Full Judgment Text
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CASE NO.:
Appeal (civil) 3283 of 2002
PETITIONER:
THE CORPORATION OF CALICUT
Vs.
RESPONDENT:
K. SREENIVASAN
DATE OF JUDGMENT: 03/05/2002
BENCH:
S. Rajendra Babu & B.N. Agrawal
JUDGMENT:
B.N. AGRAWAL,J.
Leave granted.
The judgment impugned in this appeal has been passed by Kerala High
Court in a Second Appeal whereby the same has been allowed, appellate
decree, upholding that of the trial court dismissing the suit, set aside and the suit
has been decreed.
The short facts are that the appellant-Corporation, which was established
by an Act promulgated by Kerala Legislature, owned a building constructed by
it in the year 1972 and immediately after construction the plaintiff-respondent
was put in its occupation as a licensee on payment of licence fee at the rate of
Rs. 4325/- per month wherein he was running a lodging house as well as a
restaurant. As the plaintiff-respondent defaulted in making payment of licence
fee, the licence was terminated on 1.3.1989 whereafter the plaintiff’s continuance
in occupation of the building in question became unauthorised leading to
issuance of a notice by the Estate Officer under Section 4 of the Kerala Public
Buildings (Eviction of Unauthorised Occupants) Act, 1968 (hereinafter referred to
as ‘the Act’) which was duly served upon the plaintiff-respondent, requiring him
to show-cause as to why an order of eviction be not passed against him in view
of the fact that his occupation became unauthorised within the meaning of
Section 2(f) of the Act inasmuch as the licence granted in his favour was
terminated. Thereupon, on 23.6.1989 the Estate Officer after satisfying himself
that the building was in unauthorised occupation of the respondent passed an
order of his eviction therefrom. The said order of eviction was challenged by the
plaintiff-respondent before the Civil Court by filing a suit for permanent injunction
restraining the defendant-appellant from evicting the plaintiff from the building
pursuant to the aforesaid order of eviction stating , inter alia, that the plaintiff was
inducted as a tenant and not licensee and in case he was found to be a
licensee, his occupation could not be treated to be unauthorised within the
meaning of Section 2(f) of the Act, as such the Estate Officer could not have
assumed jurisdiction and passed order of eviction. The suit was contested by
the defendant-appellant on grounds, inter alia, that the plaintiff was a licensee
and not a lessee, that occupation of licensee after termination of the licence
became unauthorised within the meaning of Section 2(f) of the Act, as such the
Estate Officer was quite competent to pass an order of eviction and the suit was
barred under Section 15 of the Act.
The trial court dismissed the suit observing that it was not necessary to go
into the question as to whether the transaction was lease or licence as even if it
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was a case of licence, the same was covered by the provisions of Section 2(f) of
the Act, the Estate Officer had jurisdiction to decide the matter and pass an order
of eviction and consequently the suit was barred under Section 15 of the Act.
On appeal being preferred, the trial court’s decree was affirmed with a finding
that the transaction in question was licence and not lease. Thereupon, the
plaintiff-respondent filed a Second Appeal before the Kerala High Court which
allowed the same, set aside judgment and decree passed by the appellate court
upholding those of the trial court and decreed the suit on the ground that the
Estate Officer had no jurisdiction to entertain the matter and pass order of
eviction under the provisions of the Act as occupation of the plaintiff-respondent
cannot be treated to be unauthorised within the meaning of Section 2(f) of the Act
as case of licensee is not covered therein and consequently the bar created by
Section 15 of the Act did not operate. Challenging decision of the High Court,
the present appeal has been filed by special leave.
Shri T.L. Vishwanatha Iyer, learned Senior Counsel appearing on behalf of
the appellant, in support of appeal submitted that case of a licensee is covered
by Section 2(f) of the Act and the High Court was not justified in holding
otherwise and decreeing the suit on the ground that the Estate Officer had no
jurisdiction to pass the order of eviction. On the other hand, Shri P.
Krishnamoorthy, learned Senior Counsel appearing on behalf of the respondent,
submitted that occupation of plaintiff, who was a licensee, cannot be treated to
be unauthorised within the meaning of Section 2(f) of the Act and consequently,
the Estate Officer having no jurisdiction to pass the order of eviction, the suit has
been rightly decreed by the High Court. In view of the rival submissions, the
question that arises for consideration of this Court is:
"whether continuance in occupation of a licensee
after expiry or termination of the authority for
occupation granted under the licence can be treated
to be unauthorised within the meaning of Section 2(f)
of the Act?".
The necessity of enacting Kerala Public Buildings (Eviction of
Unauthorised Occupants) Act, 1968 by the Kerala Legislature appears to be that
the tendency to unauthorisedly occupy public buildings, either from its very
inception without any authority whatsoever or continuing in its occupation after
the authority under which a person was allowed to occupy had either expired or
had been determined for any reason whatsoever, was galloping fast and keeping
in mind the time taken for eviction under ordinary law by resorting to civil suit in a
protracted litigation, a speedy remedy has been provided by enacting such
special legislation therefor. ‘Public building’ has been defined under Section 2(d)
of the Act to mean any building or part of a building belonging to or taken on
lease or requisitioned by , or on behalf of, the Government or a
local authority or a company or a Corporation. ‘Corporation’ has been
defined under Section 2(aa) to mean a Corporation established or constituted by
or under any Central or State Act and owned or controlled by the Government of
Kerala. Under Section 3 of the Act the State Government is empowered to
appoint any Gazetted Officer below the rank of District Collector as Estate Officer
for exercising the powers under the Act and Section 4 empowers the Estate
Officer to initiate a proceeding for eviction of those persons who are found to be
in unauthorised occupation of any public building whereas under Section 5 he is
competent to pass an order of eviction. Section 10 provides for an appeal
against the order of eviction. Section 15 of the Act creates a bar to the institution
of a suit challenging the order of eviction passed by the Estate Officer as well as
that passed in appeal. Section 2(f) of the Act which defines the expression
‘unauthorised occupation’ may be usefully quoted hereinbelow:-
"S.2(f).- "unauthorised occupation", in relation to any
public building, means the occupation by any
person of the building without authority for such
occupation and includes the continuance in
occupation by any person of the public building
after the authority (whether by way of lease or any
other mode of transfer) under which he was allowed
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to occupy the building has expired or has been
determined for any reason whatsoever."
[Emphasis added]
The definition of expression ‘unauthorised occupation’ contained in Section 2(f)
of the Act is in two parts. In the first part the said expression has been defined to
mean the occupation by any person of the public building without authority for
such occupation. It implies occupation by a person who has entered in
occupation of any public building without lawful authority as well as occupation
which was permissive at the inception but has ceased to be so. The second part
of the definition is inclusive in nature and it expressly covers continuance in
occupation by any person of the public building after the authority (whether by
way of lease or any other mode of transfer) under which he was allowed to
occupy the building has expired or has been determined for any reason
whatsoever. This part covers a case where a person had entered into
occupation legally under valid authority, but who continues in occupation after the
authority under which he was put in occupation has expired or has been
determined. The words ‘whether by way of lease or any other mode of transfer’
in this part of the definition are very wide in amplitude and would, undoubtedly,
cover a case where a person has come into occupation of a public building under
an authority granted in his favour by the licence, as a licensee, which has expired
or has been determined.
‘Lease’ has been defined under Section 105 of the Transfer of Property
Act, 1882, relevant portion whereof reads thus:-
"S.105. 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."
‘Licence’ has been defined under Section 52 of the Indian Easements Act, 1882
to mean a grant by one person to another or to a definite number of other
persons, a right to do, or continue to do, in or upon 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.
Section 53 specifies the persons who can grant a licence and Section 54 lays
down that the grant may be express or implied whereas Section 55 defines
accessory licences. According to Section 56 only certain types of licences
enumerated thereunder are transferable and not all. Duties of the grantors are
specified in Sections 57 and 58 whereas Section 59 says that grantor’s
transferee is not bound by the licence. Section 60 provides grounds for
revocaiton of licence and Section 62 the contingencies under which a licence is
deemed to be revoked whereas Section 61 lays down that revocation of licence
may be express or implied. Rights of a licensee, whose licence has been
revoked in accordance with law, to remain in occupation of the property for a
reasonable time after its revocation, have been enumerated in Section 63.
Under Section 64 even if a licensee is evicted, though grounds for revocation of
licence do not exist or forcefully evicted, his only remedy is to recover
compensation from grantor and not to resume occupation which undoubtedly
would never mean that a licensee can be forcefully evicted by the grantor without
taking recourse to the provisions of law. We may usefully refer to the provisions
of Section 52 of the Indian Easements Act, 1882 which run thus:
"S.52. Licence 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 licence"
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[Emphasis added]
At this juncture, it may be useful to state that similar provisions have been
made in the Public Premises (Eviction of Unauthorised Occupants) Act, 1971
(hereinafter referred to as ‘the Central Act’) enacted by the Parliament wherein
also an Estate Officer is authorised to pass an order of eviction of persons who
were found to be in unauthorised occupation of a public premises and expression
‘unauthorised occupation’ has been defined under Section 2(g) of the Central Act
as under:-
"S.2(g).- ‘unauthorised occupation’ in relation to any
public premises, means the occupation by any person
of the public premises without authority for such
occupation, and includes the continuance in
occupation by any person of the public premises after
the authority (whether by way of grant or any other
mode of transfer) under which he was allowed to
occupy the premises has expired or has been
determined for any reason whatsoever".
This Court while dealing with distinction between ‘licence’ and ‘lease’ has
enumerated in various decisions as to what are the rights of a licensee. In the
case of Associated Hotels of India Ltd. vs. R.N. Kapoor, AIR 1959 SC 1262, it
was observed at page 1269 thus:-
".if a document gives only a right to use the property in a
particular way or under certain terms while it remains in possession
and control of the owner thereof, it will be a licence. The legal
possession, therefore, continues to be with the owner of the
property, but the licensee is permitted to make use of the
premises for a particular purpose. But for the permission, his
occupation would be unlawful."
[Emphasis added]
In the case of B.M. Lall vs. M/s. Dunlop Rubber Co. (India) Ltd.. & Anr.,
AIR 1968 SC 175, there was an agreement between the employer and the
employee under which occupation of the employee in the premises was to cease
not only on the termination of his employment but also on his transfer from one
station to another and on his death. The employer was at liberty to allot any
other flat to the employee on his transfer to another station and assign the
premises fallen vacant by virtue of transfer to any other employee. In these
circumstances, the Court observed at page 178 thus:
"All the terms of the agreement are consistent with the expressed
intention that the officer is permitted to occupy the flat as a
licensee and nothing in the agreement shall be deemed to create
the relationship of landlord and tenant. The agreement on its true
construction read in the light of the surrounding circumstances
operates as a license and not as a tenancy. It creates no interest in
the land. It gives only a personal privilege or license to the servant
to occupy the premises for the greater convenience of his
work."
[Emphasis added]
In the case of Qudrat Ullah . vs. Municipal Board, Bareilly., AIR 1974 SC
396, it was observed at page 398 thus:-
"If an interest in immovable property, entitling the transferee to
enjoyment is created, it is a lease; if permission to use land
without right to exclusive possession is alone granted, a licence is
the legal result".
[Emphasis added]
In the case of Khalil Ahmed Bashir Ahmed vs. Tufelhussein Samasbhai
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Sarangpurwala, AIR 1988 SC 184, Sabyasachi Mukharji, J., as he then was,
observed at page 190 thus:
"To put precisely..if permission to use land without exclusive
possession was alone granted, a licence was the legal result. We
are of the opinion that this was a licence."
[Emphasis added]
A Constitution Bench of this Court in the case of Ashoka Marketing Ltd.,
and Anr. vs. Punjab National Bank & Ors., AIR 1991 SC 855, which was case of
a lessee, was considering the matter under the Central Act and in relation to the
provisions of Section 2(g) of the Act observed at page 870 thus:-
"It implies occupation by a person who has entered into occupaiton
of any public premises without lawful authority as well as
occupation which was permissive at the inception but has ceased
to be so..This part covers a case where a person had entered
into occupation legally under valid authority but who continues in
occupation after the authority under which he was put in occupation
has expired or has been determined. The words "whether by way
of grant or any other mode of transfer" in this part of the definition
are wide in amplitude".
In the case of M/s. Jain Ink Manufacturing Company vs. Life Insurance
Corporation of India & Anr., AIR 1981 SC 670, the Court while considering the
import of expression ‘unauthorised occupation’ within the meaning of Section
2(g) of the Central Act, in relation to a lessee, which provision is similar to that of
Section 2(f) of the Act, observed at page 672 thus:-
"To begin with, it is manifest that S. 2(g) does not use the word
‘possession’ or the words ‘entry into possession’ at any point of
time at all. The section merely requires occupation of any
public premises. Entry into possession connotes one single
terminus, viz., the point of time when a person enters into
possession or occupies the property whereas occupation is a
continuous process which starts right from the point of time when
the person enters into possession or occupies the premises and
continues, until he leaves the premises. What is germane for the
purpose of interpretation of Section 2(g) is whether or not the
person concerned was in occupation of the public
premises when the Premises Act was passed. In the instant
case, it is not disputed that the appellant continued to occupy the
property even after the Premises Act came into forceIn these
circumstances, therefore, the case of the appellant squarely falls
within the ambit of the definition of ‘unauthorized occupation’ as
contemplated by S.2(g)."
[Emphasis added]
In the case of Jiwan Dass vs. Life Insurance Corporation of India & Anr.,
1995 (1) Rent Control Journal 541, while upholding constitutional validity of the
Central Act which was challenged by a tenant, this Court observed that the
provisions of Section 5 of the Central Act, conferring power upon the Estate
Officer to order eviction from public premises, would apply in a case of tenancy,
lease or licence and observed at pages 543-44 thus:-
"The statute advisedly empowered the authority to act in the public
interest and determine the tenancy or lease or licence before taking
action under Section 5 of the Act..An owner is entitled to deal
with his property in his own way profitable in its use and
occupation. A public authority is equally entitled to use the public
property to the best advantage as a commercial venture. As an
integral incidence of ejectment of a tenant/licensee is inevitable."
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[Emphasis added]
It is true that a licensee does not acquire any interest in the property by
virtue of grant of licence in his favour in relation to any immovable property, but
once the authority to occupy and use the same is granted in his favour by way
of licence, he continues to exercise that right so long the authority has not
expired or has not been determined for any reason whatsoever, meaning thereby
so long the period of licence has not expired or the same has not been
determined on the grounds permissible under the contract or law. Occupation of
licensee is permissive by virtue of the grant of licence in his favour, though he
does not acquire any right in the property and the property remains in possession
and control of the grantor, but by virtue of such a grant, he acquires a right to
remain in occupation so long the licence is not revoked and/or he is not evicted
from its occupation either in accordance with law or otherwise. Main thrust of
Section 2(f) of the Act is upon the expression ‘occupation’ with authority or
without authority. If a person without any authority occupies any public building
he would be a trespasser and his case would be covered by first part of Section
2(f) and would be liable to be evicted under the provisions of the Act instead of
taking recourse to ordinary law by filing a properly constituted suit which is
dragged on for years together. Second part of Section 2(f) deals with cases
where a person is in occupation by virtue of an authority granted in his favour
irrespective of the fact whether the authority is in the form of lease or licence or
in any other form. So far as case of lease of a public building is concerned,
upon expiry of the period limited thereby or its determination in accordance with
law, the special procedure prescribed under the Act providing speedy remedy for
eviction would apply even though some interest in the immovable property is
created in favour of the lessee by virtue of creation of lease in his favour. But in
a case of licence, no interest in the property is created by virtue of the grant, but
a person acquires a right to continue his occupation by virtue of the authority
granted in his favour under the licence unless the period of licence has expired
or the same has been determined or licence has been revoked and/or the
licensee is evicted by the grantor. If it is held that Section 2(f) would apply only in
case of lease and not in the case of licence, the position will be very incongruous
as in the case of lease, though a lessee acquires interest in the property which is
a higher right, but he can be evicted under the special procedure prescribed
under the law providing much speedy remedy whereas in case of licence, a
licensee, who does not acquire any interest in the property and has only some
sort of right of occupation by virtue of the nature of grant in his favour so long he
is not evicted, can be evicted through long drawn ordinary procedure of filing a
civil suit. This could not have been the intention of the Legislature. Apart from
that, out of the expressions ‘whether by way of lease’ or ‘any other mode of
transfer’, the expression ‘any other mode of transfer’ is very wide and would not
necessarily mean only that mode of transfer whereby a right has been created in
immovable property. The expression ‘transfer’ under the Transfer of Property
Act connotes creation of some interest in immovable property. But under Section
2(f) of the Act such a restricted meaning would defeat the purpose of legislation
which is impermissible. The expression "any other mode of transfer" would
definitely bring within its sweep the case of a licensee where right of the grantor
to occupy and continue to occupy immovable property is transferred though
under law, the property remains in possession and control of the grantor. In view
of the foregoing discussions, we hold that the expression ‘unauthorised
occupation’ within the meaning of Section 2(f) of the Act would embrace within its
ambit the case of licensee as well after expiry of the period of licence or upon its
determination for any reason whatsoever, as such the Estate Officer was quite
justified in initiating proceeding under the Act and passing eviction order therein.
In the result, the appeal is allowed, impugned judgment and decree
rendered by the High Court are set aside and those passed by the appellate
court upholding judgment of the trial court are restored. In the circumstances of
the case, there shall be no order as to costs.
...J.
[S. RAJENDRA BABU]
J.
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[B.N. AGRAWAL]
MAY 3, 2002.
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