This case interpretation/summary of M. N. Clubwala v. Fida Hussain Saheb (1964) is written by Mr Sonu Choudhary, a student at the Faculty of Law (Delhi University). If you also want to publish your articles or case interpretations/summaries, send your work to niyamskanoon09@gmail.com.
Introduction
We all know that a tenant gets various protections by law against the exploitative terms and conditions of the landlord. But to get the benefit of these protections, there must exist a relationship between the lessor and lessee. The Court generally dive into the agreements made by them to determine the relationship between the parties, but what will happen if there is no formal agreement between them or there exists ambiguity in the agreement. This case (M. N. Clubwala v. Fida Hussain Saheb) deals with such an issue. So be careful and read this case study/summary.
Facts of the case (M. N. Clubwala v. Fida Hussain Saheb)
A builing owned by the appellant (M. N. Clubwala) was being used as a market known as Zam Bazar after obtaining a license with certain conditions from the Municipality.
The present respondents (Fida Hussain Saheb and Ors.) were the sellers of meats who had taken a stall in that market by an agreement signed by them only. They instituted a suit before the City Civil Court challenging the demand of some extra fees by the contractors appointed by the appellant to collect dues from the stall holders.
Though the City Civil Court found the extra fees being sought illegal, he dismissed the case on the finding that the respondents were mere licensees.
In an appeal before the HC, the Court by referring to the various protections granted by the agreement like a prior notice before evacuation, held that the respondents were the tenants of the appellant. Therefore, the HC reversed the decision of the lower court and granted relief to the respondents.
The appellant therefore came with this appeal before the Supreme Court.
The issue before the Supreme Court
Whether the respondents (meat vendors) were tenants of the appellant-landlord (M.N. Clubwala) or mere licensees.
Decisions
No, the respondents (meat vendors) were not the tenants of the appellant-landlord (M.N. Clubwala) but mere licensees. Therefore they are not entitled to get the benefits of a tenant.
Appeal allowed.
Set aside the decree of the HC.
Reasoning and Other Observations
In case of the absence of a written agreement or any ambiguity in the agreement, the Court shall go into the surrounding circumstances and the conduct of the parties to determine the nature of the relationship between the parties.
Though the exclusive possession of a premise is one of the considerations, it is not conclusive evidence of a lease. There must be an exclusive possession coupled with an interest in the property to consider it as a lease, as observed in Associated Hotels of India Ltd. v. R.N. Kapoor (1960).
Though the stallholders had exclusive possession of the stalls, they didn't have the right to use them at their pleasure. They were entitled to use it only for a particular period and purpose subject to various conditions.
Also, the license granted to the landlord indicates that the legal possession of the stalls rested with the landlord.
The duties cast upon the landlord could never be carried out by the landlord if he transfers the possession in favour of the tenants (respondents).
The necessity of prior notice before evacuation to a licensee doesn’t indicate that it is a lease agreement.
