B. M. Lall (Dead) by L. Rs. v. Dunlop Rubber & Co. Ltd. & Ors.

lacUwat, l~The respondents are limited companies hav-ing their head offices in Calcutta. On May 15, 1953, the two Com-panies jointly purchased the premises known as 'King's Court' at No. 46B Chowringhee Road, Calcutta, for the purpose of provid-ing residential accommodation for their staff. They instituted a suit against one B. M. Lall, since deceased, predecessor of the appellants in C. A. No. 2253 / 66 for recovery of possession of flat No. 8 in the aforesaid premises in his occupation as a tenant, and another suit against the appellant in C. A. No. 2254/66 for reco-very of possession of flat No. 9 rn his occupation as a tenant, on the ground that they reasonably required the fiats for the occupation of their staff. By Sec. 13(1) of the West Bengal Premises Tenancy Act, 1956, (West Bengal Act XII of 1956), the tenants are protect-ed from eviction except on one or more of the grounds specified in the sub-section. The grounds mentioned in clause (f) of S. 13(1) are:-"

"Where the premises are reasonably required by the landlord either for purposes of building or re-building or for making thereto substantial additions or alterations or for his own occupation if he is the owner or for the occu-pation of any person for whose benefit the premises are held;" ......

The respondents claim that they reasonably require the flats for their own occupation. The trial court c&missed the tuitL Prem these decrees, the respondents filed appeals in the High Court at Calcutta. The High Court set aside the decrees passed by the trial court and decreed the suits. The present appeals have been filed under certificates granted by the High Court.

The High Court held that (!) a limited company can be a land-lord within the meaning of s. 13(l)(f) and can reasonably require the premises for its own occupation. and (2) where there are several landlords, the requirement of the premises by the landlords for the occupation of one or more of them is sufficient to bring the case within Sec. 13(1)((). These findings are not challenged in this Court. Before us it is also conceded by all the appearing parties that the respondents are entitled to a decree for recovery of possession of the two tlats under sec. 13(1 )((), if they establish that they reasonably require the tlats for the occupation of respon-dent No. 2, Guest Keen and Williams Ltd. only.

The two courts concurrently foond that respondent No. 2 reasonably requires the tlats for the occupation of its stall. The Company is under an obligation to provide free residential accom-modation for its officers in properties either rented or owned by it. In view of the acute scarcity of accommodation in the city, it is not possible to find other convenient tlats for officers who were transferred to the city from other stations. Suitable provision for the accommodation of officers visiting Calcutta on tour is a matter of necessity. The sole question is whether the occupation by its stall officers would be the company's own occupation. The point of dispute on which the two courts differed is whether the officer to whom the tlat would be allotted would occupy it as a tenant or as a licensee. It is common case before us that if he is a licensee his occu-pation would be on behalf of the company and its requirement would be for its own occupation. On the other hand, if he is a tenant his occupation would be on bis own account and the company's requirement would not be for its own occupation. It appears that the officers provided with accommodation by the Company are required to execute agreements in a standard form. The terms and conditions of the agreement are as follows : -

I. The Licensee whilst in the employment of the Company at r' Calcutta and for the sole purpose of the Licensee being

more conveniently situated in such employment is hereby permitted by the Company to occupy as a Licensee during the term of bis employment at Calcutta Flat No. 25, situated in the Company's property known as Kings Court, Calcutta, or such other flat as may be allotted to the Licensee at the company's discretion (hereinafter referred to as "the said permises") subject to the terms and condi-tions hereinafter contained.

¶2In the event of the Company deciding to levy License

fees and the Company reserves the right to do so without prior notice, the Licensee shall pay to the Company each month such License fees which may be varied by the Company from time to time at its discretion and the Com-pany shall be eatitled to deduct such License fees from the emoluments or to become due to the Licensee from Company.

26 BUPllBllll OOUBT UPORTB [1968) 1 s.o.a.

¶3The occupation of the said premises by the Licensee is

a condition of his employment at Calcutta with the com· pany and such right of occupation shalJ forthwith cease upon his employment being tenninated by the company or on his leaving such employment or on his transfer away from Calcutta or on his death whichever is earlier. Notice given by the Company to the Licensee of termina· tion of employment or of transfer away from Calcutta shall be deemed to· be sufficient notiee of revocation of the licence.

¶4The Company shall be entitled to determine forthwith

the licence hereby granted if the licensee shall fail to com-ply with any of the terms and conditions herein contained and on his part to be observed and non-compliance with the terms and conditions herein contained may be deemed by the company to be misconduct.

¶5These presents shall not or shall not be deemed to create

any relationship of landlord and tenant between the company and the licensee in respect of the said premises. 6. The company shall pay all present and future revenue and

municipal taxes payable in respect of the said premises and keep the said premises in repair during the continu-ance of these presents.

Conditions to be complied with by the licensee: -

I. The Licensee shall pay the cost of electricity and gas con· .E

Sllllled within the said premises and the company may at its discretion deduct such charges from the emoluments due or to become due to the Licensee from the compeny. 2. The Licensee shall not cause or permit to be ca\19C any

disturbance or nuisance in or in the vicinity of the said premises. r 3. No structure or alteration temporary or permanent,

other than common ornaments shall be erected, fixed or carried out by the Licensee in the said premises or gar-den· without prior written permission from the company. The Licensee shall not do or permit to be done any act or thing which causes damage or is liable to cause damage to the said premises. The cost of rectification of such damage will be recoverable in accordance with condition (I).

¶4Alterations of or extensions to the installed electrical

circuit are strictly prohibited.

S. No notice advertisement or placard other than the Licen-

see's own name. which may be fixed to the main door of the said premises, shall be fixed or permitted to be fixed to any portion of the said premises.

LALL "· nmoP RUBBER co. (Baohawat, J.) 27 6. The said. premises shall be used entirely··as-a dwelling

place and no business or trade shall be carried out on the said. premises or any part• thereof· without prior written permission from the company.'

. - - 7. The Licensee will not permit any persons other than his

own personal servants to occupy ·the ·servants' quarters allotted .. to him by the company and, will not permit the garage allotted to him· by the company to be· used for residential purpose.

¶8·The Licensee shall not take in any paying. guest without

prior written pemiission ·from the company · and' such permission shall be deemed to have been withdrawn when the paying guest ceases' to· reside. · 9. The Lice.nsee shail not le; or pa~ with possession of the

whole or any part of the said premises to any person, firm or company. During periods when the· Licensee· is absent from Calcutta the Company, may assign the ·premises to any other employee or suitable person at its sole . discre-tion. · The question is whether the· occupier under this agreement i~ a tenant or a licensee. The distinction between a· lease and a license is· well known. Sec. 105 of the Transfer of Property Act defines a lease. Sec. 52 of the Indian Easements Act defines a license. A lease ...... is the transfer of a right to enjoy the premises; whereas· a license is a· privilege to· do something on the premises which otherwise would be unlawful. H the agreement is in· writ-ing, 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· 1essee or a licen-see. The transaction is a lease, if it. grants an interest in the land; it is a license if it gives a personal privilege· with no interest in the land. The question is not of words but of· substance and the label which, the parties choose to put' upon the transaction,· though relevant, is not decisive .. The· test of exclusive possession is not decisive, see Errington v. Errington and. Woods,(') Associated Hotels.of India Ltd. v. R: N. Kapoor,(') though it is a very impor-tant indication in favour of tenancy. See Addiscombe , Garden Estates.Ltd ... and Anr. v. Crabbe and Ors.('). A servant in occupa-tion of premises belonging to his master, may be a tenant or a licensee, see Halsbury's Laws of England, Third Edition, Vol. 23, art. 990. p. 411. A service occupation is a particular kind of license whereby· a servant is required to live in the premises for the better performance of his duties. Formerly, the occupation of the servant was regarded as a tenancy unless it was a service occu- (') [1~521 l K.B. 290, 298. (') [19581 l Q,B. 513, 525, (1) [1!681 S.C.R. 368, 381-5.

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·----------~--- 28 S'Cll'Bm OOUBT :uPOlml [1968] 1 s.o.L pation, see Nippon Menkwa Kalmshiki v. F. Portlock('). Now it is settled law that a servant may be a licensee though he may not be in service occupation. In Torbett v. Fmtlknerri Denning, L. J. said:

"A service occupation is, in truth, only one form of licence. It is a particular kind of licence whereby a servant is required to live in the house in order the better to do his work. But it is now settled that there are other kinds of licence which a servant may have. A servant may in some circumstances be a, licensee even though he is not requir-ed to live in the house, but is only permitted to do so because of its convenience for his work-see Ford v. Langford ((1949) 65 The Times L.R. 138), per Lord Jus-tice Asquith, and Webb, Ltd. v. Webb (unreported, October 24, 1951)-and even though he pays the rates, Gorham Contractors, Ltd. v. Field (unreported, March 26, 1952), and even though he has exclusive possession, Cobb v. Lane (1952 I The Times L.R. 1037)".

The Lord Justice then continued:

"If a servant is given a personal privilege to stay in a house for· the grea.ter convenience of his work, and it is treated as . part and parcel of his remuneration, then he is a licensee, even though the value of the house is quan-tified in money; but if he is given an interest in the land, separate and distinct from his contract of service. at a sum properly to be regarded as a rent, then he is a tenant, and none the less a tenant because he is also a servant. The distinction depends on the truth of the relationship and not on the label which the_parties choose to put UJl<>ll it: see Facchini v. Bryson-0952 l The Times L.R. 1386)." The last observation covers the present case. Under the standard r form of agreement of respondent No. 2, the occupation of the officer ceases not only on the termination of his employment but also on his transfer from Oilcutta and on his death. The company is at liberty to allot any other fiat to the officer. Durlnlf the ab-sence of the servant from Calcutta, the company is at liberty to assign the premises to any other employee or other person. The accommodation is free, but the Company reserves the right to levy license fees. All the terms of the agreement are consistent with the _expressed intention that the officer is permitted to occupy the fiat as a licensee and nothing in the agreement shall be deemed to create the relationship of landlord and tenant. The agreement on its true construction read in the light of the surrounding circum-stances operates as a license and not as a tenancy. It creates no interest in the land. Jt gives only a personal privilege or license

(') A.I.R. 1922 Dom. 70. (1) [ 1961] 2 T.L.R. M8,641t, to the servant to occupy the premises for the grea.ter convenience of his work.

The High Court rightly held that the respondents reasonably require the fiats for respondent No. 2's ow.n occupation through officers holding the fiats on its behalf as licensee. If so, it is con-ceded that it is not necessary for the respondents to establish the reasonable requirement by respondent No. I also for its own occupation. The High Court decided this issue also in favour of the respondents. As the decision on this issue is not necessary for the disposal of this appeal, we express no opinion on it. The High Court rightly decreed the suits.

In the result, the appeals are dismissed. There will be no order as to oosts.