Holding

The agreement was a licence, not a lease, and the appellant is a licensee; the lower courts' eviction order stands.

Summary

The appellant, originally a monthly tenant, executed a written "leave and licence" agreement with the respondent (licensor) granting the appellant use of workshop premises for five years at a fixed licence fee, subject to numerous restrictions such as limited hours of use, prohibition of residential use, and the licensor's right to enter at any time. In 1970 the respondent filed an ejectment suit under Section 41 of the Presidency Small Cause Courts Act, 1882, claiming the appellant was a licensee and not a tenant. The trial court and the High Court both held that the agreement created a licence, ordering the appellant to vacate. On appeal, the Supreme Court examined whether the document constituted a lease or a licence, emphasizing that the decisive factor is the parties' intention, the presence of exclusive possession, and the nature of the consideration. Finding that the agreement expressly used the term "licence", imposed usage restrictions, and retained the licensor's right of entry, the Court concluded that it was a licence, not a lease, and therefore upheld the lower courts' orders. The appeal was dismissed.

Issues considered

The nature of the agreement: whether it creates a lease (tenant) or a licence (licensee).
Whether the appellant is entitled to tenant protection under the law.
The jurisdiction of the Court of Small Causes under Section 41 of the Presidency Small Cause Courts Act, 1882.
The propriety of High Court interference under Article 227 of the Constitution.

Legislation cited

Indian Easements Act, 1882s. 52
Presidency Small Cause Courts Act, 1882s. 41
Transfer of Property Act, 1882s. 105, s. 108

Subjects

lease vs licenceintention of partiesevictionSection 41Small Causes Court jurisdictionlandlord-tenant relationshipexclusive possessioncontract interpretation

Judgment

KHALIL AHMED BASHIR AHMED A
v.
TUFELHUSSEIN SAMASBHAI SARANGPURW ALA

NOVEMBER 13, 1987

[SABYASACHI MUKHARJI AND G.L. OZA, JJ.] B

Presidency Small Cquses Courts Act, 1882: Section 41-Suit for
ejectment-Question whether occupant a licensee 'tenant-Intention of
the parties to the agreement decisive consitieration-Lease and license-
Distinction between.
c
Transfer of Property Act, 1882: Sections 105 and 108--Lease and
license-Distinction between-Interest in immovable property entitling
transferee to enjoyment created-Effect of-Whether agreement creates
relationship of landlordltenant or /icensor'licensee-Intention of
parties-Decisive consideration.
D
Practice & Procedure: High Court-Jurisdiction of-Whehter
entitled to interfere with view of Trial Court which is a possible and
plausible one merely because another view is attractive.

The appellant, who was stated to be a monthly tenant of the suit
premises, entered into an agreement, which was described as an agree· E
ment of 'leave and licence', with the respondent on 9th February, 1965
and the respondent and the appellant were described therein as licensor
and licensee respectively. It was stated in the agreement that the
licensor was seized of the premises in dispute as a monthly tenant and
gave and granted 'leave and license' to the licensee to use and occupy
the said premises for a period of five years, merely for the purpose of F
workshop business, at a monthly compensation of Rs.225 that the
licensor shall be entitled to terminate the agreement and cancel and
revoke and withdraw the leave and licence granted earlier and to take
possession forthwith of the said premises if the licensee committed any
default of any terms and conditions or failed to pay the compensation
for two months or if the licensee at any time put up false or adverse G
claim of tenancy or sub-tenancy, that the licensee shall pay the electric
charges in respect of consumption of electricity and the rent of the said
premises should be paid by the licensor only, and that the licensor shall
have the full right to enter upon the premises and inspect the same at
anytime.
H

1057
1058 SUPREME COURT REPORTS [ 1988) I S.C.R.
A In November 1970, the respondent filed an ejectment proceed· ·
ings against the appellant· under section 41 of the Presidency
Small Canse Courts Act, 1882. It was contended hy the appellant that
there was sub-tenancy by the respondent in his favour as monthly
tenant.
B
The trial court passed a decree and ordered the appellant to
vacate the premises holding that the agreement was for leave
and licence and that the appellant was a licensee and not a sub·
tenant.

On the case being remanded hy the Supreme Court in a Special
C Leave Petition filed by the respondent against the earlier decision of the
High Court, allowing the appellant's special civil application, the High
Court upheld the order of the Court of Small Causes, and ordered
eviction of the appellant.

b In the Special Leave Petition against the aforesaid decision, it was
contended that the document in question read as a whole was a lease
and not a license.

Dismissing the appeal by special leave,

E HELD: 1.1 If an interest in immovable property entitling the
transferee to enjoyment was create_!!, it was lease; if permission to use
land without exclusive possession was alone granted, a licence was the
legalresult. [10670-E)

1.2 In determining whether an agreement creates between the
F parties the relationship of landlord and tenant or merely that of
licensor and licensee, decisive consideration is the intention of the
parties. [1068B·Cl

In view of the intention of the parties in the document and the
facts and circnmstances of the instant case, it was a licence and not a
G lease. This is clear from the language used and the restrictions put upon
the nse of the premises in question by the appellant. In the document in
question the expression "licence" was introduced and clause (2) said
that it was only for the business purposes. The licence fee was fixed. It
permitted nser only for 20 hours. Restriction in the hours of work
negates the case for lease. Clause (12) gives to the licensor right to enter
H upon the premises and inspect the same at any time. 11067E-F]
KHALIL AHMED v. T.S. SARANGPURWALA [MUKHARJI, J.I 1059

1.3 Where two views are possible and the trial court has taken A
one view which is a possible and plausible view merely because another
view is attractive, the High Court should not interfere and would be in
error in interfeting with the finding of the trial court or interfering
under Article 227 of the Constitution over such decision. [1068E-Fl

DH. Maniar and others v. Woman Laxman Kudav, [1977] 1 B
S.C.R. 403; Miss Mani J. Desai v. Mis. Gayson & Co. Pvt. Ltd. 73
Bombay Law Reporter 394; Associated Hotels of India Ltd. v. R.N.
Kapoor, [1,60] 1S.C.R.368; Mrs. M.N. Clubwala and anotherv. Fida
Hussain Saheb and others, [1964] 6 S.C.R. 642 at page 653; Sohanlal
Naraiiidas v. Laxmidas Raghunath Gadit, 68 Bombay Law Reporter
400; Sohan Lal Naraindas v. Laximdas Raghunath Gadit, [1971] 3
S.C.R. 319; Qudrat Ullah v. Municipal Board, Bareilly, [1974] 2 C
S.C.R. 530; Bookerv. Palmer, [1942] 2 All ER 674 at 676, 677; Venkat-
lal G. Pittie & Anr. v. Mis. Bright Bros. (Pvt) Ltd., [1987] 2 scale 115;
Mis. Beopar Sahayak (P) Ltd. & others v. Shri Vishwa Nath & 5 others,
(1987] 2 scale 27; Satyanaryan Laxminarayan Hegde and others v. Mal-
likarjun Bhavanappa Tirumale, A.I.R. 1960 S.C. 137 and Halsbury's D
Laws of England., Fourth Edition, Volume 27 page 13, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1377
of 1982.

From the Judgment and Order dated 17.11.1980 of the Bombay E

-- High Court in Special Civil Appeal No. 251of1977.

F.R. Nariman, E.K. Jose, P.H. Parekh and Miss Sunita Sharma
for the Appellant.

Y.H. Muchhala, B.R. Aggarwala and Miss. S. Manchanda for F
the Respondent.

..
The Judgment of the Court was delivered by

SABYASA CHI MUKHARJI, J. This appeal by special .leave
arises from the judgment and order of the High Court of Bombay G
dated 17th of November, 1980. The main question involved in this
appeal is whether the appellant was a licensee or a tenant and also
incidentally the question whether the Court of Small Causes, Bombay
had jurisdiction to deal with the eviction petition in this case. The
premises in question belongs to the Bombay City Weavers Co-
operative Limited. They filed ejectment proceedings against one H
1060 SUPREME COURT REPORTS [!988] I S.C.R.

Sugrabhai Mohammed Husain, their tenant and obtained a decree. It
A
is stated that the appellant was a monthly tenant of the suit premises
since about 2nd February, 1965. On or about 9th of February, 1965 a
fresh document of that date, was executed and it is alleged that the
appellant continued by virtue of that agreement. It is alleged that this
agreement was entered into between the parties since the respondent
wanted to charge more rent or mesne profits. This agreement is in
writing and this was for a period of five years, i.e., from 1st }
September, 1965 to 31st of August, 1970. The main contention in-
volved in this appeal is whether the appellant was a tenant or a
licensee? The answer would be dependent upon the construction of the
aforesaid document. It is necessary, therefore, to refer to the said
C agreement in little detail. The agreement is described as an agreement -~-·
of 'leave and licence' entered into between the respondent on the one
hand and the appellant on the other wherein the respondent had been
described as the 'licensor and the appellant had been described as the
licensee' and the recitals therein recite that the licensor was seized and
possessed of and was otherwise well entitled as the monthly tenant of
D the workshop premises situated at 231, Ripon Road, Cooperative
Building, Bombay, being the premises in dispute, and whereas the
licensee had approached the licensor to allow him to occupy and use
the said premises for the purpose of carrying out his business of work-
shop for a period of five years and whereas the licensor had agreed to
allow the licensee to use the premises under the said leave and licence
E of the licensor for a period of five years from 1st of September, 1965
till 31st of August, 1970, that agreement was being executed. it was
stated that the licensor gave and granted his 'leave and licence' to the
licensee to use and occupy the said premises for the period of five
years. Clause 2 of the said agreement recites that the licensee had
agreed to use the premises as above and merely for the purpose of
--
f workshop business. It further goes on to state that the "licensee shall
not under any circumstances be allowed to use the premises for the
residential purposes or any other purpose save and except specified
therein". The period of leave and licence was to commence from 1st of
September, 1965 to 31st of August, 1970 and it was further submitted
that the licensee and the licensor shall not terminate the said agree-
G meat earlier save and except on the ground of breach of any of the
...
terms and conditions written therein. The licensor was entitled to
terminate the agreement earlier notwithstanding the fact that the
period of the agreement might not have expired. It further stipulated
that the licensee should deposit a sum of Rs.2,500 for the due perform-
ance of the terms and conditions of the agreement. The said deposit
H was to be kept free of interest and the same was to be refunded to the
KHALIL AHMED v. T.S. SARANGPURWALA [MUKHARJI, J.l 1061
..., licensee on the licensee surrendering possession of the said premises
A
by removing himself and his belongings on the expiry of the period of
the agreement or sooner termination or determination thereof after
deducting all the dues if any for payment of compensation. It further
stipulated that the licensee shall pay to the licensor a monthly compen-
sation of Rs.225 per month. It is further stipulated that the licensee
would be entitled to keep the keys of the said premises with him and B
1 shall be at liberty to work in the said premises for twenty hours subject
to restriction of rules and regulations imposed by the Municipal or any
other local authority or authorities. It is further provided that the
licensee shall be alone responsible and liable for any breach or contra-

l vention of any rule or regulation of the said authorities and he shall
indemnify the licensor therefor. The document further stipulated that
the licensee shall be at liberty to construct loft and electric fittings and
apparatus and tools and shall be entitled to the ownership thereof and
c
shall be free to carry away such articles and the licensor agreed and
undertook that he shall not obstruct the removing of such articles at
the time of the delivery of the possession of the said workshop. It is
further mentioned in the said agreement that it was agreed by the D
licensee that if he commits any default of any terms and conditions or
fails to pay the compensation for two months or if the licensee at any
time puts up false or adverse claim of tenancy ·or sub-tenancy the
licensor shall be entitled to terminate the agreement and cancel and
'-I revoke and withdraw the leave and licence granted earlier and shall be
entitled to take possession forthwith of the said premises. It is further E
stipulated that the licensee shall pay the electric charges in respect of
consumption of electricity and the rent .of the said premises should be
paid by the licensor only. The agreement recited that the licensee shall
not allow any other person to use and occupy the said premises and
shall not do any unlawful or illegal business therein. The agreement
further recited that the licensor shall have the full right to enter upon F
(--- the premises and inspect the same at any time. In setting out the terms
of the agreement the emphasis has been supplied to the relevant
clauses to highlight the points in controversy.

On or about 9th November, 1970, the respondent herein filed an
ejectment proceeding against the appellant under section 41 of the G
Presidency Small Cause Courts Act, 1882. It is well to refer to section
-f 41 of the said Act which is in Chapter VII and deals with summons
against person occupying property without leave and provides that
when any person has had possession of any immovable property
situate within the local limits of the Small Cause Court's jurisdiction
and of which the annual value at rack-rent did not exceed two H
1062 SUPREME COURT REPORTS [ 1988] I S.C.R.

A thousand rupees, as the tenant, or by permission, of another person, ~
or of some person through whom such other person claims, and such
tenancy or permission has been determined or withdrawn then a suit
can be filed by a summons against the occupant calling upon him to
show cause therein. It was only when the person was in occupation by
permission of the grantor that after the recovery of the permission a
B suit for possession could have been instituted under section 41 of the
~M. ~

On or about 9th of November, 1970 the owner of the premises
filed an ejectment proceeding against one Sugrabhai Mohammed
Husain and obtained a decree. The trial Judge in the instant case
J ·

C passed a decree in ejectment petition filed by the respondent and ~ ~
ordered the appellant to vacate· the premises before 31st of January,
1975. Before the Judge, Court of Small Causes the points of defences
were filed in which the appellant had stated that the application was
not maintainable and the plaintiff was himself occupying the premises
under one Sugrabhai Mohammed Husain who himself had adopted
D ejectment proceedings against the respondent. The appellant was con-
tending that he was a direct tenant of the'respondent. Without pre-
judice to the above contention it was contended by the appellant that
the respondent was not the owner of the workshop and also denied
that he had given the workshop to respondent for conducting business.
The submission was that there was sub-tenancy by the respondent in
E favour of the appellant as a monthly tenant of the business with the
articles and machinery belonging to the appellant and not to the
respondent. On those grounds it was contended that ejectment pro-
ceedings was liable to be rejected.
...
It was recorded by the court with the expression "B.C", a term
F of some ambiguity as explained later, that the appellant was not claim-
ing protection as a sub-tenant under the Rent Act but only the sub- "~
tenancy as such and therefore, it was recorded that as agreed 'B.C'. no
preliminary issue was to be framed. The learned Judge, noted that the
only point that arose for consideration was whether the appellant
proved that he was a sub-tenant as such or not. It is interesting to note
G that in the judgment of the Small Cause Court and also of the High
Court at several places the expression "B.C." was used; this is intrigu-
ing as we find that it intrigued Vaidya, J. because he stated in his f--
judgment dated 9th of December, 1975 what the expression "B.C."
was meant by Court. He recorded further that he thought that "B.C."
meant 'by consent'. The learned Judge recorded further that it was
H practice in the Court of Small Causes, Bombay of using the expression
KHALIL AHMED v. T.S. SARANGPURWALA lMUKHARJI, J.] 1063

"B. C. ". The said learned Judge, however, observed that the use of the A
words in the paragraph which we have stated hereinbefore made the
entire paragraph meaningles&. We could not agree more.

In order to go back to the findings of the learned Judge of the
Court of Small Cause and the learned High Court Judge found that the
appellant had failed to prove that he was a sub-tenant of the respon- B
dent.and the learned Judge found him to be a licensee. On an analysis
and examination of evidence recorded and in the background of the
documents in question the learned Judge came to the conclusion factu-
ally that it was an agreement for leave and licence and the appellant
was a licensee and not a sub-tenant. It was an agreed position as the
learned Judge noted that the respondent therein was a tenant of the C
entire suit premises and had produced a rent receipt for the month of
April, 1971 for a monthly rent of Rs.56.25 p.m. inclusive of municipal
taxes and had also produced light bill for the period 20. 10. 65 and
19.11.65. The learned Judge observed that from the evidence it would
be seen that it was not the case of the appellant even that he had gone
to occupy the suit premises any time before that date and the dispute D
started only from the date of the agreement. In the light of the legal
position and also the fact that the rent, light bill stood in the name of
the respondent showed that there was no desire to create any lease by
the document mentioned hereinbefore and the appellant regarded him
as a mere licensee. There was no error of fact as such on that. To this
finding our attention was drawn and greatreliance was placed. To go E
back to the narration of events, the appellant filed special civil applica-
tion in the High Court of Bombay under Article 227 of the Constitu-
tion. The High Court of Bombay allowed the special civil application
on 9th December, 1975. Thereafter in 1977 a special leave petition to
this Court under Article 136 of the Constitution was filed being S.L.P.
No. 274/77 and an order was passed in Civil Appeal No. 2181of1977 F
by which the case was sent back to the High Court for a fresh decision,
keeping in view the decision of this Court in D.H. Maniar and others v.
Waman Laxman Kudav, [1977] 1 S.C.R. 403. Thereafter the High
Court disallowed the special civil application by its order dated 17th of
November, 1980.
G
That decision was a case where the appellants therein had
granted a licence in respect of certain shop premises in Bombay to the
respondent under a Leave and Licence Agreement which expired on
31st March, 1966. Thereafter the appellants had served a notice upon
the respondent calling upon him to remove himself from the said pre-
mises. The respondent refused to do so. In July, 1967 the appellants H
1064 SUPREME COURT REPORTS [1988] 1 S.C.R.

A filed an application for eviction under section 41 of the Presidency
Small Cause Courts Act. The contention of the respondent that he was
a tenant was negatived by the Small Cause Court, Bombay. The
respondent approached the High Court under Article 227 of the
Constitution. The High Court refused to interfere with the finding of
the Small Cause Court that the respondent was a licensee and not a
8 tenant. The Bombay Rent Act was amended by Maharashtra Act 17 of
1973. By the amending Act, sections 5(4A) and 15A were introduced
in the parent Act to confer on the licensee, who had a subsisting
agreement on February 1, 1973, the status and protection of a tenant
under the Bombay Rent Act.

The respondent in that case by an amendment had taken the plea -
C of protection under the Maharashtra Amendment Act 17 of 1973 on
the ground that he was in occupation of the premises <in 1st February,
1973 under a subsisting agreement for licence. The Small Cause Court,
Bombay negatived the plea on the ground that there was no subsisting
agreement for licence on the 1st of February, 1973 as there was
D nothing on record to show that after 31st March, 1966 the leave and
licence agreement between the parties was renewed or any fresh agree-
ment was entered into. The respondent had filed a revision petition
under section 115 of C.P.C. in the High Court. The High Court
allowed the revision on the ground that the licence was not put an end
to by the appellants and that in any event by filing the application for
E eviction the appellant licensor had granted an implied licence to the
respondent licensee to continue in possession till a decree of eviction
was passed in his favour. This Court allowing the appeal held that in
order to get the advantage of section 15A of the Bombay Rent Act, 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 was such a licensee,
F the non-obstante clause of section 15A( 1) give him the status and
protection of a tenant in spite of there being anything to the contrary
in any other law or in contract. 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 amended provision of the Bombay Rent Act. It
was further held that a person continuing in possession of the premises
G after termination, withdrawal or revocation of the licence continued to
occupy it was a trespasser or a person who had no semblance of any
right to continue in occupation of the premises. Such a person could
not be called a licensee at all. It was futher held that a person continu-
ing in occupation of such premises after revocation of the licence was
still liable to pay compensation or damages for its use and occupation.
H It was further held that filing an application under section 41 of the
KHALIL AHMED v. T.S. SARANGPURWALA [MUKHARJI, J.I 1065

Presidency Small Cause Courts Act might in certain circumstances
A
have the effect of putting an end to the licence if it was subsisting on
the date of its filing. But that cannot possibly have the effect of reviv-
ing the licence as opined by the learned Judges. Such a proposition of
Jaw, it was further concluded by this Court, was both novel and in com-
prehensible. It was further held that it was right that the Court should
act in consonance with the spirit of the Maharashtra Amending Act 17 B
i of 1973, but the Court cannot and should not cast the law to the winds
or twist or stretch it to a breaking point amounting to almost an absu-
.-: rdity. It was observed that the finding of the High Court that the
respondent was in occupation of the premises under a subsisting
licence was wholly wrong and suffered from serious infirmities of law
. /.t and fact and deserved to be set aside.
c
The High Court disallowed the special civil application under
Article 227 of the Constitution on 17th of November, 1980 and that is
the judgment impugned in this appeal. The High Court in the judg-
ment under appeal noted that if it was held that the docwnent created
a lease rather than a licence than the tenant would be entitled to D
protection. The Bombay High Court in Miss Mani J. Desai v. Mis.
Gayson & Co. Pvt. Ltd., 73 Bombay Law Reporter 394 had held that
the Court of Small Causes would have no jurisdiction to proceed with
the application filed under section 41 of the Presidency Small Cause
'-../ Courts Act. The learned Judge rejected the contention of the appel-
Jani that he was a tenant and having found that the period of licence E
had come to an end, he passed an order of eviction agaiust the appel-
Jant. The High Court in the judgment under appeal noted the facts
mentioned hereinbefore by this Court in the decision of D.H. Maniar
and allowed the appeal. This decision was remanded back to the High
Court and it was directed that the appellant should be heard afresh in

r- accordance with law because in a previous decision Vaidya, J. by the F
judgment dated 9th of December, 1975 as mentioned hereinbefore had
allowed the appellant's appeal. The learned Judge referred to the
several decisions and background of the facts and affirmed the deci-
sion of the learned trial judge that the payment to be made to the
respondent for the use and occupation was compensation and not rent.
The High Court affirmed the decision of this Court and upheld the G
order of the Court of Small Causes and ordered eviction.
'- -1 \ In support of this appeal Sree R.F. Nariman very laboriously
took us through the documents. He submitted that the docwnent in
question in the instant case read as a whole was lease and not a licence.
He referred us to the decision of this Court in the case of Associated H
1066 SUPREME COURT REPORTS [1988] 1 S.C.R.

A
Hotels of India Ltd. v. R.N. Kapoor, [1960] 1 S.C.R. 368 where at
,.
page 383 this Court noted that there was a marked distinction between
a lease and a licence. Section 105 of the Transfer of Property Act, 1882
defined a lease of immovable property as a transfer of a right to enjoy
such property made for a certain time in consideration of a price paid
or promised. Under section 108 of the said Act, the lessee is entitled to
B be put in possession of the property. A lease involves a transfer of an
interest in land, Subba Rao, J. as the learned Chief Justice then was, r
observed in that case. This Court referred to the well-known decision
in the case of Errington v. E"ington, [1952] 1 All E.R. 149where Lord
Denning reviewing the case law on the subject summarized the posi-
tion as follows:
--
~·
c "The result of all these cases is that, although a person who
is let into exclusive possession is, prima facie, to be con-
sidered to be tenant, nevertheless he will not be held to be
so if the circumstances negative any intention to create a
tenancy.''
D
The Court of Appeal in England again in Cobb v. Lane, [1952] 1 All
E.R. 1199 considered the legal position and laid down that the inten-
tion of the parties was the real test for ascertaining the character of a
document. Somervell, L.J., had observed:
~

E " ... The solution that would seem to have been found is,
as one would expect, that it must depend on the intention
of the parties."

Denning, L.J. also reiterated the same decision. Reviewing these deci-
sions Denning, L.J. had observed at page 384 of the report (1) that to
F ascertain whether a document created a licence or lease, the substance
of the document must be preferred to the form; (2) the real test was -'"'(,
the intention of the parties-whether they intended to create a lease or
a licence; (3) if the document created an interest in the property, it is a
lease; but if it only permitted another to make use of the property, of
which the legal possession continued with the owner, it was a licence;
G and (4) if under the document a party got exclusive possession of the
property, prima facie, he was considered to be a tenant; but circum-
stances might be established which negative the intention to create a f-_;
lease.

Mr. R.F. Nariman very strenuously relied on the decision of this
ff Court in Mrs. M.N. Clubwala and another v. Fida Hussain Saheb and
KHALIL AHMED v. T.S. SARANGPURWALA IMUKHARJI, J.] 1067

others, (1964] 6 S.C.R. 642 at page 653. This Court emphasised the if A
the exclusive possession to which a person was entitled under an agree-
ment with a landlord was coupled with an interest in the property, the
agreement would be construed not as a mere licence but as a lease. Mr.
Nariman's point was that the facts of the case were identical to the
facts of the present case. Our attention was drawn to a ·decision of the
Bombay High Court in the case of Sohanlal Naraindas v. Laxmidas B
Raghunath Gadit, (68 Bombay Law Reporter 400) where Tarkunde, J.
observed that the intention of the parties and exclusive possession
were important elements. This decision was approved in appeal by this

.. ,., Court in Sohan Lal Naraindas v. Laxmidas Raghunath Gadit, [1971] 3
S.C.R. 319 where this Court reiterated that the test of exclusive
possession was important point. He drew our attention to the observa-
tions of Shah, C.J. at page 321 of the Report. Reliance was also placed C
on the observations of Krishna Iyer, J. in the decision of Qudrat Ullah
v. Municipal Board, Bareilly, [1974] 2 S.C.R. 530 where at page 533 of
the report Krishna Iyer, J. observed that there is no simple litmus test
to distinguish a lease as defined in section 105, Transfer of Property
Act from licence as defined in section 52 of the Easements Act, but the D
character of the transaction turns on the operative intent of the parties.
To put precisely if an interest in immovable property entitling the
transferee to enjoyment was created, it was a lease; if permission to
use land without exclusive possession was alone granted, a licence was
the legal result. we are of the opinion that this was a licence and not a
lease as we discover the intent. For this purpose reference may be E

- made to the language used and the restrictions put upon the use of the
premises in question by the appellant. In the document in question the
expression "licence" was introduced and clause (2) said that it was
only for the business purposes. The licence fee was fixed. It permitted
user only for 20 hours. Restriction in the hours of work negates the
case for a lease. Clause (12) is significant which gave to the licensor the F
right to enter upon the premises and inspect the same at any time. In
our opinion the background of the facts of this case and the back-
ground of the entire document negate the contention of the appellant
that it was a lease and not a licence.

A good deal of submission was made before us that if it was a G
lease and not a licence, then this point could be taken in aid of the
submission that the Court had to jurisdiction, and there was no estop-
pel. It was contended that estoppel was a plea in equity and that there
was no equity in favour of the respondent. We were invited to embark
upon the traded field of estoppel and equity and very many learned
passages from judgments of eminent Judges of Calcutta, Bombay and H
1068 SUPREME COURT REPORTS [1988] 1 S.C.R.

of this Court were cited. But in this case we had not been tempted. ;-
A Our attention was drawn to several decisions 'but in the view we have
taken we cannot say that the view taken by the High Court or the
Court of Small Causes was incorrect. It was a possible view. That is
sufficient for us.

B
The distinction between leave and licence has been well sum-
marised in Halsbury's Laws of England, Fourth Edition, Volume 27
page 13. In determining whether an agreement creates between the
parties the relationship of landlord and tenant or merely that of
licensor and licensee the decisive consideration is the intention of the
parties. Lord Greene MR had observed this in Booker v. Palmer,
c [1942] 2 All ER 674 at 676, 677. This is a salutary test.

The intention here is manifest. In any event this is a possible
view that could be taken. This Court in Venkatlal G. Pittie & Anr. v.
Mis. Bright Bros. (Pvt). Ltd., [1987] 2 Scale 115 and M's. Beopar
D Sahayak (P) Ltd. & others v. Shri Vishwa Nath & 5 others, [1987] 2
scale 27, held that where it cannot be said that there was no error
apparent on the face of the record, the error if any has to be discovered
by long process of reasoning, and the High Court should not exercise
jurisdiction under .Article 227 ofthe Constitution. See in this connec-
tion the observations of this Court in Satyanarayan Laxaminarayan
E Hegde and others v. Mallikarjun Bhavanappa Tirumale, A.I.R. 1960
S.C. 137. Where two views are possible and the trial court has taken
one view which is a possible and plausible view merely because
another view is attractive, the High Court should not interfere and
would be in error in interfering with the finding of the trial court or
interfering under Article 227 of the-Constitution over such decision.
F
In the aforesaid view of the matter, we are clearly of the opinion
that in view of the intention of the parties in the document and the
facts and circumstances of this case, it was a licence and not a lease.
We need not detain ourselves with the question of estoppel upon
which very interesting arguments were advanced before us by Mr.
G Nariman is noted above.

In the aforesaid view of the matter this appeal must fail as we
find no ground to interfere with the decision of the High Court. The
appeal fails and is dismissed. In the facts and circumstances, there will
H be no order as to costs.
KHALIL AHMED v. T.S. SARANGPURWALA [MUKHARJI, J.) 1069

In view of the fact that the appellant has been carrying on busi- A
ness for some time, we give the appellant time upto 31st March, 1988
to give up and deliver vacant possession provided the appellant files
the usual undertaking with the Registrar of the Court of Small Causes,
Bombay within three weeks from this date.
B
N.P.V. Appeal dismissed.