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PETITIONER: PURAN SINGH SAHNI

       Vs.

RESPONDENT: SMT. SUNDARI BHAGWANDAS KRIPALANI AND OTHERS

DATE OF JUDGMENT20/02/1991

BENCH: SAIKIA, K.N. (J) BENCH: SAIKIA, K.N. (J) PUNCHHI, M.M.

CITATION:  1991 SCR  (1) 592        1991 SCC  (2) 180  JT 1991 (2)    24        1991 SCALE  (1)303

ACT:      Bombay Rents, Hotel and Lodging House Rates (Control  ) Act,  1947]  Transfer  of  Property  Act,  1882:   Ss.5(4A), 5(11)(bb),  15A/s. 105- Agreement giving temporarily  for  a fixed period, use of Premises with furniture and fittings on compensation  for  use and occupation without  creating  any interest  in  the grantee-Whether a leave and licence  or  a lease-Licence  terminated  w.e.f.  10.3.1972-Status  of  the occupant  thereafter-Whether  entitled to  Protection  as  a deemed tenant under s. 15-A ‘Leave and licence’ and ‘Lease’- Distinction between.     Constitution  of India: Art. 14: S. 91, Maharashtra  Co- operative "Societies Act, 1960-Whether ultra vires.      Maharashtra  Co-operative Societies Act, 1960:  S.  91- Eviction of a nominal member by a tenant copartner member of a tenant copartnership Co-operative Housing  Society-Whether a  dispute  touching  ‘business of  a  society’-Whether  the society  and  tenant co-partner member can raise  a  dispute under-Jurisdiction  of Co-operative Courts-Whether bared  by s.  28(1)  of Bombay Rents, Hotel and  Lodging  House  rates (Control) Act, 1947.

HEADNOTE:      The  second respondent was a tenant  copartnership  co- operative Housing Society and father of the first respondent was  its tenant co-partner member. By an  application  dated 10.6.1969 he sought permission of the society to temporarily induct  the  appellant into his flat. On the same  date  the appellant  applied  to  the said  Society  for  its  nominal membership  stating that  he  intended to take the flat  for temporary  use and occupation, that he would not  claim  any right  of permanent nature and that on receipt of notice  he would vacate the flat. By an agreement of leave and  licence dated   11.6.1969,   the   father  of   respondent   no.   1 (licensor)gave  use  of  the flat  with  its  furniture  and fittings to the appellant (licensee) on Rs. 1,000 per  month as  compensation for use and occupation for a period  of  11 months  with a facility of renewal of the agreement for  two such  further   periods.  The  Managing  Committee  of   the Society,  by its Resolution dated 13.6.1969. I  granted  the permission.                                                       593

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    The  licensor  by letter dated 22.1.1972  purported  to terminate  the  licence  w.e.f.  10.3.1972,  and  asked  the appellant to vacate the flat, but the latter declined to  do so. On receiving intimation from the licensor, the  Society, by  its  letter dated 22.2.1972, required the  appellant  to vacate  the flat and deliver its possession to the  licenser before  the  stipulated  date, but  in  vain.  Instead,  the appellant on 13.3.1972 applied to the Court of Small Causes, Bombay for fixation of standard rent of flat.      In  April  1972 the licensor and the Society  raised  a dispute   under  s.  91  of  the  Maharashtra   Co-operative Societies   Act,  1960  to  recover  possession   from   the appellant,who  in  turn filed a suit in the Court  of  Small Causes,  Bombay  for declaration that he was tenant  of  the flat.  He also filed an interim application for stay of  the dispute  proceeding  till disposal of  his  application  for fixation  of standard rent, which was rejected and his  writ petition  against the said order was also dismissed  by  the High Court on 7.9.1977.      The  Co-operative Court, Bombay dismissed  the  dispute proceeding holding that the appellant was a licensee and not a  tenant but the society was an idle party which  acted  in collusion with the licensor to evict the appellant.      On  appeal  by  the  licenser  and  the  Society,   the Maharashtra State Co-operative Appellate Court set aside the order of the Co-operative Court, against which the appellant filed a writ petition before the High Court contending  that the  agreement, though style as a leave and licence,  was  a lease; that s. 91 of the Maharashtra Co-operative  Societies Act was not attracted and could not have been invoked by the respondents;  and that s. 91 itself was ultra vires Art.  14 of  the  Constitution to the extent it tried to  reach  non- members of co-operative societies. The High Court  dismissed the  writ  petition.  Hence the present  appeal  by  special leave.      By Maharashtra Act 17 of 1973, ss. 5(4A), and 15-A were introduced  in  the Bombay Rents, Hotel  and  Lodging  House Rates   (Control)  Act,  1947,to  confer  the   status   and protection of a tenant on a licensee, who, on the first  day of  Feb.  1973, had a subsisting agreement and was  on  that date  in occupation of any premises or part  thereof,  which was not less than a room, as a licensee.      On   the  question  whether:(1)  the  agreement   dated 11.6.1969  was one of leave and licence or if lease, and  if it was so, whether the                                                       594 occupant was entitled to benefit of s. 15-A of the Rent Act; and  (2)  the matter was one touching the  business  of  the society  so  as  to  attract s.19  of  the  Maharashtra  co- operative  Societies  Act  within the  jurisdiction  of  Co- operative Courts.      Dismissing the appeal, this Court      HELD: 1.1 By mere use of the word lease or licence  the correct categorisation of an instrument under law cannot  be affected.  Whether a particular grant amounts to lease or  a licence,  depends on its substance.  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.   If there  is  a  transfer  of interest  in  law  and  exclusive possession is given to the grantee or where the  ingredients of  a  lease are present and the licensee is,  according  to law,  a tenant, then it is a lease and he ought to be  given benefit of the Rent Act. [602B-E]      1.2 In determining whether the agreement was a lease or

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licence,  the  test  of  exclusive  possession,  though   of significance,  is  not  decisive  and  exclusive  possession itself will not amount to creation of interest nor would  it militate   against  the  concept  of  a  licence,   if   the circumstances  negative any intention to create  a  tenancy. [602G, E-F]      1.3  The  intention  of  the  parties  in  making   the agreement is determinative of the question whether it was  a lease or licence.  The intention has to be gathered from the terms  of  the  agreement construed in the  context  of  the surrounding,  antecedent and consequent circumstances.   The crucial test would be what the parties intended.  If in fact it  was  intended to create an interest in the  property  it would  be  a  lease, if it did not, it would  be  a  licence Interest  for  this  purpose  means  a  right  to  have  the advantage  accruing  from  the premises or a  right  in  the nature  of  property in the premises but  less  than  title. [603H, 602F-H]      2.  In the instant case, it is clear from the tenor  of the  agreement  that  the intention of the  parties  was  to create only a licence and not a lease. Positively it  speaks of a licence for the use of the flat and negatively that the licensee  would not-claim any tenancy or  subtenancy.   What was  given  to  the licensee was the use of  the  flat  with furniture,  fittings etc., which could not be said  to  have created  any interest in the flat though in effect  the  use continued for a stipulated period of time. [602A-C]                                                         595      Board  of Revenue etc. v. A.M. Ansari  etc.,[1976]  (3) SCR  661; Tarkeshwar Sio Thakur Jiu v. Dar Dass Dey & Co.  & Ors.,  [1979] 3 SCC 106, relied on;  Sohan Lal Naraindas  v. Laxmidas, Raghunath Gadit (1971) 1 SCC 276, followed.      Antoniades  v. Villiers and Anr., [1988] (3) All.  E.R. 1058;  N.E. Railway v. Hastings, [1900] A.C. 260,  Isaac  v. Hotel  De  Paris, Ltd. [1960] (1) All E.R.  348,  Booker  v. Palmer [1942] 2 All E.R. 674 referred to.      3.1  Section 15A read with s. 5(11)(bb) of  the  Bombay Rents,  Hotel and Lodging House Rates (Control)  Act,  1947, makes  the  tenant one of status rather  than  of  contract. Intention  to create a licence as defined in the Act if  the other requirements fulfilled, would, therefore, be enough to confer  that  status from the specified date.   Section  15A required  that  the occupant must be in  occupation  of  the premises  as a licensee as  defined in s.5(4A) on the  first day  of  Feb.  1973.  If he be such  a  licensee,  the  non- obstante   clause  of  s.15A(1) gives  him  the  status  and protection  of a tenant in spite of there being anything  to the  contrary in any other law or in any contract.  Even  as against  the  express  terms  of  the  subsisting   contract licence,  a  person in occupation of any  premises  or  part thereof,  which  is  not less than a room,  as  a  licensee, shall, in view of these provision, be deemed to have  become a tenant on the first day of Feb. 1973, and would enjoy  the benefits  of s. 15A.  But if he was not a licensee  under  a subsisting  agreement on the 1st of Feb. 1973, then  he  did not get the advantage of the amending provision of the  Rent Act. [608E-F, 610AB]      3.2 The sine qua non for the applicability of s. 15A of the  Rent Act was that a licensee  must be in occupation  as on  Feb.1,  1973,  under a  subsisting  licence.   A  person continuing  in possession after termination,  withdrawal  or revocation  of the licence is a trespasser or a  person  who has  no semblance of any right to continue in occupation  of the  premises.  Such a person by no stretch  of  imagination could be called a licensee. [612B-C, 610C]

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    4.  The appellant would, otherwise, be included in  the definition  of licensee under s. 5(4A) of the Rent Act,  but as  he  had  no subsisting licence, the  same  having  stood terminated by notice on 10.3.1972, the licence as defined by the Rent Act itself would not apply to appellant’s case, and he  was  nothing but a rank trespasser not entitled  to  the protection  of  s.  15A  of the  Rent  Act  and  could  not, therefore,  plead the bar of s. 28(1)  thereof.[608A,  609A, 612C-D]                                                        596      D.H.  Maniar and Ors. v. Waman Laxman Kudav,  [1976]  4 SCC 118, O.N. Bhatnagar v. Smt. Rukibai  Narsindas & Others, [1982] 3 SCR 681, relied on.  Chandavarkar Sita Ratna Rao v. Ashalata S. Guram, [1986] 4 SCC 447, referred to.      Hindustan  Petroleum Corporation Ltd. & Anr.  v.  Shyam Cooperative  Housing  Society  &  Ors,  [1988]  4  SCC  747, distinguished.      5.  The  matter  of eviction of  the  appellant  was  a dispute touching the business of the society as envisaged by s.91  of the Maharashtra Co-operative Societies Act and  the Co-operative  Courts rightly  exercised  jurisdiction.[611B; 613B]      Smt.  Krishna  Rajpal Bhatia and Ors. v. Miss Leela  H. Advani & Ors., [1989] 1 SCC 52, relied on.  Deccan Merchants Cooperative  Bank Ltd. v. M/S Dalichand Jugraj Jain &  Ors., [1969] 1 SCR 887 referred to.      6.  Since  the  appellant was  involved  in  a  dispute touching  the  business  of the society of which  he  was  a nominal member, his contention that s. 91 of the Maharashtra Co-operative  Societies Act to the extent it tries to  reach persons  who are not members is ultra vires Art. 14  of  the Constitution, was not tenable. [613C-D]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2846  of 1989.      From  the  Judgment and Order dated  24.4.1989  of  the Bombay High Court in W.P.No. 4118 of 1986.      H.S.   Guru  Raja   Rao,  S.  Markandeya  and  Ms.   C. Markandeya, for the Appellant.      L.A. Kriplani and S.K. Jain  for the Respondents.      The Judgment of the Court was delivered by      K.N.  SAIKIA, J. This appeal by special leave  is  from the  Judgment  and Order of the High Court of  Bombay  dated 24.4.1989  in Writ Petition No. 4118 of 1986 dismissing  the petition.      The second respondent Shyam Cooperative Housing Society Ltd.  was a tenant co-partnership cooperative  society  (for short, ‘the                                                        597 Society’)  and Panjumal H. Advani late father of  the  first respondent  (for short, ‘Advani’) was its tenant  co-partner member.  By an application  dated 10.6.1969, Advani obtained permission   of   the  Society  to  induct   the   appellant temporarily  into  his flat and accordingly,  the  appellant took  on  rent from Advani flat No. 24, Block  No.  1,second floor, Nanik Niwas, situate at Bhulabhai Desai Road,  Bombay (for  short,  ‘the  flat’) on a monthly rent  of  Rs.  1,000 (Rupees  one thousand) on 10.6.1969.  On the same  date  the appellant,  under  the  Society’s  rules,  applied  for  its nominal membership stating, inter alia, that he intended  to take  the  flat for temporary use and  occupation;  that  he would  not claim any right of permanent nature; and that  he

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would  vacate the flat on receipt of notice thereof.  By  an agreement of leave and licence dated 11.6.1969 entered  into between  the  appellant  and  Advani,  the  appellant   took exclusive  possession of the flat.  The agreement was for  a period of 11 months and was renewable for 2 further  periods of 11 months each.  Vide Resolution No. 208 dated 13.6.1969, the   Managing   Committee  of  the  Society   granted   the permission.      By letter dated 22.1.1972 Advani purported to terminate the  licence  with  effect from   10.3.1972  and  asked  the appellant  to vacate the flat and the appellant  having  not acceded to the request, Advani informed the Society,  which, vide letter dated 22.2.1972 required the appellant to vacate the  flat and to deliver possession thereof to Advani on  or before  the  10th  March, 1972.  The  appellant  instead  of vacating the flat filed an application in the Court of Small Causes,  Bombay on 13.3.1972 for fixation  of  its  standard rent.   In  April  1972, Advani and  the  Society  raised  a dispute  under  section 91 of  the  Maharashtra  Cooperative Societies  Act to recover possession from the appellant  who in turn filed declaratory suit No. 989/5305 of 1972  in  the Court  of  Small  Causes, Bombay  on  10.11.1972  seeking  a declaration  that  he was the tenant of the  flat,  with  an interim  application  for stay of the  proceeding  till  the disposal  of his application for fixation of standard  rent; but  that  application was rejected and  the  appellant  was thereafter   unsuccessful  in  the  High  Court  which   was dismissed  on  7.9.1977.   The learned  Judge  of  the  IInd Cooperative  Court,  Greater Bombay by  his  Judgment  dated 6.3.1985 dismissed the suit holding that the appellant was a licensee and not a tenant, but the Society was an idle party and  had  acted  in  collusion with  Advani  to  vacate  the appellant.      Advani   and   Society  appealed   therefrom   to   the Maharashtra  State  Cooperative Appellate Court,  Bombay  in Appeal  No. 397 of 1985 which  was allowed and the  impugned Judgment of the IInd                                                      598 Cooperative Court was  set aside on 31.7.1986.      The  appellant  impugned the appellate  order  in  Writ petition No. 4118 of 1986 in the High Court of Judicature at Bombay,  contending, inter alia, that the agreement  between the  appellant  and  Advani, though styled as  a  leave  and licence,  was  a lease; that section 91 of  the  Maharashtra Cooperative Societies Act, 1960 was not attracted and  could not  have been invoked by Advani and the Society;  and  that section  91  itself was ultra vires the Article  14  of  the Constitution  of  India  to the extent  it  tried  to  reach persons who were not members of cooperative societies.      The  High  Court, while dismissing the  writ  petition, inter alia, held that the agreement was of  temporary nature and no interest in the flat having been created in favour of the  appellant, even though he had exclusive possession,  it could  not  have been a lease; that  the  alleged  collusion between  Advani and the Society to evict the  appellant  was based  on conjectures and could not take the matter  out  of the  purview of section 91 of the Cooperative Societies  Act which was not ultra vires.      Mr.  S.S.  Gururaja Rao, the learned  counsel  for  the appellant  submits,  inter alia, that  the  agreement  dated 11.6.1969 between Advani and the appellant was one of  lease with  all its ingredients and not one of leave and  licence; that the agreement having been a lease the cooperative Court had no jurisdiction in respect thereof and it was the  Civil Court  envisaged under the Bombay Rents, Hotel  and  Lodging

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House Rates (Control) Act, 1947 that would have jurisdiction in  the matter; and that even assuming that the  Cooperative Court  had  jurisdiction in respect of a leave  and  licence created  under the provisions of the Act, that  Court  would not  have jurisdiction in this matter, the  appellant  being only  a  nominal  member  and not a  tenant  member  of  the Society.      Mr.  L.A.  Kripalani,  the  learned  counsel  for   the respondents, submits that the agreement was one of leave and licence  and  not  of  lease; that  in  the  matter  of  the agreement  the Cooperative Court alone has jurisdiction  and no  other  court;  and that being a nominal  member  of  the Society in view of his application for such a membership the appellant  would   come  within  the  jurisdiction  of   the Cooperative Court.      The  first  question  to be decided   in  this  appeal, therefore, is                                                      599 whether the agreement dated 11.6.1969 was one of lease or of leave and licence.      In the agreement dated 11.6.1969 the Party of the First part  has  been called the ‘licensor’ and the Party  of  the Second  part has been called the ‘licensees’.  The  licensor is  stated  to be a shareholder and member of  the  Society. Its recitals said:          "AND WHEREAS the Licensor is the absolute owner  of          the  said flat and whereas the party of the  Second          part has approached the Party of the First part  to          allow them the use of the said flat with, fittings,          fixtures and furniture lying therein.          AND WHEREAS the Party of the First part has  agreed          to  allow the party of the Second part to  use  the          said flat along with fittings, furniture,  fixtures          etc.      The following were the relevant terms of the agreement:          "1.  The ‘licensor’ has given the use of  his  flat          No.24,  2nd  floor,  Nanik  Niwas,  Block  No.   1,          Bhulabhai Desai Road  on Leave and Licence basis.          2.  The  licence in the initial stage  is  for  the          period of 11 months to be renewed by another period          of 11 months and a second option of 11 months also,          to make up the period of 33 months.          3.  The  Licensees shall pay  compensation  of  Rs.          1,000  (Rupees one thousand only) per month to  the          ‘licensor’  the  use of the said  flat  along  with          fittings, fixtures and furniture lying therein more          fully described in the schedule herewith  attached;          This  compensation payable by the said  ‘Licensees’          to  the  said  ‘Licensor’  shall  include  all  the          charges  and  taxes leviable either  by  the  Shyam          Cooperative Housing Society Ltd., Bombay -26 or  by          the  Bombay Municipal Corporation  or by any  local          or  State authorities except the changes which  are          specially mentioned hereunder.          xxx    xxx   xxx   xxx   xxx   xxx   xxx   xxx  xxx           xxx    xxx   xxx   xxx   xxx   xxx   xxx  xxx  xxx                                                        600          9.  It  is  agreed  by  this  agreement  that  only          ‘Licensee’   is  intended  to  be  given   to   the          ‘Licensees’ to use the flat and fixtures, fittings,          furniture   etc.  more  fully  described   in   the          schedule attached herewith and the ‘Licensees’ will          at  no  time claim tenancy or  sub-tenancy  of  the          premises.   The premises are in Nanik Niwas,  Block          No.1,  Second  Floor,  Flat  No.24,  of  the  Shyam

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        Cooperative  Housing  Society Ltd., and  the  rules          regulations and bye-laws of the said Society do not          permit any tenancy or sub-tenancy being created  in          respect of the premises.          xxx     xxx     xxx     xxx     xxx     xxx     xxx          xxx    xxx    xxx    xxx    xxx    xxx     xxx          22.  That the ‘Licensee’ will not  surrender  their          rights  under  this agreement in favour  of  anyone          else except the ‘Licensors’.  That the  ‘Licensees’          shall  observe all rules, regulations, and  by-laws          of the Shyam Cooperative Society as nominal members          during the period of this licence.      From  the above recitals and the terms  and  conditions there  is  no  doubt that ex facie it is one  of  leave  and licence  for  use  of  the  flat  and  fixtures,   fittings, furniture etc. and that the licensee would at no time  claim tenancy  or  sub-tenancy in respect of the flat.   There  is also   no  doubt  that  in  his  application   for   nominal membership,  the appellant stated that he intended  to  take the flat for temporary use and occupation and that he  would not  claim any right of permanent nature.  In  the  Managing Committee  Resolution No.208 dated 13.6.1969, the  appellant was  admitted  as a nominal member of the  Society  and  was permitted  to  temporarily  occupy the  flat.   Thus,  there appears to be no room for contending, contrary to the  terms of  the  agreement, that the agreement was a lease  and  the appellant was a tenant of Advani, as such the Bombay  Rents, Hotel   and   Lodging  House  Rates  Control    Act,   1947, hereinafter   referred to as ‘the Rent Act’, was  applicable to him.      However,  relying on Antoniades v. Villiers  and  Anr., reported in 1988 (3) All E.R. 1058, it is submitted for  the appellant that he having been given exclusive possession  of the  flat for a time, the agreement must be construed  as  a lease  and  him as a tenant.  In that  case  the  respondent let  a  flat to the appellants, a  young  unmarried  couple, under  separate but identical agreements termed  ‘licenses’, which  were executed contemporaneously and  stipulated  with reiterated  emphasis  that the appellants were not  to  have exclusive possession.  In particular,                                                        601 by clause 16, that agreement stated that the licensor  shall be entitled  at any time to use the rooms together with  the licensee  and permit other persons to use all of  the  rooms together with the licensee and further stated that the  real intention  of  the parties in all the circumstances  was  to create  a  licence which did not come under the  Rent  Acts. The rental payable was 87 pounds per month by each  occupant and  the agreements were determinable by one month’s  notice by either party.  The respondent never attempted to use  any of  the  rooms or authorised any other persons  to  use  the rooms.   In July 1986 the respondent gave the  appellants  a notice  to  quit and applied to the court for an  order  for possession,  but his claim was dismissed on the ground  that the  appellants  were  tenants  who  were  entitled  to  the protection of the Rent Acts.  The respondent appealed to the Court  of Appeal, which allowed his appeal.  The  appellants having  appealed to the House of Lords it was held that  the agreements  were  interdependent  on one  another  and  were therefore  to  be read together as constituting  one  single transaction.   Since  it  was  the  intention  of  the   two appellants to occupy the flat as man and wife and since that intention  was known to the respondent, the true  nature  of the  arrangement  was  to create a  joint  tenancy  and  the purported retention by the respondent of the right to  share

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the  occupation of the small flat with the appellants or  to introduce an indefinite number of third parties to do so was clearly a pretence to deprive them of the protection  of the Rent Acts.  It followed that the agreements created a  joint tenancy and not a licence, and the appeal would therefore be allowed.  It may be noted that in the above  case there  was no obligation  of or relation to any cooperative society and laws governing members thereof, whereas in the instant  case admittedly  Advanai  was a tenant co-partner member  of  the Society  and  the appellant by virtue of  the  agreement  of licence  was also  admitted to nominal membership  accepting his  statement in his application.  While  interpreting  the agreement  we have also to see what  transpired  before  and after  the agreement.  Ex praecedentibus  et  consequentibus optima bit interpretation.  The best interpretation is  made from  the context.  "It is a true rule of construction  that the sense and meaning of the parties in any particular  part of  an  instrument  may be collected  ex  antecedentibus  et consequentibus; every part of it may be brought into  action in  order  to  collect  from  the  whole  one  uniform   and consistent sense, if that may be done."  As was said in N.E. Railway v. Hastings, [1900] A.C. 260(267):          "The  deed  must  be read as a whole  in  order  to          ascertain the true meaning of its several  clauses,          and   the  words  of  each  clause  should  be   so          interpreted as to bring them into                                                        602          harmony  with the other provisions of the  deed  if          that interpretation does no violence to the meaning          of which they are naturally susceptible.      In  the agreement the intention to create a licence  is clear. Positively it speaks of a licence for the use of  the flat  and negatively that the licensee would not  claim  any tenancy  or sub-tenancy.  That the intention of the  parties was to create only a licence and not a lease is clear   from the  tenor of the agreement.  True, by mere use of the  word lease or licence the correct categorisation of an instrument under  law  cannot  be  affected.  What  was  given  to  the licensee  was  to use of the flat with  furniture,  fittings etc., which could not be  said to have created any  interest in  the  flat  though  in effect the  use  continued  for  a stipulated   period  of  time.   It  is  true,   where   the ingredients  of  a  lease are present and  the  licensee  is according to law, a tenant, he ought to be given the benefit of the Rent Act.      As  was  held in Board of Revenue etc. v.  A.M.  Ansari etc.,  AIR  1976  SC  1813: 1976 (3)  SCR  661,  it  is  the substance  of the agreement between the parties which  is  a decisive consideration on the question  whether a particular grant  amounts to a lease or a licence.  In  Tarkeshwar  Sio Thakur  Jiu v. Dar Dass Dey & Co. & Ors., AIR 1979 SC  1669: (1979)  3 SCC 106, the document though named as licence  was construed  as a lease.  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.  If there is a  transfer  of interest  in  law and exclusive possession is given  to  the grantee  then it is a lease.  Thus, exclusive possession  by itself  will not amount to creation of interest.   Exclusive possession by itself would not militate against the  concept of a licence, if the circumstances negative any intention to create a tenancy.      Following  Sohan  Lal Naraindas v.  Laxmidas  Raghunath Gadit, [1971] 1 SCC 276, we reiterate that the intention  of the  parties  to an agreement has to be  gathered  from  the

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terms  of  the agreement construed in  the context   of  the surrounding, antecedent and consequent  circumstances.   The crucial test would be what the parties intended.  If  infact it  was intended to create  an interest in the property,  it would  be a lease, if it did not, it would be a licence.  In determining  whether the agreement was a lease  or  licence, the test of exclusive possession, though of significance, is not  decisive.  Interest for this purpose means a  right  to have the advantage accruing from the premises or a right  in the nature of property in the premises but less than title.                                                   603      Lease  has been defined in section 105 of the  Transfer of Property Act as under:          "A  lease of immovable property is a transfer of  a          right  to enjoy such property, made for  a  certain          time,  express  or implied, or  in  perpetuity,  in          consideration  of a price paid or promised,  or  of          money, a share of crops, service or any other thing          of  value,  to  be  rendered  periodically  or   on          specified  occasions  to  the  transferor  by   the          transferee,   who  accepts  the  transfer  on  such          terms."      The  essential elements of a lease are: 1. the parties 2. the subject matter, or immovable property 3. the demise, or partial transfer 4. the term, or period 5. the consideration, or rent.      The  relationship  of  lessor  and  lessee  is  one  of contract.  In Bacon’s Abridgement, a lease is defined as  "a contract   between  the  lessor  and  the  lessee  for   the possession   and profits of land, etc., on the one side  and recompense  by  rent or other consideration on  the  other." Hence it has been held that "a mere  demand for  rent is not sufficient to create the relationship of landlord and tenant which is a matter of contract assented to by both  parties." When the agreement vests in the lessee a right of possession for a certain time it operates  as a conveyance or  transfer and  is a lease.  The section defines a lease as  a  partial transfer,  i.e.,  a transfer of a right of enjoyment  for  a certain time.      This  Court  has  held that a renewal  of  a  lease  is really grant of a fresh lease though it is called a  renewal because it postulates the existence of a prior lease.  Where the  initial term was, say one year, it could  not  co-exist with a renewal of that very lease within  one year.  Renewal could  take place only on the expiry of the  initial  lease, and not before.      The intention of the parties in making the agreement is determinative  of  the question whether it was  a  lease  or licence.   In Halsbury’s Laws of England, 4th Edn. Vol.  27, at paragraph 6, on General Principles                                                       604 for determining whether agreement creates lease or a licence we read:          "In   determining  whether  an  agreement   creates          between  the parties the relationship  of  landlord          and tenant or merely that of licensor and  licensee          the decisive considerations is the intention of the          parties.   The  parties  to  an  agreement  cannot,          however,  turn  a lease into a  licence  merely  by          stating that the document is to be deemed a licence          or   describing   it   as   such.    The   parties’          relationship   is   determined   by   law   on    a          consideration   of all relevant provisions  of  the

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        agreement; and an agreement labelled by the parties          to it as a ‘licence’ will still be held to create a          tenancy   if  the  substance   of   the   agreement          conflicts  with that label.  Similarly, the use  of          operative  words (‘let’, ‘lessor’ etc.)  which  are          appropriate  to  a  lease  will  not  prevent   the          agreement  from conferring only a licence  if  from          the whole document it appears that it was  intended          merely to confer a licence.  Primarily the court is          concerned  to  see  whether  the  parties  to   the          agreement intend to create an arrangement  personal          in its nature or not, so that the assignability  of          the grantee’s interest, the nature of the land  and          the grantor’s capacity to grant a lease will all be          relevant  considerations in assessing what  is  the          nature of the interest created by the  transaction.          In the absence of any formal document the  parties’          intention  must be inferred from the  circumstances          and the parties’ conduct."      It  has been submitted for the appellant that the  very fact of exclusive possession of the flat being given to  the appellant  was sufficient to make him lessee and Advani  his landlord.   We  do  not  agree with  the  submission  in  an unqualified  form.   There have been cases  where  exclusive possession  has been given  outside the Rent Act.  In  Isaac v.  Hotel  De  Paris,  Ltd., [1960]  (1)  All  E.R.348,  the respondent  company  owning  the hotel de  Paris  where  the lessees of another  building called the P.Hotel, it was held that  the respondent company were entitled to an  order  for possession  because  the relationships between  the  parties was  not  that of landlord and tenant but  of  licensor  and licensee, even though there was exclusive possession by  the appellant  and the acceptance of the amount of the  rent  by the respondent company, the circumstances and the conduct of the parties showing that all that was intended  was that the appellant  should  have a personal privilege  of  running  a night bar at the P.Hotel with no interest                                                      605 in  the land at all, and this privilege came to an end  with the  notice  of  May, 1956 and that  after  the  notice  the appellant remained in occupation at sufferance, and, in  the circumstances,  the  acceptance of rent  by  the  respondent company  did not waive their right to immediate  possession. It  was  observed that there were many cases  in  the  books where  exclusive  possession  had  been  given  of  premises outside  the  Rent Restriction Acts and yet there  had  been held  to  be no tenancy.  Lord Denning  quoted  from  Booker v.Palmer, [1942] 2 All E.R. 674 (677):          "There is one golden rule which is of very  general          application,  namely, that the law does not  impute          intention  to enter into legal  relationship  where          the  circumstances and the conduct of  the  parties          negative any intention of the kind.’      The following passaged was also cited with approval:          "It   is  clear  from  the  authorities  that   the          intention   of   the  parties  is   the   paramount          consideration  and  while  the  fact  of  exclusive          possession together with the payment of  rent is of          the  first importance, the circumstances  in  which          exclusive   possession  has  been  given  and   the          character  in  which money  paid as rent  has  been          received are also matters to be considered."      On  the question of nature and effect of the  grant  of exclusive  possession in paragraph 7 of Halsbury’s  Laws  of England, 4th Edn., Vol.27, we read:

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        "The  fact  that the agreement grants  a  right  of          exclusive  possession is not in  itself  conclusive          evidence of the existence of a tenancy, but it is a          consideration of the first importance, although  of          lesser  significance  than  the  intention  of  the          parties.          In  deciding  whether  a  grantee  is  entitled  to          exclusive  posession  regard  must be  had  to  the          substance  of  the  agreement.  In  order  to  give          exclusive  possession  there need  not  be  express          words  to  that  effect; it is  sufficient  if  the          nature  of  the  acts to be  done  by  the  grantee          requires that he should have exclusive  possession.          However,  the  grant  of an exclusive  right  to  a          benefit can be inferred only from language                                                      606          which  is  clear and  explicit.   If  an  exclusive          right   of   possession  is  subject   to   certain          reservations  or to a restriction of  the  purposes          for   which   the  premises  may   be   used,   the          reservations  or restriction will  not  necessarily          prevent the grant operating as a lease."      We may now examine the position of the appellant  under the Rent Act.  The  Rent Act has not defined a ‘lease’.   As defined  in section 5(11) ‘tenant’ means any person by  whom or  on  whose account rent is payable for any  premises  and includes-      (a) such  sub-tenants and other persons as have derived title under a tenant before the 1st day of February,      1973;      (aa) any person  to whom interest in premises has  been assigned  or  transferred  as  permitted  or  deemed  to  be permitted, under section 15;      (b)  any person remaining, after the  determination  of the lease, in possession, with or without the assent of  the landlord,  of  the  premises leased to such  person  or  his predecessor  who  has  derived title before the 1st  day  of February, 1973;      (bb) such licensees as are deemed to be tenants for the purpose of this Act by section 15A;      (c)      xxx     xxx     xxx    xxx    xxx    xxx" Thus the above sub-section (bb) read with section 15A of the Rent  Act  makes  the  ‘tenant’ one of  status  and  not  of contract.  the licensee has been conferred the status  of  a tenat. This  reminds us of what Sir Henry Maine observed  in Ancient  Law.   "The movement of progressive  societies  had been  from status to contract".  But Lord  Simmonds  pointed out in Johnson v. Merston, [1978] 8 All E.R. 37, that  since the days of Maine, the movement of the progressive societies in  various  fields, has been almost the reverse,  that  is, from contract to status.  With acute dearth of accommodation and  dire  need  for it people may agree to  a  pretence  or unreasonable term from which law alone can protect them  and render justice to the parties.      As  defined  in  the  section 5(4A)  of  the  Rent  Act ‘licensee’,  in respect of any premises or any part  thereof means:                                                       607          "The person who is in occupation of the premises or          such  part  as the case may be under  a  subsisting          agreement for licence given   for a licence fee  or          charge; and includes any person in such  occupation          of  any  premises  or part thereof  in  a  building          vesting  in  or leased to  a  co-operative  housing          society  registered  or  deemed  to  be  registered

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        under  the Maharashtra Cooperative  Societies  Act,          1960; but does not include a paying guest, a member          of  a  family residing together, a  person  in  the          service or employment of the licensor, or a  person          conducting  a  running business  belonging  to  the          licensor  or a person having any accommodation  for          rendering  or carrying on medical  or  para-medical          services  or activities in or near a nursing  home,          hospital  or  sanatorium, or a  person  having  any          accommodation  in a hotel, lodging  house,  hostel,          guest   house,  club,  nursing  home,   sanatorium,          dharamshala,  home  for  widows,  orphans  or  like          premises,    marriage  or  public  hall   or   like          premises,   or   in  a  place   of   amusement   or          entertainment  or  like  institution,  or  in   any          premises belonging to or held by an employee or his          spouse who on account of the exigencies of  service          or provision of a residence attached  to his or her          post  or  office is temporarily not  occupying  the          premises,  provided that he or she charges  licence          fee or charge for such premises of the employee  or          spouse   not  exceeding  the  standard   rent   and          permitted  increases  for such  premises,  and  any          additional  sum  for services  supplied  with  such          premises,  or  person having accommodation  in  any          premises or part thereof for conducting a  canteen,          creche,dispensary or other  services   as amenities          by   any  undertaking  or  institution;   and   the          expressions  ‘licence’,  ‘licensor’  and  ‘premises          given on licence’ shall be construed accordingly."      The  above definition is comprehensive one.  A  licence is  a power or authority to do some act which, without  such authority, could not lawfully be done.  In the context of an immovable  property a licence is an authority to do  an  act which would otherwise be a trespass.  It passes no interest, and  does  not  amount to a demise, nor  does  it  give  the licensee an exclusive right to the use of the property.  The definition in the Rent Act includes any person in occupation under a subsisting agreement for licence given for a licence fee or charge of any premises or part thereof in a  building vesting  in  or  lease  to  a  cooperative  housing  society registered or deemed to be registered under the                                                        608 Maharashtra Cooperative Societies Act, 1960.  The  appellant would,  otherwise, be included within this definition.   But he has no subsisting licence, the same having been cancelled on 10.3.72.      Section  15A  of  the Rent Act which  was  inserted  by Maharashtra Act 17 of 1973 provides:          "Certain  licensee  in occupation on  1st  February          1973 to become tenants.          (1) Notwithstanding anything contained elsewhere in          this Act or anything  contrary in any other law for          the time being in force, or in any contract,  where          any  person is on the 1st day of February  1973  in          occupation  of  any premises, or any  part  thereof          which  is  not less than a room, as a  licensee  he          shall  on that date be deemed to have  become,  for          the  purposes  of  this  Act,  the  tenant  of  the          landlord,  in  respect  of  the  premises  or  part          thereof, in his occupation .          (2)  The  provisions of sub-section (1)  shall  not          affect  in any manner the operation of  sub-section          (1) of section 15 after the date  aforesaid."      Thus,  section 15A read with section 5(11) (bb) of  the

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Rent  Act  makes  the tenant one of status  rather  than  of contract.  Intention to create a licence as defined in  that Act if the other requirements fulfilled would, therefore, be enough  to confer that status from the specified date.   The above  provisions  applies to person in  occupation  of  any premises or part thereof which is not less than a room, as a licensee  he  shall on the date be deemed to have  become  a tenant  on the first day of February 1973.  The  licence  of the  appellant   was cancelled on 10.3.72.   Again,  in  the instant agreement what has been given is only the use of the flat and the furnitures and fittings.      ‘Licence’  had earlier been defined in section   52  of the Indian  Easements Act, 1882:          "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 immovable  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                                                         609          an interest in the property, the right is called  a          license."      In  view  of  licence  of  the  appellant  having  been cancelled  on  10.3.72, licence as defined by the  Rent  Act itself, would not apply, to the appellant’s case.  He would, therefore, not be protected under s. 15A of the Rent Act.      The learned counsel  for the appellant submits that due to  scarcity of accommodation, the appellant had  to  accept the terms that he would not, by virtue of the agreement   of leave and licence, claim any right of tenancy or sub tenancy and that should not be a bar to his being given the  benefit under  the  Rent Act.  However, considering  the  facts  and circumstances of this case we are not inclined to hold  that the appellant should not be bound by the expressed intention in the agreement.      In  Chandavarkar  Sita Ratna Rao v.  Ashalata  S.Guram, [1986]  4  SCC  447, this Court  held  that  licence  was  a privilege and not an interest in property.  A tenant,  whose interest in the tenancy is determined for any reason but who is  protected  by  the statute, was  entitled  to  create  a licence  in  favour  of another person  until  a  decree  of eviction  has been passed against him.  A  statutory  tenant was  in  the same position as a contractual tenant  until  a decree for eviction is passed against him and the rights  of contractual  tenant  including the right to  create  licence even  if he was transferor of an interest which was  not  in fact  the  transfer of interest.  If the licence  have  been created  before February 1, 1973, the licensee must, by  the express terms of section 15A of the Rent Act be deemed to be a  tenant and he should, subject to provisions of  the  said Act  be  deemed  tenant of the landlord  on  the  terms  and conditions  of the agreement consistent with the  provisions of  the Act.  At paragraph 58 of the report it was  observed that  there was no reason and there was nothing in the  Rent Act  or  the Statement of Objects and Reasons  to   indicate that  restricted meaning to the expression "licence"  should be  given.  As the amended section said that whoever was  in possession as a licensee should be deemed to have become for the purpose of the Act the tenant  of the landlord and there was  no  warrant to restrict the ordinary  meaning  of  that expression.   If the restricted meaning was given  then  the apparent  scheme  or  the purpose for  introduction  of  the amendment  would be defeated at least to a large section  of licensees  who  were contemplated to be  protected,  as  the objects of the Act sought to do.

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    The Rent Act was amended by Maharashtra Act 17 of 1973. By                                                   610 the  Amending  Act  section  5(4A)  and  section  15A   were introduced in the parent Act to confer on the licensee,  who had  a subsisting agreement of February 1, 1973  the  status and protection of a tenant under the Rent Act.  Section  15A required  that  the occupant must be in  occupation  of  the premises  as a licensee as defined in section 5(4A)  on  the 1st  of February, 1973.  If he be such a licensee, the  non- obstinate clause of section 15A (1) gives him the status and protection  of a tenant in spite of there being anything  to the contrary in any other law or in any contract.  In  other words,  even as against the express terms of the  subsisting contract of licence,the licensee would enjoy the benefits of section  15A.   But  if  he  was  not  a  licensee  under  a subsisting  agreement on the 1st of February, 1973, then  he did  not get the advantage of the amending provision of  the Rent Act.  A person continuing in possession of the premises after  termination, withdrawal or revocation of the  licence continued  to occupy it as a trespasser or as a  person  who has  no semblance of any right to continue in occupation  of the  premises.  Such  a person by no stretch of  imagination could  be  called a licensee.  In D.H. Maniar  and  Ors.  v. Waman Laxman Kudav, [1976] 4 SCC 118, this position was made clear.   The  appellant  in the instant  case  was  not   in possession  as  a  licensee on 1st of  February,  1973,  the licence  having  been terminated prior to that  date.   This takes   us  to  the  next  question,  namely,  whether   the Cooperative Court had jurisdiction over the matter.      Section 91(1) of the Maharashtra Cooperative  Societies Act which deals with disputes, provides:          "(1)  Notwithstanding  anything  contained  in  any          other law for the time being  in force any  dispute          touching   the  constitution,  elections   of   the          committee or its officers other than the  elections          of committees of the specified societies  including          its   officers,   conduct  of   general   meetings,          management  of  business  of  a  society  shall  be          referred  by any of the parties to the dispute,  or          by  a  federal  society to  which  the  society  is          affiliated  or by a creditor of the society,  to  a          cooperative  Court if both the parties thereto  are          one or other of the following:-          (a)  a society its committee, any  past  committee,          any  past or present  officer, any past or  present          agent, any past or present servant or nominee, heir          or  legal representative of any  deceased  officer,          deceased agent or deceased  servant of the society,          or the Liquidator of the society;                                                    611          (b)  a  member, past member or  a  person  claiming          through a member, past member or a deceased  member          of a society, or a society which is a member of the          society  or a person who  claims to be a member  of          the society.          xxx      xxx      xxx       xxx       xxx       xxx      Under the above provision the matter of eviction of the appellant  by  the tenant co-partner member of  the  society can be said to be touching the business of the society.      In  Deccan  Merchants  Cooperative  Bank  Ltd.  v.  M/s Dalichand  Jugraj  Jain & Ors., [1969] (1) SCR 887,  it  has been   held  that  the word  "business"  in  the  expression ‘touching the business of a society’ in section 91 (1)  does not mean affairs of the society.  It has been used here in a

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narrower sense and means the actual trading or commercial or other  similar  business activity of the society  which  the society  is authorised to enter into under the Act  and  the Rules and its bye-laws.  It was, however, held that  section 91  of  the Maharashtra Cooperative Societies  Act  did  not affect  the  provisions of section 26 of the  Bombay  Rents, Hotel  &  Lodging House Rates Control Act,  1947.   Although both    these  provisions  start  by   excluding   "anything contained  in any other law", two Acts could  be  harmonized best by holding that in matters covered by the Rent Act, its provisions  rather  than the provisions of  the  Maharashtra Cooperative Societies Act, should apply.  The latter Act was passed  in the main, to shorten litigation, lessen its  cost and to provide a summary procedure for the determination  of the disputes relating to internal management of the society. But  under  the Rent Act a different  social  objective  was intended  to  be  achieved and  for  achieving  that  social objective  it  was necessary that the  dispute  between  the landlord  and the tenant should be dealt with by the  courts set up under the Rent Act and in accordance with the special provisions  of that Act and this social objective   did  not impinge   on  the  objective  underlying   the   Maharashtra Cooperative Societies Act.      In   O.N.Bhatnagar  v. Smt. Rukibai Narsindas  &  Ors., [1982] 3 SCR 681, which  was also case of Shyam  Cooperative Housing  Society Limited, it was held that the claim of  the society together with such member for ejectment of a  person who  was permitted to occupy having become a nominal  member thereof,  upon revocation of licence was a  dispute  falling within   the  purview  of  section  1  of  the   Maharashtra Cooperative  Societies  Act, 1960 and  that  the  proceeding under section 91(1) of the Maharashtra Cooperative Societies Act, 1960 were                                                    612 not  barred  by the provisions of section 28 of  the  Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.  The two  Acts,  could  be best harmonized by  holding  that  the matters  covered  by the Rent Acts, its  provisions,  rather than the provisions of the Cooperative Societies Act  should apply.   But where the parties admittedly did not  stand  in the  jural  relationship of landlord and  tenant,  as  their dispute would be governed by section 91(1) of the  Societies Act and that the appellant by virtue  of his being a nominal member,  acquired a right to occupy the flat as a  licensee, but his rights were inchoate,.  In the facts of the  instant case  upon the terms of sections 5(4A) and 15A of  the  Rent Act, it is clear that the appellant was not entitled to  the protection  of  section  15A.   The sine  qua  non  for  the applicability of s. 15A of the Rent Act was that a  licensee must  be  in  occupation  as on February  1,  1973  under  a subsisting licence.  It is not disputed  that the  appellant did not answer that description since the agreement of leave and licence in his favour admittedly stood terminated by the notice of the respondent No. 1 on 10.3.1972.  That being so, the appellant was nothing but a rank trespasser and was  not entitled  to the protection of section 15A of the  Rent  Act and  could  not, therefore, plead the bar of  section  28(1) thereof.      In Hindustan Petroleum Corporation Ltd. & Anr. v. Shyam Cooperative  Housing  Society & Ors., [1988] 4 SCC  747,  at paragraph  14 it was held under the facts of that case  that the  petitioner  Hindustan Petroleum  Corporation  Ltd.  was clearly  protected under section 15A of the Rent Act and  in that  view of the matter the jurisdiction of  the  Registrar under  Section 91(1) of the Cooperative Societies Act  would

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be  as  laid  down in O.N. Bhatnagar’s  case  (supra).   The proceedings  initiated  under section  91  were  accordingly quashed.  This case is, therefore, distinguishable on facts.      Following  Bhatnagar’s  case  in  Smt.  Krishna  Rajpal Bhatia and Ors. v. Miss Leela H. Advani & Ors., [1989] 1 SCC 52,  where  a tenant co-partner member of a  registered  co- partnership  type  cooperative  housing  society   inducting another  person  into her flat for a term of  eleven  months subject  to  renewal  of the term from time  to  time  after obtaining  society’s  permission and after  the  person   so inducted  becoming a nominal member of the society  and  the agreement  between  the parties embodied in  usual  standard form  of leave and licence, it was held that the tenant  co- partner  member only created a licence  and not a lease  and that  the  Maharashtra Cooperative Societies Act,  1960  was applicable.   There  also  the  nominal  membership  of  the society was obtained in terms of the society’s bye-laws  and the licence was                                                        613 terminated  by  notice  after expiry of the  term,  but  the occupant  was  not vacating.  Claim made by  the  co-partner under  section 91 of the Maharashtra  Cooperative  Societies Act,  1960  for  ejectment  of  the  occupant  was  held  to constitute  a ‘dispute touching the business of  a  society’ within the meaning of section 91  and hence the  Registrar’s jurisdiction  to  entertain the claim was held not  to  have been barred under section 28 of the Rent Act.      Applying  the law laid down in the above  decisions  we are of the view that the instant dispute is one envisaged in section 91 of the Maharashtra Cooperative Societies Act  and the Cooperative Courts rightly exercised jurisdiction.      The  next question, namely, section 91 is ultra  vires the  Article 14 of the Constitution of India to the extent it   tries  to  reach persons who are  not  members  is  not tenable, inasmuch as the appellant is involved in a  dispute touching  the business of the Society and he was  a  nominal member of the Society by dint of his agreement of leave  and licence and he was made so on his application.      Result  is that this appeal fails and it is  dismissed, but  under the facts and circumstances of the  case  without any order as to costs.  Interim orders stand vacated. R.P.                                        Appeal dismissed.                                                  614