With the passage of time, the system of giving properties on leave and license basis in Maharashtra is taking its roots, but still a good number of the property owners are apprehensive because they are not sure that they would get back possession of the properties on the expiry of the term. However, in view of the following judicial pronouncement, such fear seems unfounded, provided legal requirements are complied with.
One Shri Mohd. Hussain Furniture Walla, (Licensor) as the owner of Flat No. 51, in Victoria Apartments, St. Alexius Road, Bandra, Mumbai, gave his premises on leave and license basis, as per the Agreement dated 25.03.2003, for a period of 22 months to one Ms. Pari-neeta Choudhary on a monthly license fee of Rs.18,000.
In addition, an additional agreement was also executed between the parties for payment of charges at Rs.10,000 per month in respect of furniture and fixtures in the said premises. The term of the license expired in January 2005 and the licensee continued to occupy the said premises even thereafter and licensor accepted the monthly license fee and the additional charges. Only on to" December 2005, he moved a petition before the Competent Authority, who, besides ordering eviction of the licensee, also directed her to pay the damages at Rs. 56,000/- per month from 16th January 2005 till handing over possession of the licensed premises to the lesser.
This decision was challenged by way of revision u/s 44 of the Maharashtra Rent Control Act by the licensee but the same was dismissed and the order of the Competent Authority was upheld.
Aggrieved by this order the licensee filed a Writ Petition No.2276 of 2008 before the Hon'ble Bombay High Court under Article 227 of the Constitution of India. The matter came up for hearing before Hon'ble Mr. Justice A. M. Khanwilkar on the 9th September 2008, when the licensee pleaded that not issuing legal notice to her and continuing to accept the monthly license fee, was indicative of the fact that the licensee has become the tenant in respect of the licensed premises.
But this argument was not accepted by the Hon'ble High Court which observed that the fact of acceptance of the monthly compensation by itself would not to be sufficient to positively hold that the relationship of the parties that of licensor and licensee was converted into one of landlord and tenant and the fact that licensee instituted the proceedings before the Competent Authority, almost after 11 months from expiry of the license period, would again not by itself indicate that he has waived his statutory right of eviction of the petitioner from the suit premises because there is legal presumption uls 24 of the Act about conclusiveness of the contents of the leave and license agreement . It would merely indicate that the licensor allowed the licensee to overstay the license period and nothing more and the relationship would still remain of licensor and licensee.
The Hon'ble High Court has, therefore, held that the arrangement between the parties was purely one of the leave and license and the relationship created between them on account of the said transaction was that of the licensor and licensee and in view of the legal presumption uls 24 of the Act, it would necessarily follow that the licensee is obliged to vacate the premises on the expiry of the license period in January, 2005.
On the question of payment of damages from 16th January 2005, the Hon'ble High Court did not agree with the order of the Competent Authority, as upheld in the revision.
The Hon'ble High Court observed that the licensor did not call upon the licensee to vacate the suit premises nor informed her that she would be liable to pay damages for continuing possession and he filed the eviction proceedings only 16th December 2005. Therefore, the licensor would be entitled for the damages from the licensee at double the rate of license fee fixed in the Agreement of License only from 16th December 2005, when he initiated the proceedings.
As regards the quantum of the damages, again the Hon'ble High Court did not agree with the order of the Competent Authority, as upheld in revision and observed that the license agreement provided for the monthly licensee fee @ Rs. 18,0001- only and the additional agreement to pay charges @ Rs. 10,0001- in respect of furniture and fixtures provided therein cannot be reckoned for purposes of computing damages uls 24(2) of the said Act. Therefore, the Hon'ble High Court held that licensee would be liable to pay license fees @ Rs. 18,0001- from 16-12-2005 till handing over the possession to the suit premises.
One Shri Mohd. Hussain Furniture Walla, (Licensor) as the owner of Flat No. 51, in Victoria Apartments, St. Alexius Road, Bandra, Mumbai, gave his premises on leave and license basis, as per the Agreement dated 25.03.2003, for a period of 22 months to one Ms. Pari-neeta Choudhary on a monthly license fee of Rs.18,000.
In addition, an additional agreement was also executed between the parties for payment of charges at Rs.10,000 per month in respect of furniture and fixtures in the said premises. The term of the license expired in January 2005 and the licensee continued to occupy the said premises even thereafter and licensor accepted the monthly license fee and the additional charges. Only on to" December 2005, he moved a petition before the Competent Authority, who, besides ordering eviction of the licensee, also directed her to pay the damages at Rs. 56,000/- per month from 16th January 2005 till handing over possession of the licensed premises to the lesser.
This decision was challenged by way of revision u/s 44 of the Maharashtra Rent Control Act by the licensee but the same was dismissed and the order of the Competent Authority was upheld.
Aggrieved by this order the licensee filed a Writ Petition No.2276 of 2008 before the Hon'ble Bombay High Court under Article 227 of the Constitution of India. The matter came up for hearing before Hon'ble Mr. Justice A. M. Khanwilkar on the 9th September 2008, when the licensee pleaded that not issuing legal notice to her and continuing to accept the monthly license fee, was indicative of the fact that the licensee has become the tenant in respect of the licensed premises.
But this argument was not accepted by the Hon'ble High Court which observed that the fact of acceptance of the monthly compensation by itself would not to be sufficient to positively hold that the relationship of the parties that of licensor and licensee was converted into one of landlord and tenant and the fact that licensee instituted the proceedings before the Competent Authority, almost after 11 months from expiry of the license period, would again not by itself indicate that he has waived his statutory right of eviction of the petitioner from the suit premises because there is legal presumption uls 24 of the Act about conclusiveness of the contents of the leave and license agreement . It would merely indicate that the licensor allowed the licensee to overstay the license period and nothing more and the relationship would still remain of licensor and licensee.
The Hon'ble High Court has, therefore, held that the arrangement between the parties was purely one of the leave and license and the relationship created between them on account of the said transaction was that of the licensor and licensee and in view of the legal presumption uls 24 of the Act, it would necessarily follow that the licensee is obliged to vacate the premises on the expiry of the license period in January, 2005.
On the question of payment of damages from 16th January 2005, the Hon'ble High Court did not agree with the order of the Competent Authority, as upheld in the revision.
The Hon'ble High Court observed that the licensor did not call upon the licensee to vacate the suit premises nor informed her that she would be liable to pay damages for continuing possession and he filed the eviction proceedings only 16th December 2005. Therefore, the licensor would be entitled for the damages from the licensee at double the rate of license fee fixed in the Agreement of License only from 16th December 2005, when he initiated the proceedings.
As regards the quantum of the damages, again the Hon'ble High Court did not agree with the order of the Competent Authority, as upheld in revision and observed that the license agreement provided for the monthly licensee fee @ Rs. 18,0001- only and the additional agreement to pay charges @ Rs. 10,0001- in respect of furniture and fixtures provided therein cannot be reckoned for purposes of computing damages uls 24(2) of the said Act. Therefore, the Hon'ble High Court held that licensee would be liable to pay license fees @ Rs. 18,0001- from 16-12-2005 till handing over the possession to the suit premises.
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