Annaya Kocha Shetty (Dead) Through Lrs vs Laxmibai Narayan Satose Since Deceased Through Lrs & Others

2025 INSC 466 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.84 OF 2019

ANNAYA KOCHA SHETTY (DEAD) THROUGH LRS … APPELLANT(S)

VERSUS

LAXMIBAI NARAYAN SATOSE SINCE DECEASED THROUGH LRS & OTHERS … RESPONDENT(S)

JUDGMENT

S.V.N. BHATTI, J.

1. The Civil Appeal arises from the Order dated 16.07.2018 in Civil

Revision Application No. 247 of 2016 in the High Court of Judicature at

Bombay (“Impugned Order”), confirming the Judgment dated 17.08.2015 in

appeal No. 547 of 2004 of the appellate bench . The Judgment dated

17.08.2015 reversed the judgment and decree dated 20/22.03.2004 in R.A.D.

Suit No. 1860 of 1997 before the Small Causes Court at Mumbai. The LRs of

the plaintiff are appellant nos. 1.1 to 1.4 in the Civil Appeal.

2. The plaintiff filed the suit for declaration that the plaintiff is the deemed

tenant/protected licensee of the first defendant in terms of section 15A of the

Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, as enforced

from 01.02.1973 (“Bombay Rent Act”), for shop nos. 5 and 6, Shri

Samarthashraya Vishranti Graha, Nanabhai Court, Dr. Babasahib

Ambdedkar Marg, Hindmata Junction, Dadar, Bombay-400014 (for short, Signature Not Verified

SNEHA DAS ‘the Plaint Schedule’). The plaintiff also prayed for a restraint order against Digitally signed by Date: 2025.04.08 17:20:07 IST Reason:

the defendants from interfering with or dispossessing the plaintiff from the

1 Plaint Schedule. The suit was filed against Laxmibai Narayan

Satose/defendant no.1, and M.S. Nanabhoy/defendant no.2. The plaintiff

pleads that the first defendant is the landlady, and through her, the plaintiff

claims a right of declaration as noted above. Admittedly, the second defendant

is the owner of the Plaint Schedule. The Plaint Schedule was under a lease

with the husband of the first defendant, and after the original tenant’s demise,

the first defendant continued as lessee of the Plaint Schedule. The first

defendant was running a hotel under the name and style of “Shri

Samarthashraya Vishranti Graha” (“the Hotel”). The first defendant, after the

demise of her husband, ran the business for some time. But she was unable

to run it successfully, so she allowed her brother ‘Namdev Morye’, to continue

running the Hotel. The said arrangement did not prove to be advantageous to

the first defendant. With this background, the plaintiff claims to have stepped

in the Plaint Schedule and that, on 16.08.1967, an agreement styled for

conducting hotel business was entered into between the plaintiff and the first

defendant. The said arrangement was continued under subsequent

agreements between the plaintiff and the first defendant. On 28.02.1997, the

first defendant served notice to the plaintiff to vacate and hand over the

business being run in the Plaint Schedule. With the above development, the

plaintiff filed the suit for the reliefs noted above.

3. The averments in the plaint are elaborate; commensurate to the detailed

plaint, the written statement is equally elaborate. To wit, the plaint runs into

eight pages, and the written statement is sixteen pages long. The resultant

consequence is that, in the trial, much oral evidence is brought on record,

resulting in a lengthy judgment by the trial court. The judgment of the

appellate bench is equally lengthy, even though the core issue for

consideration could have been captured in a nutshell by the appellate bench.

2 A judgment should be coherent, systematic, and logically organised. It should

enable the reader to trace the facts to a logical conclusion on the basis of legal

principles.1 Lately, this Court has been experiencing meandering pleadings

irrespective of the nature of the dispute. We are reminded of Abraham

Lincoln’s ode to a lawyer friend – “[h]e can compress the most words into the

smallest ideas of any man I ever met.” Such lengthy pleadings would even

upset Polonius from Shakespeare’s Hamlet. Every word that is not a help is a

hindrance because it distracts. A reader who realizes that a brief is wordy will

skim it; one who finds a brief terse and concise will read every word. 2 The

parties to a suit ought not to compel the court to exercise its jurisdiction

under Order 6 Rule 16 of the Code of Civil Procedure, 1908 and strike out

unnecessary or frivolous pleadings. The effort of pleading and evidence should

be to be concise to the cause and must not confuse the cause. The lengthy

pleadings and avoidable evidence are well within the scrutiny of trial courts,

and, at the right stage, must be regulated within four corners of the law. Such

an approach by trial courts would like a stitch in time, save nine. Long and

drawn-out pleadings will run the risk of having a cascading effect on the

appellate and revisional courts. Meandering pleadings will land up with laden

weight in SLPs, making the narrative difficult. The time has come for courts

to invoke the jurisdiction under Order 6 Rule 16 and make litigation workable.

Courts are also confronted with AI-generated or computer-generated

statements. While technology is useful in enhancing efficiency and efficacy,

the placid pleadings will disorient the cause in a case. It is time that the

approach to pleadings is re-invented and re-introduced to be brief and precise.

1 Shakuntala Shukla v. State of Uttar Pradesh, (2021) 20 SCC 818 2 Scalia & B. Garner, Making Your Case: The Art of Persuading Judges, pp. 81 (2008) Ch-35.

3 Having remarked on the need for brevity, we have a task on hand to deliver a

brief judgment.

4. The solace to this Court in deciding the Civil Appeal is that all the

learned Counsel appearing for the parties have presented the core of

controversy alone for adjudication in the Civil Appeal. The prelude to the

plaintiff’s narrative is needed in as much as meandering pleadings lead to

discursive judgments.

5. The plaintiff was in the business of conducting hotels in Mumbai. On

mutually agreed terms and conditions, the first defendant granted a leave and

license of the suit premises to augment her income. In unequivocal terms, the

plaint refers to the prohibition of law prevailing then, and that the deed was

devised to circumvent such prohibition. Therefore, it is alleged that the

agreement dated 16.08.1967 is captioned as an ‘agreement of conducting’,

and the parties are referred to as owner and conductor. The agreement dated

16.08.1967 is one in the nature of the licensor and licensee of the premises

of the Plaint Schedule, but not a mere agreement for conducting the hotel

business of the first defendant by the plaintiff. The arrangement initially

lasted for eleven months and has been extended from time to time. The Plaint

Schedule falls within section 28 of the Bombay Rent Act. Section 15A has

been inserted into the Bombay Rent Act vide amendment of 1963, which was

later enforced from 01.02.1973, whereunder deemed tenancy and consequent

protection to the tenant has been granted by the legislature. The plaintiff, by

the existing arrangement of leave and license with the first defendant, is a

deemed tenant and hence prayed for the reliefs referred to above. The first

defendant contested the suit and denied the existence of a landlord-tenant

relationship between the plaintiff and the defendant. The agreement dated

16.08.1967, in letter and spirit, was entered into between the first defendant

4 and the plaintiff for the conduct of hotel business being carried on by the first

defendant. The agreement dated 16.08.1967 is a contemporaneous document

evidencing the agreement between the parties, and the clauses have been

appropriately incorporated and adhered to by the parties till the present suit

was filed. By serving the notice to hand over the business, the first defendant

terminated the arrangement. Section 15A of the Bombay Rent Act is not

attracted to the subject arrangement, and the plaintiff cannot claim the status

of a deemed tenant of the Plaint Schedule.

6. The trial court answered the substantial issues in favour of the plaintiff

and against the first defendant. The gist of the reasoning and findings is that

the plaintiff is a licensee and not a mere conductor of the business of the first

defendant. The trial court held that it depends on the nature and quality of

the plaintiff’s occupation of the suit premises and not on the mere

nomenclature of the agreement dated 16.08.1967. The trial court, while

referring to various clauses of the agreement dated 16.08.1967, held that:

6.1 Clause I of this agreement denotes that the owner has granted the

plaintiff leave and licence to use and occupy the hotel premises.

6.2 Clause III of the agreement indicates that in consideration of the leave

and licence, the conductor shall pay the owner for the first 5 periods each of

11 months royalty at the rate of Rs. 1000/- per month before the 5th of

subsequent months.

6.3 Clauses I and III of the agreement clearly show that in consideration of

Rs. 1000/- per month, defendant no. 1 granted leave and licence in favour of

the plaintiff to use and occupy the hotel premises.

6.4 Clause IV of the said agreement fastens liability upon the plaintiff to

bear and pay regularly all the electric bills, water charges, workman wage,

5 license fee, etc. The trial court held that if it were defendant no. 1, who was

running the business, she would have been expected to bear all these charges.

6.5 Clause VI of the agreement shifts the risk to bear all the costs regarding

the business on the plaintiff.

6.6 Clause VII imposes restrictions on the plaintiff to use the suit premises

for carrying on hotel business only and not to change the nature of the

business. Hence, no running business was given to him.

6.7 Clause XIV of this agreement makes the plaintiff fully responsible for

paying the workers their wages and exempts defendant no. 1 regarding the

same. None of the servants initially employed by the deceased defendant no.

1 were there after the execution of the said agreement.

6.8 The trial court was of the view that all the various clauses of the

agreement indicate that the deceased defendant no. 1 did not retain any

dominant control in the hotel business being run by the plaintiff in the suit

premises. Hence, if the plaintiff carried on the business, defendant no. 1 ought

not to have discontinued paying sales tax. Merely mentioning the word

“royalty” in receipts is not sufficient to conclude that there was an agreement

of conducting the Hotel between the parties. Considering the nature of

exclusive use, occupation, and possession of the plaintiff with respect to the

suit premises from 1967 to date, the nomenclature of the agreement has no

wider significance in determining the relationship.

6.9 Relying on oral evidence, the trial court notes that the law in force at

the time did not allow for a tenant-landlord arrangement in the factual matrix

at hand. Consequently, the agreement dated 16.08.1967 was styled as an

agreement of conducting, but the contents pointed towards an agreement of

leave and license. This is also buttressed, the trial court held, by the fact that

the plaintiff was paying rent of Rs. 1000/- per month. The trial court held

6 that the evidence of the witnesses deserves to be relied upon, especially

because during cross-examination, the said oral and documentary evidence

was not seriously challenged. Thus, it was held that the plaintiff is a deemed

tenant under section 15A of the Act.

7. The appellate bench examined and interpreted the agreement dated

16.08.1967 in its entirety and reversed the judgement and decree of the trial

court. The appellate bench examined the scope and object of sections 91 and

92 of the Evidence Act, 1872 and the bar on parties to an agreement to adduce

oral evidence contrary to the clauses in a written agreement. The appellate

bench held that the contemporaneous agreement through which the plaintiff

secured permission to enter into the Plaint Schedule is a plain agreement to

conduct the business of the first defendant and not a leave and license of

premises in favour of the plaintiff. The appellate bench found that the trial

court failed to interpret relevant clauses in the agreement that pointed to the

arrangement as one of leave and license. The appellate bench appreciated the

consideration received by the first defendant between March 1967 and

September 1973, i.e., 99 receipts evidencing receipt and payment of royalty

for conducting the business. The appellate bench heavily relied on these

royalty receipts as evidence supporting the existence of conducting

agreements for running the hotel business rather than a simple leave and

license arrangement. Further, it pointed out that the trial court should have

carefully considered the tenor of these receipts. The consistent payment of

royalties every month indicated that the arrangement was merely to conduct

a business and not to be a licensee of the Plaint Schedule. Electricity bills,

sales tax registration, BMC permission, etc., were part of the evidence

considered by the appellate bench in assessing the nature of the plaintiff's

7 occupation and business operations. By relying on the applicable clauses in

the agreement dated 16.08.1967 and the contemporaneous situation, the

agreement was styled as an agreement for conducting business. The appeal

of defendant no.1 was hence allowed.

8. Aggrieved by the reversal of the trial court order by the appellate bench,

the plaintiff filed Civil Revision Application No. 247 of 2016. The High Court,

through the Impugned Order, confirmed the view of the appellate bench. It

was held by the High Court that sections 91 and 115 of the Evidence Act,

1872 point to the finding that the Plaint Schedule was given for running the

Hotel on a conducting basis and not on a leave and license basis.

9. The High Court held that the intention of defendant no. 1 and her LRs

was to give the hotel business on a conducting basis to the plaintiff and that

there was no intention to execute a leave and license agreement regarding the

said premises. The Impugned Order looked into the agreement dated

16.08.1967 in detail and stated that –

• The “recital” notes the conducting basis nature of the agreement.

• Clause III refers to the payment of royalty at Rs. 1000 pm.

• Clause IV requires the plaintiff to incur and pay electricity charges.

• Clause V requires the rent of the premises to be borne by defendant

no. 1 to the landlord defendant no. 2.

• Clause VII and X point towards conducting of the hotel business.

• Utensils and furniture were annexed.

10. The High Court held that all the subsequent agreements formed a part

of the conducting agreements. Moreover, the plaintiff cannot deny the

execution of the conducting agreement on the premise that he was not well-

conversant with the English language. Thus, the High Court held that the

8 appellate bench was correct in noting that the agreement was for the conduct

of business.

11. Shri B.H. Marlapalle, learned Senior Counsel, placed reliance on the

reasoning adopted by the trial court and contrasted the interpretation

adopted by the appellate bench and High Court, on a plain reading of

agreement dated 16.08.1967, as erroneous. It is argued that the

nomenclature of a deed is not the determinative circumstance of the status,

rights, duties, or obligations undertaken by the parties to a deed. From the

evidence on record, with considerable force, it is argued that the entrustment

of the Plaint Schedule to the plaintiff is not that of an ongoing business, but

that of a lessee-licensee. The agreement must be understood in its letter and

spirit, as well as the right with which the plaintiff is enjoying the Plaint

Schedule. The learned Senior Counsel places reliance on Provash Chandra

Dalui and another v. Biswanath Banerjee and another3 for the proposition that

the best interpretation of the contract is to be made from the context, and it

is to be construed with reference to its object and the whole of its terms. Further, he relies on Chandavarka Sita Ratna Rao v. Ashalata S. Guaram 4 to

interpret Section 15A of the Bombay Rent Act to contend that a valid pre-

1973 license converts the plaintiff into a tenant entitled for protection under

the Bombay Rent Act.

12. The learned Senior Counsel fairly argues that the standing of the

plaintiff is dependent on the interpretation of the agreement dated 16.08.1967

and also the subsequent documents evidencing the nature of enjoyment of

the plaintiff. He relies on the test in Varisalli Mohd. Ilias v. Abdul Sattar Gulam

3 (1989) Suppl 1 SCC 487 4 (1986) 4 SCC 447

9 Hussain5 for determining whether under an agreement, leave and license are

created or authorised to conduct business to interpret the subject agreement,

and the decision in all fours is applicable to the facts of the case.

13. Mr. Chinmoy Khaladkar, learned Counsel appearing for defendant no.

1, argues that the plaintiff, both in law and fact, is estopped from resiling from

the clauses under the agreement dated 16.08.1967. It is axiomatic and not

disputed by defendant no. 1 that a deed is not constructed by the

nomenclature of the document but by the text and the tenor of all the clauses

governing the relationship between the parties. By relying on Provash

Chandra Dalui (supra), he commends this Court to interpret the suit

agreement. Sections 91 and 92 of the Evidence Act, 1872 are attracted to the

case on hand and do not fall within any of the exceptions for adducing oral

evidence, either contrary to the agreed clauses or to explain the clauses agreed

to between the parties. He has invited our attention to the agreement in its

entirety, particularly the preface determining the standing of the plaintiff as

conductor and the first defendant as owner of the business. The agreement

deals with conveying authority to the plaintiff. Defendant no. 1, under the

agreement, declares to have been carrying on the business of hotel and tea

catering and desired to give the right to conduct the business in favour of the

plaintiff. Clause 1 further reinforces the relationship. Clauses 7, 8, 10, 12,

14, 15, and 16 abundantly make it plain and clear that considering the

contemporaneous circumstances in 1967, the plaintiff could deal with the

business being run by the first defendant, and not the occupancy right of the

Plaint Schedule. The certificate of registration under the Bombay Sales Tax

Act, 1959, is rightly excluded by the appellate and revisional courts. Further,

5 (1991) Mah LJ 1523

10 the photocopy of the certificate cannot be relied upon in evidence for any

purpose. To appreciate the crux of the agreement dated 16.08.1967, the

schedule of items entrusted to the plaintiff for running the business would be

important.

13.1 Mr. Chinmoy Khaladkar also relies on Mangala Vaman Karandikar vs.

Prakash Damodar Ranadeon6 to delineate the scope and ambit of sections 91

and 92 of the Evidence Act, 1872. According to him, the Three-Judge Bench

judgement in Mangala Vaman Karandikar (supra) squarely governs the

situation, and oral evidence ought not to be examined to interpret the

agreement dated 16.08.1967 and the subsequent agreements.

14. Shri Vinay Navare, learned Senior Counsel, appears for respondent no.

3, a subsequent purchaser from defendant no. 2, and supports the plaintiff.

The arguments of Shri Vinay Navare are not adverted to as the second

defendant did not participate before the trial court or the appellate bench. In

the subject Civil Appeal, we are not enquiring into or adverting to the stance

of respondent no. 3 vis-à-vis the other parties to the litigation. The available

contentions of respondent no. 3 are left open for consideration in an

appropriate proceeding.

15. We have taken note of the arguments addressed by the learned Counsel

appearing for the parties.

16. The circumstances dealing with the dispute between the parties are

stated in required detail in the preceding paragraphs. At the outset, let us

refer to the ratio of this Court in Provash Chandra Dalui (supra) on the

construction of the basic agreement between the plaintiff and the defendant.

This Court held that the court must look at the words used in the contract

6 (2021) 6 SCC 139

11 unless they are such that one may suspect that they do not covey the

intention correctly. If the words are clear, there is very little the court can do

about it. In constructing a deed, looking at the surrounding circumstances

and subject matter is legitimate only if the words used are doubtful.

17. The guide to the construction of deeds and tools adopted can broadly

be summarised as follows:

17.1 The contract is first constructed in its plain, ordinary and literal

meaning. This is also known as the literal rule of construction.

17.2 If there is an absurdity created by literally reading the contract, a shift

from literal rule may be allowed. This construction is generally called the

golden rule of construction.

17.3 Lastly, the contract may be purposively constructed in light of its object

and context to determine the purpose of the contract. This approach must be

used cautiously.

18. The construction of a deed is “generally speaking, a matter of law.”

However, when there is an ambiguity in the deed, determining its meaning is

a mixed question of fact and law.7 This concept is encapsulated by sections

91 and 92 of the Evidence Act, 1872.

18.1 Section 91 of the Evidence Act, 1872 denotes that a deed constitutes

the primary evidence of the terms to which the parties are to adhere. Whereas

section 92 of the Evidence Act, 1872 forbids any contradictions or variations

in a written document by extrinsic evidence.8 However, there are exceptions

outlined in the proviso to section 92, that allow variations from this general

rule:

“92. Exclusion of evidence of oral agreement. – “When the terms of any such contract, grant or other disposition of property, or any matter required by

7 Halsbury, 4th Edn. Vol. 12 ¶1461.

8 TN Electricity Board v. N. Raju Reddiar, AIR (1996) SC 2025 at 2027. 12

law to be reduced to the form of a document have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms;

Proviso (1): Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party want or failure of consideration, or mistake in fact or law:

Proviso (2): The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document:

Proviso (3): The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved.

Proviso (4): The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents. Proviso (5): Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved; Provided that the annexing of such incident would not be repugnant to, or inconsistent with the express terms of the contract: Proviso (6): Any fact may be proved which shows in what manner the language of a document is related to existing facts.” (Emphasis supplied)

18.2 The subtle distinction in the point of law, as carved out by the provisos,

is that the evidence to vary the terms of an agreement in writing is not

admissible, but evidence to show that there is no agreement in the first place

is admissible.9 Thus, unless the grounds fall within the provisos read with the

illustrations to section 92, there is a bar on adducing oral evidence.

19. Now, we excerpt and construe the relevant clauses of the agreement

dated 16.08.1967:

“THIS AGREEMENT made at Bombay this 16th day of August 1967 BETWEEN SMT. LAXMIBAI NARAYAN SATOSE, a Hindu adult inhabitant of Bombay, hereinafter referred to as the “Owner" of the One Part (which expression shall mean and include her heirs, administrators, legal representatives and assigns unless repugnant to the context herein contained) AMD SHRI ANNAYA SHETTY, also a Hindu inhabitant of Bombay hereinafter referred to as the “Conductor” of the Other Part (which expression shall mean and include his heir, administrators and legal representatives unless repugnant to the context herein contained.

WHEREAS THE Owner above named is the Owner and sole proprietor of a Hotel Business known as "Shri Samarthashraya Vishranti Graya" at 225,

9 Tyagaraja Mudaliyar and another v. Vedathanni, (1936) AIR PC 70. 13

Nanabhai Court, Dr. Ambedkar Road, at Shop Nos. 5 and 6 on the ground floor bearing C.S. No. 11/26 Dadar, Naigaum.

AND WHEREAS the said Owner has been carrying on the business of Hotel and tea catering in the said premises.

AND WHEREAS the Owner is desirous of giving the said business on conducting basis and the Conductor has agreed to take upon certain terms and conditions.

AND WHEREAS it is considered desirable to reduce the terms and conditions into writing.

NOW THIS AGREEMENT WITNESSETH AS UNDER:

1. That the Owner does hereby give to the Conductor and the Conductor doth hereby take accordingly for conducting the said business concerned viz. the said Hotel business of the Owner carried on under the name and style of "Shri Samarthashraya Vishranti Graha" at the above said premises and for the purpose of carrying on the said business, the said Hotel premises and to use fittings and fixtures and furniture and other accessories (more particularly described in the Schedule annexed herto under) for the period and upon the terms and conditions herein after contained.

2. xxx xxx xxx

3. In consideration of the leave and license the Conductor shall pay to the owner for the first five periods each of eleven months Royalty at the rate of Rs.

1000/- (Rupees One Thousand only) every month on or before the 5th of the subsequent month. The Conductor agrees that for the sixth, seventh and eighth period of eleven months each, the Conductor agrees that for the sixth, seventh and eighth period of eleven months each, the Conductor shall pay to 'the Owner a higher amount of Royalty per month (i.e. Rs. 1100/- per month) (Rupees One Thousand One Hundred per month) at the time of the renewal of this.

4. xxx xxx xxx

5. xxx xxx xxx

6. xxx xxx xxx

7. That the Conductor shall use the said premises for carrying on Hotel business only of the Owner as aforesaid and he shall not change the name and the nature of the business.

8. That the Conductor shall carry on and conduct the said business entrusted to him, himself and he shall not give the same to anybody else for conducting or otherwise.

9. That the Conductor shall observe and perform all the rules and regulations and bye laws imposed by the local and Government authorities for doing the business of the like nature and he shall keep the owner indemnified against any action or penalties that might be imposed for breach thereof.

10. It is further agreed by the Conductor that he shall use the furniture fixtures and the business accessories as set out in the Schedule herein under annexed with true and proper are and caution and on the termination of this agreement he shall hand over the possession of the along with the premises to the owner in the same condition.

11. xxx xxx xxx

12. That on termination of this agreement by efflux of time or on earlier determination thereof, the Conductor shall quit and cease to use and occupy said premises and/or carry on and conduct the said business of the Owner and the Conductor shall hand over complete charge of the business to the owner peacefully and without delay and demur.

13. xxx xxx xxx

14. It is further agreed by the Conductor that he shall be fully responsible to the workers employed by him for paying their wages and the Owner is not responsible for the same AND on the date of the commencement of this agreement there was no worker in the said concern employed by the owner.

14

15. It is further agreed that if the Conductor does not desire to run and conduct the said hotel business, the Conductor shall serve on the owner a notice to that effect of one month and on the expiration of the said notice period of one month the Owner shall assume the charge and take possession of the said hotel immediately.

16. The Conductor hereby agrees to allow the owner to visit or inspect the Hotel premises at all reasonable times without any obstruction.” (Emphasis supplied)

20. The plaintiff, contrary to the clauses under which the plaintiff has taken

over the Hotel run in the Plaint Schedule, pleads the relationship of

tenant/subtenant as having been given under leave and license.

21. The construction of the excerpted clauses can be summed up thus:

a. The nomenclature is an agreement of conducting.

b. The parties to the agreement are referred to as owner and conductor.

c. The parties agree on the ownership of the hotel business known as ‘Shri Samarthashraya Vishranti Graha.’ d. The owner has been carrying on the hotel business in the Plaint Schedule.

e. The owner desires to give the business on a conducting basis, and the conductor has agreed to take the business upon the terms and conditions set out therein. Clause 1 specifically refers to the owner giving to the conductor, and the conductor agreeing to take for conducting the business. That is, the said hotel business of the owner carried on under the name and style of Shri Samarthashraya Vishranti Graha at the aforesaid premises. The owner thus granted to the conductor to use and occupy the said hotel premises – including fittings, fixtures, furniture, etc. f. The consideration is stated as royalty for conducting the business. g. The conductor is obligated to carry on the Hotel business only of the owner.

h. The conductor carries on and conducts the business entrusted to him and is barred from entrusting it to a third person for conducting the business otherwise.

i. The conductor is allowed to use the utensils and fixtures, and is obligated to return them upon the termination of the agreement.

15 j. The conductor is obligated to hand over the complete charge of the business to the owner if the relationship is terminated either by termination or efflux of time.

k. The conductor obligates himself to be fully responsible to the workers and the salaries payable to them.

l. The conductor severs the relationship of running the business by serving a month’s notice to the owner.

m. The owner is allowed to visit or inspect the Hotel at all times without obstruction.

22. The plaintiff and the first defendant entered into the agreement dated

16.08.1967, and the contemporaneous document reproduces or reflects the

subject matter of the agreement, terms and conditions agreed between the

parties, rights, and limitations on the owner and the conductor. The plaintiff

has taken over the business under the agreement dated 16.08.1967. With a

few minor variations, the agreements referred to above have been entered into,

and the plaintiff asserts a change of status only when a notice is served to

hand over the business by the first defendant. The plain interpretation of the

agreement dated 16.08.1967 discloses that the parties to the agreement,

briefly stated, were contemplating dealing with a business and have entered

into an agreement for conducting the business. The argument of the plaintiff,

by looking at the nomenclature, is that the standing of the plaintiff as

interpreted by the appellate bench and the High Court is erroneous. By

looking at the deed, we have no hesitation in holding that the agreement is

one for conducting the business of the first defendant. We are excluding oral

evidence from consideration as none of the exceptions is attracted.

23. The plaintiff adduced oral and documentary evidence either to dilute

the obligation/standing of the plaintiff in the agreement dated 16.08.1967, or

to claim the status of a deemed tenant. The first and foremost document relied

16 on is the registration certificate under the Bombay Sales Tax Act, 1959. The

plaintiff, as conductor of the business, has assumed the responsibility for the

incidences of running the business. This includes payment of sales tax as

well. Including the subject business in the dealership of the plaintiff would

not materially alter the position under the agreement dated 16.08.1967.

Further, a photocopy of the registration certificate is exhibited before this

Court. We are convinced that, in the facts and circumstances of the case, the

said photocopy of the registration certificate will not change the status of the

plaintiff from the conductor of the business to a sub-tenant and, by operation

of law, a deemed tenant. Similarly, the receipts evidencing payment of royalty

would militate against the status of deemed tenancy claimed by the plaintiff.

As noted earlier, sections 91 and 92 are substantive provisions under the

Evidence Act, 1872. Unless and until the case falls under one or the other

exceptions enabling receipt of oral evidence on a written document, the court

is precluded from entertaining oral evidence. The document or deed

interpreted in a particular case is not relied upon, but the subject deed is

construed on well-established principles. The law recognises both ownership

and possession of an owner of a property. A lease recognises the outcome of

a rightful separation of ownership and possession between lessor and lessee.

Section 108 of The Transfer of Property Act, 1882 deals with the rights of the

lessor and lessee. Under the said section, one of the conditions is that the

lessor is bound by lessee’s request to put lessee in possession of the property.

In the case on hand, admittedly, defendant no. 1 is in possession of the

property from defendant no. 2. Whereas the Agreement of Conducting

business does not deal with the possession so enjoyed by defendant no. 1 in

favour of the plaintiff. The absence of such a crucial clause in the agreement

dated 16.08.1967 is a vital circumstance in construing the subject matter of

17 the said agreement. This is an added circumstance to hold that what has been

entrusted is to run the business in the plaint schedule but not occupying the

plaint schedule under leave and licence. In the case on hand, the terms of the

agreement dated 16.08.1967 are clear that the entrustment to the plaintiff is

the ownership of the hotel business of the first defendant and not the tenancy

right of the first defendant in favour of the plaintiff.

24. From the above perspective and for the reasons stated supra, we are in

agreement with the view taken by the first appellate court and the Impugned

Order of the High Court. The Civil Appeal fails and is accordingly dismissed

with costs quantified at Rs. 1,00,000/- payable to defendant no. 1. Pending

applications, if any, shall stand disposed of.

..……….…………………J. [PANKAJ MITHAL]

...…………………………J. [S.V.N. BHATTI]

New Delhi;

April 8, 2025.

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