that allow variations from this general
rule:
“ 92. Exclusion of evidence of oral agreement. – “When the terms of any
such contract, grant or other disposition of property, or any matter required by
7 th
4 Edn. Vol. 12 ¶1461.
Halsbury,
8
TN Electricity Board v. N. Raju Reddiar , AIR (1996) SC 2025 at 2027.
12
law to be reduced to the form of a document have been proved according to
the last section, no evidence of any oral agreement or statement shall be
admitted, as between the parties to any such instrument or their
representatives in interest, for the purpose of contradicting, varying, adding
to, or subtracting from, its terms;
Proviso (1): Any fact may be proved which would invalidate any document, or
which would entitle any person to any decree or order relating thereto; such
as fraud, intimidation, illegality, want of due execution, want of capacity in
any contracting party want or failure of consideration, or mistake in fact or
law:
Proviso (2): The existence of any separate oral agreement as to any matter on
which a document is silent, and which is not inconsistent with its terms, may
be proved. In considering whether or not this proviso applies, the Court shall
have regard to the degree of formality of the document:
Proviso (3): The existence of any separate oral agreement, constituting a
condition precedent to the attaching of any obligation under any such contract,
grant or disposition of property, may be proved.
Proviso (4): The existence of any distinct subsequent oral agreement to rescind
or modify any such contract, grant or disposition of property, may be proved,
except in cases in which such contract, grant or disposition of property is by
law required to be in writing, or has been registered according to the law in
force for the time being as to the registration of documents.
Proviso (5): Any usage or custom by which incidents not expressly mentioned
in any contract are usually annexed to contracts of that description, may be
proved; Provided that the annexing of such incident would not be repugnant
to, or inconsistent with the express terms of the contract:
Proviso (6): Any fact may be proved which shows in what manner the
language of a document is related to existing facts.”
(Emphasis supplied)
18.2 The subtle distinction in the point of law, as carved out by the provisos,
is that the evidence to vary the terms of an agreement in writing is not
admissible, but evidence to show that there is no agreement in the first place
9
is admissible. Thus, unless the grounds fall within the provisos read with the
illustrations to section 92, there is a bar on adducing oral evidence.
19. Now, we excerpt and construe the relevant clauses of the agreement
dated 16.08.1967:
“THIS AGREEMENT made at Bombay this 16th day of August 1967
BETWEEN SMT. LAXMIBAI NARAYAN SATOSE, a Hindu adult inhabitant of
Bombay, hereinafter referred to as the “Owner" of the One Part (which
expression shall mean and include her heirs, administrators, legal
representatives and assigns unless repugnant to the context herein contained)
AMD SHRI ANNAYA SHETTY, also a Hindu inhabitant of Bombay hereinafter
referred to as the “Conductor” of the Other Part (which expression shall mean
and include his heir, administrators and legal representatives unless
repugnant to the context herein contained.
WHEREAS THE Owner above named is the Owner and sole proprietor
of a Hotel Business known as "Shri Samarthashraya Vishranti Graya" at 225,
9
Tyagaraja Mudaliyar and another v. Vedathanni, (1936) AIR PC 70.
13
Nanabhai Court, Dr. Ambedkar Road, at Shop Nos. 5 and 6 on the ground
floor bearing C.S. No. 11/26 Dadar, Naigaum.
AND WHEREAS the said Owner has been carrying on the business of
Hotel and tea catering in the said premises.
AND WHEREAS the Owner is desirous of giving the said business on
conducting basis and the Conductor has agreed to take upon certain terms
and conditions.
AND WHEREAS it is considered desirable to reduce the terms and
conditions into writing.
NOW THIS AGREEMENT WITNESSETH AS UNDER:
1. That the Owner does hereby give to the Conductor and the Conductor doth
hereby take accordingly for conducting the said business concerned viz. the
said Hotel business of the Owner carried on under the name and style of "Shri
Samarthashraya Vishranti Graha" at the above said premises and for the
purpose of carrying on the said business, the said Hotel premises and to use
fittings and fixtures and furniture and other accessories (more particularly
described in the Schedule annexed herto under) for the period and upon the
terms and conditions herein after contained.
2. xxx xxx xxx
3. In consideration of the leave and license the Conductor shall pay to the owner
for the first five periods each of eleven months Royalty at the rate of Rs.
th
1000/- (Rupees One Thousand only) every month on or before the 5 of the
subsequent month. The Conductor agrees that for the sixth, seventh and
eighth period of eleven months each, the Conductor agrees that for the sixth,
seventh and eighth period of eleven months each, the Conductor shall pay to
'the Owner a higher amount of Royalty per month (i.e. Rs. 1100/- per month)
(Rupees One Thousand One Hundred per month) at the time of the renewal of
this.
4. xxx xxx xxx
5. xxx xxx xxx
6. xxx xxx xxx
7. That the Conductor shall use the said premises for carrying on Hotel business
only of the Owner as aforesaid and he shall not change the name and the
nature of the business.
8. That the Conductor shall carry on and conduct the said business entrusted to
him, himself and he shall not give the same to anybody else for conducting or
otherwise.
9. That the Conductor shall observe and perform all the rules and regulations
and bye laws imposed by the local and Government authorities for doing the
business of the like nature and he shall keep the owner indemnified against
any action or penalties that might be imposed for breach thereof.
10. It is further agreed by the Conductor that he shall use the furniture fixtures
and the business accessories as set out in the Schedule herein under annexed
with true and proper are and caution and on the termination of this agreement
he shall hand over the possession of the along with the premises to the owner
in the same condition.
11. xxx xxx xxx
12. That on termination of this agreement by efflux of time or on earlier
determination thereof, the Conductor shall quit and cease to use and occupy
said premises and/or carry on and conduct the said business of the Owner
and the Conductor shall hand over complete charge of the business to the
owner peacefully and without delay and demur.
13. xxx xxx xxx
14. It is further agreed by the Conductor that he shall be fully responsible to the
workers employed by him for paying their wages and the Owner is not
responsible for the same AND on the date of the commencement of this
agreement there was no worker in the said concern employed by the owner.
14
15. It is further agreed that if the Conductor does not desire to run and conduct
the said hotel business, the Conductor shall serve on the owner a notice to
that effect of one month and on the expiration of the said notice period of one
month the Owner shall assume the charge and take possession of the said
hotel immediately.
16. The Conductor hereby agrees to allow the owner to visit or inspect the Hotel
premises at all reasonable times without any obstruction.”
(Emphasis supplied)
20. The plaintiff, contrary to the clauses under which the plaintiff has taken
over the Hotel run in the Plaint Schedule, pleads the relationship of
tenant/subtenant as having been given under leave and license.
21. The construction of the excerpted clauses can be summed up thus:
a. The nomenclature is an agreement of conducting.
b. The parties to the agreement are referred to as owner and
conductor.
c. The parties agree on the ownership of the hotel business known as
‘Shri Samarthashraya Vishranti Graha.’
d. The owner has been carrying on the hotel business in the Plaint
Schedule.
e. The owner desires to give the business on a conducting basis, and
the conductor has agreed to take the business upon the terms and
conditions set out therein. Clause 1 specifically refers to the owner
giving to the conductor, and the conductor agreeing to take for
conducting the business. That is, the said hotel business of the
owner carried on under the name and style of Shri
Samarthashraya Vishranti Graha at the aforesaid premises. The
owner thus granted to the conductor to use and occupy the said
hotel premises – including fittings, fixtures, furniture, etc.
f. The consideration is stated as royalty for conducting the business.
g. The conductor is obligated to carry on the Hotel business only of
the owner.
h. The conductor carries on and conducts the business entrusted to
him and is barred from entrusting it to a third person for
conducting the business otherwise.
i. The conductor is allowed to use the utensils and fixtures, and is
obligated to return them upon the termination of the agreement.
15
j. The conductor is obligated to hand over the complete charge of the
business to the owner if the relationship is terminated either by
termination or efflux of time.
k. The conductor obligates himself to be fully responsible to the
workers and the salaries payable to them.
l. The conductor severs the relationship of running the business by
serving a month’s notice to the owner.
m. The owner is allowed to visit or inspect the Hotel at all times
without obstruction.
22. The plaintiff and the first defendant entered into the agreement dated
16.08.1967, and the contemporaneous document reproduces or reflects the
subject matter of the agreement, terms and conditions agreed between the
parties, rights, and limitations on the owner and the conductor. The plaintiff
has taken over the business under the agreement dated 16.08.1967. With a
few minor variations, the agreements referred to above have been entered into,
and the plaintiff asserts a change of status only when a notice is served to
hand over the business by the first defendant. The plain interpretation of the
agreement dated 16.08.1967 discloses that the parties to the agreement,
briefly stated, were contemplating dealing with a business and have entered
into an agreement for conducting the business. The argument of the plaintiff,
by looking at the nomenclature, is that the standing of the plaintiff as
interpreted by the appellate bench and the High Court is erroneous. By
looking at the deed, we have no hesitation in holding that the agreement is
one for conducting the business of the first defendant. We are excluding oral
evidence from consideration as none of the exceptions is attracted.
23. The plaintiff adduced oral and documentary evidence either to dilute
the obligation/standing of the plaintiff in the agreement dated 16.08.1967, or
to claim the status of a deemed tenant. The first and foremost document relied
16
on is the registration certificate under the Bombay Sales Tax Act, 1959. The
plaintiff, as conductor of the business, has assumed the responsibility for the
incidences of running the business. This includes payment of sales tax as
well. Including the subject business in the dealership of the plaintiff would
not materially alter the position under the agreement dated 16.08.1967.
Further, a photocopy of the registration certificate is exhibited before this
Court. We are convinced that, in the facts and circumstances of the case, the
said photocopy of the registration certificate will not change the status of the
plaintiff from the conductor of the business to a sub-tenant and, by operation
of law, a deemed tenant. Similarly, the receipts evidencing payment of royalty
would militate against the status of deemed tenancy claimed by the plaintiff.
As noted earlier, sections 91 and 92 are substantive provisions under the
Evidence Act, 1872. Unless and until the case falls under one or the other
exceptions enabling receipt of oral evidence on a written document, the court
is precluded from entertaining oral evidence. The document or deed
interpreted in a particular case is not relied upon, but the subject deed is
construed on well-established principles. The law recognises both ownership
and possession of an owner of a property. A lease recognises the outcome of
a rightful separation of ownership and possession between lessor and lessee.
Section 108 of The Transfer of Property Act, 1882 deals with the rights of the
lessor and lessee. Under the said section, one of the conditions is that the
lessor is bound by lessee’s request to put lessee in possession of the property.
In the case on hand, admittedly, defendant no. 1 is in possession of the
property from defendant no. 2. Whereas the Agreement of Conducting
business does not deal with the possession so enjoyed by defendant no. 1 in
favour of the plaintiff. The absence of such a crucial clause in the agreement
dated 16.08.1967 is a vital circumstance in construing the subject matter of
17
the said agreement. This is an added circumstance to hold that what has been
entrusted is to run the business in the plaint schedule but not occupying the
plaint schedule under leave and licence. In the case on hand, the terms of the
agreement dated 16.08.1967 are clear that the entrustment to the plaintiff is
the ownership of the hotel business of the first defendant and not the tenancy
right of the first defendant in favour of the plaintiff.
24. From the above perspective and for the reasons stated supra, we are in
agreement with the view taken by the first appellate court and the Impugned
Order of the High Court. The Civil Appeal fails and is accordingly dismissed
with costs quantified at Rs. 1,00,000/- payable to defendant no. 1. Pending
applications, if any, shall stand disposed of.
..……….…………………J.
[PANKAJ MITHAL]
...…………………………J.
[S.V.N. BHATTI]
New Delhi;
April 8, 2025.
18