Full Judgment Text
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CASE NO.:
Appeal (civil) 123 of 2000
PETITIONER:
Chandy Varghese & Ors
RESPONDENT:
K. Abdul Khader & Ors.
DATE OF JUDGMENT: 08/08/2003
BENCH:
Shivaraj V.Patil & D.M. Dharmadhikari.
JUDGMENT:
J U D G M E N T
Dharmadhikari J.
This appeal under Article 136 of the Constitution of India has
been preferred by the successors-in-interest of contesting Defendant
No. 1 â\200\223 Chandy against the judgment dated 07.12.1998 passed by
the High Court of Kerala confirming the decree of injunction and
recovery of possession passed by the courts below in favour of the
respondents who are the Legal Representatives of the original
plaintiff â\200\223 Kochunni.
The principal question which falls for consideration in this
appeal is whether the contesting defendants are entitled to protection
against eviction from the suit property under Section 106 of the
Kerala Land Reforms Act, 1963 [for short ’the Act’]. Section 106 of
the Act protects the lessee against eviction from a land obtained by
him for commercial or industrial purposes and over which he has
constructed a building for commercial and industrial purposes before
20.5.1967.
The relevant sub-section (1) of Section 106 of the Act with
explanation therein reads thus :-
"106. Special provisions relating to leases for commercial or
industrial purposes. â\200\223 (1) Notwithstanding anything contained in this
Act, or in any other law, or in any contract, or in any order or decree
of court, where on any land leased for commercial or industrial
purpose, the lessee has constructed buildings for such commercial or
industrial purpose before the 20th May, 1967, he shall not be liable to
be evicted from such land, but shall be liable to pay rent under the
contract or tenancy, and such rent shall be liable to be varied every
twelve years.
Explanation :- For the purpose of this section, -
(a) ’lessee’ includes a legal representative or an assignee of the
lessee; and
(b) "Building" means a permanent or a temporary building and includes
a shed.
Before stating the facts and the findings of the courts below, it
may be stated that the provisions of Section 106 of the Act were
considered by the High Court of Kerala in Abdul Rahiman vs. Type
[1965 K.L.T. 247]. The law laid down by the Division Bench in that
case has held the field in application of the provisions to cases arising
under the Act. Placing interpretation on section 106 read with section
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3 (1) (iii) of the Act, the Division Bench held that within the purview
of the section, are covered only ’leases relating to lands on which
after grant of lease, building for industrial or commercial purposes
was constructed by the lessee before 20.5.1967’. It is held that the
other two types of leases viz., ’leases of building’ and ’leases of
building together with land’ are not entitled to protection against
eviction under section 106 of the Act. The legal result was that unless
it is shown that the subject matter of lease for commercial or
industrial purposes was the land alone, section 106 of the Act would
have no application.
On the principle of stare decisis, this interpretation of the
provisions of Section 106 of the Act which has held the field in Kerala
for the last more than 35 years, the question raised before us has to
be decided on the facts found.
It is not disputed that the suit land to the extent of 32 cents
was owned by the predecessors-in-title of the plaintiffs by name
Kochunni. The documents produced in the court showed that one K.S.
Sankara Narayana Iyyer was running a Saw Mill in a shed standing on
the suit land. None of the documents including additional documents
produced establish that K.S. Sankara Narayana Iyyer had been
granted the lease of land by Kochunni for a commercial or industrial
purpose and lessee had put up a building on it before 20.5.1967 as to
be entitled to seek protection of Section 106 of the Act. Some
additional documents were filed in the High Court by the appellant to
show that the Sankara Narayana Iyyer had transferred his rights to
his brother Janardana Iyyer and the latter on 30.12.1958 gifted back
his rights in the property to Sankara Narayana Iyyer. Thereafter
Sankara Narayana Iyyer sold the super-structures and machineries
but not any right over the land to Sainaba - wife of Kochunni and
their children. The document of that sale deed dated 29.8.1960 is
marked in trial court as Ex.A-15 and is included in the paper-book as
Annexure-P.3. The plaintiff filed the suit pleading inter alia that the
contesting defendants acquired only rights of a licensee from their
predecessors-in-interest and they are liable to be evicted on
revocation of licence in their favour.
The suit was contested on the ground that appellant’s
predecessors-in-interest had obtained a lease of the land and having
constructed a shed for running Saw Mill on the same prior to
appointed day i.e. 20.5.1967, they were entitled to protection
against eviction under Section 106 of the Act. The case of the
defendants rests on document [Ex.A-3] dated 03.7.1965
[Annexure.P-10 in the paper-book]. It is an agreement entered into
with Kochuvareed, who, it is pleaded, obtained leasehold right to land
with shed and machineries of the Saw Mill from Sainaba and others.
Without going into the question whether document [Ex.A-3]
dated 03.7.1965 executed by Kochuvareed in favour of first
defendant Chandy is bad for want of registration, as has been held by
the High Court, we have examined the said document to ascertain
the correctness of the concurrent findings of the courts below that
the document is ineffectual to create a leasehold right on the land in
favour of the contesting defendant so to sustain claim of protection
under Section 106 of the Act. It cannot be disputed in law that
contesting defendant-Chandy could not have acquired better rights
than what his transferor - Kochuvareed possessed. If Kochuvareed
is held to be only a licensee on the land, the contesting defendant -
Chandy cannot claim leasehold right under the document of transfer
of rights made in in his favour by the former.
Learned senior counsel Shri Rajinder Sachar appearing for the
successors-in-interest of the defendant as appellants before us took
pains to take us through the various documents and transactions
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entered between the parties. He has strenuously urged that there
was a transfer of leasehold rights of the original lessee of the land in
favour of contesting defendant and the courts were wrong in not
extending benefit of protection under Section 106 of the Act. The
appellants trace title in favour of their predecessor as lessee of the
land from transferor - Kochuvareed. Kochuvareed had himself
obtained title to the suit property from Sainaba and others, who are
legal representatives of Kochunni, under sale deed dated 05.2.1964
[Ex.A-2]. The relevant recitals of the sale deed read thus :-
"Where as the above mentioned parties named 1 & 2 has purchased
M/s Allied Saw Mill machineries such as 154 H.P. Electric Motor,
Circular Saw etc., belonging to the establishment installed in a shed in
the property in Ward No. 17, Alwaye Municipal Town, belonging to
Thandanaparambil Abdul Rehiman Kochunni from Subramonian
Sankara Narayana Iyyerâ\200¦â\200¦â\200¦â\200¦â\200¦â\200¦â\200¦..
And where as after apportioning the profits among partners, it is
decided to sell 15 H.P. Electric Motor, Circular Saw, new installed Re-
Saw machine, Counter Shafts and fittings, other accessories and
electric fittings, installed in the above mentioned land including the
shed for a consideration of Rs.4,000/- and the sale consideration is
received in the presence of Sub-Registrar by Smt. Sainaba."
From the above recitals, it is not possible to infer that there
was any transfer of interest in the land granted to Kochuvareed on
which the shed and machinery of Saw-Mill were installed.
The other document described as Rent Deed is alleged to have
been executed on the same day i.e., 05.2.1964. Under the said
Rent Deed, Kochuvareed took possession of the land in Ward No. 17
from Kochunni on a monthly rent of Rs. 150/- for carrying on
business of M/s Allied Saw Mill which was earlier run by Smt. Sainaba
and others.
The above Rent Deed thus, shows that Kochuvareed obtained
possession of the land with the Saw-Mill and its machineries installed
on it but in the absence of clear words of granting any leasehold right
in the land, it cannot be inferred that the parties intended by the said
document to create a lease of land. Further recitals in the Rent
Deed indicate that Kochunni had merely granted permission or
licence to Kochuvareed to use part of his land for the purpose of
carrying on the Saw-Mill business :-
"I have taken the land to do timber business and to conduct Saw Mill
Industry. I do not have right to enter into other properties within
the boundaries of your properties, except in the schedule property.
I will not claim compensation in the event of voluntary vacating or
eviction. I am not entitled to transfer this right or to part with
possession. If any loss is sustained to you on account of my acts,
I will be responsible for the same. Contrary to this agreement, at
the time of surrendering/vacating the property or being evicted if
arrears of rent is outstanding, I am not entitled to remove the
sheds etc., from the land before the entire arrears with interest
are paid."
[Emphasis added]
In the schedule of the document, the description of property is
as under :-
"Description of Property :- The entire land comprised in
SY.No.256/2B, 50 cents except the building and 6 feet courtyard in
front of the building which is located in the Western side and
constructed in North-South direction extended towards east from
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north."
The contesting defendant Chandy claims to have derived
leasehold rights to the land in suit under agreement dated 03.7.1965
executed by Kochuvareed in his favour. The agreement is dated
03.7.1965 and the relevant recitals read thus :-
"Whereas it is mutually agreed between the parties that the first
party shall purchase and the second party shall convey his absolute
rights over the buildings constructed at his expense in the land
situated in Ward No. 17, Alwaye Municipality belonging to
Thandanaparambil Kochunni S/o Abdul Rehiman and in the Saw Mill
and other machineries installed in the building and rental rights for a
consideration of Rs. 43,000/- and this deed is executed and signed."
The further relevant recital reads as under :-
"The second party hereby undertake to pay the rent for the land to
Kochunni out of the amounts given by the first party.
Sub-section (3) of section 125 of the Act requires that if in any
suit or proceeding, a question arises regarding rights of a tenant, the
civil court shall refer such question to the Land Tribunal having
jurisdiction over the area in which the land or part thereof is situate,
for the decision of that question. Sub-section (4) of the said section
requires that the Land Tribunal shall decide the said question and
return its findings to the civil court whereupon the civil court shall
decide the suit by accepting the decision of the Land Tribunal on the
question referred. Under sub-section (6) of section 125, the decision
of the Land Tribunal on the question referred to it, shall be deemed to
be part of the findings of the civil court for the purpose of the appeal.
The relevant sub-sections (1) to (6) of section 125 read thus :-
"125. Bar of jurisdiction of civil courts.-(1) No. civil court shall
have jurisdiction to settle, decide or deal with any question or to
determine any matter which is by or under this Act required to be
settled, decided or dealt with or to be determined by the Land
Tribunal or the appellate authority or the Land Board [or the Taluk
Land Board] or the Government or an officer of the Government :
Provided that nothing contained in this sub-section shall apply to
proceedings pending in any court at the commencement of the Kerala
Land Reforms (Amendment) Act, 1969.
(2) No order of the Land Tribunal or the appellate authority or the
Land Board [or the Taluk Land Board] or the Government or an
officer of the Government made under this Act shall be questioned in
any civil court, except as provided in this Act.
(3) If in any suit or other proceeding any question regarding rights
of a tenant or of a kudikidappukaran [including a question as to
whether a person is a tenant or a kudikidappukaran] arises, the civil
court shall stay the suit or other proceeding and refer such question
to the Land Tribunal having jurisdiction over the area in which the
land or part thereof is situate together with the relevant records for
the decision of that question only.
(4) The Land Tribunal shall decide the question referred to it under
sub-section (3) and return the records together with its decision to
the civil court.
(5) The civil court shall then proceed to decide the suit or other
proceedings accepting the decision of Land Tribunal on the question
on the question referred to it.
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(6) The decision of the Land Tribunal on the question referred to it
shall, for the purposes of appeal be deemed to be part of the finding
of the civil court.
(7) â\200¦â\200¦â\200¦â\200¦â\200¦â\200¦â\200¦â\200¦â\200¦â\200¦â\200¦
The above provisions of section 125 of the Act show that the
finding of the Land Tribunal on the claim of tenancy over land-in-suit
is entitled to great weight being a subject matter in its exclusive
jurisdiction. It has binding effect on the civil court. Such finding is
deemed to be finding of the civil court under sub-section (6)
fictionally for the purposes of appeal. The finding of the Land Tribunal
which has exclusive jurisdiction over the subject can be scrutinized in
appeal but can be held liable to be upset only on strong and cogent
grounds.
The Land Tribunal in its order dated 28.12.1988, came to the
following conclusions after scrutiny of documents and other evidence
of the parties :-
"From this citation the Vendors have purchased the Mill and
machineries of M/s Allied Saw Mill from Sankara Narayana Iyer and
these things were sold to Kochvareed. Moreover, there is no reason
to believe that the land was taken on lease from Kochunni as the
three partners of the Allied Saw Mill were the children of Kochunni
and the three others were subsequently inducted in the business.
Therefore, I can come to a conclusion that Sainaba and others have
not taken the Land on lease from Kochunny."
The Land Tribunal also considered the document conveying
rights in favour of the contesting defendant-Chandy and came to the
following conclusions :-
"Here in the document, Kochuvareed has taken shed and premises for
conducting a Timber business and Saw Mill on rent with a condition to
conduct the business only for a period of 3 years and after 3 years,
he has to vacate the land and shed if any, constructed by him.
Moreover, if the owner of the land demands the possession of the
land, the rentee has to vacate the land without any compensation
and also he has no authority to give possession of the plaint
schedule property to a third person. These conditions will not
confer a lease arrangement. The interest of the grantee is limited.
Therefore, he cannot be treated as a lessee but only a licensee.
Moreover, the AW-1 is his cross-examination has stated that his
father Chandy and C.P. Kochuvareed were conducting the business on
licence.
"His deposition is given below :-
My father and Kochuvareed were conducting the industry as per the
licence.
Therefore, I find that C.P. Kochuvareed is not lessee on the property.
The issue is found accordingly."
[Underlining to add emphasis]
The first appellate court confirmed the finding of the Land
Tribunal which was accepted by the trial court that none of the
documents is sufficient to conclusively indicate that there was any
transfer of any right over the land in favour of the contesting
defendant. The concurrent finding is that the contesting defendant
only obtained an assignment of the super-structure and machineries
standing on the land. It is held that Kochuvareed and thereafter the
contesting defendant were only licensees in the land. In any case, it
was not the case of grant of a lease of land for commercial and
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industrial purposes whereon any building or super-structure was
constructed before the appointed date i.e. 20.5.1967. The High Court
confirmed these findings after re-examining the documents and
interpreting them for itself.
We have heard in reply learned senior counsel Shri K.
Parasaran appearing for the respondents [plaintiffs’ successors-in-
interest]. On behalf of the respondents, the concurrent findings of the
courts below are supported and it is contended that there is no
ground for this Court to interfere under Article 136 of the Constitution
of India in the concurrent findings of all courts below.
Whether a particular document or transaction creates a ’lease’
or ’licence’ is not an easy task for the court to decide but the well
established test laid down by the decision of this Court and as has
been followed consistently, beginning from the decision of
Associated Hotels of India Ltd., vs. R.N. Kapoor [AIR 1959 SC
1264] is that ’it is not the form but substance of the document has
to be seen to gather the intention of the parties for determining
whether the document/transaction is a lease or licence’. It is further
held as under:-
"The following propositions may be taken as well established :- (1) To
ascertain whether a document creates a licence or lease, the
substance of the document must be preferred to the form; (2) the
real test is the intention of the parties whether they intended to
create a lease or a licence; (3) if the document creates an interest in
the property, it is a lease; but, if it only permits another to make use
of the property, of which the legal possession continues with the
owner, it is a licence, and (4) if under the document a party gets
exclusive possession of the property, prima facie, he is considered to
be a tenant; but circumstances may be established which negative the
intention to create a lease."
Section 105 of the Transfer of Property Act defines a lease of
immovable property as ’transfer of a right to enjoy such property
made for a certain time in consideration for price paid or promised’.
Under section 108 of this Act, the lessee is entitled to be put in
possession of the property. A ’lease’ is, therefore, ’a transfer of
interest in land’. Whereas section 52 of the Easement Act defines a
’licence’ to mean ’a right granted to another person over immovable
property to do or continue to do some act which would in the absence
of such right be unlawful’. When such right does not amount to an
easement or creates any interest in the property, the right is called a
’licence’. In all cases where the dispute is about the nature of the
document to be a lease or licence, the question that has to be
addressed by the Court to itself is what is the intention disclosed by
the parties from the terms of the document or the transaction. Where
the conclusion is that circumstance or conduct of the parties shows
that all that was intended was that the occupier should have a
personal privilege with no interest in the land, the transaction would
be licence and not a lease. In Board of Revenue vs. A.M. Ansari
[1976 (3) SCC 512], this Court observes :-
"It is the creation of an interest in immovable property or a right to
possess it that distinguishes a lease from a licence. A licence does not
create an interest in the property to which it relates while a lease
does. There is, in other words, transfer of a right to enjoy the
property in case of a lease. As to whether a particular transaction
creates a lease or a licence is always a question of intention of the
parties which is to be inferred from the circumstances of each case.
For the purpose of deciding whether a particular grant amounts to a
lease or a licence, it is essential therefore, to look to the substance
and essence of the agreement and not to its form.
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In order that an agreement can be said to partake of the character
of lease, it is necessary that the grantee should have obtained an
interest in and possession of land. If the contract does not create an
interest in land then the land would be considered as a mere
warehouse of the thing sold and the contract would be a contract
for goods."
[Emphasis added]
In the case in hand, all the courts including the High Court after
examining the documents and the terms mentioned therein, came to
the conclusion that the transferee of the shed and the machineries
had only a licence to maintain them in the land and no right in land
was intended to be created by the parties.
The concurrent finding of all the courts is that original owner
viz., Kuchunni, never intended to transfer any interest in land to
Shankara Narayan Iyyer. The above named transferee was found to
be merely licensee for running Saw-Mill in the shed erected on the
land. The said transferee being himself a licensee could not and was
not found to have transferred any right in the land to original owner’s
wife â\200\223 Sainaba and her children. Kuchvareed from whom the
contesting defendant â\200\223 Chandy is said to have acquired title, obtained
right to the shed and Saw-Mill from Sainaba and her children.
Kochuvareed acquired only right to shed and Saw-Mill as a licensee
and he could not have, therefore, conferred any leasehold rights in
the land to contesting defendant â\200\223 Chandy. He was rightly held to
have acquired only right to the shed and machineries of the Saw-Mill
with a licence to enter upon the land for use of shed and the
machineries.
The concurrent finding reached by the Land Tribunal and the
courts below is supported by cogent reasons based on proper
interpretation of the documents made in the light of oral evidence on
record. The inference in law thus derived by the courts from the oral
and documentary evidence, does not appear to be erroneous to
justify interference by this Court in its discretionary jurisdiction under
Article 136 of the Constitution of India.
In addition, the consistent legal position which held the field in
Kerala for more than 35 years is that for seeking protection against
eviction under section 106 of the Act, a person in occupation of the
land has to prove that he had been granted lease of the land for
commercial or industrial purposes and after grant of such lease, he
had raised a building or structure thereon for industrial or commercial
purpose prior to the appointed date i.e. 20.5.1967. We do not find
from any of the documents on record that the necessary ingredients
to invoke provisions of section 106 of the Act have been proved by
the contesting defendant. The object of the section is to protect
tenants, who have constructed building before the appointed day, on
other’s land to carry on their trade or business, from being dislocated
and disturbed.
For the aforesaid reasons, we find no merit in this appeal and it
is, accordingly, dismissed.
In the circumstances, the respondents (plaintiff’s successors)
will be entitled to costs as incurred in this Court.