DHARMARTH TRUST Vs. JAGAN NATH

JUDGEMENT

(1.) IN this suit for the recovery of Rs. 53,000/ - an objection to the admissibility of an agreement was raised by the learned counsel for the defendant at the time of recording of the statement of witness scribe of the document produced by the plaintiff. Mr. Gupta contended that the document in question was a lease deed and was for one year and therefore was necessarily to be registered under the provisions of Section 17 of the Registration Act. According to him as the document was not so registered it was not admissible in evidence. The learned counsel for the plaintiff however contended that the document was a deed of licence and as such was not required to be registered under the provisions of the Registration Act. The statement of the scribe witness was therefore, not recorded in full. Arguments have been addressed by both the learned counsel on this point.

(2.) WHETHER the document was a lease or only a license shall have to be decided on a reference to the contents of the deed itself. For this purpose the form of the document may be looked into but the form alone would not be of as much help as the substance of the document would be. It is the intention of, the parties that would determine the character of the deed and it will be from the terms and conditions of the document itself and also from other attending circumstances and the conduct of the parties that would be the main factors to be taken into consideration for correct interpretation of the deed. There is no gainsaying the fact that if the document creates an interest in the property it is a lease but if it only gives permission to another person for making use of the property of which the legal possession continues with the owner, it is a license. The transfer of exclusive possession by itself may not be enough to establish that the document created a lease as there may be circumstances that may negative such an impression. There is clear distinction between the concept of lease and that of the licence, the distinction has now been well brought out in a number of Supreme Court judgments such as AIR 1959 S.C. 1262, 1976 (3) S.C. Cases 485, 1976 (3) S.C. Cases 7512, A.I.R. 1965 S.C. 610. The consensus of judicial opinion in this regard now appears to be that - the -determining factor as to whether a document created a lease or was a license was to ascertain from the terms and conditions of the document the intention of the parties.

(3.) IN para 27 of the judgment of the Supreme Court reported in A.I.R. 1959 S.C. 1262 after stating that there was a marked distinction between a lease and a licence and after noting the definition of both these concepts, it has been laid down as follows: "The following prepositions may therefore be taken as well -established: i) to ascertain whether a document creates a licence or lease the substance of the document must be preferred to the form ; ii) the real test is the intention of the Parties - whether they intended to create a lease or a licence ; iii) if the document creates an interest in the property it is a lease but if it only permits another only to use the ; property of which the legal possession continues with the owner, it is a licence ; and iv) 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. The same principles of law have been laid down and followed in AIR 1975 Allahabad 373 wherein it has been laid down as follows: "The cordinal touch stone on which the relationship between the parties who claim to be licence -holder or licensee or lessor or lessee, must be decided whether the grant creates an interest or estate in the property which is the subject matter of the agreement. Delivery of exclusive possession is a relevant factor but it would be conclusive to the existence of a lease only when it is coupled with an interest in the property and not otherwise." The same principle of law has been laid down in AIR 1972 Madras 372.