I. AGREEMENT WITH [ ] IS ONLY CONDUCTING AGREEMENT.
- Rasiklal Kumbha Gala v. Manilal Ravji, 2006 (1) Bom CR 425: Manu/MH/0650/2005
Indicative Facts
The petitioner here was aggrieved by the order of the Small Causes Court allowing Ejectment Application filed by the alleged Licensor against the alleged Licensee, who had in fact entered into a Conducting Agreement. The petitioner was the conductor, and the respondent was the owner.
The alleged licensee had sought protection under the Bombay Rent Act, 1947. The same was held to be not applicable in view of the specific exception excluding conducting agreements.
Key Observations/Ratio
“Whatever may be the reason for occupying the premises in question, but if it based on the foundation of conducting business, I am of the view that the occupant or such person is not entitled for protection as available under the Bombay Rent Act, either as a licensee or sub-tenant. The exclusion of the word ‘conducting agreement’ makes provisions amply clear.”
The long and exclusive possession is the basic foundation to claim the protection of lease or license. But if the possession of the premises has a foundation of the conducting business, it is difficult to accept that in each and every case, the intention was to create license or lease. The agreement as referred above, made the conditions very clear which were well within the knowledge of the parties. The parties, having once accepted these terms and conditions, cannot turn around to say later on that the intention was to create lease. (para. 7)
Knowing fully well, the effect and operation of the law, including the definition of ‘license’, still if a party agrees to enter into such agreement to conduct business, there remains further no doubt that the intention was always to carry on business on the basis of such conducting agreement and there was no intention to create lease or license. (para. 8)
- Paradigm Franchising Pvt Ltd v. Krishna Continental, Manu/DE/0762/2008
Indicative Facts: Arbitration dispute arising out of conducting agreement.
Key Observation/Ratio
Arbitration Dispute – conducting agreement. Section 9 considered by the court, and not rejected as non-arbitrable.
(Note: No tenancy issue raised specifically)
- Jayant L. Shah v. Naranji Lalji Khona, 2006 (4) Bom CR 653
Indicative Facts:
Suit for declaration that the Defendant has no right, title or interest to carry on the business in the suit premises.
On facts (not enumerated at length), the court found that the agreement was actually leave and license, and not a mere conducting agreement.
Clause 7 of the agreement under consideration provided for “leave and license”
Key Observations/Ratio:
It is now settled law that in case of the leave and license agreement or conducting agreement what is required to be seen by the Court is the true and correct intention of the parties at the time of executing the said agreements.
Held on facts that the agreement was a leave and license agreement, distinct from conducting agreement.
- Frank Warr & Co. Ltd. v. London County Council, (1904) 1 KB 713
Indicative Facts
The Agreement provided: “The landlord hereby grant and let, and the tenant hereby take for the term…. The free and exclusive right to sell refreshments at the [theatre] , with the necessary use of the refreshment rooms and bars and cloak rooms and wine cellars of the said theatre…
The theatre acquired by State and compensation payable only if there is “interest” in the theatre. Held License
Similarities with [ ]’s Case
The tenant shall provide and maintain a proper and efficient staff…
The keys were given to the tenants who kept the cellars locked, and used them for the purpose of storing the wines and spirits which were to be sold…
Key Observations/Ratio
Instead of letting the refreshment rooms or the cellars, the agreement provides merely for the use of them by the plaintiffs so far as necessary for its purposes. (@page 719)
License for pleasure – personal.
License for profit – extends to servants, agents etc.
It cannot in law be the case, in my opinion, that if a man gave a license to persons to come on to his field to play cricket, and to other persons a license to come there for the purpose of supplying to those engaged in the game with refreshments for profit, the one license would not confer an interest in the land but the other would. @ page 723
- Vidya Securities v. Comfort Hotels, AIR 2003 DEL 214
Indicative Facts:
Arbitration petition under Section 9 of the Arbitration & Conciliation Act for interim injunction from parting with possession.
The question whether there is lease or a mere license came up because it would affect the procedure for dispossession.
Aspects considered
· Before the conducting agreement was entered into, the restaurant was being run by the owner.
· The keys of the premises were always with the respondent;
· The staff earlier employed by the respondent continued to work in the restaurant although salaries were being paid by the petitioner;
· The raw material for use in the restaurant was being supplied by the respondent, and the petitioner could bring in raw material only with the approval of the respondent.
· The electricity matters and air conditioner remained under the control of the respondent;
· The licenses were in the name of the respondent;
· Even the sales being made in the restaurant were not directly going to the pocket of the petitioner but were being credited to its account;
· Clause (xiii) on page 8 of the agreement dated 26.11.2001 provided that in case of breach of any terms and conditions of the management agreement the respondent could cancel the agreement or impose any penalty upon the petitioner if within 10 days of the service of the notice remedial measures were not taken by the petitioner. Such a condition could never be a part of a lease agreement and could be only in a leave and license agreement.
· The respondent always remained in physical possession of the premises in question and had full control not only over the premises but upon the staff and stuff also as catering was to not only the restaurant and the bar but to the respondent's rooms also in the Hotel.
The mere use of word “rent” in the agreement between the parties is meaningless and does not establish that a lease had been created in favour of the petitioner
Key Observations/Ratio/Finding:
On facts, held the agreement was only to run the restaurant and not a lease agreement (para 8).
- Nariman Nassarwanji Dubash v. Clover Co-operative Housing Society Limited, 2004 MhLJ (4) 717
Indicative Facts:
Paying Guest as Licensee
Similarity with [ ]’s Case
(It appears that [ ] has overall control on the entire premises, and can restrict the entry of any person by virtue of its control on the main gates)
Key Observations/Findings/Ratio
Paying Guest is not tenant. Licensor was staying in rest of premises not let out to paying guest and what paying guest was paying was consideration as a paying guest. … Mere possession of a part of residence, may be in a distinct portion having independent access, kitchen and toilet by itself cannot result in sub-lease and appellants are not entitled to protection…(@ para 13/14)
- Md Salim v. Md. Ali, (1987) 4 SCC 270
Indicative Facts
An eviction decree was passed against the tenant. A person claimed to be sub-tenant and argued that he was not bound by the eviction decree as he was not a party in the eviction proceedings. If he were decided as a licensee, he would be bound by the eviction decree.
Similarities
The court considered the agreement, which provided, inter alia:
Recital – clearly setting out the inconvenience to look after and manage the [shop].
..manage the affairs of the said business under his personal supervision for two years with effect from [●] to [●] and will restore the business along with the said articles in good condition with the expiry of the terms of this contract;
The second party will be entitled to appropriate the entire issues and profits arising out of the business in its entirety subject to the aforesaid payment to be made to the first party and the costs of license fee.
The second party shall also bear all incidental costs for carrying out business properly
Key Observations/Findings/Ratio
There was no exclusive possession with the Respondent. There was no parting of possession of the premises, there was only a right to manage the business, looking after the existing business with fixed monthly payments and this cannot be construed as an agreement of sub-tenancy.
Held License.
- Anusuyabai Narayanrao Ghate v. Maktumbi S. Nadaf, 1999 (2) Bom CR 374
Indicative Facts: Eviction application filed against the Petitioner by the Respondent, after Respondent terminated the conducting agreement with petitioner for conducting tailoring business.
Key Observations/Ratio/Findings
This Court has interpreted the agreement and found that what was agreed between the parties is for conducting the business of tailoring. Therefore, possession of the room has become a consequential act.
- Isaac v. Hotel De Paris Ltd., [1980] 1 All ER 348
Indicative Facts:
[Complex facts / Not discussed here]
Short point: Depending upon whether the petitioner is a licensee or a tenant, different statutory protection was to apply.
Key Observations/Findings:
The intention of the parties is the paramount consideration and while fact of exclusive possession together with the payment of rent is of the first importance, the circumstances in which exclusive possession has been given and the character in which money paid as rent has been received are also matters to be considered. (@page 352E)
(Note: [ ]’s paid Rs. 3.5 crores as conducting fees for the first year, but in the second year alleged tenancy and offered to pay standard rent)
II. assuming that the agreement with [ ]’s is not a conducting agreement, it as best only a leave and license agreement and not result in a sub-lease with parting/transfer of possession.
1. Rajbir Kaur v. S. Chokesari, (1989) 1 SCC 19
Indicative Facts
Respondent had, in about the year 1973, unauthorisedly and without the consent of
the appellants, inducted two sub-tenants in two portions of the premises who, thereafter, carried on their respective businesses in their respective portions so sub-let.
The respondent argued that he did not sub-let the premises, and that the business run in the two portions (tailor shop and ice cream parlor) was ancillary and incidental to the business of the respondent.
Ice Cream parlor agreement:
1. That 1st party will provide Softy Ice Cream Machine along with one employee at their premises and the whole Softy Ice Cream will be supplied by the 1st part at his own risk and costs
2. Terminable at will, at which the first part will take away the machine from the premises.
Tailor Shop Agreement
First party will do tailoring work, and will keep the employees with prior consent of the second part.
Second part will lock the premises in the evening, and possession to remain with the second part.
Arrangement has been done as it beneficial to both parties.. and will boost the business of the second part…
Second part not liable to any damages.
Except for electricity no other rent is payable.
The Ice-Cream premises can be locked from outside independently.
Key Observations/Ratio/Finding
Thus exclusive possession itself is not decisive in favour of a lease and against a mere licence, for, even the grant of exclusive-possession might turn out to be only a licence and not a lease where the grantor himself has no power to grant the lease. (@para 22)
In the last analysis the question whether a transaction is a lease or a licence "turns on the operative intention of the parties" and that there is no single, simple litmus-test to distinguish one from the other. The "solution that would seem to have been found is, as one would expect, that it must depend on the intention of the parties"
To give exclusive possession, there need not be express words to that effect; it is sufficient if the nature of the acts done by the grantee show that he has and was intended to have the right of exclusive possession. The fact that the agreement contains a Clause that no tenancy is to be created will not, of itself, preclude the instrument from creating a lease. (@para. 32)
- Delta International Limited v. Shyam Sundar Ganeriwalla, (1999) 4 SCC 545
Followed by Jainabi Yusuf v. Jainabi Alimiya, AIR 2004 Bom 394
Indicative Facts:
M is original lessee. M entered into an ‘agreement’ with D ( later amalgamated into Delta), executed a license in favour of ESSO, which inter alia provided that if D is able to obtain a lease of the said premises on terms which would not be inconsistent with ESSO’s standard form, then D will grant sub-lease to ESSO for at least a period of 10 years with three renewal options. ESSO created a sub-license in favour of Shyam Sundar, which he contended was a lease.
Key Observations/Ratio/Findings
Summary of law after reviewing various provisions of law (@para 16)
(1) To find out whether the document creates lease or license real test is to find out 'the intention of the parties'; keeping in mind that in cases where exclusive possession is given, the line between lease and licence is very thin.
(2) The intention of the parties is to be gathered from the document itself. Mainly, intention is to be gathered from the meaning and the words used in the document except where it is alleged and proved that document is a camouflage. If the terms of the document evidencing the agreement between the parties are not clear, the surrounding circumstances and the conduct of the parties have also to be borne in mind for ascertaining the real relationship between the parties.
(3) In the absence of a written document and when somebody is in exclusive possession with no special evidence how he got in, the intention is to be gathered from the other evidence which may be available on record, and in such cases exclusive possession of the property would be most relevant circumstance to arrive at the conclusion that the intention of the parties was to create a lease.
(4) If the dispute arises between the very parties to the written instrument, the intention is to be gathered from the document read as a whole. But in cases where the landlord alleges that the tenant has sublet the premises and where the tenant in support of his own defence sets up the plea of a mere licensee and relies upon a deed enter into inter se, between himself and the alleged licensee, the landlord who is not a party to the deed is not bound by what emanates from the construction of the deed; the tenant and the subtenant may jointly set up the plea of a license against the landlord which is a camouflage. In such cases, the mask is to be removed or veil is to be lifted and the true intention behind a facade of a self-serving conveniently drafted instrument is to be gathered from all the relevant circumstances. Same would be the position where the owner of the premises and the person in need of the premises executes a deed labelling it as a licence deed to avoid the operation of rent legislation.
(5) Prima facie, in absence of a sufficient title or interest to carve out or to create a similar tenancy by the sitting tenant, in favour of a third person, the person in possession, to whom the possession is handed over cannot claim that the sub-tenancy was created in his favour; because a person having no right cannot confer any title of tenancy or sub-tenancy. A tenant protected under statutory provisions with regard to occupation of the premises having no right to sublet or transfer the premises, cannot confer any better title. But, this question is not required to be finally determined in this matter.
(6) Further lease or licence is a matter of contract between the parties. Section 107 of the Transfer of Property Act inter alia provides that leases of immoveable property may be made either by registered instrument or by oral agreement accompanied by delivery of possession; if it is a registered instrument, it shall be executed by both the lessee and the lessor. This contract between the parties is to be interpreted or construed on the well laid principles for construction of contractual terms, viz. for the purpose of construction of contracts, the intention of the parties is the meaning of the words they have used and there can be no intention independent of that meaning; when the terms of the contract are vague or having double intendment one which is lawful should be preferred; and the construction may be put on the instrument perfectly consistent with his doing only what he had a right to do.
- Prakash Warehousing v. Muncipal Corporation of Greater Bombay, (1991) 2 SCC 304
Indicative Facts
MCGM terminated lease agreement on the ground of creation of alleged sub-tenancy. Subsequent to enquiry under Section 105B of MMC Act, an eviction order was passed.
Key Observations/Findings/Ratio
Held that MCGM was aware of the sub-letting, and is therefore estopped from terminating the lease agreement on that ground.
(Precise nature of transaction was not relevant in the facts of the case)]
- Corporation of Calicut v. K. Sreenivasan, (2002) 5 SCC 361
Indicative Facts
Licensee of the Corporation was sought to be evicted as being “unauthorized occupant”. Depending on whether the licensee was covered under “any other mode of transfer” would change the nature of proceeding for eviction.
Refers to (inter alia)
Associated Hotels Case
Qudrat Ullah v. Municipal Board, Bareilly, (1980) 4 SCC 435: If an interest in immovable property, entitling the transferors to enjoyment is created, it is a lease; if the permission to use land without right to exclusive possession is alone granted a license is the legal result.
Key Observations/Findings/Ratio
It is true that the licensee does not acquire any interest in the property by virtue of grant of license in his favour in relation to any immovable property, but once the authority to occupy and use the same is granted in his favour by way of license, he continues to exercise that right so long the authority has not expired or has not been determined for any reason whatsoever, meaning thereby so long the period of license has not expired or the same has not been determined on the grounds permissible under the contract or law.
Occupation of licensee is permissive by virtue of the grant of license in his favour, though he does not acquire any right in the property and the property remains in possession and control of the grantor, but by virtue of such a grant, he acquires a right to remain in occupation either in accordance with law or otherwise. (@ para. 16)
- ICICI v. State of Maharashtra, (1999) 5 SCC 708
Indicative Facts:
Under Bombay Stamp Act, Article 36- an agreement of lease is chargeable to duty only when there is an immediate and present demise –
The agreement in the present case was an agreement to lease in future while granting license rights only for first three years.
Key Observations/Findings/Ratio:
Held not chargeable to duty.
If a document gives only a right to use the property in a particular way or under certain terms, while it remains in possession and control of the owner thereof, it will be a licence. In the present case the licensee has been put in possession only for the purpose of constructing a building or buildings. Under this document, no interest in the land is conveyed in favour of the appellants. The agreement does not create a lease nor does it demise any interest in land in favour of the appellants. (@ para 8)
Although it has been contended by the respondent that there is a demise of interest in the land under the said under the said agreement….. Clause 2 expressly sets out that this agreement is not to be construed as demise in law of the said land so as to give to the licensee any legal interest in the land. (@ para. 9)
- Associated Hotels of India v. RN Kapoor, (1960) 1 SCR 368
Indicative Facts:
RN Kapoor was a proprietor of a business carried under the name of Madam Janes (hair dresser business). Under an agreement with the hotel he came to occupy certain spaces in the Ladies’ and Gents’ cloak room @ Rs. 700 per month. Later made an application under applicable Rent Control Act for determination of standard rent. Hotel contested this.
The term of the document was, in the first instance, for one year, but it might be renewed.
The amount payable for the use and occupation was fixed in a sum of Rs. 9,600 per annum, payable in four instalments.
The respondent was to keep the premises in good condition. He should pay for power and electricity.
He should not make alterations in the premises without the consent of the appellants. If he did not pay the prescribed amount in the manner agreed to, he could be evicted therefrom without notice, and he would also be liable to pay compensation with interest.
He could transfer his interest in the document with the consent of the appellants. The respondent agreed to pay the amount prescribed whether he carried on the business in the premises or not.
Shortly stated, under the document the respondent was given possession of the two rooms for carrying on his private business on condition that he should pay the fixed amount to the appellants irrespective of the fact whether he carried on his business in the premises or not.
Key Observations/Finding/Ratio:
Subba Rao, J. (@para 28)
1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form;
(2) the real test is the intention of the parties - whether they intended to create a lease or a licence;
(3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and
(4) 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.
[License confer] only a bare personal privilege on the respondent to make use of the rooms.
[License must not] put him in exclusive possession of them, untrammeled by the control and free from the directions of the appellants
The covenants are those that are usually found or expected to be included in a lease deed.
The right of the respondent to transfer his interest under the document, although with the consent of the appellants, is destructive of any theory of license.
The solitary circumstance that the rooms let out in the present case are situated in a building wherein a hotel is run cannot make any difference in the character of the holding.
- Dipak Banerjee v. Smt. Lilabati Chakroborty (1987) 4 SCC 161
Indicative Facts:
There, the question was whether the tenant had sub-let two rooms in the premises to a tailor who is stated to have established therein a tailoring business. The tenant denying the subletting contended that the tailor was allowed to occupy a part of the premises "due to pity and charity" and that he was "sewing in the house without any rent". It would appear that the tenant also did some service for the landlord and the members of his family. The alleged sub-tenant not having entered the box, the plea of sub-letting had come to be accepted. In the appeal before this Court it was held that there was neither pleading nor evidence nor a specific-finding on the question of exclusive possession of the alleged sub-tenant and that, therefore, one of the essential ingredients of a sub-lease was a lacking. It was further held that providing of services could not also be construed as consideration for purposes of the Rent Acts and that therefore, the second ingredient was also absent.
Key Observations / Findings / Ratio:
In order to prove tenancy or sub-tenancy two ingredients had to be established, firstly the tenant must have exclusive right of possession or interest in the premises or part of the premises in question and secondly that right must be in lieu of payment of some compensation or rent.
- K. Achyuta Bhat v. Veeramaneni Manga Devi, (1989) 1 SCC 9
Veera had leased a premises to Achyuta to run a hotel, who then allowed X to run the business of a hotel. Being suspicious of the transaction, Veera terminated the lease with Achyuta and proceeded for eviction.
As regards the agreement between Achyuta and X, the court find its true nature to be of sub-lease based on inter alia the following observations.
The second party to pay all taxes, fees, rates and other statutory outgoings in respect of the business;
If loss is caused to the first party by non-payment, the latter was entitled to recover all such charges from the second party..
The second party was responsible for not only payment of all expenses and charges relating to the running of the business but also for carrying out “repairs to business premises, painting, color, wash, etc. and the like”.
The second party shall on the expiry of the agreement peacefully and quietly surrender and hand over possession of the said premises to the first party ….”
The second party will be solely responsible for any consequences arising out of non-compliance with the orders passed by the competent authorities…
There is a specified provision in Clause 16 that in the event of the landlord enhancing rent there is a liability to pay enhanced rent.
Key Observation/Ratio/Findings
Held lease.. ([ ] will need to steer clear of this decision)
- Puran Singh v. Sundari Bhagwandas Kriplani, (1991) 2 SCC 180
Indicative Facts:
Broadly, whether Appellant is a lessee or a licensee – depending upon that protection under Section 15A(1) of the Bombay Rent Act would or would not be applicable
Key Observations/Findings/Ratio:
The intention of the parties in making the agreement is determinative of the question whether it was a lease or license. The test of exclusive possession though significant is not decisive. While interpreting the agreement court has also to see what transpired before and after the agreement. (@para 12)
Primarily the court is concerned to see whether the parties to the agreement intend to create an arrangement personal in its nature or not, so that the assignability of the grantee's interest, the nature of the land and the grantor's capacity to grant a lease will all be relevant considerations in assessing what is the nature of the interest created by the transaction. In the absence of any formal document the parties' intention must be inferred from the circumstances and the parties' conduct.
- Prakash Sao v. BSRTC, AIR 1981 Pat 142
Indicative Facts:
Suit for declaration that Prakash Sao was a tenant, and could not be evicted as such. Sao ran a refreshment stall for Bihar State RTC.
Similarities
Agreement called “Deed of license for running refreshment rooms”
To supply meals and refreshments of the passengers of the respondent.
To maintain and keep necessary equipments, cupboards, drawers and show cases with prior approval of RSRTC.
The licensee had agreed to dismiss any employees if such employee was considered to be undesirable by the licensor;
Licensor had the right to examine the condition of refreshment room by entering at any reasonable time.
Licensee could not effect any change / alteration in the refreshment room premises without prior consent of the licensor;
Clause that no rights / interests are created;
Key Observations/Findings/Ratio:
Held licensee
- Kuber Nathu Kandu v. Gorakh Prasad, AIR 1957 All 369
Indicative Facts:
Suit filed by subsequent transferee for possession of land by removing constructions made by Defendants.
Key Observations/Ratio/Findings
The difference between the two legal concepts (lease and license) is that while in the case of a lease an interest in the property is transferred in a license a right to do something is granted which right expressly does not amount to an interest in the property.
If a fee is charged periodically it may have much similarity to what may be called ‘rent’ in the case of a lease. But the fact that a license is granted for a period or that a fee is charged for the grant of a license would not remove the essential difference between a lease and a license which lies in the fact that that in the case of a license no interest in the property as such is transferred to the licensee.
If possession of the premises is clearly defined and is transferred as such and the restrictions on the use are mere impositions, the transaction would be a lease. Exclusive possession over immovable property does indicate apparently that the person in possession has some interest in the property but if the possession is conveyed through an express agreement or grant the exact legal position can be ascertained without placing too much emphasis on the fact of possession alone. Possession is not inconsistent with a license.
- Panjabrao Harbaji v. Gajanan Balaji, AIR 1980 Bom 396
Indicative Facts: Suit for possession by owner of land on the premise that the possessor was a mere licensee.
Key Observations/Ratio/Findings:
It is for the person is possession to prove that he had a valid tenancy in his favour, and since the fact of tenancy was neither pleaded nor proved before the trial judge, it could not be said that the person was a lessee, rather than a licensee.
- Chandu Lal v. Delhi Municipality, AIR 1978 Del 174
Indicative Facts: Suit for dispossession of defendant in occupation of land.
Key Observations/ Findings/Ratio:
Exclusive possession does not militate against the concept of a license, if the circumstances negative any intention to create tenancy.
The Petitioner’s possession of the premises on the facts and circumstances of the case cannot be held to be conclusive evidence of their being a lessee as the grant was not coupled with an interest in the property.
- M/s Quality Cut Pieces v. M/s M. Laxmi , AIR 1986 Bom 359
Indicative Facts:
X set up a departmental store in a lease space and gave spaces to various persons to set up stall.
Question came up whether such persons were licensee or sub-lessees?
Huge investments in furnishing the premises – indicative of lease, but in view of intention of parties, lack of demur etc – held license.
Key Observations/Findings/Ratio:
Stalls in departmental stores – Status – The surrounding circumstances like want of facility to independently lock the stalls, the inability of the stalls, the inability of the stall-holders to enter into the building or the stores at will, the requirement of having to seek permission of the management to change the hours of business or effect a change of merchandise, non-assignability of interest in the stalls, repeated recognition of the agreements to pay a fixed percentage of commission subject to a minimum, the correspondence of the stall holders with fiscal authorities reiterating the commission agreements, the deployment of staff like watchmen; accountants statisticians by the management to monitor the sales, want of statements by the stall-holders asserting rights of tenancy, submission of sales statements by the stall-holders to the management and payment of commission on the turnover higher than the minimum by one the stall holder are relevant factors and unequivocally establish that the stall-holders are merely licensees for reward.
Where two stalls in a departmental store faced the road, the stall-holders were given separate entrance and also given exclusive possession, the fact of exclusive possession coupled with the fact that there were other persons who were recognized to be recognized in the building was pointer to the fact that the stall holder were not mere licensee.
- Vithal Sahkari Sakhar v. Assistant Provident, 2008 Vol. 110 (1) Bom. L. T. 0120 : MANU/MH/1048/2007
Indicative Facts:
In terms of Section 17B of the Employee Provident Funds and Miscellaneous Provisions Act, 1952, upon transfer of establishment by sale, gift, lease or license or in any other manner whatsoever, the transferor and the transferee are jointly and severally liable to pay the contributions.
In the case, it was alleged by the EPF Department that the conducting agreement for running the sugar mill amounted to ‘transfer’ and thus, the conductor was liable to have its assets attached.
Key Observations/Findings/Ratio:
Held by a conducting agreement no transfer takes place.
“What is effected is an agreement for conducting business to manufacture sugar by crushing sugar cane… The intention of the parties in execution of the said agreement is not transfer of the property or assets …” (para. 11)
Eviction proceedings for eviction of a person occupying a shop under a conducting agreement. Whether the court of small causes has jurisdiction in respect of dispute arising out conducting agreement?
Section 41 of the Presidency Small Causes Courts Act, 1882 does not contemplate disputes under conducting agreement
Arbitrability of disputes between landlord / tenant and licensor/licensee.
Held, disputes between landlord-tenant and licensor-licensee are not arbitrable, and have to be decided by the Court of Small Causes, in terms of Section 41 of the Presidency Small Causes Act, 1882.
Distinction in the scope of Sections 41(1) and 41(2) of the Presidency Small Causes Act, 1882.
