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PETITIONER: KRISHNA KISHORE FIRM

       Vs.

RESPONDENT: GOVT. OF. A.P. AND OTHERS

DATE OF JUDGMENT21/09/1990

BENCH: SAHAI, R.M. (J) BENCH: SAHAI, R.M. (J) SHETTY, K.J. (J)

CITATION:  1990 AIR 2292            1990 SCR  Supl. (2)   8  1991 SCC  (1) 184        JT 1990 (4)   241  1990 SCALE  (2)709

ACT:     A.P. Cinemas (Regulation) Act, 1955/A.P. Cinemas  (Regu- lation) Rules, 1970: Rule 11--Licensee applicant in physical control of cinema site--Acquiring interest to hold by virtue of  agreement of sale-- Possession--Nature of--Whether  law- ful--Application for renewal of license -- Whether maintain- able. Words and Phrases: ’Lawful’, ’legal’ and  litigious’--Conno- tation of.

HEADNOTE:     Rule  11  of the A.P. Cinema  (Regulation)  Rules,  1970 flamed under the A.P. Cinemas (Regulation) Act, 1955, as  it stood  at the relevant time, required a licensee either  for grant  or renewal of license to file evidence of his  lawful possession of the site.     The appellant-firm had been running a cinema since  1950 on  a  piece of land leased by the then zamindar.  The  said lease  was to expire on March 31, 1976. In the meantime  the ownership  of  the  land changed hands. In  1975,  when  the appellant sought renewal of the license the estate  partner- ship, consisting of father, son and grandson objected on the ground  that it did not intend to renew the lease.  However, on March 24, 1976 one of the co-lessors, the father, entered into  an  agreement of sale with the appellant to  sell  his entire share which was one-half for a consideration. He also executed lease of the remaining half the next day in  favour of the appellant as the managing partner of the estate.  and withdrew the objection filed before the licensing  authority unconditionally.     A question arose about the nature of appellant’s posses- sion.  The  High Court found that the  co-lessor  could  not lease out the property on his behalf as the partnership deed did  not  invest him with such an authority,  and  that  the agreement  of  sale was ineffective to make him  the  owner. Consequently, the possession of appellant was not lawful  as last was neither a lessee nor an owner. Allowing the appeal, the Court, 9     HELD: 1. When a person having physical control  acquires an interest to hold or continue by virtue of an agreement of

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sale  it  cannot  be said that he had no  interest  and  his possession  was  forbidden by law. In the instant  case,  by virtue of the transaction entered between the co-lessor  and the appellant which was not challenged by him nor any  cloud was  cast  over it by creating any subsequent  interest  the appellant  may  not have become owner  but  could  certainly claim  lawful possession. In law last was entitled  to  file suit for specific performance if there was any threat to its right  or interest by the co-lessor. Such right or  interest could not be termed as litigious. [13A-C]     2.  A lessee may before expiry of lease  acquire  entire lessor’s interest resulting in drowning or sinking of  infe- rior right into superior right. That is right of one  merges into  another.  It  has been statutorily  recognised  by  s. III(d) of the Transfer of Property Act. Similarly, a  tenant after expiry of period of lease may be holding over and  the lessor  may  acquiesce in his continuance expressly  or  im- pliedly. That is from conduct of lessor the tenant’s posses- sion  may stand converted into lawful. But where the  lessor does  not agree to renew the lease nor he acquiesce  in  his continuance a lessee cannot claim any right or interest. His possession is neither legal nor lawful. In the instant case, the  appellant  had acquired some interest in  part  of  the undivided property by virtue of the agreement. It may not be a  lessee, but its possession was not without any excuse  or forbidden by law. [12D-G]     3.  The High Court erred in equating lawful with  legal. What is legal is lawful. But what is lawful may be so  with- out  being formally legal. That which is not stricto  legalo may  yet be lawful. It should not be forbidden by  law.  Al- though provision in Specific Relief Act empowering a  person or  tenant  to  recover possession if he  has  been  evicted forcibly by the landlord, may be juridical and not lawful or a  tenant  holding over is not in lawful  possession  unless landlord  agrees  or acquiesces expressly or  impliedly  but that does not alter the legal position about possession of a person not legal yet not without interest. The provision  in Specific Relief Act is rounded more on public policy than on jurisprudence. [11G; 12A-C]     4.  The  licensing  authority is  directed  to  consider renewal of license in accordance with law treating  licensee to be in lawful possession. [13F]     M.C. Chockalingam v. M. Manichavasagam, [1974] 2 SCR 143 distinguished. 10

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 2674  of 1977.     From  the  Judgment  and Order dated  19.8.1977  of  the Andhra Pradesh High Court in Writ Appeal No. 527 of 1976.     Dr.  K. Parasaran, Mr. A.D.N. Rao and A. Subba  Rao  for the Appellants.     C.  Sitaramiah, T.S.  Krishnamurthy Iyer, G.  Prabhakar, A.T.M. Sampath and P.N. Ramalingam for the Respondents. The Judgment of the Court was delivered by     R.M.  SAHAI, J. Whether possession of a lessee  who  ac- quires interest of one of the co-lessors, before  expiration of period of lease, is litigious or lawful?     Litigious and lawful possession are concepts of  varying legal shades deriving their colour from the setting in which they  emerge.  Epithet used itself indicates  the  field  in which  they  operate. The one pertains to dispute  in  which

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possession  may  be conterminous with physical or  de  facto control,  only, whereas the domain of other is control  with some  legal basis. The former may be uncertain in  character and may even be without any basis or interest but the latter is  rounded on some rule, sanction or  excuse.  Dictionarily ’litigious’  means "disputed" Concise Oxford  Dictionary  or "disputable" Concise Oxford Dictionary" or "marked by inten- tion to quarrel" Webster Third New International Dictionary, "inviting  controversy"  Webster  Third  New   International Dictionary,  "relating to or marked by  litigation"  Webster Third  New  International  Dictionary, "that  which  is  the subject of law suit". Black’s Law Dictionary. Lawful on  the other hand is defined as, "legal, warranted or authorised by the law." Black’s Law Dictionary. Jurisprudentially a person in  physical  control  or de facto possession  may  have  an interest  but no right to continue whereas a person in  pos- session,  de jure, actually or constructively has the  right to  use,  enjoy, destroy or alienate property.  "Rights  are interest protected or recognised by law. But every  interest may not be so. Its violation may not be wrong. Many interest exist de facto and not de jure; they receive no  recognition or protection from any rule or right". Solmond on  jurispru- dence. With this brief preface it may now be determined if  posses- sion of 11 appellant who had entered into an agreement of sale with one of  co-lessors of his interest, and has been found  by  High Court  to have entered into his shoes, was lawful  for  pur- poses of rule 11 framed under Andhra Pradesh Cinemas  (Regu- lation) Act 1955 which required a licensee either for  grant or  renewal  of  license to file all  necessary  record  or’ certified  copies  with the application,  "relating  to  his lawful  possession thereof", if he was not the  owner.  That the appellant has been running cinema not as owner but after obtaining lease in 1950 of 2038 2/3 sq. yds. out of 7000 sq. yds. from the then Zamindar is not in dispute. Nor it is  in dispute that ownership of land changed twice since then  and the  last purchaser in July 1974 were one V.  Venkatarathnam (in  brief  V.V. since deceased) his son  and  grandson  who formed a private partnership V.V. Estates in September  1975 and  objected to renewal of appellant’s license in  December 1975  as  the Estate did not intend to renew  the  lease  in favour of appellant which was to expire on 31st March  1976. But  problem arose when on 24th March V.V. entered  into  an agreement  of sale with appellant to sell his  entire  share which was one-half for consideration of Rs. 14,000 cash  and partnership  of  1/8th in appellants’  cinema  business.  He further  executed  lease of remaining half on  next  day  in favour  of appellant as managing partner of the  Estate  and withdrew the objection, filed before licensing authority for renewal  of  appellant’s license,  unconditionally.  Dispute however  arose as V.V.’s son on his behalf and on behalf  of his nephew refuted authority of his father to grant lease as he  had  already  withdrawn his authority to  act  on  their behalf  on  22nd March. Therefore the question  arose  about nature of appellant’s possession. The High Court found  that even though it was not open to the son to remove his  father from  position of managing partner yet V.V. could not  lease out  the property on his behalf as the partnership deed  did not invest him with such authority. And so far the agreement of sale was concerned it was ineffective to make him  owner. Consequently  the possession of appellant was not lawful  as he was neither lessee nor owner.     True the appellant was neither owner nor lessee. Yet was

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his possession forbidden in law? Was there no excuse for his possession? The error committed by High Court was to  equate lawful  with legal. Legal and lawful, normally, convey  same sense  and  are usually interchangeable. What  is  legal  is lawful. But what is lawful may be so without being  formally legal. "The principle distinction between the terms ’lawful’ and  ’legal’  is that former contemplates the  substance  of law, the latter the form of law. To say of an act that it is lawful  implies that it is authorised, Sanctioned or at  any rate not forbidden by law". 12 Black’s  Law Dictionary. Same thought about lawful has  been brought out by Pollock and Wright by explaining that "Lawful Possession" means a legal possession which is also  rightful or at least excusable. Pollock and Wright Possession in  the Common Law. Thus that which is not stricto legalo may yet be lawful. It should not be forbidden by law. In fact legal  is associated  with provisions in the Act, rules  etc.  whereas lawful  visualises  all that is not illegal against  law  or even permissible. Lawful is wider in connotation than legal. Although  provision  in  specific Relief  Act  empowering  a person or tenant to recover possession if he has been evict- ed forcibly by the Landlord, may be juridical and not lawful or a tenant holding over is not in lawful possession  unless landlord  agrees  or acquiesces expressly or  impliedly  but that does not alter the legal position about possession of a person not legal yet not without interest. The provision  in specific Relief Act is rounded more on public policy than on jurisprudence.  But concept of lawful as opposed or in  con- tradistinction  to  litigious assumes  different  dimension. M.C. Chockalingam v. M. Manichavasagam, [1974] 2 SCR 143  is of  no help as it was concerned with possession which  could not  be said to be warranted or authorised by law.  Distinc- tion  between nature of possession of a lessee after  expiry of  period of lease can better be explained by resorting  to few  illustrations. For instance a lessee may before  expiry of  lease  acquire  entire lessor’s  interest  resulting  in "drowning"  or  "sinking" of inferior  right  into  superior right. That is right of one merges into another. It has been statutorily  recognised  by Section 111(d)  of  Transfer  of Property  Act. Similarly a tenant after expiry of period  of lease  may be holding over and the lessor may  acquiesce  in his continuance expressly or impliedly. That is from conduct of  lessor the tenant’s possession may stand converted  into lawful. The other may be where lessor may not agree to renew the  lease nor he may acquiesce in his continuance.  Such  a lessee cannot claim any right or interest. His possession is neither  legal nor lawful. Such was the Chockalingam’s  case (supra). The Court held that continuance of lessee’s posses- sion  after  expiry of period of lease was  not  lawful  for purposes  of renewal of licence under Madras Cinema  Regula- tion  Act  1955 obviously because lessee was  left  with  no interest  which  could furnish any excuse or  give  it  even colour of being legal.     Yet another illustration may be, not very common  where, lessee  acquires  some  interest in part  of  the  undivided property  as in present case. Can it be said in such a  case on ratio of Chockalingam’s authority that possession of such lessee  or to be more specific of appellant was  unwarranted or  contrary  to law: Share of V.V. in 7,000  sq.  yds.  was half.  He  had agreed to sell his half  interest.  V.V.  was joint  owner with his son and grandson. He had "both  single possession and a single 13 joint  right  to possess" Pollock and Wright.  Whether  such

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joint owner could transfer his share even when he was not in exclusive possession and what would be effect of such trans- fer  need not be gone into as title suit is pending  between parties  but when a person having physical control  acquires an interest to hold or continue by virtue of an agreement of sale  it  cannot  be said that he had no  interest  and  his possession  was forbidden by law. The High Court lost  sight of  the fact that by virtue of the transaction  entered  be- tween V.V. and appellant which was not challenged by him nor any cloud was cast over it by creating any subsequent inter- est  the  appellant may not have become owner but  he  could certainly claim that he was in lawful possession. In law  he was entitled to file suit for specific performance if  there was  any threat to his right or interest by V.V. Such  right or  interest  could not be termed as litigious.  It  was  at least  not without any excuse or forbidden by law. In  words and  Phrases Permanent Edition Vol. 25A, 2nd reprint 1976  a somewhat similar situation was described as not litigious: "Where  client conveyed undivided half-interest in  land  to attorney  in consideration of attorney’s rendering  services and paying court costs, giving irrevocable power of attorney to sue, settle, or compromise, attorney received good  title as  third  person purchasing upon faith of  public  records, precluding reformation as against attorney, on the  strength of an instrument recorded after deed to attorney and  client claimed title, as against contention that attorney  acquired a "litigious right".     For  reasons  stated above this appeal succeeds  and  is allowed. The order of High Court and the licensing authority are  set aside. The licensing authority is further  directed to  consider renewal of license of the cinema in  accordance with law treating licensee to be in lawful possession.     Since suit has been filed between parties in respect  of title it is clarified that any observation made above  shall not  be  treated  as binding or deciding  right  of  parties except to the limited extent that appellant shall be treated to be in lawful possession for renewal of license subject to final  adjudication  in suit, which shall  now  proceed  as, probably,  the  proceedings  had been stayed.  It  shall  be disposed of expeditiously.     The  appellant  shall be entitled to its costs  in  this Court and High Court. P.S.S.                                    Appeal allowed. 14