Decided on April 19,1955



- (1.) FIRST defendant is the appellant. The suit is for eviction and for recovery of property on the strength of title. The allegations in the plaint are the following:- The plaint property belongs to the plaintiff-company. The compound in which the company building is situated was entrusted on varom arrangement with the first defendant on 20. 1. 1120 for which he executed a varom-chit, Ext. B, in favour of the company. Under the terms of the varam-chit the first defendant was allowed to take the usufructs from the fruit-bearing trees in the property such as cocoanut trees and jack trees and also to raise catch-crops. He was to take the income from the trees and from the catch-crops in the presence of the Managing Director of the Company. Half the income was to go to the company and the other half to the first defendant. There were some temporary sheds in the property. One-half of the rent from those sheds was also to be given to the plaintiffs. The varam amount due to the plaintiff for the year 1120 was found to be Rs. 17-8-0. Out of this, only Rs. 15/- was paid to the plaintiff. The balance amount of Rs. 2-8-0 and also the varam for the year 1121 were due from the first defendant. From the three temporary sheds put up by the first defendant and let out on rent to defendants 2 to 4 he was realising Rs. 24/- a year. Plaintiff was entitled to one half of this amount also. When notice was issued to the first defendant demanding varam he denied the varam arrangement and set up case of oral lease. The property has never been leased to the first defendant. After the denial of the varam arrangement by the first defendant he must be deemed to be in possession of the property as a trespasser and the plaintiff is entitled to recover possession of the property on the strength of title with mesne profits which was estimated at rs. 60/- a year.
(2.) THE first defendant denied the varam arrangement and contended as follows:- He was holding the property under the plaintiff-company on oral lease from the year 1114 onwards. Till the year 1116 the annual pattam was Rs. 12/ -. In the year 1116 the pattam was enhanced to Rs. 15/- and the lease arrangement was made permanent. But, the company insisted on getting a varam chit executed by him. Accordingly, a varam chit was executed by him in the year 1116. That varam-chit was not intended to be acted upon and nothing was done in pursuance to it. Even after the execution of the varam-chit the first defendant was in possession of the property as lessee. He is entitled to the benefits of the Cochin Verumpattomdars Act and is not liable to be evicted from the property. THE pattom for the years 1117 to 1119 has been paid by him. In the year 1120 the company insisted on getting another varam-chit from him and accordingly he executed a varam-chit on 20. 1. 1120. That document is really a lease deed though styled a varam-chit. He continued to be in possession of the property as lessee even after the execution of the varam-chit. THE plaintiff is entitled to get only the annual pattom of Rs. 15/ -. Plaintiff is not entitled to get any share of the rent from the sheds put up by him. He deposited Rs. 31-3-8 arrears of rent for the years 1121 and 1122 and interest thereon. The main question to be decided in the case was whether the first defendant was holding the property as a lessee or whether he was only a licensee. The trial court found that the first defendant was only a licensee and not a lessee and that he was not entitled to the benefits of the cochin Verumpattomdars Act. That court, therefore, decreed the suit. Mesne profits were awarded at the rate of Rs. 50/- a year. The appeal filed by the first defendant in the District Court was also dismissed. Hence this second appeal. The only question for decision in the second appeal is whether Ext. B evidences a lease or a licence. Lease is defined thus in S. 105 of the Transfer of Property Act: "a lease of immovable property is a transfer of a right to enjoy such property, made for 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". Licence is defined in S. 52 of the Easements Act as follows: "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 granter, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence". In the case of a lease there is transfer of a right to enjoy the property and that right amounts to an interest in the property. But, a licence does not create any interest in the property. A lease is a partial transfer of property, i. e. , a transfer of the right of enjoyment of the property for a specified time or in perpetuity. In the case of a licence there is no transfer of property. The licencee is only given the right to use the property in a particular way and on certain terms while the property continues to be in the possession of the owner.
(3.) IN Ag. Secretary, Board of Revenue v. S. I. Ry. Company (1925 Mad. 434 F. B.) it was held that the test whether a document creates a lease or a licence is whether it vests any exclusive interest in immovable property in the person in whose favour it is executed or whether it gives him merely a right to enter into the property and do something thereon. The distinction between a lease and a licence was thus explained by mudholkar, J. , in Baldeo Prasad v. Rewaram Ramanath (1950 Nag. 107): "for deciding whether a particular grant amounts to a lease or a licence regard must be had to the substance of the agreement. If according to the contract the land is to be used in a certain way and on certain terms while its possession and control remained with the owner himself, the right conferred would be merely a licence and nothing more. But if the nature of the acts to be done by the grantee requires that he should be in exclusive possession or if the agreement provides that he shall be in exclusive possession, the proper inference to be drawn would be that it is a lease. The essential condition about the creation of a tenancy over a corporeal hereditament is that tenant should have a right to the exclusive possession of the premises. This view was taken in a large number of cases including Glenood lumber Co. v. Philips (1904 A. C. 405) where Their Lordships of the Privy council have observed: 'if the right granted conveys to the grantee an exclusive right of occupation of the land, though subject to certain reservations or to a restriction of the purposes for which it may be used, it is in law a demise of the land itself"'. The question was considered by this Court in Ouseph v. Kunjathu (1951 K. L. T. 44 ). Govinda Pillai, J. , observed in that case: "an agreement for the cultivation of land under which a person is to cultivate another's land and the two are to share the products in certain proportions may be a lease if there is an intention to transfer an interest in the property. But if there is no such intention such agreement cannot create a lease the matter is, as held in Brahmamoyee Baramain v. Mansur (1920 Cal. 548), one purely of construction in each case. If there is no intention to transfer an interest in the property, the right will be a licence and not a lease. The use of the words pattam and pattachit is not of much consequence. It had been laid in Lumber v. Phillips (1904 A. C. 405) and King v. Allen & Sons (1916 (2)A. C. 54) that in construing such grants the substance of the transaction must be considered and not merely the nomenclature used by the parties. The rulings in re Burmah Shell Oil Storage & Distributing Company Limited of India (1933 All. 735), Sherif Bodum Ivaji v. Emperor (1930 Bom. 165), Sabdi Bapari v. Budhai (1925 Cal. 370) and B. N. W. Rly. Company Limited v. Janaki Prasad (1936 pat. 362) are also in support of this position".;

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