ALLAHABAD BANK Vs. SADAY CHAND MAHATAB

JUDGEMENT

(1.) This case has been placed before this bench in view of the difference of opinion between two of the Hon'ble Judges of this court. The question succinctly put is as to whether the memorandum of agreement dated 7th February, 1979 entered into by the parties constitutes a lease or licence.

(2.) The basic fact of the matter is not in dispute. The plaintiffs-respondents are the joint owners of a premises bearing No. 2 Netaji Subhas Road, Calcutta as described in the schedule appended to the plaint. The appellant Bank approached the plaintiffs with a proposal to purchase the said premises at a price of Rs. 81 lakhs. For the said purpose negotiations had been held between July '78 and February 79. The parties also discussed about observance and performance of various formalities in this regard. However, as the plaintiffs had some difficulties in execution the deed of sale in favour of the defendant-appellant immediately, as it appears from the minutes of discussion dated 6th November, 1995, it was suggested that pending execution of the formal deed of sale the parties may enter into a leave and licence agreement for one year at the first instance: pursuant whereto the aforementioned agreement had been entered into.

(3.) In terms of the said agreement the respondents agreed to allow the appellant to use and occupy the ground floor of the said premises which was expected to be vacant by 15th February, 1979 and the remaining floors as soon thereafter as the then occupier would vacate. Pursuent to the said agreement the appellant was put in possession of a portion of the premises in question which was vacant. On the expiry of the aforementioned period of one year, the said period was extended thrice. Admittedly, the agreement to sell the said premises by the respondent in favour of the appellant failed through. The respondents, on the expiry of the extended period filed a suit against the appellant in the Original Side of this court which was marked as suit No. 644 of 1984 praying, inter alia, for the following reliefs :-