# [1968] 1 S.C.R. 23

- **Citation:** [1968] 1 S.C.R. 23
- **Court:** Supreme Court of India
- **Decided:** 1965-07-05
- **Bench:** R. S. 8Aoiawat, J. M. Shelat, V. Bhargava
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1968-1-s-c-r-23-4111
- **Pages:** 7

## Headnote

23
West Benoal Premises Tenancy Act (XII of 1956)-s. 13(1) _(/)-
Limited Company buyina premises f<>r
housinQ o.tlicers-Whether
o.tlicer'r occupation that of tenant or 'licensee'-and wheth.er Company's 'own occupation'.
The respondent limited companies purchased certain premises
In Calcutta for the purpose of providing residential accommodation
C for their staff. They instituted suits against the appellants for the recovei;y of t;••te•i<>n of ~o flats on the ground that as these fla_ts were
required or housing their officers, they were reasonably required for
the occupation of the respondents within the meaning of s. 13(1) (f)
of the West Bengal Premises Tenancy Act, 1~6.
The Trial Qourt dismissed the suits but the High Court allowed
an appeal and held that a limited company can be a landlord wit!rln
D
the meaning of s. 13(1) (f) and can reasonably require the premises .
for its own occupation; and that 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 s. 13(1)
(f). In the appeal before the Supreme Coilrt the only question for determination was whether on the construction of the terms of an agreement which was normally signed between each of the respondents
and any officer who was &Dotted a flat, the officer oceupied the flat
E
as a tenant or a licensee, and therefore whether the officer's occupation would be the company's own occupation within the meaning of
clause (f).
r
Held: Dismissing the appeal: The High Court !lightly held
that the respondent reasonably required the flats for the second
respondent oomp&IJY's own occupation through officers holding flats
m Its behalf as licensees. [29B]
Under the standard form of agreement, the occupation of the
officer ceased on the termination of his employment, upon his death,
or on his transfer and the company was at liberty to allot him•· any
other flat or to assign the premises to any other employee or other
person during his absence. In view of these and its other terms the
agreement operated as a license and not as a tenancy. It created no
interest in the land and gave only a .personal privilege or license to
G the servant to occupy thei premises for the greater convenience of
his work. f28F-Hl
Under s. 105 of. the Transfer of Property Act, a lease is the transfer of a right to enjoy the premises whereas under s. 52 of the Indian
Easements Act a license is a privilege to do something on. the premises which otherwise would be unlawful. The transaction is a leaae
If It gralltll an Interest in the land; it is a licehse If It gives a persoB nal privilege with no interest in the land. [27E-F]
. Errington v. Errington and Woods, [1952] 1 K; B. 290, 298: As.wcia~a Hotels of India Ltd. v. R. N. Kapoor. [1960] 1 S.C.R. 368; 381-5:
Add1SCombe Garden Elfate1 !.td. and Anr. v. Crabbe and Ors. [1958]
1 Q.B. 513, S2S; referred to.
S'CIP!lmlO OOUllT BBPORTS
[1968] I s.0.11.
A service oceupatlon Is a 1>articular kind of license whereby a A
servant is required to live in the premises for the better performance
of hia duties. Nbw It is also settled law that a servant may be a
licensee though he may not be in service occupation. [2'7H)
Nippon Menkwa Kalmshiki v. F. Portlock, A.I.R 1922 Born. ?O;
and Torbett v. Faulkner, [1952] 2 T .LR. 659, 560; referred to.
OVIL APPELLATE JURISDICl10N:
Civil Appeals Nos. 2253 B
and 2254 of 1966.
Appeals Crom the judgment and decree dated July 5, 1965 of
the Calcutta High Court in Appeals from Original Decrees NOi:.
490 and 489 of 1960 respectively.
Sarjoo Prasad and R. Ganapathy Iyer, for the appellant (in 0
C. A. No. 2253 of 1966).
Devaprosad Chaudhury and Sukumar Ghose, for the appellant (Jn C. A. No. 2254 of 1966).
A. K. Sen, S. K. Gamb/lir and D. N. Gupta, for the respon·
dents (in both the appeals).

## Text

B
B. M. LALL (DEAD) BY L RS.
11.
DUNLOP RUBaER A CO. L1D. & Oils.
'l_uly 18, .1967
[R. S. 8AOIAWAT, J. M. SHELAT AND V. BHARGAVA, JJ.)
23
West Benoal Premises Tenancy Act (XII of 1956)-s. 13(1) _(/)-
Limited Company buyina premises f<>r
housinQ o.tlicers-Whether
o.tlicer'r occupation that of tenant or 'licensee'-and wheth.er Company's 'own occupation'.
The respondent limited companies purchased certain premises
In Calcutta for the purpose of providing residential accommodation
C for their staff. They instituted suits against the appellants for the recovei;y of t;••te•i<>n of ~o flats on the ground that as these fla_ts were
required or housing their officers, they were reasonably required for
the occupation of the respondents within the meaning of s. 13(1) (f)
of the West Bengal Premises Tenancy Act, 1~6.
The Trial Qourt dismissed the suits but the High Court allowed
an appeal and held that a limited company can be a landlord wit!rln
D
the meaning of s. 13(1) (f) and can reasonably require the premises .
for its own occupation; and that 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 s. 13(1)
(f). In the appeal before the Supreme Coilrt the only question for determination was whether on the construction of the terms of an agreement which was normally signed between each of the respondents
and any officer who was &Dotted a flat, the officer oceupied the flat
E
as a tenant or a licensee, and therefore whether the officer's occupation would be the company's own occupation within the meaning of
clause (f).
r
Held: Dismissing the appeal: The High Court !lightly held
that the respondent reasonably required the flats for the second
respondent oomp&IJY's own occupation through officers holding flats
m Its behalf as licensees. [29B]
Under the standard form of agreement, the occupation of the
officer ceased on the termination of his employment, upon his death,
or on his transfer and the company was at liberty to allot him•· any
other flat or to assign the premises to any other employee or other
person during his absence. In view of these and its other terms the
agreement operated as a license and not as a tenancy. It created no
interest in the land and gave only a .personal privilege or license to
G the servant to occupy thei premises for the greater convenience of
his work. f28F-Hl
Under s. 105 of. the Transfer of Property Act, a lease is the transfer of a right to enjoy the premises whereas under s. 52 of the Indian
Easements Act a license is a privilege to do something on. the premises which otherwise would be unlawful. The transaction is a leaae
If It gralltll an Interest in the land; it is a licehse If It gives a persoB nal privilege with no interest in the land. [27E-F]
. Errington v. Errington and Woods, [1952] 1 K; B. 290, 298: As.wcia~a Hotels of India Ltd. v. R. N. Kapoor. [1960] 1 S.C.R. 368; 381-5:
Add1SCombe Garden Elfate1 !.td. and Anr. v. Crabbe and Ors. [1958]
1 Q.B. 513, S2S; referred to.
S'CIP!lmlO OOUllT BBPORTS
[1968] I s.0.11.
A service oceupatlon Is a 1>articular kind of license whereby a A
servant is required to live in the premises for the better performance
of hia duties. Nbw It is also settled law that a servant may be a
licensee though he may not be in service occupation. [2'7H)
Nippon Menkwa Kalmshiki v. F. Portlock, A.I.R 1922 Born. ?O;
and Torbett v. Faulkner, [1952] 2 T .LR. 659, 560; referred to.
OVIL APPELLATE JURISDICl10N:
Civil Appeals Nos. 2253 B
and 2254 of 1966.
Appeals Crom the judgment and decree dated July 5, 1965 of
the Calcutta High Court in Appeals from Original Decrees NOi:.
490 and 489 of 1960 respectively.
Sarjoo Prasad and R. Ganapathy Iyer, for the appellant (in 0
C. A. No. 2253 of 1966).
Devaprosad Chaudhury and Sukumar Ghose, for the appellant (Jn C. A. No. 2254 of 1966).
A. K. Sen, S. K. Gamb/lir and D. N. Gupta, for the respon·
dents (in both the appeals).
The Judgment of the Court was delivered by
D
lacUwat, l~The respondents are limited companies having their head offices in Calcutta. On May 15, 1953, the two Companies jointly purchased the premises known as 'King's Court' at
No. 46B Chowringhee Road, Calcutta, for the purpose of providing residential accommodation for their staff. They instituted a
suit against one B. M. Lall, since deceased, predecessor of the E
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 recovery 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 F
Act, 1956, (West Bengal Act XII of 1956), the tenants are protected 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 occupation of any person for whose benefit the premises are
held;" ......
G
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 B
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.
LALL t>. J>ma.0P BUBBBB 00. (~
/,)
211
A
The High Court held that (!) a limited company can be a landlord 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
B 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 respondent 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
C Company is under an obligation to provide free residential accommodation 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
D 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 occupation would be on behalf of the company and its requirement
E 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
G
Licensee at the company's discretion (hereinafter referred
to as "the said permises") subject to the terms and conditions hereinafter contained.
2. In 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
B
month such License fees which may be varied by the
Company from time to time at its discretion and the Company 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.
3. The 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.
4. The Company shall be entitled to determine forthwith
the licence hereby granted if the licensee shall fail to comply 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.
5. These 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 continuance of these presents.
Conditions to be complied with by the licensee: -
I. The Licensee shall pay the cost of electricity and gas con·
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.
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 garden· 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).
4. Alterations of or extensions to the installed electrical
circuit are strictly prohibited.
S. No notice advertisement or placard other than the Licensee'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.
A
B
c
D
.E
r
G
•
..
LALL "· nmoP RUBBER co. (Baohawat, J.)
27
A 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.'
B
c
D
.
-
-
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 . discretion.
·
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
E 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· writing, 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 licenF 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
G Hotels.of India Ltd. v. R: N. Kapoor,(') though it is a very important indication in favour of tenancy. See Addiscombe , Garden
Estates.Ltd ... and Anr. v. Crabbe and Ors.('). A servant in occupation 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
H 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.
(1) [1!681 S.C.R. 368, 381-5.
(') [19581 l Q,B. 513, 525,
------·-·---- ·----------~---
28
S'Cll'Bm OOUBT :uPOlml
[1968] 1 s.o.L
pation, see Nippon Menkwa Kalmshiki v. F. Portlock('). Now it A
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 required 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 Justice 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 quantified 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)."
B
c
D
E
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 absence of the servant from Calcutta, the company is at liberty to
assign the premises to any other employee or other person. The a
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- B
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,
LALL 11. DUNLOP Rl'BBER co. (Buhawat J,)
29
A 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 conceded that it is not necessary for the respondents to establish the
B 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.
C
In the result, the appeals are dismissed. There will be no order
as to oosts.
R.K.P.S.
Appeals dismissed.