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CASE NO.: Appeal (civil)  6203 of 1999

PETITIONER: Achintya Kumar saha

RESPONDENT: M/s Nanee Printers and Others                            

DATE OF JUDGMENT: 30/01/2004

BENCH: P.VENKATARAMA REDDI &  S.H. KAPADIA.

JUDGMENT: JUDGMENT

Kapadia, J.

       Ashok Kumar Bose (since deceased) was the owner of the  premises No. 119/1A, Harish Mukherjee Road, Bhowanipore, Calcutta  \026 700 026.  He died leaving behind him his wife Smt. Madhuri Bose,  (since deceased), Shri Ajoy Kumar Bose (son) and a daughter.  Ashok  Kumar Bose left a Will dated 1st March, 1974 bequeathing all his  properties to his widow Smt. Madhuri Bose for the period of her     natural life, but with no right to alienate the property and thereafter to  his son Ajoy Kumar Bose (respondent No. 4 herein).  On 5th July, 1976  Smt. Madhuri Bose executed an agreement of licence for 11 years in  favour of M/s Nanee Printers, a proprietary firm carried on by one  Ranaji Ganguly (respondent Nos. 1 and 2 herein). On 10th October,  1980, the appellant herein bought the entire property No. 119/1A  including the suit premises consisting of a Printing Press in a Katcha  shed from Ajoy  Kumar  Bose (respondent No.4) to which the  deceased Smt. Madhuri Bose was a confirming party.  On 7th July,  1981, the present appellant filed a Title Suit for eviction against  respondent Nos. 1 and 2 herein and sought possession of the suit  premises.  In the Title Suit, a declaration was sought to the effect that  M/s Nanee Printers were in unauthorised occupation of the suit  premises as trespassers on revocation of the leave and licence  agreement dated 5th July, 1976.  M/s Nanee Printers contested the Title  Suit.  In the written statement, they alleged that they were monthly  tenants in the suit premises; that the purported agreement dated 5th July  1976 was a tenancy in disguise of a  licence; that Shri Ajoy Kumar  Bose (respondent No. 4 herein) was a consenting party to the  agreement dated 5th July, 1976 and since respondent No. 2 herein was  in need of accommodation, he had no option but to sign the agreement  dated 5th July, 1976.  By the written statement, M/s Nanee Printers  denid that Smt. Madhuri Bose (since deceased) had no right to let out  the suit premises on rent.  It was further alleged by M/s Nanee Printers  that under the agreement dated 5th July 1976, M/s Nanee Printers were  permitted to install electricity and telephone in the premises and under  the circumstances they were tenants in respect of the premises.  In the  alternative it was alleged that even if they were held to be licensees,  the said licence was irrevocable and therefore, the suit was liable to be  dismissed with costs.                  In the said suit, the following issues were framed by the trial  court: "1.     Is this suit maintainable? 2.      Has the suit been properly valued? 3.      Has the Court fees been paid sufficient? 4.      Has this Court jurisdiction to try the suit? 5.      Are the defendant Nos. 2 and 3 thika tenants in respect of  the suit premises?

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6.      Is there any relation of landlord and tenant between the  parties? 7.      Are the defendants tenants or licensees in respect of the  suit premises? 8.      If the defendants nos. 2 to 3 are found to be licensees,  whether the said license is revocable or not? 9.      Is the plaintiff entitled to get a decree as prayed for? 10.     To what other reliefs, the plaintiff is entitled?"                  By judgment and order dated 29th August 1992, the trial Court  came to the conclusion that respondent Nos. 1 and 2 herein were  licensees and not tenants; that the licence was for 11 years for running  a Printing Press with liberty to  the licensor to renew the licence for  further 11 years and therefore, respondent Nos. 1 and 2 were not  trespassers as alleged by the appellant (plaintiff) herein.  The trial  Court further found that Shri Ajoy Kumar Bose (respondent No.4)  was fully aware of the agreement dated 5th July, 1976 between his  mother Smt. Madhuri Bose on one hand and respondent Nos. 1 and 2  herein on the other hand and that he had consented to the agreement  dated 5th July, 1976 by his conduct.  However, the trial court found  that respondent Nos. 1 and 2 have failed to prove monthly tenancy.  The trial court further found that the licence was irrevocable as  respondent Nos. 1 and 2 had raised a permanent construction and  extension over the existing structure by 50 feet with the consent of  Smt. Madhuri Bose and her son respondent No.4.  The trial court  further found that Shri Ajoy Kumar Bose (respondent No. 4) was an  important witness and yet he was not examined by the appellant  herein.  In the circumstances, the trial court dismissed the Title Suit  filed by the appellant.

       Being aggrieved by the judgment and order of the trial court,  the appellant herein filed an appeal before the 9th Additional District  Judge, Alipore vide Title Appeal No. 132 of 1993.  By judgment and  order dated 10th May 1996, the Appellate Court allowed the appeal  holding that Smt. Madhuri Bose had a limited ownership right and she  was not competent to create any right in property and transfer the  same in favour of respondent Nos. 1 and 2. The first Appellate Court  further found that there was no evidence of a irrevocable licence in  favour of respondent Nos. 1 and 2 and, therefore, the judgment of the  trial court was reversed and a decree of eviction was passed in favour  of the appellants herein and against respondent Nos. 1 and 2 herein.   Although the first Appellate Court allowed respondent Nos. 1 and 2 to  argue on the question of tenancy, the Court did not adjudicate upon  that question.    

       Being aggrieved by the judgment and order of the first  Appellate Court dated 10th May 1996, respondent Nos. 1 and 2 herein  preferred an appeal before the High Court being Second Appeal No.  510 of 1996 inter alia on the ground that the first  Appellate Court had  failed to adjudicate the question of tenancy; that the first Appellate  Court had failed to appreciate that the licence in question was tenancy  in disguise.  At this stage, it may be noted that in the Second Appeal  preferred by respondent Nos. 1 and 2 before the High Court, the plea  of irrevocable licence was given up.  At this stage, it may be pointed  out that during the pendency of the appeal before the High Court,  respondent Nos. 1 and 2 herein had moved an application under  Section 107 Civil Procedure Code (C.P.C.) and under Order XLI Rule  23 C.P.C. for amendment of the written statement filed by respondent  Nos. 1 and 2 in the trial court.  By judgment and order dated 31st  January 1997, the application for amendment of the written statement  was dismissed by the High Court pending the hearing and final  disposal of the Second Appeal.

       By judgment and order dated 16th September, 1998 passed by  the High Court in Second Appeal No. 510 of 1996, the High Court

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came to the conclusion that since exclusive possession of the suit  premises was given for business purposes in a residential area for  consideration to respondent Nos. 1 and 2 with a right to make further  construction, the agreement dated 5th July, 1976 was a tenancy and not  a licence.  The High Court further found that under the agreement  dated 5th July 1976, respondent Nos. 1 and 2 were entitled to bring in  electricity and telephone connection which also indicated that the  object of the agreement was to create a tenancy.  The High Court  further found that the purported licence was for 11 years with  authority given to the licensor Smt. Madhuri Bose to renew the  licence for further 11 years also indicated that the agreement was that  of a tenancy and not a licence.  The High Court came to the  conclusion that the agreement was given a nomenclature of leave and  licence in order to avoid the provisions of West Bengal Premises  Tenancy Act, 1956 (hereinafter referred to as "the said Act 1956").  In  the circumstances, the High Court came to the conclusion that the suit  instituted by the appellants for eviction of respondent Nos. 1 and 2 as  trespassers was not maintainable.  That in this case, respondent No. 4  was an important witness and yet he was not examined by the  appellant and in the circumstances, the First Appellate Court ought to  have drawn an adverse inference against the appellant. The High  Court further observed that even municipal taxes were payable and  paid by respondent Nos. 1 and 2 which circumstance supported the  case of tenancy in favour of respondent Nos. 1 and 2.  While allowing  the appeal, the High Court further observed that the tenancy for 11  years came within the  purview of the said Act 1956 and in the  absence of notice under Section 13(6)(g) of the said Act 1956 and in  the absence of any of the grounds of eviction under Section 13(1) of  the said Act 1956, the impugned decree was a nullity.  Accordingly,  the High Court allowed the Second Appeal No. 510 of 1996 filed by  respondent Nos. 1 and 2 and set aside the judgment and order passed  by the First Appellate Court and dismissed the suit filed by the  appellant herein.  Being aggrieved by the judgment and order passed  by the High Court, the appellant has come to this Court by way of  special leave.

       Before coming to the arguments, we may point out that in cases  where courts are required to consider the nature of transactions and  the status of parties thereto, one cannot go by mere nomenclatures  such as, licence, licensee, licensor, licence fee etc.  In order to  ascertain the substance of the transaction, we have to ascertain the  purpose and the substance of the agreement.  In such cases, intention  of the parties is the deciding factor.  In order to ascertain the intention,  we have to examine the surrounding circumstances including the  conduct of the parties.  In the present case, the High Court was right in  examining the terms of agreement coupled with the circumstances  surrounding the agreement in question like exclusive possession of the  premises being given to respondent Nos. 1 and 2 for monetary  consideration for 11 years with a clause of renewal of the licence for  further 11 years; payment of municipal taxes by respondent Nos. 1  and 2, the rent receipts issued by Smt. Madhuri Bose, the premises  being let out for business purposes in a residential locality and  conduct of the plaintiffs in not examining Ajoy Kumar Bose  (respondent No.4) who is held to have consented to the agreement in  question. All the above circumstances taken together show that  respondent Nos. 1 and 2 were not trespassers. They show that the  agreement was a tenancy in disguise of a licence.

       Mr. Sanyal, learned senior counsel for the appellant contended  that a bare look at Section 100 C.P.C. shows that the jurisdiction of  the High Court to entertain the second appeal is confined to appeals  which involve substantial question of law specifically set out in the  Memo of Appeal and formulated by the High Court.  He contended  that in the present case no such question has been set out in the Memo  of Appeal and nor is the question so formulated and the High Court

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was, therefore, not justified in entertaining the Second Appeal. He  further contended that in second appeal, the High Court proceeded to  entertain a new plea of tenancy under the West Bengal Premises  Tenancy Act, 1956 and even rendered its decision on the said point  without following the mandatory provisions of Section 100 C.P.C.  He  submitted that tenancy under the said Act 1956 was never in issue. He  submitted that the judgment of the High Court was illegal and in  excess of its jurisdiction for deciding a new point taken up for the first  time in second appeal and, therefore, not sustainable and deserves to  be set aside.  In this connection, reliance was placed by him on the  judgment of this Court in the case of Kshitish Chandra Purkait vs.  Santosh Kumar Purkait and Others reported in (1997) 5 SCC 438.   Mr. Sanyal further contended that on 6th April 1992 an application  was moved by respondent Nos. 1 and 2 to amend the written  statement pending the hearing and final disposal of second appeal  before the High Court which was expressly rejected by the High Court  vide its order dated 31st January 1997.  In this connection, it was  pointed out that respondent Nos. 1 and 2 had applied for amendment  of the written statement vide application dated 6.4.1992 in the Title  Suit of 1981 and by that application they attempted to raise a new plea  of statutory tenancy under the said Act 1956 which was rejected by  the High Court in second appeal, and yet by the impugned judgment,  the High Court has held that respondent Nos. 1 and 2 were the tenants  under the said Act 1956.  Mr. Sanyal, therefore, contended that the  High Court had erred in entertaining a new plea for the  first time in  second appeal and that it had erred in rendering a decision on a new  point without even prior notice thereof to the appellants which was  not permissible under Section 100 C.P.C. and consequently, the  impugned judgment deserves to be set aside.  Learned counsel for the  appellant further contended that the High Court had erred in invoking  Section 103 C.P.C. in this case.  He contended that section 103 C.P.C.  had no application to the facts of this case as respondent Nos. 1 and 2  had given up the plea of tenancy (issue No. 6) before the trial Court.   He further contended that the trial court in the Title Suit had  categorically come to the conclusion that respondent Nos. 1 and 2  were not the tenants of the suit premises and despite that declaration  no cross objection was filed before the First Appellate Court. He  further pointed out that even the plea of irrevocable licence was given  up by respondent Nos. 1 and 2 in second appeal before the High  Court.  Mr. Sanyal, learned senior counsel for the appellant contended  that in order to attract section 103 C.P.C., the appellate Court must be  satisfied that an issue necessary for the disposal of the appeal had  arisen before the lower appellate court which has not been decided by  the lower appellate court or which has been wrongly decided by the  said Court.  In the circumstances, he submitted that the High Court  had erred in invoking section 103 C.P.C. in this case.

       We do not find any merit in the arguments advanced on behalf  of the appellant.  The main issue around which the entire case evolves  is : whether the agreement dated 5.7.1976 was a license or a tenancy.   This issue was there before the trial court and the agreement was held  to be a license.  It was there also before the lower Appellate Court but  it was not adjudicated upon.  When the core issue is not adjudicated  upon, it results in a substantial question of law under section 100  C.P.C.  In the case of Santosh Hazari v. Purushottam Tiward (Dead)  by Lrs. reported in AIR 2001 SC 965, it has been held that whether a  question of law is a substantial question of law in a case will depend  on facts and circumstances of each case, the paramount consideration  being the need to strike a balance between obligation to do justice and  necessity to avoid prolongation of any dispute. In that matter, this  Court found that an important issue had arisen for determination  before the first appellate court: whether dependent had made out the  case of adverse possession and whether the suit filed by the plaintiff  was liable to be dismissed as barred by time under Article 65 of the  Limitation Act 1963, which issue was decided by a cryptic order

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passed by the first appellate court and in the circumstances this Court  took the view that failure to decide the core issue gives rise to a  substantial question of law.  In our view, the judgment of this Court in  the case of Santosh Hazari (supra) applies to the facts of this case.   Although the core issue of tenancy arose before the first appellate  court the same was not adjudicated upon and in the circumstances the  High Court was right in invoking Section 103 C.P.C.   Moreover as  can be seen from the record, the plea of tenancy was allowed to be  argued before the first appellate court but the said point was not  adjudicated upon.  Lastly, in the High Court in second appeal, this  point was argued by both sides whereupon the High Court gave its  finding to the effect that respondent Nos. 1 and 2 were tenants and  their tenancy cannot be terminated without notice under Section 13(6)  and the failure of appellant making out any of the grounds under  Section 13(1) of the said Act 1956.  Hence, the judgment of this Court  in the case of Kshitish Chandra (supra) has no application.  It is now  settled by the judgment of this Court in the case of V. Dhanapal  Chettiar vs. Yesodai Ammal reported in AIR 1979 SC 1745 that in  order to get a decree of eviction against the tenancy under any State  Rent Control Act, determination of a lease in accordance with the T.P.  Act is unnecessary and surplusage as the landlord cannot get the  eviction of the tenant even after such determination and the tenant  continues to be the tenant even thereafter till the landlord makes out a  case  under the Rent Act.  This position is also indicated by the  definition of the word ’tenant" under section 2(h) of the said Act  1956.           Lastly it has been contended on behalf of the appellant that  agreement dated 5th July 1976 has since expired by afflux of time  during the pendency of proceedings and in view of subsequent event  the High Court should have moulded the relief and granted decree for  eviction on that ground alone.  We do not find any merit in this  argument.  The Title Suit filed by the appellant was on the basis that  the agreement dated 5th July, 1976 was a licence which stood revoked  and on revocation the said respondent Nos. 1 and 2 became  trespassers.  However, in view of the above finding of the High Court  that the said agreement dated 5th July, 1976 was a contract of tenancy  and that the said respondents were tenants, the entire substratum of the  original Title Suit falls.  Hence, we do not find any merit in the above  argument.

       The contention of the appellant’s counsel that Issue No. 6  having not been pressed before the trial Court, the plea of tenancy  could not have been raised by the respondents is equally untenable.  Issue No. 7 is comprehensive enough to cover that point.  The fact  that petition for amendment of written statement raising the plea of  statutory tenancy was rejected during the pendency of Second Appeal  cannot also be considered to be fatal to the respondents’ case.  The  issue whether the respondents were tenants or not was very much  alive throughout the proceedings, though the appellate Court did not  deal with that aspect.  The High Court, therefore, assumed its powers  under Section 103 and found that issue against the appellant.

       For the foregoing reasons, this civil appeal fails.  We,  accordingly, dismiss the same, but in the facts and circumstances of  the case, direct the parties to bear their own costs throughout.