Santimoy Roy Choudhury vs Chairman, Jangipur Municipality

S.K. Chakravarti, J.—The vexed question as to whether a per son is a tenant or a licensee arises for determination in this appeal. The Appellant and his four brothers, each having equal share, were the owners of plot No. 129 in Basudevpur. That plot was being used as a trenching ground by the Jangipur Municipality, the Respondent No. 1, since 1926 at least, originally under the Appellant''s father Purna, and since his death, under the Appellant and his brothers. This plot was acquired under Act II of 1948 for the purpose of building a hospital and the Jangipur Municipality relinquished its claim to compensation. The Appellant preferred a claim before the Land Acquisition Collector but was awarded nothing. He then prayed for a Reference to the learned District Judge and it was made. His contention was to the effect that the Municipality was only a licensee and never had any tenancy right, and in the circumstances, he was entitled to the entire compensation in respect of this acquisition, and the land should have been valued at the rate of Rs. 2,000 per bigha. This case was also made out before the learned District Judge who held that the Municipality was a tenant and that the Appellant "will get compensation payable to the landlord proportionately to the extent of l/5th share", "on the basis of yearly rent payable to him" and directed the Collector to ascertain the compensation on this basis. The present appeal has been fried against that award.

The first point that is pressed on behalf of the Appellant by Mr. C. N. Mukherjee, learned Advocate appearing for him, is to the effect that on the evidence as adduced before the learned Judge, he was entirely in the wrong in holding that the Municipality was a tenant and not a mere licensee. He has also made a grievance of the fact that the learned Judge did not take into consideration the settlement khatian (Ex. 1) which records this land as in the possession of the Appellant and his brothers without any under-tenancy and further that the Municipality had filed an objection u/s 44(2a) of the West Bengal Estates Acquisition Act which has also been dismissed (Ex. 3).

He has also referred to a number of decisions, namely, Mrs. M.N. Clubwala and Another Vs. Fida Hussain Saheb and Others, ; Associated Hotels of India Ltd. v. R. N. Kapoor (1960) 2 S.C.A. 1; Ram Prosad Mondal Vs. Sm. Snehalata Ghosh, and B.M. Lal (dead) by his legal representative and B.M. Dunlop Rubber Company (India) Ltd. (1968) 1 S.C.A. 18.

It is no doubt a fact that the learned Judge did not take into account Exs. 1 and 3. We have to consider whether because the principles which would follow from, the decisions referred to above may be summarised as follows.

There is a distinction between a lease and licence. Section 105 of the Transfer of Property Act defines a lease. Section 52 of the Indian Easements Act defines a licence. A lease is the transfer of a right to enjoy the premises ; whereas a licence is a privilege to do something on the premises which otherwise would be unlawful. If the agreement is in writing, it is a question of construction of the agreement having regard to its terms, and where its language is ambiguous, having regard to its object, and the circumstances under which it was executed whether the rights of the occupier are those of a lessee or a licensee. The transaction is a lease if it grants an interest in the land; it is a licence if it gives a personal privilege with no interest in the land. The question is not one of words but of substance and the label which the parties choose to put upon the transaction, though relevant, is not decisive. The list of exclusive possession is not conclusive,......though it is a very important in favour of tenancy. Vide Lal''s case (4).

It may be pointed out that one time it was held that exclusive possession would be a determining factor to find out if a person is a tenant or a licensee. But that principle was modified in Errington v. Erringion and Woods (1952) 1 K.B. 290 to the extent that it would not be conclusive on the point but would certainly be a very important indication in favour of tenancy and has been followed in the Associated Hotel''s case (supra) as also in Lal''s case (supra).

(2) the real test is the intention of the parties whether they intended to create a lease or a licence ;

(3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property of which the legal possession continues with the owner, it is a licence ; and

(4) if under the document a party gets exclusive possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease. Vide Associated Hotel''s case (Supra).

In the absence, however, of a formal document the intention of the parties must be inferred from the circumstances and conduct of the parties. Vide Clubwala''s case (Supra).

It is against the background of these principles that it has to be found out in this particular case whether the possession by the Municipality of the land was that of a tenant or a licensee. The settlement khatian not having recorded, the possession of the Municipality, the onus would lie heavily on it. But that the settlement khatian is wrong in this respect, would appear from the very admission of P.W. 1 himself who states that till the date of delivery of possession of the acquired land in connection with the acquisition, the Municipality possessed it for trenching ground. Under the rules it was necessary for the settlement authorities to record the possession of the Municipality which admittedly was in possession even if it was a licensee. There is also no case made out in the petition that the Appellant or his brothers or his father had ever exercised any acts of possession over the property after it had come into possession of the Municipality in 1926 or had reserved any rights to itself. Even P.W. 1 does not state that there were any acts of possession during this period by them or their father. The lacuna was sought to be made up by the evidence of P.W. 2 who went further than the Appellant himself and contended that Purna Babu, the father of the Appellant, used to sell the trees of the land during his life-time and used to grow crops even on it. The learned Judge was quite right in rejecting his testimony. The fact, therefore, remains that the Municipality was in exclusive possession. In the receipts which were granted by Purna Babu and even after him by the Appellant or his brothers would show that it was being realised as thika rent for the trenching ground. Of course, the mere use of the term ''rent'' by itself would not show that the Municipality was a tenant. Unfortunately, there is no document giving right to the Municipality to possess this land. We have, therefore, to gather the intention from the circumstances in this case. We have pointed out some of the circumstances which would lead to an inference that the Municipality was in possession as a tenant. A further fact would remain that the Municipality by its original resolution wanted to take this land for a period of nine years and has been in continuous possession of this land on payment of rents since 1926. Mr. Mukherjee has emphasized the fact that the receipts were being granted for the trenching ground. That by itself would not show that it was a mere licence to use the ground for trenching purposes. In the circumstances, we agree with the learned Judge that the Municipality was a tenant and not a licensee since 1926 at least and that it had an interest in the land and the intention of Purna Babu was to create a lease.

Mr. Mukherjee has next contended that the learned Judge was wrong in applying the Non-Agricultural Tenancy Act to the instant matter and that even if the Municipality was a non-agricultural tenant, the Appellant would also be non-agricultural tenant and, as such, the distribution of the compensation has not been made in accordance with law. The settlement khatian shows that the West Bengal Estates Acquisition Act applies to it and that the interest of the Appellant and his brothers was that of a settled raiyat and raiyats with rights of occupancy. No case has been made out either before the trial Judge or before the Collector or even in the memorandum of appeal to the effect that the interest of the Appellant was that of a non-agricultural tenant. Rather the case that has been made out is just to the contrary. The entries in the khatian regarding the character of the interest have not been challenged at any stage of the proceeding. We, accordingly, hold that the interest of the Appellant and that of his brothers in this property is that of the settled raiyat or raiyat with right of occupancy and not that of non-agricultural tenant. As the Municipality is a tenant under the Appellant and his brothers, as we have already found, even assuming, that the Non-Agricultural Tenancy Act does not apply to the interest of the Municipality, the Municipality would be an under- raiyati with right of occupancy in the land and the interest of Appellant and his brother must be deemed to have vested in the State under the West Bengal Estates Acquisition Act. It is doubtful whether the interest of the Municipality would be that of a non-agricultural tenant. Even if its status be that of a non-agricultural tenant, the status of his landlord would not necessarily be that of a non-agricultural tenant. It appears that the State has not filed any cross-objection regarding the direction by the learned Judge to give compensation to the Appellant on the basis of the yearly rent payable to him. As a matter of fact, Mr. B. C. Banerjee, learned Advocate appearing for the State, has drawn our attention to the Orders Nos. 13 and 14 in the records of the trial Court which would show that a sum of Rs. 67.03 np. was found to be the compensation due to the Appellant and the cheque for that amount had been received. In this view of the matter, we do not question this apportionment and, whether the Municipality is an under-raiyat or a non-agricultural under-tenant, the Appellant would not be entitled to get any compensation higher than that.

The result, therefore, is that this appeal fails and is dismissed.

There will be no order as to costs in this proceeding before us.

S.K. Datta, J.

I agree.