Calcutta High Court
A. T. Gooyee Enterprises vs Nand Lal Rathi on 25 August, 2025
Author: Sugato Majumdar
Bench: Sugato Majumdar
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
Present:
The Hon'ble Justice Sugato Majumdar
CS/258/2009
IA NO: GA/8/2025
A. T. GOOYEE ENTERPRISES
VS
NAND LAL RATHI
With
EOS/1/2010
NAND LAL RATHI
VS
M/S. A. T. GOOYEE ENTERPRISES AND ORS.
For the Plaintiff : Mr. Joyjit Ganguly, Sr. Adv.
Mr. Pradip Sancheti, Adv.
Mr. Rudrajit Sarkar, Adv.
Mr. Jatan Monga, Adv.
Ms. Vanshika Newar, Adv.
For the Defendant : Mr. Siddhartha Lahiri, Adv.
Mr. Debraj Dutta, Adv.
Hearing concluded on : 14/07/2025
Judgment on : 25/08/2025
Sugato Majumdar, J.:
CS 258 of 2009 is heard analogously with EOS 1 of 2010 and both the suits are
disposed of by this common judgment.
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CS 258 of 2009:
CS 258 of 2009 was filed by M/s A. T. Gooyee (in short “the partnership firm”)
against the Defendant Mr. Nanda Lal Rathi (in short “Mr. Rathi”). The Plaintiff is a
partnership firm having its principle place of business at 10A, Hospital Street,
Kolkata-700072. The Defendant Mr. Nanda Lal Rathi runs a proprietorship business
of the name and style of Raathi Centre at G-4A, Kamalalaya Centre, 156A, Lenin
Sarani, Kolkata-700013.
Before adverting to rival pleadings one thing must be kept in mind, relevance
of which will be discussed later on. CS 258 of 2009 was originally instituted by M/s
A.T. Goyee Enterprises. By subsequent amendment of plaint, the name was changed
to M/s A.T. Gooyee Enterprises. T.S. No. 5305 of 2008 was instituted by Mr. Rathi
against M/s A.T. Goyee Enterprises and three of its partners. Difference in spelling
of M/s A.T. Goyee Enterprises and M/s A.T. Gooyee Enterprises would be relevant
for consideration of argument made by the Learned Counsel for Mr. Rathi.
The Plaint case of CS 258 of 2009 may be summarized as follow:
a) The Plaintiff, being a partnership firm, is a sub-lessee of the premises
no. 157C, Lenin Sarani, Kolkata-700013 which comprises of a
building having total area of 6400 sq. ft. in the said premises. This
portion of the premises is a space for car parking.
b) In the month of April, 2004, the partnership firm inducted the Mr.
Rathi as a licensee in the said building being 157C, Lenin Sarani,
Kolkata-700013. This is the suit property specified in Schedule “A” of
the plaint. The license was granted in terms and conditions set out in
the agreement dated 01/04/2004 for a period of 5 years at a monthly
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license fee of Rs.45,000/-. Mr. Rathi took possession on 1st April,
2004. Mr. Rathi also furnished interest free security deposit for a
sum of Rs.2,70,000/-.
c) Since the month of October 2008, Mr. Rathi stopped payment of any
further license fee. The partnership firm adjusted unpaid license fee
from October 2008 to March 2009 against the security deposit. From
the month of April 2009 onward, the partnership firm did not accept
any payment. Apart from this, Mr. Rathi also defaulted in paying
certain other charges including the electricity and maintenance
charges which the partnership firm is entitled to recover.
d) The partnership firm issued a notice dated 25/02/2009 through its
Advocate under Section 108 of Transfer of Property Act, 1882 calling
upon Mr. Rathi to deliver up, vacant and peaceful possession of the
suit premises. Mr. Rathi received the notice on 02/03/2009. In spite
of service of the notice, Mr. Rathi neglected and failed to hand over
the peaceful and vacant possession and also failed to furnish the
particulars of the amount of taxes which had been deducted by the
Mr. Rathi on account of license fee payable to the partnership firm,
by March 2009 together with certificate. Rather the partnership
firm, on 05/03/2009, received a letter issued by Mr. Rathi through
his Advocate wherein the agreement of license was denied; it was
stated that the agreement is a tenancy agreement. It also came to the
knowledge of the partnership firm that a suit for declaration of
tenancy and injunction was filed by Mr. Rathi in the City Civil Court
at Calcutta.
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e) Since Mr. Rathi did not hand over the peaceful and vacant
possession, the partnership firm instituted the instant suit, praying
for recovery of khas possession, mesne-profit at a rate of Rs.10,000/-
per diem on and from 01/04/2009 to 01/08/2009 with an interest at
a rate of 15% per annum along with other prayers.
Mr. Rathi contested the suit by filing written statement. Contentions of the written
statement may be summarized as follow:
a) It is stated that the instant suit is not maintainable, bad for non-
joinder and mis-joinder of the parties, barred by law of limitation
failed to disclose any cause of action.
b) The positive case of Mr. Rathi, the Defendant is that he obtained
possession of the suit premises on 01/04/2004 and deposited a sum
of Rs.2,70,000/- as interest fee security deposit with the Plaintiff.
License fee is Rs.45,000/- per month. But the Plaintiff issued rent
bill to the Defendant. According to the Defendant, he is not licensee
but rather a tenant.
c) It is further contended that the Defendant is not liable to be evicted.
The Defendant denied all other allegations made in the plaint.
The original plaint was amended by Order dated 10th January, 2017 consequent to
which the first additional written statement was filed. Contentions of the additional
written statement are:
d) Mr. Rathi instituted the Title Suit No. 5305 of 2008 in the City Civil
Court at Calcutta against M/s A.T. Goyee Enterprises and Mr.
Surendra Prasad Jaiswal, Mr. Lal Mohan Chowrasia and Miss. S.
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Sharma as Defendants therein, praying, inter alia, for decree of
declaration that Mr. Rathi, the Plaintiff therein was a tenant under
the Plaintiff in respect of the suit property.
e) Mr. Rathi entered into an agreement dated 01/04/2004 wherein M/s
A.T. Goyee Enterprises described itself as an absolute owner of the
suit premises. The said agreement dated 01/04/2004 was executed
between M/s A.T. Goyee Enterprises and Mr. Rathi wherein one Mr.
Surendra Prasad Jaiswal, Mr. Lal Mohan Chowrasia and Miss. S.
Sharma represented themselves as partners of the firm.
f) The next contention raised in the additional written statement was
that M/s A.T. Goyee Enterprises was not registered under the Indian
Partnership Act, 1932 at the time of signing of the agreement. It was
further contended that M/s A.T. Goyee Enterprises had disclosed a
document being indenture of sub-lease dated 06/05/2000 executed
by M/S Deluxe Builders and Promoters Ltd. and M/s A. T. Goyee
Enterprises wherein the former granted sub-lease of the premises
unto the later. In the said sub-lease dated 06/05/2000, the said M/s
A.T. Gooyee Enterprises represented itself as a registered partnership
firm having Mr. Manish Kumar Jaiswal, Mr. Manoj Kumar Jaiswal,
Mr. Lal Mohan Chowrasia and Smt. Sreema Sharma as partner of the
firm. In the said deed was executed by Mr. Lalmohan Chowrasia as
partner of M/s A. T. Gooyee Enterprises. In nutshell, it is contended
that though the Plaintiff stated itself as a registered partnership firm
and absolute owner of the suit premises, they were neither registered
till the filing of the suit nor the absolute owner of the suit premises.
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This additional written statement was filed in the month of April,
2017.
Another additional written statement was filed by the Defendant, Mr. Rathi on 24th
January, 2018. This additional written statement was filed after amendment of
plaint in terms of Order dated 7th November, 2017. In this additional written
statement or the second additional written statement verified on 18 th January, 2018
and filed on 24th January, 2018, Mr. Rathi pleaded as follow:
g) A preliminary objection was taken by Mr. Rathi that the partnership
firm was not registered in terms of the Indian Partnership Act, 1932.
This plea was in the original written statement.
h) The partnership firm and Mr. Rathi entered into an agreement dated
01/04/2004 wherein the partnership firm described itself as an
absolute owner of the premises being the basement situated at 157C,
Lanin Sarari, Kolkata-700013; the partnership firm described in itself
as “A.T. Goyee Enterprises”. In the agreement dated 01/04/2004,
address was stated at 157C, Lanin Sarari, Kolkata-700013. Prior to
filing of the suit, the partnership firm sent a purported notice dated
25/02/2009 wherein and whereby the advocate for the Plaintiff
described it as “A.T. Goyee Enterprises” a partnership firm having its
office at 10A, Hospital Street, Kolkata-700072 represented by its
partner Mr. Surendra Prasad Jaiswal. In the instant suit, the address
of the said “A.T. Goyee Enterprises” has been stated to be at 10A,
Hospital Street, Kolkata-700072. The agreement dated 01/04/2004
was executed between Mr. Rathi and the firm “A.T. Goyee
Enterprises” wherein one Mr. Surendra Prasad Jaiswal, Mr.
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Lalmohan Chowrasia and Miss. S. Sharma represented themselves as
partners of the Plaintiff firm. According to Mr. Rathi, M/s A.T. Goyee
Enterprises was not registered firm under Indian Partnership Act,
1932.
i) The partnership firm had disclosed a document being an indenture of
sub-lease dated 6th May, 2000 executed by M/s Deluxe Builders and
Promoters Ltd., on the one hand and M/s A.T. Gooyee Enterprises
wherein the said M/s. Deluxe Builders and Promoters Ltd. granted a
sub-lease of the premises to M/s A.T. Gooyee Enterprises. This
indenture of sub-lease dated 06/05/2000 was executed by Manish
Kumar Jaiswal, Manoj Kumar Jaiswal, Mr. Lalmohan Chowrasia and
Smt. Sreema Sharma representing their as partners of the
partnership firm and the deed was executed by Mr. Lalmohan
Chowrasia as partner of A.T. Gooyee Enterprises.
j) The partnership firm obtained an order and judgment of eviction
against Mr. Rathi under Chapter XIIIA of the Original Side Rules on
16th March, 2011 which was reversed by the Division Bench and
upheld by the Supreme Court of India.
k) It was further contended that there was an interpolation of a letter
“o” after the letter “G” but before the letter “o” in the rent bills. But in
the place of at the button right hand corner the name of the Plaintiff
appeared to be “A.T. Goyee Enterprises”. Mr. Rathi used to issue
cheques in the name of “A.T. Goyee Enterprises” towards payment of
rents which were encashed months after months. Mr. Rathi
contended that there was no privity of contract with “A.T. Goyee
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Enterprises”. It was further contended that “A.T. Goyee Enterprises”
and “A. T. Gooyee Enterprises” are two different entities.
l) It was contended that the persons who have represented the Plaintiff
firm in the purported sub-lease dated 6th May 2000 as partners were
not those persons who executed the agreement dated 1st April, 2004.
m) In the premises that the landlord was M/s A.T. Goyee Enterprises,
the Plaintiff partnership firm M/s A.T. Gooyee Enterprises is not
entitled to any decree and the suit is not maintainable.
The Plaintiff, the partnership firm, filed reply of the additional written
statement of the Defendant on 24/01/2018. It was contended as follow:
1. The partnership firm namely, M/s A.T. Gooyee Enterprises was
initially constituted on 16th August, 1999 with the partners, namely,
Manish Kumar Jaiswal, Manoj Kumar Jaiswal, Lalmohan Chowrasia
and Smt. Sreema Sharma. The firm was sub-lessee of the property,
the original lessee being M/s. Deluxe Builders and Promoters Ltd.
The said Manish Kumar Jaiswal and Manoj Kumar Jaiswalare are
nephews of Surendra Prasad Jaiswal. In spite of being partners of the
firm, the business was administered and run for all practical
purposes by Surendra Prasad Jaiswal. Manish Kumar Jaiswal and
Manoj Kumar Jaiswal executed a power of attorney in favour of
Surendra Prasad Jaiswal. On the strength of that power of attorney,
Surendra Prasad Jaiswal, representing Manish Kumar Jaiswal and
Manoj Kumar Jaiswal executed the instant leave and license
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agreement with Mr. Rathi. The suit property was always considered
as assets of the partnership firm M/s A.T. Gooyee Enterprises.
2. On 31/03/2007, the said Manish Kumar Jaiswal and Manoj Kumar
Jaiswal retired from the business of the firm as a result of which the
firm was reconstituted having partners as Surendra Prasad Jaiswal,
Lalmohan Chowrasia and Smt. Sreema Sharma. On the strength of
such reconstruction, the partnership sought for registration with the
register of firms prior to filing of the instant suit.
3. It is stressed that the Plaintiff’s name is always M/s A.T. Gooyee
Enterprises. The name is misspelt in the leave and license agreement
as A.T. Goyee Enterprises. Defendant had taken a leave and license
of the suit property from the three persons; hence the Defendant,
namely Mr. Rathi cannot deny the existence of privity of contract. On
expiry of the stipulated period, he is bound to handover the suit
property to the partnership firm.
4. The Plaintiff denied all other allegations of the additional written
statement.
E.O.S/1/2010:
Genesis of E.O.S. No. 1 of 2010 is the suit filed in City Civil Court by Mr. Rathi.
This suit was originally numbered as Title Suit No. 5305 of 2008. This suit was filed
by Mr. Rathi against M/s A.T. Goyee Enterprises, as the Defendant No. 1 and Sri
Suresh Prasad Jaiswal, Sri Lalmahan Chowrasia and Sri S. Sharma being the
partners, as the Defendant no. 2-4. Thereafter by Order dated 01/12/2009 passed by
10 | P a g ethe Co-ordinate Bench, the suit being the T.S. No.5305 of 2008 was transferred to
this Court and was renumbered as E.O.S. No. 1 of 2010.
The plaint case of E.O.S. No. 1 of 2010, in nutshell, is stated and summarized
as follow:
a) Mr. Rathi, the Plaintiff is a business man and is engaged in the
business of fitting gas kits in automobiles having office at 157C, Lenin
Sarani, Kolkata-700013. Mr. Rathi is in occupation of the entire
basement along with rooms situated in the said basement.
b) The Defendant firm, namely, M/s A.T. Goyee Enterprises is the
owner/landlord of the entire basement of the premises no. 157C,
Lenin Sarani, Kolkata-700013 represented by the other Defendants
as partners.
c) An agreement was executed between the Mr. Rathi and the
Defendant no. 1 whereby the entire basement situated at 157C, Lenin
Sarani, Kolkata-700013, being the suit property, was given in tenancy
to Mr. Rathi from 01/04/2004 till 31/03/2009. From the very
inception the Defendants intended to create a tenancy. In terms of
the agreement, Mr. Rathi would pay to the Defendants fee at a rate of
Rs.45,000/- per month payable on or before the next 15 days after
completion of a month. This was sub-lease rent. This apart, a sum of
Rs.1,000/- was also payable as lease rent per mensem.
d) Mr. Rathi also furnished a sum of Rs.2,70,000/- as interest free
security deposit for due performance of the agreement. In addition to
11 | P a g ethe payment of license fees, Mr. Rathi also had to pay maintenance
charges and electricity charges.
e) Suddenly, in the month of October 2008, the Defendants refused to
accept fees, namely occupational charges in respect of the suit
premise. It is pleaded that intention of the Defendants was to create
a tenancy in the suit property. Mr. Rathi tendered lease rent and sub-
lease rent by cheques but the Defendants did not accept the said
rents.
f) The Defendants were trying to disturb the possession of Mr. Rathi
and also tried to disconnect electricity connection but the same was
resisted. The Plaintiff also lodged a complaint in Bowbazar Police
Station on 11/12/2008.
g) In this circumstances, Mr. Rathi instituted the suit in the City Civil
Court of Calcutta praying for declaratory decree that the Plaintiff is a
tenant in the suit property, declaratory decree that the Plaintiff has
the right to enjoy electricity connection; a further declaratory decree
that the Plaintiff is entitled to use, occupy the suit property as tenant;
decree for permanent injunction prohibiting the Defendants from
disturbing peaceful possession of the suit property along with other
prayers.
In terms of the Order dated 01/12/2009, passed by the Co-ordinate Bench,
Title Suit No. 5305 of 2008 was transferred to this Court for analogous hearing and
was re-numbered as E.O.S 1 of 2010 as stated earlier. Before another Co-ordinate
Bench, the Learned Counsel for the Defendant in E.O.S 1 of 2010 being representing
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the Plaintiff in CS 258 of 2009 submitted that he did not want to use written
statement in this E.O.S 1 of 2010 since he wanted to rely on legal principles
pertaining to the suit and both the suits could be decided simultaneously by a
common judgment. This was noted in the Order dated 30/08/2016. Therefore,
written statement in E.O.S 1 of 2010 was not filed.
On the basis of pleadings of the parties, a Co-ordinate Bench framed the
following issues in terms of the Order dated 26/09/2016:-
1. Whether the suit is maintainable in the present form?
2. Whether under the agreement dated 1st April, 2014 entered into
between the Plaintiff and the Defendant, the Defendant is a
tenant or a licensee under the Plaintiff?
3. Whether the Defendant is entitled to protection under or is
entitled to any reliefs under the West Bengal Premises Tenancy
Act, 1997?
4. Whether the Defendant, on expiry of the agreement by efflux of
time, was bound to hand over possession of the suit premises to
the Plaintiff?
5. Whether the Plaintiff is entitled to recovery of khas possession
of the suit premises from the Defendant?
6. Whether the Plaintiff is entitled to recover damages including
mesne profits from the Defendant? If so, at what rate?
7. To what reliefs, if any, in the Plaintiff entitled to?
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Subsequently, in terms of another Order dated 15/02/2018, an additional issue was
framed:-
1. Whether there is any relationship between the Plaintiff and the
Defendant as landlord and tenant?
Both the parties adduced oral as well as documentary evidences.
Issue No. 1, 2 , 3 & Additional Issue No.1:
The point of maintainability, as argued by the Learned Counsels, is embedded
in the substantive matrix of both the suits. Maintainability of the both the suits,
therefore, will be taken up contextually along with the merit.
These issues are germane in EOS 1 of 2010 since the principal prayer in the
same is a decree for declaration that Mr. Rathi, the Plaintiff of EOS 1 of 2010 was a
monthly tenant under the Defendant in EOS 1 of 2010 in respect of the entire
basement situated at premises no. 157C, Lenis Sarani, Kolkata-700013 at a monthly
rent of Rs.45,000/- and Rs.10,000/- respectively.
The first point argued by Mr. Lahiri, the Learned Counsel for Mr. Rathi, the
suit, namely, CS 258 of 2009 was instituted by M/s A.T. Goyee Enterprises. The
partnership firm obtained a decree under Chapter XIIIA of the Original Side Rules.
An appeal was preferred wherein the original judgments were set aside. The
partnership firm went up to the Supreme Court. All throughout, the name use was
“A.T. Goyee Enterprises”. By a second amendment of plaint the name of the
partnership firm was changed to M/s A.T. Gooyee Enterprises on the ground that
there was inadvertent mistake in typing the name as M/s A.T. Goyee Enterprises.
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The principal limb of argument of Mr. Lahiri was that the relationship
between Mr. Rathi and the partnership firm was that of tenancy although a leave and
license agreement was executed in form; it was basically a tenancy in masquerade. It
was contended by Mr. Lahiri that P.W. 1 stated that the entire area is still under
exclusive possession of Mr. Rathi. DW 1 also deposed that he is an exclusive
possession of the suit premises. Mr. Rathi being DW 1 further stated in course of
examination-in-chief that he was a tenant. No question challenging the testimony of
exclusive possession was put to Mr. Rathi in course of cross-examination. In
nutshell, it is now established in evidence that Mr. Rathi is in exclusive possession of
the suit premises which indicates and points out that the relationship was basically
one of a landlord and tenant and not of a licensor and licensee.
It is further contended by Mr. Lahiri that P.W. 1 admitted in course of cross-
examination that lease rent was Rs.1,000/- per month and sub-lease rent was
Rs.45,000/- per month. This was also in the statement of DW 1. Apart from this, the
partnership firm M/s A.T. Goyee had given a go by to the license agreement dated
01/04/2004 by accepting Rs.1,000/- per month as a lease rent and Rs.45,000/- per
month as sub-lease rent which is beyond the scope of the agreement.
It was contended that the notice dated 25/02/2009 (Ext. F & Ext. 7) was, in
fact, a notice under Section 108 of the Transfer of Property Act, 1882 which point to
the fact that the partnership firm accepted Mr. Rathi as a tenant.
The Plaintiff in EOS 1 of 2010 did not file in the written statement leaving
thereby the pleading of tenancy in EOS 1 of 2010 unchallenged and uncontroverted.
It was sum and substance of the argument of Mr. Lahiri that there existed a
relationship of landlord tenant which has been established clearly and unequivocally
as a result of which Mr. Rathi is entitled to the reliefs prayed for in EOS 1 of 2010.
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Referring to Associated Hotels of India Vs. R. S. Kapoor [AIR 1959 SC
1262], Mr. Lahiri argued that real intentions of the parties are to be considered and
if under a document a party get exclusive possession of the property prima facie he is
considered to be a tenant. Mr. Lahiri also refers to Mrs. M.N. Clubwala & Anr.
Vs. Fidahussain Saheb & Ors. [AIR 1965 SC 610], Khalil Ahmed Bashir
Ahmed Vs. Tufelhussein Samasbhai Sarangpurwala [(1988) 1 SCC 155],
Capt. B.V. D’souza Vs. Antonio Fausto Fernandas [(1989) 3 SCC 574],
Smt. Rajbir Kaur & Anr. Vs. M/S. S. Chokersiri & Co. [(1989) 1 SCC 19],
Delta International Ltd. Vs. Shyam Sundar Ganeriwalla & Anr. [(1999) 4
SCC 454] and C.M. Beena & Anr. Vs. P.N. Ramachandra Rao [(2004) 3
SCC 595] to substantiate his contention that the so called license agreement was a
camouflage and the real intention of the parties was to create a tenancy.
Mr. Ganguly, the Learned Senior Counsel appearing for the partnership firm
submitted that the defense of monthly tenancy is vague and misconceived, plaint in
EOS 1 of 2010 does not say that there is a tenancy; no case of similar nature has been
made out in the written statement filed in CS 258 of 2009. It was the defense case of
Mr. Rathi that he was a monthly tenant under the West Bengal Premises Tenancy
Act, 1997 for which issue no. 3 was framed. No case of tenancy under the Transfer of
Property Act, 1882 was made out in the written statement. Now, the contrary
arguments were made. Mr. Ganguly submitted further that there is a difference
between the West Bengal Premises Tenancy Act, 1997 and the Transfer of Property
Act, 1882. In the former case, the tenant is protected and cannot be evicted by any
court of law except on certain grounds whereas a lessee can be evicted at the will by
the lessor by issuing a notice terminating the lease as provided in Section 106 or 111
thereof. Month to month lease mentioned in Section 106 does not and cannot be
construed to mean a monthly tenancy. Lease created under a document for a
16 | P a g e
purpose other than agricultural or manufacturing purpose and subject to Section 107
of the Transfer of Property Act, 1882 is a lease of monthly basis, irrespective of the
tenure. A monthly tenancy is protected by the Rent Act. On the other hand, license
is nothing but a permissive occupation and right to use the property for certain
purpose. A monthly tenancy, prior to 28/12/1998, included a leasehold right unless
it is that kind of lease which had been executed on or after 01/12/1948:-
a) If the lease was for a period of not more than 20 years.
b) And even otherwise was expressly terminable before its expiration.
Thus, in terms of the provision of West Bengal Premises Tenancy Act, 1956 even a
registered lease for a period of not more than 20 years executed after 1 st December,
1948 and containing a clause that it is expressly terminable before expiry of its tenure
was considered to be a monthly tenancy protected under the 1956 Act. On the
contrary, the Act of 1997 keeps out of its ambit all the premises, residential or non-
residential, where rent exceeds the prescribed limit. In the instance case, rent is
about Rs.45,000/- per month which took it out of the ambit of the West Bengal
Premises Tenancy Act, 1997.
Mr. Ganguly, the Learned Senior Counsel further submitted that the ratio in
Technician Studio’s case (supra) as well as Park Street properties’ case (supra)
are not applicable in the instance case. Those decisions were made in different
factual background.
It was further argued by Mr. Ganguly that from Ext. No. D, it is clear that
there was no intention to create a lease or sub-lease or month to month tenancy; the
intention was rather to permit occupation for a fixed period. It was argued by Mr.
Ganguly that exclusive possession is not a sole criterion of tenancy or lease; even a
17 | P a g e
licensee can be in an exclusive possession. Mr. Ganguly referred to Puran Singh
Sahni Vs. S.B. Kripalani & Ors. [1999 (2) SCC 21], to substantiate his
argument.
In nutshell, Mr. Ganguly argued that Mr. Rathi was not a tenant to be
protected under a rent control legislation and he is liable to be evicted on expiry of
the tenure of license.
I have heard rival submissions.
The question whether a given agreement, termed as leave and license, is really
so or a tenancy in camouflage intrigued the judiciary from time to time, whether be
the courts of England and Wales or the courts of India.
In Errington v. Errington & Woods [(1952) 1 K.B. 290, 297] Lord
Denning, explaining the classic definition of a license, referred to an old judgment
delivered by Vaughan C.J. In Thomas v. Sorrell [(1673) Vaughan 351] where it
was propounded that a dispensation or license properly passes no interest nor alters
or transfers property in anything, but only makes an action, lawful which, without it,
had been unlawful. Lord Denning explained that difference between a tenancy and a
license is, therefore, that, in a tenancy, an interest passes in the land, whereas, in a
license, it does not. In distinguishing between them, a crucial test has sometimes
been supposed to be whether the occupier has exclusive possession or not. If the
occupier was in exclusive possession, he was said to be a tenant, albeit only a tenant
at will, whereas if he had not exclusive possession he was only a licensee but test of
exclusive possession is by no means decisive. The law is further expounded by Lord
Denning that although a person who is let into exclusive possession is prima facie to
be considered to be a tenant, nevertheless he will not be held to be so if the
18 | P a g e
circumstances negative any intention to create a tenancy. Words alone may not
suffice. Parties cannot turn a tenancy into a license merely by calling it one. But if
the circumstances and the conduct of the parties show that all that was intended was
that the occupier should be granted a personal privilege, with no interest in the land,
he will be held to be a licensee only. Referring to judicial precedents Denning L.J
observed:
“The result of all these cases is that, although a person who is let into
exclusive possession is prima facie to be considered to be a tenant,
nevertheless he will not be held to be so if the circumstances negative any
intention to create a tenancy. Words alone may not suffice. Parties cannot
turn a tenancy into a licence merely by calling it one. But if the
circumstances and the conduct of the parties show that all that was
intended was that the occupier should be granted a personal privilege,
with no interest in the land, he will be held to be a licensee only.”
In Addiscombe Garden Estates Ltd. & Another v. Crabbe & Ors.
[(1958) 1 Q.B. 513] this issue was again considered where the Bench explained the
scope of the principal laid down in Errington v. Errington & Woods [(1952) 1
K. B. 290, 297]. A similar plea was considered by the Bench as to whether the
agreement is a tenancy or a licensee. Referring to Errington v. Errington &
Woods [(1952) 1 K. B. 290, 297] it was observed that the fact of exclusive
occupation is no longer conclusive in favour of the view that he holds as a tenant and
not a licensee. Lord Jenkins explained that it is vital to the plaintiffs’ claim for
possession of the premises that they should be able to establish that this document
described as a license is in truth a license, as opposed to a tenancy agreement. If it is
a mere license, then the plaintiffs’ claim to possession must follow. If, on the other
hand, although described as a license, it has the effect of a tenancy agreement, then
19 | P a g e
prima facie the plaintiffs must be faced, before they can get possession, a task of
compliance with the Act. It was further observed that a document described as a
license is, merely on that account, to be regarded as amounting only to a license in
law. The whole of the document must be looked at; and if, after it has been examined,
the right conclusion appears to be that, whatever label may have been attached with,
it is in fact conferred and imposed on the grantee in substance the rights and
obligations of a tenant, and on the grantor in substance the rights and obligations of
a landlord, then it must be given the appropriate effect and must be treated as a
tenancy agreement as distinct from license. Again, in Cobb v. Lane [(1952) 1 All
ER 1199] court of appeal considered the legal position and laid down that intention
of the parties was the real test for ascertaining the character of a document. In
Somervell, L.J. observed that the solution that would seem to have been found is, as
that it must depend on the intention of the parties.
In Shell-Mex & B.P. Ltd. v. Manchester Garages Ltd. [(1971) 1 WLR
612] Buckley L.J. observed that whether a transaction is a license or tenancy the
court is not to have regard to the label which the parties give to the document or to
the formal language of the document, but to the substance of the transaction.
Referring to Addiscombe Garden Estates Ltd. (supra) it was observed:
“One must look at the transaction as a whole and at any indications
that one finds in the terms of the contract between the two parties
to find whether in fact it is intended to create a relationship of
landlord and tenant or that of licensor and licensee. ”
In Associated Hotels of India Ltd. Vs. R. N. Kapoor (AIR 1959 SC
1262) difference between lease and license was expounded. Speaking for the Bench
K. Subrao, J. laid down that if a document gives only right to use a property in a
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particular way or under certain terms while possession and control of the owner
thereof, it will a license. The legal possession, therefore, continues to the owner of
the property but the licensee is permitted to make use of the property for a particular
purpose. It is the permission which makes the occupation lawful but does not create
any estate or interest in the property. The test of exclusive possession is not a
conclusive proof; referring to Errington v. Errington & Woods and Cobb v.
Lane, it was observed by the Supreme Court of India that intention of the parties are
of real test for ascertaining the character of the document. This was followed a
number of subsequent decisions of the Supreme Court of India referred to by the
Learned Counsel for Mr. Rathi. In Mrs. M. N. Clubwala & Anr. Vs. Fida
Hussain Saheb & Ors. (AIR 1965 SC 610) it was reiterated that the exclusive
possession is not conclusive evidence. In Khalil Ahmed Bashir Ahmed Vs.
Tufelhussein Samasbhai Sarangpurwala [(1988) 1 SCC 155] the Court
reiterated that in ascertaining the relationship the intention of the parties is decisive
consideration. Observations of the Supreme Court of India in Sohan Lal
Naraindas v. Laxmidas Raghunath Gadit,[(1971) 1 SCC 276], referring to
M.N. Clubwala (Mrs) (supra) may be looked into:
“8. A license confers a right to do or continue to do something in or upon
immovable property of grantor which but for the grant of the right may be
unlawful, but it creates no estate or interest in the immovable property of the
grantor. A lease on the other hand creates an interest in the property demised.
9. Intention of the parties to an instrument must be gathered from the terms of
the agreement examined in the light of the surrounding circumstances. The
description given by the parties may be evidence of the intention but is not
decisive. Mere use of the words appropriate to the creation of a lease will not
preclude the agreement operating as a license. A recital that the agreement does
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not create a tenancy is also not decisive. The crucial test in each case is whether
the instrument is intended to create or not to create an interest in the property
the subject-matter of the agreement. If it is in fact intended to create an interest
in the property it is a lease. If it does not, it is a license. In determining whether
the agreement creates a lease or a license the test of exclusive possession,
though not decisive, is of significance. ”
In Delta International Ltd. Vs. Shyam Sundar Ganeriwalla & Anr. [(1999)
4 SCC 545] it was reiterated by the Supreme Court of India:
“1) To find out whether the document creates a lease or a license the real test is
to find out “the intention of the parties”; keeping in mind that in cases where
exclusive possession is given, the line between a lease and a license is very
thin.
(2) The intention of the parties is to be gathered from the document itself.
Mainly, the intention is to be gathered from the meaning and the words used
in the document except where it is alleged and proved that the document is a
camouflage. If the terms of the document evidencing the agreement between
the parties are not clear, the surrounding circumstances and the conduct of the
parties have also to be borne in mind for ascertaining the real relationship
between the parties.
(3) In the absence of a written document and when somebody is in exclusive
possession with no special evidence how he got in, the intention is to be
gathered from the other evidence which may be available on record, and in
such cases exclusive possession of the property would be the most relevant
circumstance to arrive at the conclusion that the intention of the parties was to
create a lease.
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(4) If the dispute arises between the very parties to the written instrument, the
intention is to be gathered from the document read as a whole. But in cases
where the landlord alleges that the tenant has sub-let the premises and where
the tenant in support of his own defence sets up the plea of a mere licensee and
relies upon a deed entered into, inter se, between himself and the alleged
licensee, the landlord who is not a party to the deed is not bound by what
emanates from the construction of the deed; the tenant and the sub-tenant
may jointly set up the plea of a license against the landlord which is a
camouflage; in such cases, the mask is to be removed or the veil is to be lifted
and the true intention behind a facade of a self-serving conveniently drafted
instrument is to be gathered from all the relevant circumstances. Same would
be the position where the owner of the premises and the person in need of the
premises executes a deed labelling it as a license deed to avoid the operation of
rent legislation.
(5) Prima facie, in the absence of a sufficient title or interest to carve out or to
create a similar tenancy by the sitting tenant in favour of a third person, the
person in possession to whom the possession is handed over cannot claim that
the sub-tenancy was created in his favour; because a person having no right
cannot confer any title of tenancy or sub-tenancy. A tenant protected under
statutory provisions with regard to occupation of the premises having no right
to sub-let or transfer the premises, cannot confer any better title. But, this
question is not required to be finally determined in this matter.
(6) Further lease or license is a matter of contract between the parties. Section
107 of the Transfer of Property Act, 1882 inter alia provides that leases of
immovable property may be made either by a registered instrument or by an
oral agreement accompanied by delivery of possession; if it is a registered
instrument, it shall be executed by both the lessee and the lessor. This contract
between the parties is to be interpreted or construed on the well-laid principles
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for construction of contractual terms, viz., for the purpose of construction of
contracts, the intention of the parties is the meaning of the words they have
used and there can be no intention independent of that meaning; when the
terms of the contract are vague or having double intendment, one which is
lawful should be preferred; and the construction may be put on the instrument
perfectly consistent with his doing only what he had a right to do.”
It must be kept in mind that this is not a case of unregistered lease. Legal
consequences are different in case of an unregistered lease. M/s Technicians
studio Pvt. Ltd. Vs. Lila Ghosh [(1977) 4 SCC 324] involved the case of part
performance under a void lease. However, the Supreme Court of India reiterated the
principal that intention of the parties is a clue to decide on the actual relationship.
Park Street Properties (P) Ltd. v. Dipak Kumar Singh [(2016) 9 SCC 268]
was decided in respect of unregistered lease deed. In the instance case is different in
facts as it involves an agreement of license, as the nomenclature bears, which is not
compulsory registerable instrument.
Before any further discussion on the point, another argument of Mr. Lahiri
should be addressed. Mr. Lahiri argued that in absence of any authority, evidence of
P.W.1 should be discarded. Again, Mr. Lahiri relied upon statement of P.W.1 as
witness that Mr. Rathi is in exclusive possession. Both cannot run at the same time.
P.W.1 is one of the partners of the firm. Partnership deeds were adduced in evidence
which establish that. Therefore, his evidence cannot be discarded.
A scrutiny of this agreement being Ext. D reveals certain things. Firstly, the
term licensee included successor in title. The parties who signed the agreement
understanding its full meaning terms and conditions, put in black and white that the
word licensee would include successor in title, implying and meaning thereby that
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the grant of license would devolve on the successors. The very concept of license, as
discussed above, is opposed to heritability of the permission. License is just a
permission to do something which would otherwise would have been unlawful and of
course not heritable. This agreement incorporates and intended heritability of
possessory title. This clear indicates that the parties intended to create a tenancy.
Secondly, the agreement speaks of monthly license fee of Rs.45,000/- per
month. Rent receipts which were collectively marked and exhibited, show that
Rs.45,000/- per month was payable on account of sub-lease rent and Rs.1,000/- as
lease rent per month. Use of the word license fee in the agreement is a specimen of
crafty drafting calculated to feign creation of license hiding the embedded tenancy.
The circumstances show that the parties intended to create a tenancy and by use of
the terms lease and sub-lease in subsequent rent receipts reinforce the hypothesis
that a tenancy was created as opposed to license.
Thirdly, there is a stipulation in the license agreement that Mr. Rathi will not
be an exclusive possession and shall allow the servants, agents into the premises. It
is in evidence of both the parties that the possession was exclusive to Mr. Rathi. As it
is noted earlier, exclusive possession is not a sole criterion to decide on whether a
particular relationship is license or tenancy but a conjugate understanding of all the
elements of tenancy present in this case, namely, creation of interest, heritability and
excusive possession clearly and unequivocally established that in the masquerade of
license, a monthly tenancy was created and Mr. Rathi was nothing but a tenant under
the agreement, namely, Ext. D.
The conclusion made above that Mr. Rathi was a tenant does not mean that
the agreement itself is a void one. The agreement was there but true intention of the
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parties is here explored. This did not make the agreement void by itself. The efficacy
of the agreement still remained.
Issue no. 1 and 2 are decided in favour of the Mr. Rathi and this Court is of the
view of that prayer (a) of EOS 1 of 2010, namely, the declaratory decree should be
allowed to Mr. Rathi. The other prayers of EOS 1 of 2010 shall be taken up later on.
So far as the additional issue no.1 is concerned, Mr. Lahiri’s principal
contention was, there existed no privity of contract and no landlord-tenant
relationship between Mr. Rathi and M/s A.T. Gooyee Enterprises. It was contended
by Mr. Lahiri that the agreement of leave and license dated 01/04/2004 was
executed between Mr. Rathi and M/s A.T. Goyee Enterprises. The partnership firm
produced the deed of partnership dated 16/08/1998 (Ext. A) wherein the name of the
firm appears as M/s A.T. Goyee Enterprises, general power of attorney dated
14/09/1999 (Ext. E, E/1, E/2) also used the spelling of the firm name as M/s A.T.
Goyee Enterprises. Then the deed of retirement of partner dated 31/03/2007
(Ext.D) and other exhibits show that the name of the firm is M/s A.T. Goyee
Enterprises. Inviting attention to deposition of PW 1, Mr. Lahiri submitted that P.W.
1 deposed that there was a typographical error and spelling mistake of the name of
the firm and the same got corrected but the answers were evasive. Referring to the
testimony of DW 1, Mr. Lahiri contended that in course of cross-examination, DW 1
being Mr. Rathi stated that he was a tenant under M/s A.T. Goyee Enterprises. DW 1
produced rent receipts (Ext.3), money receipts (Ext.4) and bank passbook (Ext.5)
which clearly show that the name is M/s A.T. Goyee Enterprises.
In nutshell, Mr. Lahiri contended that there is no privity of contract between
M/s A.T. Gooyee and Mr. Rathi. For this reason, no subsisting tenancy was
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determined and the suit for eviction as well as recovery of possession being CS 258 of
2009 is liable to be dismissed.
Mr. Ganguly, the Learned Counsel for the partnership firm submitted that it
was manifest from Ext. A that the partnership firm M/s A.T. Gooyee Enterprises
consisted of four partners being Manish Jaiswal, Manoj Jaiswal, Lalmohan
Chowrasia and Seema Sharma. A power of attorney was executed by two of the
partners Manish Jaiswal, Manoj Jaiswal which is Ext. E empowering Surendra
Prasad Jaiswal to act on behalf. It was partnership firm M/s A.T. Gooyee Enterprises
who took sub-lease of the suit premises as evidenced by Ext. C. Sum and substance
of the argument of Mr. Ganguly is that the entire defence is based on a mistake, in
describing the name of the firm in Ext. D, the name of the firm is just a business
name and not its identity like an incorporated company. Inviting attention to the
reverse side of the stamp paper used for Ext. D, namely, the license agreement, Mr.
Ganguly submitted that the spelling therein was M/s A.T. Gooyee Enterprises. This
clearly indicates that Mr. Rathi accepted both the names and both the spellings from
the very inception of the agreement. It is argued by Mr. Ganguly that Mr. Rathi fails
to produce any documents to prove existence of a firm named M/s A.T. Goyee
Enterprises.
To appreciate rival contentions, it is necessary to consider evidences adduced
by the parties.
The Deed of sub-lease dated 06/05/1999 was executed between M/s Delux
Builders & Promoters Ltd. as sub-lessor and M/s A.T. Gooyee Enterprises. The deed
was signed on behalf of the firm by Manish Jaiswal, Manoj Jaiswal, Lalman
Chourasia and Seema Sharma. In the said deed of sub-lease, the name of the firm
was “A.T. Gooyee Enterprises”. The Deed of Partnership dated 16/08/1999 was
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executed between Manish Jaiswal, Manoj Jaiswal, Lalman Chourasia and Seema
Sharma. Name of the partnership firm was mentioned as M/s A.T. Goyee
Enterprises. A Deed of Retirement was executed subsequently on 31/03/2007
evidencing retirements of Manoj and Manish Jaiswal and admission of S.P. Jaiswal
as partner. Name of the reconstituted partnership firm was M/s A.T. Gooyee
Enterprises. Place of business in both the deeds were mentioned as 157B, Lenin
Sarani, Kolkata – 700072. Two rent receipts, issued to Mr. Rathi dated 14/08/2008
and 14/10/2008 carried the name “M/s A.T. Goyee Enterprises”. The original leave
and license agreement spelt name of the firm as M/s Goyee Enterprises. The stamp
paper on which the first page of the said deed was typed had the name M/s Gooyee
Enterprises. Ext.5 was passbook in respect of bank account which contained an entry
with the name M/s Gooyee Enterprises. Mr. Rathi explained in evidence that this
entry showed payment of lease-rent as well as sub-lease rent to M/s A.T. Gooyee
Enterprises. This entry had corresponding date of 18/08/2008. This date was
subsequent to reconstitution of the partnership in terms of the Deed of Retirement
dated 31/03/2007. Another thing must be considered. In the written statement Mr.
Rathi stated (Para.9) that the sub-lease dated 06/05/1999 was executed between
M/s Delux Builders & Promoters Ltd and M/S A.T. Goyee Enterprises. In amended
written statement Mr. Rathi made the same averment (Para.11) with the spelling M/s
A.T. Gooyee Enterprise.
Mr. Rathi made averments in the written statement and amended written
statement that sub lease was executed between M/s Delux Builders & Promoters Ltd
and M/s A.T. Goyee Enterprises. In the Plaint of EOS 1 of 2010, it was mentioned
that the Defendant therein (M/s A.T. Goyee Enterprises) is the owner/landlord of the
entire basement. Mr. Rathi must be aware of the sub-lease deed as in his pleadings
he referred to the sub-lease deed executed between the partnership firm and M/s
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Delux Builders & Promoters Ltd. He must be aware of the spelling M/s A.T. Gooyee
Enterprises. When the leave and license agreement was executed it contained the
spelling M/s A.T. Goyee Enterprises whereas in the stamp paper the name came as
M/s A.T. Gooyee Enterprises. Mr. Rathi executed the agreement without any
objection and acted on it. Subsequently he tendered rent and the same was accepted
by M/s A.T. Gooyee Enterprises. Mr. Rathi in his deposition stated that he paid rent
by cheques. Entry in his passbook dated 18/08/2008 shows the entry bearing name
“A.T. Gooyee Enterprises”. He admitted that this is an entry in the passbook
evidencing payment of lease rent and sub-lease rent. This document was marked as
Ext. 5. This establish that without any dispute he accepted A.T. Gooyee Enterprises
as landlord to whom rent was paid and accepted. This contradicts his averments in
the additional written statement that rents paid in the name of A.T. Goyee
Enterprises. This establish that Mr. Rathi accepted his tenancy, as claimed, under
M/s A.T. Gooyee Enterprises. Nothing is there on record to show that at any point of
time he raised and objection on the dichotomy of the spelling or denied his liability to
pay rent to either of them. In fact, he himself used the spelling in his written
statements interchangeably. Therefore, safe conclusions which can be drawn are
that, firstly, Mr. Rathi is estopped from raising any dispute regarding two spellings;
secondly, he accepted both M/s A.T. Goyee Enterprises and M/s A.T. Gooyee
Enterprises as the selfsame entity with difference in spelling by inadvertent mistake;
thirdly, the defense raised herein is only a sham defense and afterthought which he is
estopped from raising.
Inevitable conclusion after aforesaid discussion is that there existed landlord-
tenant relationship between Mr. Rathi and the partnership firm; both M/s A.T.
Goyee Enterprises and M/s A.T. Goooyee Enterprises are selfsame entity.
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This issue is decided in favour of the partnership firm being the Defendant in
EOS 1 of 2010 and Plaintiff in CS 258 of 2009.
Issue no. 3 and 4:
The observation of this Court in clear language, as discussed above, is that the
relationship between the partnership firm and Mr. Rathi is one of landlord and
tenant. It was further observed that unlike and unregistered deed of lease, this
agreement is not void or devoid of any legal efficacy. Both the parties relied as well as
acted on this agreement. Interpreting the agreement (Ext. D) as an agreement of
tenancy, this Court merely wriggled out the true intention of the parties embedded in
it without discarding or avoiding the agreement to any extent. In fact, this agreement
stands.
Undisputed and admitted evidence is that payable sub-lease rent was
Rs.45,000/- and lease rent was Rs.1,000/- per month. Clearly the tenancy is not
covered by the West Bengal Premises Tenancy Act, 1997, rather it will be governed by
the provisions of the Transfer of Property Act, 1882. Therefore, it is decided in
respect of Issue no. 3 that Mr. Rathi is not entitled to protection or entitled to any
relief under the West Bengal Premises Tenancy Act, 1997.
Issue No.3 is therefore decided in favor of the partnership firm, against Mr.
Rathi.
As observed and reiterated that the agreement remains valid, this becomes
agreement of tenancy for a fixed tenure and on expiry of the same, unlike a statutory
tenant, Mr. Rathi has no right to occupation or possession of the suit premises.
When the landlord tenant relationship is guided by Transfer of Property Act, 1882
without the same being the lease or sub-lease unless there is holding over or
30 | P a g e
otherwise agreed upon, tenancy comes to an end, on expiry of the fixed period and
the tenant’s possession is akin to that of a trespasser. Plethora of decisions support
this contention. This being the position Mr. Rathi is liable to hand over the
possession to the suit premises to the partnership firm.
Once the tenancy expired by efflux of time and the occupation of Mr. Rathi is
akin to that of a trespasser; he is not entitled to decree in respect of the prayers other
than the prayer (a) in the plaint of EOS 1 of 2010.
Issue no. 4 is also decided against Mr. Rathi.
Issue No. 5,6 & 7:
It has already been decided above that on expiry of tenancy, occupation of Mr.
Rathi is akin to that of the trespasser. His occupation is unauthorized. He is also
liable to pay mesne profits, therefore, from the day when his occupation became
unauthorized, namely on and from 01/04/2009. This Court will fix a date of hearing
on mesne profits and rate at which it will be payable.
These issues are decided accordingly.
On appreciation of evidences and hearing the Learned Counsels, this Court
pass the following orders:
E.O.S/1/2010:
1. Mr. Rathi, the Plaintiff in EOS 1 of 2010 do get a decree of declaration that he
was a tenant of the M/s A.T. Gooyee Enterprises under the agreement
01/04/2004.
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2. Prayers (b) to (h) of the plaint in EOS 1 of 2010 are refused. EOS 1 of 2010
stands disposed of. Let decree be drawn up in EOS 1 of 2010 accordingly.
C.S/258/2009:
3. M/s A.T. Gooyee Enterprises, the Plaintiff in CS 258 of 2009 do get a decree
for recovery of possession of the suit premises.
4. Mr. Rathi shall hand over peaceful and vacant possession within 90 days from
the date of drawing up the preliminary decree of recovery of possession in case
of default the Plaintiff of CS 258 of 2009, M/s A.T. Gooyee Enterprises, shall
be at liberty to draw up execution proceeding.
5. Preliminary decree of recovery of possession may be drawn up.
Fix 12/11/2025 for hearing on mesne profit.
(Sugato Majumdar, J.)