THE HONBLE SRI JUSTICE A.V. SESHA SAI
WRIT PETITION No.15824 of 2006
09-02-2016
A.P. Gandhi Smaraka Nidhi, Rep. by Jr. Secretary, Gandhi Gyan Mandir, Sultan
Bazar, Hyderabad ... PETITIONER
Government of Andhra Pradesh, Rep. by Principal Secretary, Social Welfare
Department, Secretariat, Hyderabad and others RESPONDENTS
Counsel for petitioner : Sri V. Hari Haran
Counsel for Respondents: GP for Social Welfare
<GIST:
>HEAD NOTE:
?Cases referred
1.AIR 1959 SC 1262
2.AIR 1988 SC 184
3.AIR 1991 Kerla 281
4.AIR 1925 Mad. 434
THE HONBLE SRI JUSTICE A.V. SESHA SAI
WRIT PETITION No.15824 of 2006
ORDER:
The issue in the present writ petition arises under A.P.
Schedule Areas Land Transfer Regulations. In the present
writ petition challenge is to the order of the State Government
issued vide G.O.Ms.No.43 Social Welfare (LTR-2) Department,
dated 16-05-2006. By virtue of the said order, the 1st
respondent State Government confirmed the orders passed
by the District Collector/Agent to Government, Khammam
and the Spl. Deputy Collector.
The subject matter of the writ petition is the land
admeasuring 123.48 Hectors situated in Sy.No.287/18 of
Chirramalla village, Pinapaka mandal, Khammam District.
On the report submitted by the Mandal Revenue Officer
(Tahsildar), Pinapaka Mandal the Special Deputy Collector
pressed into service the provisions of A.P. Schedule Areas
Land Transfer Regulations (hereinafter called, Regulations)
and passed an order, dated 30-09-1993 in case
No.83/93/PNK, directing the Mandal Revenue Officer,
Pinapaka to take over the possession of the subject land on
the ground of violation and contravention of Regulations.
As against the said order of ejectment, the petitioner
preferred appeal before the Agent to Government/District
Collector and the District Collector by virtue of an order,
dated 25-02-1994 dismissed the said appeal vide
C.M.A.No.17 of 1993.
Assailing the said orders passed by the primary and
appellate authorities the petitioner preferred revision before
the State Government. The 1st respondent State
Government vide G.O.Ms.No.43, dated 16-05-2006 dismissed
the said revision filed by the petitioner. The said orders of the
primary, appellate and revisional authorities are under
challenge in the present writ petition.
This Court while ordering rule nisi on 31-07-2006 in
W.P.M.P.No.19730 of 2006 granted interim stay.
Heard Sri V. Hari Haran, learned counsel for the
petitioner and learned Government Pleader for Social Welfare
for respondents, apart from perusing the material available
before this Court.
Submissions/contentions of the learned counsel for the
petitioner:
1. The orders passed by the respondent authorities are
erroneous, contrary to law and opposed to the very spirit
and object of the provisions of Regulations.
2. Having held that the special leave and licence agreement
is inadmissible in evidence, the authorities ought to have
held in favour of the petitioner.
3. The leave and licence is not a transfer of interest in the
property and the same would not fall under the
definition of transfer as defined under the Regulations.
4. The respondent authorities ought to have appreciated
that no possession of the property much less any title
was transferred to the 4th respondent under the leave
and licence agreement.
5. Various clauses in the leave and licence agreement
categorically demonstrate titular and possessory rights
of the petitioner only.
6. The authorities ought to have seen that the petitioner
itself is an organization working for the welfare of the
Tribals, as such, the question of the petitioner
transferring any right to a non-tribal does not arise.
7. The authorities failed to note that the agreement by itself
does not have the effect of deviating the object of
Regulations. The reasoning of authorities to treat the
leave and licence agreement under the category of other
dealing as stipulated under Section 2 (g) of Regulation
is only erroneous and in-correct.
In support of his submissions and contentions the
learned counsel for the petitioner placed reliance on the
following judgments:
1. AIR 1959 SC 1262. (paragraph Nos.32, 33 and 36)
2. AIR 1988 SC 184. (paragraphNos.9, 10 and 14)
3. AIR 1991 KER 281. (paragraph Nos.4, 5 and 8)
4. AIR 1925 Mad 434 (paragraph Nos.2, 3 and 4)
The submissions/contentions of learned Government
Pleader:
1. There is no illegality nor there exists any infirmity in the
orders under challenge, as such, the present writ petition
is not maintainable and the petitioner is not entitled for
any relief from this Court under Article 226 of the
Constitution of India.
2. The subject transaction between the petitioner and
Bhadrachalam Paper Board falls under the definition of
transfer as defined under Clause 2 (g) of the Regulations,
as such, the same falls under the prohibition as
contained under Clause 3 of the Regulations.
3. Since the orders impugned are supported by valid and
cogent reasons, the same are not amenable for any
judicial review under Article 226 of the Constitution of
India.
4. Impugned orders are strictly in accordance with the
Regulations, as such, the present writ petition has no
merit and is liable to be dismissed.
In the above backdrop, the issues that boil down for
consideration of this Court are:
1. Whether the questioned orders are in accordance with the A.P.
Scheduled Area Land Transfer Regulations?
2. Whether the transaction between the petitioner and the
Bhadrachalam Paper Board is hit by the provisions of the
Regulations.
3. Whether the petitioner herein is entitled for any relief from this
Court under Article 226 of the Constitution of India?
The information available before this Court reveals that
the petitioner and the Bhadrachalam Paper Board entered
into an un-registered leave and licence on 27-02-1990. On
the ground that the said transaction amounts to transfer as
defined under Regulation 2(g) of the Regulations thereby
attracts the prohibition contained under Regulation 3,
respondent authorities passed the questioned orders.
On the otherhand, it is the case of the petitioner
precisely that the said transaction in between the petitioner
and the 5th respondent does not fall under the said
prohibitory regulations.
In order to examine the above said issues and for
arriving at just and correct conclusions, it may be apt and
appropriate to refer to the relevant recitals in the said
agreement of leave and licence, dated 27-02-1990. Clauses 2,
3, 4, 7, 8, 11 and 16 of the said agreement of leave and
licence read as under:
2. The FIRST PARTY agrees to grant an irrevocable
licence to the SECOND PARTY to carry out the
plantation management as envisaged in these presents
on the Scheduled Land, subject to the terms and
conditions hereof, and the SECOND PARTY agrees to
take up the said plantation management in the manner
set out hereunder and subject to the terms and
conditions of these presents.
3. For the purpose of and in the course of carrying
out the plantation management, the FIRST PARTY
hereby agrees that the SECOND PARTY shall and is
hereby permitted to do the following for and on behalf
and for the benefit of the FIRST PARTY:
a) to carry out survey of the Scheduled Land and make
appropriate plots or partitions, as may be required for
the purpose of carrying out these presents;
b) to level and develop the Scheduled Land including
digging and excavation in a scientific manner and
employing modern techniques;
c) to carry out all such operations and to do all such
acts, deeds and things as are necessary for and
incidental to the plantation management envisaged
under these presents;
d) to erect necessary temporary structures as are
required for the purpose on the Schedule Land;
e) to bring such machinery and tools and tackles for the
purpose of digging wells, laying pipes, and to provide
sprinklers and such other equipment on the Schedule
Land as are necessary for the purpose;
f) to provide for suitable storage tank on the Schedule
Land for storing water for plantation operations and
management;
g) to install requisite irrigation equipment, dig channels,
trenches, lay pipes, etc., on the Schedule Land;
h) to install pumps, electric poles, electrical equipment
and lay the power lines on the Schedule Land;
i) to bring and operate on the Schedule Land
mechanized and other transport vehicles for purposes of
carrying out the plantation management;
j) to bring water from adjacent lands and other sources
by such means as are convenient and economical to
create water facilities for the plantation operations;
k) to provide for suitable fence and stockades on the
Schedule Land, as may become necessary and
incidental in order to protect the Schedule Land and the
plantations, and the requisite equipment, implements,
etc., in the course of carrying out of the said plantation
management, and
l) to do all other acts, deeds, matters and things as are
incidental and ancillary to the operations envisaged in
these presents for the purpose of effectively carrying out
the plantation management.
4. The FIRST PARTY will have right to do inter-crop
cultivation between the tree-planting lines without,
however, damaging or interfering with the tree-
seedlings, for which the SECOND PARTY will not have
any objection.
7. In consideration of the FIRST PARTY agreeing to
sell the ultimate yield coming from the Schedule Land at
the end of each 7-year period as envisaged in these
presents and the SECOND PARTY being thus assured of
the steady and sustained supply of the raw material
required by it for its manufacturing operations, and
further the FIRST PARTY having agreed to sell the said
material at the pre-agreed firm rates as mentioned in
Clause (5) above irrespective of the market price of such
material at the end of each such 7-year period, the
SECOND PARTY agrees to bear all the expenses that
are required to be incurred by the FIRST PARTY for the
operations contemplated under these presents and shall
not lay any claim on the FIRST PARTY on this account,
subject, however, to Clause (14) infra.
8. The SECOND PARTY shall, at the end of each
year of leave and licence herein contemplated, furnish
to the FIRST PARTY a statement of account detailing the
expenditure incurred by the SECOND PARTY in carrying
out the plantation management as envisaged in these
presents upon the Schedule Land, and obtain from the
FIRST PARTY an acknowledgment thereon.
11. It is specifically understood and agreed by both
the parties that notwithstanding anything contained in
these presents, the ownership and possession of the
Schedule Land shall always remain and be deemed to
remain with the FIRST PARTY. It is also specifically
understood and agreed that no transfer of interest of
any kind in the Schedule Land shall or shall be deemed
to take place at any time from the FIRST PARTY to the
SECOND PARTY by virtue of these presents. The FIRST
PARTY shall be responsible for regular payment of all
taxes, cesses, assessment and other outgoings on the
Schedule Land.
16. It is mutually agreed that at the end of the
agreement period as envisaged in Clause (1) above, the
SECOND PARTY, if desired by the FIRST PARTY, leaves
the stumps on the Scheduled Land, free of any
compensation therefor. Likewise, the SECOND PARTY
agrees to leave all the structures of immovable nature
and improvements made on and attached to the
Schedule Land, against payment at their book value.
The Regulations relevant and pertinent for the present
case on hand are:
Regulations 2 (g) and 3(2)(a)&(b) of the Andhra Pradesh
Scheduled Areas Land Transfer Regulation, 1959, which read
as under:
Section 2(g): Transfer means mortgage with or without
possession lease, sale, gift, exchange or any other
dealing with immovable property, not being a
testamentary disposition and includes a charge on such
property or a contract relating to such property in
respect of such mortgage, lease, sale, gift, exchange or
other dealing.
Section 3 (2)(a): Where a transfer of immovable
property is made in contravention of sub-section (1), the
Agent, the Agency Divisional Officer or any other
prescribed Officer may, on application by any one
interested, or on information given in writing by a public
servant, or suo moto decree ejectment against any
person in possession of the property claiming under the
transfer, after due notice to him in the manner
prescribed and may restore it to the transfer or his
heirs.
Section 3(2)(b): If the transferer or his heirs are not
willing to take back the property or where their
whereabouts are not known, the Agent, the Agency
Divisional Officer or prescribed officer, as the case may
be, may order the assignment or sale of the property to
any other member of a Scheduled Tribe (or a society
registered or deemed to be registered under any law
relating to Co-operative Societies for the time being
inforce in the State) composed solely of members of the
Scheduled Tribes, or otherwise dispose of it, as if it was
a property at the disposal of State Government.
As per the recitals in the agreement of leave and licence,
dated 27-02-1990 the first party (petitioner herein) is the
absolute owner with exclusive possession of 123.48 Hectors
(305 acres of land) situated in Sy.No.287/18 of Chirramalla
village, Pinapaka mandal, Khammam District and the 1st
party is desirous of raising Eucalyptus trees/pulpwood
plantations suitable as raw material for manufacture of paper
and paperboards. It is further stipulated in the said leave and
licence agreement that the 2nd party (Bhadrachalam Paper
Board) has requisite knowledge and expertise in industrial
pulpwood plantations and management thereof by
introducing modern methods and by making use of modern
advanced and sophisticated technology in development of
land, crop management, in providing irrigation potential,
water distribution and conservation and proper use of water,
in providing inputs for better and healthy crop and in
protection and preservation of crop from pests and wastage,
etc. It is further clear from the agreement that the 1st party
petitioner herein approached the 2nd party Bhadrachalam
Paper Board with a request to take up plantation
management on his/her land and as a quid pro quo therefore
has further offered to sell the eventual produce of the
plantation on his land to the 2nd party on the terms and
conditions enumerated in the agreement. It is further clear
from the agreement that for the purpose of carrying out
plantation management the 1st party/petitioner herein agreed
to grant an irrevocable licence to the 2nd party to enter upon
the land and to do all acts, deeds, matters and things as are
necessary to carry out the said plantation management.
As per Clause 4 of the agreement the 1st party will have
right to do inter-crop cultivation between the tree-planting
lines without, damaging or interfering with the tree-seedlings,
for which the 2nd party will not have any objection. It is also
evident from Clause 11 of the agreement that the ownership
and possession of the schedule land shall always remain and
be deemed to remain with the 1st party/petitioner herein and
no transfer of interest of any kind in the schedule land shall
or shall be deemed to take place at any time from the 1st party
to the 2nd party.
In this context, it would be appropriate to refer to the
judgments cited by the learned counsel for the petitioner.
In case of Associated Hotels Of India Limited v.
R.N. Kapoor , the Honble Apex Court held at paragraph
Nos.32, 33 and 36 as under:
32. There is a marked distinction between a lease
and a licence. Section 105 of the Transfer of Property
Act defines a lease of immoveable property as a
transfer of a right to enjoy such property made for a
certain time in consideration for a price paid or
promised. Under s. 108 of the said Act, the lessee is
entitled to be put in possession of the property. A lease
is there-' fore a transfer of an interest in land. The
interest, transferred is called the leasehold interest. The
lessor parts with his right to enjoy the property during
the term of the lease, and it follows from it that the
lessee gets that right to the exclusion of the lessor.
Whereas s. 52 of the Indian Easements Act defines a
licence thus :
"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 immoveable 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."
33. Under the aforesaid section, 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. It
does not create in his favour any estate or interest n the
property. There is, therefore, cleat distinction between
the two concepts. The dividing line is clear though
sometimes it becomes very thin or even blurred. At one
time it was thought that the test of exclusive possession
was infalliable and if a person was given exclusive
possession of a premises, it would conclusively
establish that he was a lessee. But there was a change
and the recent trend of judicial opinion is reflected in
Errington v. Errington [1952] 1 All E.R. 149, wherein
Lord Denning reviewing the case law on the subject
summarizes the result of his discussion thus at p. 155:
"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 tenant, nevertheless he will not be held
to be so if the circumstances negative any intention to
create a tenancy."
36. The following propositions may, therefore, 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. Judged by the said tests, it is not possible to hold
that the document is one of licence. Certainly it does not
confer only a bare personal privilege on the respondent
to make use of the rooms. It puts him in exclusive
possession of them, untrammelled by the control and
free from the directions of the appellants. The covenants
are those that are usually found or expected to be
included in a lease deed. The right of the respondent to
transfer his interest under the document, although with
the consent of the appellants, is destructive of any
theory of licence. The solitary circumstance that the
rooms let out in the present case are situated in a
building wherein a hotel is run cannot make any
difference in the character of the holding. The intention
of the parties is clearly manifest, and the clever
phraseology used or the ingenuity of the document-
writer hardly conceals the real intent. I, therefore, hold
that under the document there was transfer of a right to
enjoy the two rooms, and, therefore, it created a
tenancy in favour of the respondent.
In case of Khalil Ahmed Bashir Ahmed v. Tufelhussein
Samasbhai Sarangpurwala , the Honble Apex Court held at
paragraph Nos.9, 10 and 14 as under:
9. In support of this appeal Sree R.F. Nariman very
laboriously took us through the documents. He
submitted that the document in question in the instant
case read as a whole was lease and not a licence. He
referred us to the decision of this Court in the case of
Associated Hotels of India Ltd. v. R.N. Kapoor, [1960] 1
S.C.R. 368 where at page 383 this Court noted that
there was a marked distinction between a lease and a
licence. Section 105 of the Transfer of Property Act,
1882 defined a lease of immovable property as a
transfer of a right to enjoy such property made for a
certain time in consideration of a price paid or promised.
Under section 108 of the said Act, the lessee is entitled
to be put in possession of the property. A lease involves
a transfer of an interest in land, Subba Rao, J. as the
learned Chief Justice then was, observed in that case.
This Court referred to the well-known decision in the
case of Errington v. Errington, [1952] 1 All E.R. 149
where Lord Denning reviewing the case law on the
subject summarized the position as follows:
"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 tenant, nevertheless he will not be held
to be so if the circumstances negative any intention to
create a tenancy."
The Court of Appeal in England again in Cobb v. Lane,
[1952] 1 All E.R. 1199 considered the legal position and
laid down that the intention of the parties was the real
test for ascertaining the character of a document.
Somervell, L.J., had observed:
"... The solution that would seem to have been found is,
as one would expect, that it must depend on the
intention of the parties."
Denning, L.J. also reiterated the same decision.
Reviewing these decisions Denning, L.J. had observed
at page 384 of the report (1) that to ascertain whether a
document created a licence or lease, the substance of
the document must be preferred to the form; (2) the real
test was the intention of the parties-whether they
intended to create a lease or a licence; (3) if the
document created an interest in the property, it is a
lease; but if it only permitted another to make use of the
property, of which the legal possession continued with
the owner, it was a licence; and (4) if under the
document a party got exclusive possession of the
property, prima facie, he was considered to be a tenant;
but circumstances might be established which negative
the intention to create a lease.
10. Mr. R.F. Nariman very strenuously relied on the
decision of this Court in Mrs. M.N. Clubwala and
another v. Fida Hussain Saheb and others, [1964] 6
S.C.R. 642 at page 653. This Court emphasised the if
the exclusive possession to which a person was entitled
under an agreement with a landlord was coupled with
an interest in the property, the agreement would be
construed not as a mere licence but as a lease. Mr.
Nariman's point was that the facts of the case were
identical to the facts of the present case. Our attention
was drawn to a decision of the Bombay High Court in
the case of Sohanlal Naraindas v. Laxmidas Raghunath
Gadit, (68 Bombay Law Reporter 400) where Tarkunde,
J. Observed that the intention of the parties and
exclusive possession were important elements. This
decision was approved in appeal by this Court in Sohan
Lal Naraindas v. Laxmidas Raghunath Gadit, [1971] 3
S.C.R. 319 where this Court reiterated that the test of
exclusive possession was important point. He drew our
attention to the observations of Shah, C.J. at page 321
of the Report. Reliance was also placed on the
observations of Krishna Iyer, J. in the decision of
Qudrat Ullah v. Municipal Board, Bareilly, [1974] 2
S.C.R. 530 where at page 533 of the report Krishna
Iyer, J. Observed that there is no simple litmus test to
distinguish a lease as defined in section 105, Transfer
of Property Act from licence as defined in section 52 of
the Easements Act, but the character of the transaction
turns on the operative intent of the parties. To put
precisely if an interest in immovable property entitling
the transferee to enjoyment was created, it was a lease;
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 and not a
lease as we discover the intent. For this purpose
reference may be made to the language used and the
restrictions put upon the use of the premises in question
by the appellant. In the document in question the
expression "licence" was introduced and clause (2) said
that it was only for the business purposes. The licence
fee was fixed. It permitted user only for 20 hours.
Restriction in the hours of work negates the case for a
lease. Clause (12) is significant which gave to the
licensor the right to enter upon the premises and inspect
the same at any time. In our opinion the background of
the facts of this case and the background of the entire
document negate the contention of the appellant that it
was a lease and not a licence.
14. In the aforesaid view of the matter, we are clearly
of the opinion that in view of the intention of the parties
in the document and the facts and circumstances of this
case, it was a licence and not a lease. We need not
detain ourselves with the question of estoppel upon
which very interesting arguments were advanced before
us by Mr. Nariman is noted above.
In case of T.K. Jacob v. Gracykutty and others , the
Kerala High Court held in paragraph Nos.4, 5 and 8 as under:
4. The recent decision of the Supreme Court on the
subject is reported in AIR 1988 SC 1845(RajbirKaurv.
M/s. Chokosiriand Co.). Venkatachaliah, J. speaking for
the Bench consisting of Chief Justice and himself has
articulately and lucidly considered the question
referring to the fundamental principles, in the decisions
of the Supreme Court. The Supreme Court said (at page
1850 of AIR 1988 SC):--
"Exclusive possession itself is not decisive in favour of a
lease and against a mere licence, for, even the grant of
exclusive possession might turn out to be only a licence
and not a lease where the grantor himself has no power
to grant the lease. In the last analysis the question
whether a transaction is a lease or a licence "turns on
the operative intention of the parties" and that there is
no single., simple litmus test to distinguish one from the
other."
5. The property in question is an extent of 90 cents. It is
within the Municipal Corporation limits. The document
shows that in the property, there were trees and the
executant reserved his rights to take the yield of the
trees. The document is Ext. Bl. It is dt. 31-3-1967. As
per the document, defendant obtained certain rights
stated in the document and for that, he has agreed to
pay a remuneration (rent) of Rs. 350/ - per mensum for
the first five years and thereafter, for the next five years
Rs. 375/-. Thus the period fixed in Ext. Bl is ten years.
Of course, there is a clause that after ten years, if the
first defendant wants, the period can be extended on a
rent to be fixed on mutual agreement of the parties. In
the document, it is stated that the property is taken for
a commercial purpose, to wit, stacking timber. It is also
provided in the document that necessary sheds can be
constructed by the defendant for facilitating the
commercial purpose of the defendant. , There it is stated
that he is allowed to do it as a licensee and further it is
provided that after the expiry of the period, the
structures Court by the defendant have to be removed
by him and vacant possession of the property has to be
given to the owner of the property --Vakkachan.
8. In Quadrat Ullah v. Bareilly Municipality (AIR
1974 SC 396), Krishna lyer, J. had occasion to consider
the question in detail. This decision has been referred to
in -AIR 1988 SC 1845. Krishna lyer, J. said that . "there
is no simple litmus test to distinguish a lease as defined
in Section 105 of the Transfer of Property Act from a
licence as defined in Section 52 of the Easements Act,
but the character of the transactions turns on the
operative intent of the parties. To put it pithily, if an
interest in immovable property, entitling the transferors
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 right."
In case of the Acting Secretary, Board of Revenue
(Separate Revenue) v. the Agent, South Indian Railway
Company Limited , the Madras High Court held in paragraph
Nos.2 to 5 as under:
2. Ordinarily a lease is a grant of property for a time by
one who has a greater interest in the property, the
consideration being usually the payment of rent. A
license, on the other hand, is a permission to do some
act which, without such permission, it would be
unlawful to do. All the cases to which we have been
referred make the distinction between a lease and a
license to depend upon whether sole and exclusive
occupation is given.
3. Now, the document in its terms contains a number of
restrictions which might be consistent with the grant of
a lease but which collectively indicate in my opinion
that what was granted was a license. The drawer of the
document was evidently anxious to avoid giving a lease
so as not to contravene the instructions of the
Government of India that Railway Companies have no
permission to lease lands in their possession without
the concurrence of the Secretary of State. Throughout
the document the person who is given possession is
called a "licensee," and in Clause 12 there is an express
provision that "nothing herein contained shall be
construed to create a tenancy in favour of the licensee."
The fact that certain clauses of the agreement impose
conditions which would be ordinarily implied by the
grant of a license but would be exceptions to the grant
of a lease, does not necessarily indicate that it is a
lease. These clauses were probably inserted ex
abundante cautela; for instance, under Clause 4 " The
licensee shall allow the General Traffic Manager . . . or
any one authorised by him in this behalf free access at
all times to the said land." Clause 1 makes the use of
the land subject to any regulations or by-laws as may
from time to time be passed. Under Clause 2 the
licensee is prohibited from erecting any building on the
land. Under Clause 3 he cannot allow the land to be
used for any other goods but his own. Under Clause 6
there is an agreement to pay rent, but that of itself will
not make the document a lease. It is simply a misuse of
the term to call it "rent "instead of "fees" if it is not a
lease. Clause 10 further provides for the "privileges," as
they are termed, not being transferred or sub-let without
the consent of the General Traffic Manager. Clause 11
provides for the license being revocable on 15 days'
notice on either side. Finally, the document is one
signed by both parties to the agreement and is not a
unilateral deed. All these terms which I have quoted
indicate that the merchants were not given the sole and
exclusive occupation of the plots of ground upon which
they were to deposit the coal.
4. That being so, the intention of the parties as gathered
from the document is against its being construed as a
demise of an interest in property. The ground put
forward by the Agent of the Railway for holding that the
document is a license rather than a lease, namely, that
in every lease the lessor should have a legal right to
lease out the land, does not affect my judgment. Even a
person without a title to land may execute what
purports to be a lease of that land. The test is not the
right of the lessor to give the lease, but the interest
intended by him to be created by the document. The fact
however that the Railway Company is prohibited by
orders of the Government of India from executing leases
of lands in their possession is important for
understanding the intention of the framer of the
document as showing that the Company would be
naturally averse to giving away any rights that ought to
be reserved. A number of cases have been quoted
before us, but the two which to my mind appear to have
most bearing on the question are Frank Warr and Co.,
Ltd. v. London County Council (1904) 1 KB 713, where
the use of refreshment rooms was given by the lessees
of a Theatre, and Sweetmeat Automatic Delivery Co. v.
Commissioners of Inland Revenue (1895) 1 QB 484,
where automatic machines were placed on the platform
of Railway Stations. In both these cases the permission
given was held to fall short of a lease for the reason
that no interest in land was given by the agreements.
5. Coming now to decisions of this Court, both in Seeni
Chettiar v. Santhanathan Chettiar (1896) ILR 20 M 58 :
6 MLJ 281 (FB) and in Mammi-kulti v. Puzhakkal Edom
(1906) ILR 29 M 353 the test of whether a document
was a lease or not was held to be whether it vested any
exclusive interest in immoveable property in the
transferee or whether it gave him merely a right to enter
on the property and to do something thereon.
A perusal of the appellate order passed by the Agent to the
Government discloses that the appellate authority, except
referring to the judgments of the Honble Apex Court, did not
examine the issues in the light of the principles laid down in
the said judgments. Though the petitioner filed written
submissions and also cited the judgments of the Honble Apex
Court, the revisional authority simply endorsed the orders of
the lower authorities. Except endorsing the orders of the
lower authorities, there was absolutely no objective
consideration by the revisional authority.
Another significant and peculiar aspect which requires
to be noted in this context is that on one hand the authorities
conclude that the subject document is inadmissible in
evidence and on the other hand, they attempted to interpret
the recitals contained therein against the petitioners. The
principles laid down in the above-referred judgments in the
considered and definite opinion of this Court are squarely and
aptly applicable to the case on hand.
In the instant case also the recitals clearly show that
the petitioner did neither lose the possession of the property
nor parted with the same in order to indulge in any
transaction which attracts the prohibition as contained under
the Regulations. In absence of the necessary and mandatory
ingredients as contained in Section 2 (g) of the Regulations,
by any stretch of imagination, it cannot be concluded that the
transaction is hit by the Regulations.
Another vital aspect, which cannot be lost sight of is
that the petitioner is undertaking welfare activities in the
agency area for the tribal people, which fact is not disputed
by the respondents. In these circumstances, this Court is of
the considered opinion that the orders impugned in the
present writ petition are unsustainable and untenable as the
transaction in the instant case does not fall under the
definition of transfer as defined under Section 2 (g) of the
Regulations.
For the aforesaid reasons, the writ petition is allowed,
setting aside the orders of the 1st respondent State
Government issued vide G.O.Ms.No.43 Social Welfare (LTR-2)
Department, dated 16-05-2006, confirming the orders of the
Agent to Government, dated 27-02-1990 and the orders of the
Special Deputy Collector, dated 30-09-1993. There shall be
no order as to costs.
The Miscellaneous Petitions, if any, pending in this Writ
Petition shall stand closed.
___________________
A.V. SESHA SAI, J
February 09, 2016
WRIT PETITION No.15824 of 2006
09-02-2016
A.P. Gandhi Smaraka Nidhi, Rep. by Jr. Secretary, Gandhi Gyan Mandir, Sultan
Bazar, Hyderabad ... PETITIONER
Government of Andhra Pradesh, Rep. by Principal Secretary, Social Welfare
Department, Secretariat, Hyderabad and others RESPONDENTS
Counsel for petitioner : Sri V. Hari Haran
Counsel for Respondents: GP for Social Welfare
<GIST:
>HEAD NOTE:
?Cases referred
1.AIR 1959 SC 1262
2.AIR 1988 SC 184
3.AIR 1991 Kerla 281
4.AIR 1925 Mad. 434
THE HONBLE SRI JUSTICE A.V. SESHA SAI
WRIT PETITION No.15824 of 2006
ORDER:
The issue in the present writ petition arises under A.P.
Schedule Areas Land Transfer Regulations. In the present
writ petition challenge is to the order of the State Government
issued vide G.O.Ms.No.43 Social Welfare (LTR-2) Department,
dated 16-05-2006. By virtue of the said order, the 1st
respondent State Government confirmed the orders passed
by the District Collector/Agent to Government, Khammam
and the Spl. Deputy Collector.
The subject matter of the writ petition is the land
admeasuring 123.48 Hectors situated in Sy.No.287/18 of
Chirramalla village, Pinapaka mandal, Khammam District.
On the report submitted by the Mandal Revenue Officer
(Tahsildar), Pinapaka Mandal the Special Deputy Collector
pressed into service the provisions of A.P. Schedule Areas
Land Transfer Regulations (hereinafter called, Regulations)
and passed an order, dated 30-09-1993 in case
No.83/93/PNK, directing the Mandal Revenue Officer,
Pinapaka to take over the possession of the subject land on
the ground of violation and contravention of Regulations.
As against the said order of ejectment, the petitioner
preferred appeal before the Agent to Government/District
Collector and the District Collector by virtue of an order,
dated 25-02-1994 dismissed the said appeal vide
C.M.A.No.17 of 1993.
Assailing the said orders passed by the primary and
appellate authorities the petitioner preferred revision before
the State Government. The 1st respondent State
Government vide G.O.Ms.No.43, dated 16-05-2006 dismissed
the said revision filed by the petitioner. The said orders of the
primary, appellate and revisional authorities are under
challenge in the present writ petition.
This Court while ordering rule nisi on 31-07-2006 in
W.P.M.P.No.19730 of 2006 granted interim stay.
Heard Sri V. Hari Haran, learned counsel for the
petitioner and learned Government Pleader for Social Welfare
for respondents, apart from perusing the material available
before this Court.
Submissions/contentions of the learned counsel for the
petitioner:
1. The orders passed by the respondent authorities are
erroneous, contrary to law and opposed to the very spirit
and object of the provisions of Regulations.
2. Having held that the special leave and licence agreement
is inadmissible in evidence, the authorities ought to have
held in favour of the petitioner.
3. The leave and licence is not a transfer of interest in the
property and the same would not fall under the
definition of transfer as defined under the Regulations.
4. The respondent authorities ought to have appreciated
that no possession of the property much less any title
was transferred to the 4th respondent under the leave
and licence agreement.
5. Various clauses in the leave and licence agreement
categorically demonstrate titular and possessory rights
of the petitioner only.
6. The authorities ought to have seen that the petitioner
itself is an organization working for the welfare of the
Tribals, as such, the question of the petitioner
transferring any right to a non-tribal does not arise.
7. The authorities failed to note that the agreement by itself
does not have the effect of deviating the object of
Regulations. The reasoning of authorities to treat the
leave and licence agreement under the category of other
dealing as stipulated under Section 2 (g) of Regulation
is only erroneous and in-correct.
In support of his submissions and contentions the
learned counsel for the petitioner placed reliance on the
following judgments:
1. AIR 1959 SC 1262. (paragraph Nos.32, 33 and 36)
2. AIR 1988 SC 184. (paragraphNos.9, 10 and 14)
3. AIR 1991 KER 281. (paragraph Nos.4, 5 and 8)
4. AIR 1925 Mad 434 (paragraph Nos.2, 3 and 4)
The submissions/contentions of learned Government
Pleader:
1. There is no illegality nor there exists any infirmity in the
orders under challenge, as such, the present writ petition
is not maintainable and the petitioner is not entitled for
any relief from this Court under Article 226 of the
Constitution of India.
2. The subject transaction between the petitioner and
Bhadrachalam Paper Board falls under the definition of
transfer as defined under Clause 2 (g) of the Regulations,
as such, the same falls under the prohibition as
contained under Clause 3 of the Regulations.
3. Since the orders impugned are supported by valid and
cogent reasons, the same are not amenable for any
judicial review under Article 226 of the Constitution of
India.
4. Impugned orders are strictly in accordance with the
Regulations, as such, the present writ petition has no
merit and is liable to be dismissed.
In the above backdrop, the issues that boil down for
consideration of this Court are:
1. Whether the questioned orders are in accordance with the A.P.
Scheduled Area Land Transfer Regulations?
2. Whether the transaction between the petitioner and the
Bhadrachalam Paper Board is hit by the provisions of the
Regulations.
3. Whether the petitioner herein is entitled for any relief from this
Court under Article 226 of the Constitution of India?
The information available before this Court reveals that
the petitioner and the Bhadrachalam Paper Board entered
into an un-registered leave and licence on 27-02-1990. On
the ground that the said transaction amounts to transfer as
defined under Regulation 2(g) of the Regulations thereby
attracts the prohibition contained under Regulation 3,
respondent authorities passed the questioned orders.
On the otherhand, it is the case of the petitioner
precisely that the said transaction in between the petitioner
and the 5th respondent does not fall under the said
prohibitory regulations.
In order to examine the above said issues and for
arriving at just and correct conclusions, it may be apt and
appropriate to refer to the relevant recitals in the said
agreement of leave and licence, dated 27-02-1990. Clauses 2,
3, 4, 7, 8, 11 and 16 of the said agreement of leave and
licence read as under:
2. The FIRST PARTY agrees to grant an irrevocable
licence to the SECOND PARTY to carry out the
plantation management as envisaged in these presents
on the Scheduled Land, subject to the terms and
conditions hereof, and the SECOND PARTY agrees to
take up the said plantation management in the manner
set out hereunder and subject to the terms and
conditions of these presents.
3. For the purpose of and in the course of carrying
out the plantation management, the FIRST PARTY
hereby agrees that the SECOND PARTY shall and is
hereby permitted to do the following for and on behalf
and for the benefit of the FIRST PARTY:
a) to carry out survey of the Scheduled Land and make
appropriate plots or partitions, as may be required for
the purpose of carrying out these presents;
b) to level and develop the Scheduled Land including
digging and excavation in a scientific manner and
employing modern techniques;
c) to carry out all such operations and to do all such
acts, deeds and things as are necessary for and
incidental to the plantation management envisaged
under these presents;
d) to erect necessary temporary structures as are
required for the purpose on the Schedule Land;
e) to bring such machinery and tools and tackles for the
purpose of digging wells, laying pipes, and to provide
sprinklers and such other equipment on the Schedule
Land as are necessary for the purpose;
f) to provide for suitable storage tank on the Schedule
Land for storing water for plantation operations and
management;
g) to install requisite irrigation equipment, dig channels,
trenches, lay pipes, etc., on the Schedule Land;
h) to install pumps, electric poles, electrical equipment
and lay the power lines on the Schedule Land;
i) to bring and operate on the Schedule Land
mechanized and other transport vehicles for purposes of
carrying out the plantation management;
j) to bring water from adjacent lands and other sources
by such means as are convenient and economical to
create water facilities for the plantation operations;
k) to provide for suitable fence and stockades on the
Schedule Land, as may become necessary and
incidental in order to protect the Schedule Land and the
plantations, and the requisite equipment, implements,
etc., in the course of carrying out of the said plantation
management, and
l) to do all other acts, deeds, matters and things as are
incidental and ancillary to the operations envisaged in
these presents for the purpose of effectively carrying out
the plantation management.
4. The FIRST PARTY will have right to do inter-crop
cultivation between the tree-planting lines without,
however, damaging or interfering with the tree-
seedlings, for which the SECOND PARTY will not have
any objection.
7. In consideration of the FIRST PARTY agreeing to
sell the ultimate yield coming from the Schedule Land at
the end of each 7-year period as envisaged in these
presents and the SECOND PARTY being thus assured of
the steady and sustained supply of the raw material
required by it for its manufacturing operations, and
further the FIRST PARTY having agreed to sell the said
material at the pre-agreed firm rates as mentioned in
Clause (5) above irrespective of the market price of such
material at the end of each such 7-year period, the
SECOND PARTY agrees to bear all the expenses that
are required to be incurred by the FIRST PARTY for the
operations contemplated under these presents and shall
not lay any claim on the FIRST PARTY on this account,
subject, however, to Clause (14) infra.
8. The SECOND PARTY shall, at the end of each
year of leave and licence herein contemplated, furnish
to the FIRST PARTY a statement of account detailing the
expenditure incurred by the SECOND PARTY in carrying
out the plantation management as envisaged in these
presents upon the Schedule Land, and obtain from the
FIRST PARTY an acknowledgment thereon.
11. It is specifically understood and agreed by both
the parties that notwithstanding anything contained in
these presents, the ownership and possession of the
Schedule Land shall always remain and be deemed to
remain with the FIRST PARTY. It is also specifically
understood and agreed that no transfer of interest of
any kind in the Schedule Land shall or shall be deemed
to take place at any time from the FIRST PARTY to the
SECOND PARTY by virtue of these presents. The FIRST
PARTY shall be responsible for regular payment of all
taxes, cesses, assessment and other outgoings on the
Schedule Land.
16. It is mutually agreed that at the end of the
agreement period as envisaged in Clause (1) above, the
SECOND PARTY, if desired by the FIRST PARTY, leaves
the stumps on the Scheduled Land, free of any
compensation therefor. Likewise, the SECOND PARTY
agrees to leave all the structures of immovable nature
and improvements made on and attached to the
Schedule Land, against payment at their book value.
The Regulations relevant and pertinent for the present
case on hand are:
Regulations 2 (g) and 3(2)(a)&(b) of the Andhra Pradesh
Scheduled Areas Land Transfer Regulation, 1959, which read
as under:
Section 2(g): Transfer means mortgage with or without
possession lease, sale, gift, exchange or any other
dealing with immovable property, not being a
testamentary disposition and includes a charge on such
property or a contract relating to such property in
respect of such mortgage, lease, sale, gift, exchange or
other dealing.
Section 3 (2)(a): Where a transfer of immovable
property is made in contravention of sub-section (1), the
Agent, the Agency Divisional Officer or any other
prescribed Officer may, on application by any one
interested, or on information given in writing by a public
servant, or suo moto decree ejectment against any
person in possession of the property claiming under the
transfer, after due notice to him in the manner
prescribed and may restore it to the transfer or his
heirs.
Section 3(2)(b): If the transferer or his heirs are not
willing to take back the property or where their
whereabouts are not known, the Agent, the Agency
Divisional Officer or prescribed officer, as the case may
be, may order the assignment or sale of the property to
any other member of a Scheduled Tribe (or a society
registered or deemed to be registered under any law
relating to Co-operative Societies for the time being
inforce in the State) composed solely of members of the
Scheduled Tribes, or otherwise dispose of it, as if it was
a property at the disposal of State Government.
As per the recitals in the agreement of leave and licence,
dated 27-02-1990 the first party (petitioner herein) is the
absolute owner with exclusive possession of 123.48 Hectors
(305 acres of land) situated in Sy.No.287/18 of Chirramalla
village, Pinapaka mandal, Khammam District and the 1st
party is desirous of raising Eucalyptus trees/pulpwood
plantations suitable as raw material for manufacture of paper
and paperboards. It is further stipulated in the said leave and
licence agreement that the 2nd party (Bhadrachalam Paper
Board) has requisite knowledge and expertise in industrial
pulpwood plantations and management thereof by
introducing modern methods and by making use of modern
advanced and sophisticated technology in development of
land, crop management, in providing irrigation potential,
water distribution and conservation and proper use of water,
in providing inputs for better and healthy crop and in
protection and preservation of crop from pests and wastage,
etc. It is further clear from the agreement that the 1st party
petitioner herein approached the 2nd party Bhadrachalam
Paper Board with a request to take up plantation
management on his/her land and as a quid pro quo therefore
has further offered to sell the eventual produce of the
plantation on his land to the 2nd party on the terms and
conditions enumerated in the agreement. It is further clear
from the agreement that for the purpose of carrying out
plantation management the 1st party/petitioner herein agreed
to grant an irrevocable licence to the 2nd party to enter upon
the land and to do all acts, deeds, matters and things as are
necessary to carry out the said plantation management.
As per Clause 4 of the agreement the 1st party will have
right to do inter-crop cultivation between the tree-planting
lines without, damaging or interfering with the tree-seedlings,
for which the 2nd party will not have any objection. It is also
evident from Clause 11 of the agreement that the ownership
and possession of the schedule land shall always remain and
be deemed to remain with the 1st party/petitioner herein and
no transfer of interest of any kind in the schedule land shall
or shall be deemed to take place at any time from the 1st party
to the 2nd party.
In this context, it would be appropriate to refer to the
judgments cited by the learned counsel for the petitioner.
In case of Associated Hotels Of India Limited v.
R.N. Kapoor , the Honble Apex Court held at paragraph
Nos.32, 33 and 36 as under:
32. There is a marked distinction between a lease
and a licence. Section 105 of the Transfer of Property
Act defines a lease of immoveable property as a
transfer of a right to enjoy such property made for a
certain time in consideration for a price paid or
promised. Under s. 108 of the said Act, the lessee is
entitled to be put in possession of the property. A lease
is there-' fore a transfer of an interest in land. The
interest, transferred is called the leasehold interest. The
lessor parts with his right to enjoy the property during
the term of the lease, and it follows from it that the
lessee gets that right to the exclusion of the lessor.
Whereas s. 52 of the Indian Easements Act defines a
licence thus :
"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 immoveable 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."
33. Under the aforesaid section, 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. It
does not create in his favour any estate or interest n the
property. There is, therefore, cleat distinction between
the two concepts. The dividing line is clear though
sometimes it becomes very thin or even blurred. At one
time it was thought that the test of exclusive possession
was infalliable and if a person was given exclusive
possession of a premises, it would conclusively
establish that he was a lessee. But there was a change
and the recent trend of judicial opinion is reflected in
Errington v. Errington [1952] 1 All E.R. 149, wherein
Lord Denning reviewing the case law on the subject
summarizes the result of his discussion thus at p. 155:
"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 tenant, nevertheless he will not be held
to be so if the circumstances negative any intention to
create a tenancy."
36. The following propositions may, therefore, 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. Judged by the said tests, it is not possible to hold
that the document is one of licence. Certainly it does not
confer only a bare personal privilege on the respondent
to make use of the rooms. It puts him in exclusive
possession of them, untrammelled by the control and
free from the directions of the appellants. The covenants
are those that are usually found or expected to be
included in a lease deed. The right of the respondent to
transfer his interest under the document, although with
the consent of the appellants, is destructive of any
theory of licence. The solitary circumstance that the
rooms let out in the present case are situated in a
building wherein a hotel is run cannot make any
difference in the character of the holding. The intention
of the parties is clearly manifest, and the clever
phraseology used or the ingenuity of the document-
writer hardly conceals the real intent. I, therefore, hold
that under the document there was transfer of a right to
enjoy the two rooms, and, therefore, it created a
tenancy in favour of the respondent.
In case of Khalil Ahmed Bashir Ahmed v. Tufelhussein
Samasbhai Sarangpurwala , the Honble Apex Court held at
paragraph Nos.9, 10 and 14 as under:
9. In support of this appeal Sree R.F. Nariman very
laboriously took us through the documents. He
submitted that the document in question in the instant
case read as a whole was lease and not a licence. He
referred us to the decision of this Court in the case of
Associated Hotels of India Ltd. v. R.N. Kapoor, [1960] 1
S.C.R. 368 where at page 383 this Court noted that
there was a marked distinction between a lease and a
licence. Section 105 of the Transfer of Property Act,
1882 defined a lease of immovable property as a
transfer of a right to enjoy such property made for a
certain time in consideration of a price paid or promised.
Under section 108 of the said Act, the lessee is entitled
to be put in possession of the property. A lease involves
a transfer of an interest in land, Subba Rao, J. as the
learned Chief Justice then was, observed in that case.
This Court referred to the well-known decision in the
case of Errington v. Errington, [1952] 1 All E.R. 149
where Lord Denning reviewing the case law on the
subject summarized the position as follows:
"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 tenant, nevertheless he will not be held
to be so if the circumstances negative any intention to
create a tenancy."
The Court of Appeal in England again in Cobb v. Lane,
[1952] 1 All E.R. 1199 considered the legal position and
laid down that the intention of the parties was the real
test for ascertaining the character of a document.
Somervell, L.J., had observed:
"... The solution that would seem to have been found is,
as one would expect, that it must depend on the
intention of the parties."
Denning, L.J. also reiterated the same decision.
Reviewing these decisions Denning, L.J. had observed
at page 384 of the report (1) that to ascertain whether a
document created a licence or lease, the substance of
the document must be preferred to the form; (2) the real
test was the intention of the parties-whether they
intended to create a lease or a licence; (3) if the
document created an interest in the property, it is a
lease; but if it only permitted another to make use of the
property, of which the legal possession continued with
the owner, it was a licence; and (4) if under the
document a party got exclusive possession of the
property, prima facie, he was considered to be a tenant;
but circumstances might be established which negative
the intention to create a lease.
10. Mr. R.F. Nariman very strenuously relied on the
decision of this Court in Mrs. M.N. Clubwala and
another v. Fida Hussain Saheb and others, [1964] 6
S.C.R. 642 at page 653. This Court emphasised the if
the exclusive possession to which a person was entitled
under an agreement with a landlord was coupled with
an interest in the property, the agreement would be
construed not as a mere licence but as a lease. Mr.
Nariman's point was that the facts of the case were
identical to the facts of the present case. Our attention
was drawn to a decision of the Bombay High Court in
the case of Sohanlal Naraindas v. Laxmidas Raghunath
Gadit, (68 Bombay Law Reporter 400) where Tarkunde,
J. Observed that the intention of the parties and
exclusive possession were important elements. This
decision was approved in appeal by this Court in Sohan
Lal Naraindas v. Laxmidas Raghunath Gadit, [1971] 3
S.C.R. 319 where this Court reiterated that the test of
exclusive possession was important point. He drew our
attention to the observations of Shah, C.J. at page 321
of the Report. Reliance was also placed on the
observations of Krishna Iyer, J. in the decision of
Qudrat Ullah v. Municipal Board, Bareilly, [1974] 2
S.C.R. 530 where at page 533 of the report Krishna
Iyer, J. Observed that there is no simple litmus test to
distinguish a lease as defined in section 105, Transfer
of Property Act from licence as defined in section 52 of
the Easements Act, but the character of the transaction
turns on the operative intent of the parties. To put
precisely if an interest in immovable property entitling
the transferee to enjoyment was created, it was a lease;
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 and not a
lease as we discover the intent. For this purpose
reference may be made to the language used and the
restrictions put upon the use of the premises in question
by the appellant. In the document in question the
expression "licence" was introduced and clause (2) said
that it was only for the business purposes. The licence
fee was fixed. It permitted user only for 20 hours.
Restriction in the hours of work negates the case for a
lease. Clause (12) is significant which gave to the
licensor the right to enter upon the premises and inspect
the same at any time. In our opinion the background of
the facts of this case and the background of the entire
document negate the contention of the appellant that it
was a lease and not a licence.
14. In the aforesaid view of the matter, we are clearly
of the opinion that in view of the intention of the parties
in the document and the facts and circumstances of this
case, it was a licence and not a lease. We need not
detain ourselves with the question of estoppel upon
which very interesting arguments were advanced before
us by Mr. Nariman is noted above.
In case of T.K. Jacob v. Gracykutty and others , the
Kerala High Court held in paragraph Nos.4, 5 and 8 as under:
4. The recent decision of the Supreme Court on the
subject is reported in AIR 1988 SC 1845(RajbirKaurv.
M/s. Chokosiriand Co.). Venkatachaliah, J. speaking for
the Bench consisting of Chief Justice and himself has
articulately and lucidly considered the question
referring to the fundamental principles, in the decisions
of the Supreme Court. The Supreme Court said (at page
1850 of AIR 1988 SC):--
"Exclusive possession itself is not decisive in favour of a
lease and against a mere licence, for, even the grant of
exclusive possession might turn out to be only a licence
and not a lease where the grantor himself has no power
to grant the lease. In the last analysis the question
whether a transaction is a lease or a licence "turns on
the operative intention of the parties" and that there is
no single., simple litmus test to distinguish one from the
other."
5. The property in question is an extent of 90 cents. It is
within the Municipal Corporation limits. The document
shows that in the property, there were trees and the
executant reserved his rights to take the yield of the
trees. The document is Ext. Bl. It is dt. 31-3-1967. As
per the document, defendant obtained certain rights
stated in the document and for that, he has agreed to
pay a remuneration (rent) of Rs. 350/ - per mensum for
the first five years and thereafter, for the next five years
Rs. 375/-. Thus the period fixed in Ext. Bl is ten years.
Of course, there is a clause that after ten years, if the
first defendant wants, the period can be extended on a
rent to be fixed on mutual agreement of the parties. In
the document, it is stated that the property is taken for
a commercial purpose, to wit, stacking timber. It is also
provided in the document that necessary sheds can be
constructed by the defendant for facilitating the
commercial purpose of the defendant. , There it is stated
that he is allowed to do it as a licensee and further it is
provided that after the expiry of the period, the
structures Court by the defendant have to be removed
by him and vacant possession of the property has to be
given to the owner of the property --Vakkachan.
8. In Quadrat Ullah v. Bareilly Municipality (AIR
1974 SC 396), Krishna lyer, J. had occasion to consider
the question in detail. This decision has been referred to
in -AIR 1988 SC 1845. Krishna lyer, J. said that . "there
is no simple litmus test to distinguish a lease as defined
in Section 105 of the Transfer of Property Act from a
licence as defined in Section 52 of the Easements Act,
but the character of the transactions turns on the
operative intent of the parties. To put it pithily, if an
interest in immovable property, entitling the transferors
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 right."
In case of the Acting Secretary, Board of Revenue
(Separate Revenue) v. the Agent, South Indian Railway
Company Limited , the Madras High Court held in paragraph
Nos.2 to 5 as under:
2. Ordinarily a lease is a grant of property for a time by
one who has a greater interest in the property, the
consideration being usually the payment of rent. A
license, on the other hand, is a permission to do some
act which, without such permission, it would be
unlawful to do. All the cases to which we have been
referred make the distinction between a lease and a
license to depend upon whether sole and exclusive
occupation is given.
3. Now, the document in its terms contains a number of
restrictions which might be consistent with the grant of
a lease but which collectively indicate in my opinion
that what was granted was a license. The drawer of the
document was evidently anxious to avoid giving a lease
so as not to contravene the instructions of the
Government of India that Railway Companies have no
permission to lease lands in their possession without
the concurrence of the Secretary of State. Throughout
the document the person who is given possession is
called a "licensee," and in Clause 12 there is an express
provision that "nothing herein contained shall be
construed to create a tenancy in favour of the licensee."
The fact that certain clauses of the agreement impose
conditions which would be ordinarily implied by the
grant of a license but would be exceptions to the grant
of a lease, does not necessarily indicate that it is a
lease. These clauses were probably inserted ex
abundante cautela; for instance, under Clause 4 " The
licensee shall allow the General Traffic Manager . . . or
any one authorised by him in this behalf free access at
all times to the said land." Clause 1 makes the use of
the land subject to any regulations or by-laws as may
from time to time be passed. Under Clause 2 the
licensee is prohibited from erecting any building on the
land. Under Clause 3 he cannot allow the land to be
used for any other goods but his own. Under Clause 6
there is an agreement to pay rent, but that of itself will
not make the document a lease. It is simply a misuse of
the term to call it "rent "instead of "fees" if it is not a
lease. Clause 10 further provides for the "privileges," as
they are termed, not being transferred or sub-let without
the consent of the General Traffic Manager. Clause 11
provides for the license being revocable on 15 days'
notice on either side. Finally, the document is one
signed by both parties to the agreement and is not a
unilateral deed. All these terms which I have quoted
indicate that the merchants were not given the sole and
exclusive occupation of the plots of ground upon which
they were to deposit the coal.
4. That being so, the intention of the parties as gathered
from the document is against its being construed as a
demise of an interest in property. The ground put
forward by the Agent of the Railway for holding that the
document is a license rather than a lease, namely, that
in every lease the lessor should have a legal right to
lease out the land, does not affect my judgment. Even a
person without a title to land may execute what
purports to be a lease of that land. The test is not the
right of the lessor to give the lease, but the interest
intended by him to be created by the document. The fact
however that the Railway Company is prohibited by
orders of the Government of India from executing leases
of lands in their possession is important for
understanding the intention of the framer of the
document as showing that the Company would be
naturally averse to giving away any rights that ought to
be reserved. A number of cases have been quoted
before us, but the two which to my mind appear to have
most bearing on the question are Frank Warr and Co.,
Ltd. v. London County Council (1904) 1 KB 713, where
the use of refreshment rooms was given by the lessees
of a Theatre, and Sweetmeat Automatic Delivery Co. v.
Commissioners of Inland Revenue (1895) 1 QB 484,
where automatic machines were placed on the platform
of Railway Stations. In both these cases the permission
given was held to fall short of a lease for the reason
that no interest in land was given by the agreements.
5. Coming now to decisions of this Court, both in Seeni
Chettiar v. Santhanathan Chettiar (1896) ILR 20 M 58 :
6 MLJ 281 (FB) and in Mammi-kulti v. Puzhakkal Edom
(1906) ILR 29 M 353 the test of whether a document
was a lease or not was held to be whether it vested any
exclusive interest in immoveable property in the
transferee or whether it gave him merely a right to enter
on the property and to do something thereon.
A perusal of the appellate order passed by the Agent to the
Government discloses that the appellate authority, except
referring to the judgments of the Honble Apex Court, did not
examine the issues in the light of the principles laid down in
the said judgments. Though the petitioner filed written
submissions and also cited the judgments of the Honble Apex
Court, the revisional authority simply endorsed the orders of
the lower authorities. Except endorsing the orders of the
lower authorities, there was absolutely no objective
consideration by the revisional authority.
Another significant and peculiar aspect which requires
to be noted in this context is that on one hand the authorities
conclude that the subject document is inadmissible in
evidence and on the other hand, they attempted to interpret
the recitals contained therein against the petitioners. The
principles laid down in the above-referred judgments in the
considered and definite opinion of this Court are squarely and
aptly applicable to the case on hand.
In the instant case also the recitals clearly show that
the petitioner did neither lose the possession of the property
nor parted with the same in order to indulge in any
transaction which attracts the prohibition as contained under
the Regulations. In absence of the necessary and mandatory
ingredients as contained in Section 2 (g) of the Regulations,
by any stretch of imagination, it cannot be concluded that the
transaction is hit by the Regulations.
Another vital aspect, which cannot be lost sight of is
that the petitioner is undertaking welfare activities in the
agency area for the tribal people, which fact is not disputed
by the respondents. In these circumstances, this Court is of
the considered opinion that the orders impugned in the
present writ petition are unsustainable and untenable as the
transaction in the instant case does not fall under the
definition of transfer as defined under Section 2 (g) of the
Regulations.
For the aforesaid reasons, the writ petition is allowed,
setting aside the orders of the 1st respondent State
Government issued vide G.O.Ms.No.43 Social Welfare (LTR-2)
Department, dated 16-05-2006, confirming the orders of the
Agent to Government, dated 27-02-1990 and the orders of the
Special Deputy Collector, dated 30-09-1993. There shall be
no order as to costs.
The Miscellaneous Petitions, if any, pending in this Writ
Petition shall stand closed.
___________________
A.V. SESHA SAI, J
February 09, 2016
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