ORDER
1. This second appeal is preferred from the judgment and decree of the I Additional District Judge, Coimbatore made in A.S. No. 47 of 1989 dated 7.2.90 reversing the judgment and decree of the learned Subordinate Judge, Udumalpet in O.S. No. 140 of 1986 dated 29.3.89.
2. The respondent filed a suit seeking a relief of permanent injunction restraining the appellant/defendant municipality from in any way interfering with the peaceful possession and enjoyment of the beef stall in an area of 150 sq. feet more fully described in the schedule of property annexed to the plaint alleging that a site measuring 15 x 10 feet situate within the specific boundaries stated in the schedule of property was leased out to him in the year 1980 by the appellant municipality wherein he raised the superstructure at his cost and has been conducting the beef stall without any interference from any quarters; that he has been regularly paying the rental to the appellant municipality; that in 1985-86 the rental was raised at 30%; that there were no arrears of rental payable by the respondent; that while so the appellant is making unlawful attempt to evict him from the suit property though he continued to be a lessee and hence his possession has got to be protected by granting a permanent injunction against the appellant.
3. Vehemently resisting the suit, the appellant municipality contended that the vacant site was given in auction and the plaintiff became the successful bidder only for three years and he had no right to claim any permanency as far as the municipality property was concerned; that he could not claim any right after the said period of three years was over and he was to vacate whenever he was directed to do so; that the master plan was approved by the Government of Tamil Nadu under which 59 shops were constructed and the portion in which the plaintiff has put up the superstructure has been mentioned as a road in the master plan and that was the reason why the notice was issued to him for vacating the same; that the appellant had no personal motive and only in the interest of the public and in view of the welfare measure the municipality was taking steps to evict the plaintiff; that the allegation that the municipality was creating records was nothing but a false story; that the plaintiff had no right at all to question the act of the defendant who was doing it within the powers vested under the Provisions of the District Municipalities Act; that the plaintiff had no right to state that he was entitled to be in possession which amounted to illegal and improper conduct on the part of the plaintiff in violating the terms and conditions imposed upon him at the time of giving license in his favour, that the suit itself was not maintainable and since the period of licence was over, he was not entitled to be in possession and hence the suit was to be dismissed.
4. The trial court framed the necessary issues, tried the suit and dismissed the same. The aggrieved plaintiff preferred an appeal before the first appellate court, wherein the judgment of the trial court was set aside. Aggrieved over the same, the defendant municipality has preferred this second appeal. At the time of admission, the following substantial questions of law were formulated:
(1) Whether the lower appellate court erred in law and misdirected itself in holding that the permission granted by the Municipality to the plaintiff to occupy road margin under Sec.270 of the Tamil Nadu District Municipalities Act, 1920 is a lease under Section 105 of the Transfer of Property Act and not a license?
(2) Is the plaintiff a licensee with respect to a road margin under the municipality?
(3) Whether in law, the plaintiff a licensee is entitled to relief of injunction after the expiry of license period and that too after the consent order passed in W.P. No. 5222 of 1989?
5. This appeal is an outcome of the judgment of the District Court reversing the judgment of the trial court and granting the relief of permanent injunction in favour of the respondent as asked for. The respondent claimed a relief of permanent injunction against the appellant municipality stating that he was a lessee in respect of the vacant site measuring 10 x 15 feet mentioned in the schedule of property; that he raised superstructure and has been conducting the beef stall from 1980 onwards; that he has been paying the rental regularly to the appellant municipality and that there were no arrears of rental; that there were occasions where the rental was also raised and he has accepted the same and has paid it also and there arose a necessity to file a suit for injunction since the appellant municipality was taking steps to evict him unlawfully. The only defence that was put forth by the appellant in the trial court was that the respondent was conducting his beef stall only on the basis of the licence granted to him by the appellant municipality for a period of three years; and beyond that period, he was not entitled to be in possession and the municipality was perfectly correct in taking steps to evict him and the same was well within the provisions of the Municipalities Act. Hence the first question that would arise for consideration in this second appeal would be whether the jural relationship that existed between the appellant and the respondent was one of lcensor and licensee or lessor and lessee.
6. Arguing for the appellant municipality, the learned counsel would submit that the first appellate court has granted the decree since it proceeded on the wrong footing as if the permission granted by the municipality under S. 270 of the District Municipalities Act, 1920 would amount to lease and not licence; that no lease of the road margin could be made by the municipality as it would be in violation of the statutory bar prescribed in the District Municipalities Act, 1920 and it would be ultra vires the powers of the very
municipality; that the first appellate court has assumed that the permission granted by the municipality in terms of power to regulate sales in or on public street under S. 270 of the Act and the rules made under would amount to lease under S. 105 of the Transfer of Property Act and not a mere licence; that the lower appellate court was not correct in granting the relief on the surmise as if the respondent had put up permanent construction with the knowledge and consent of the municipality, when the municipality had even at the first instance directed the respondent to make such provision, which was to be removed on the expiry of the licence period; that the first appellate court was wrong in assuming that the relationship between the plaintiff and the defendant with respect; to the permission granted for occupation of the road margin was that of lessor and lessee/ that the respondent was not entitled for the decree for injunction as he has no right to continue the sale of beef after the expiry of the licence period and the respondent was in illegal possession and hence he was not entitled to the relief of injunction against the municipality which was vested with the statutory power; that the lower appellate court should not have allowed the appeal even after the order passed by the High Court in W.P. No. 5222 of 1989, wherein the plaintiff had agreed to shift his stall to the Municipal Beef Stalls located in Dharapuram Road; that the collection of fees by the respondent was misconstrued by the lower appellate court and thus the judgment of the first appellate court has got to be set aside restoring the judgment of the trial court.
7. Vehemently opposing all the contentions put forth by the appellant’s side, the learned counsel for the respondent would submit that the first appellate court after careful scrutiny of all the documentary evidence available has arrived at a correct conclusion that the relationship between the appellant and the respondent was that of lessor and lessee and during the subsistence of the lease, the respondent could not be evicted except by due process of law and hence the judgment of the lower appellate court has got to be sustained.
8. After careful consideration of the rival submissions and the evidence adduced by both sides before the trial court, the court has to necessarily agree with the findings of the first appellate court that the relationship between the appellant and the respondent was one of lessor and lessee. It is well settled position of law that in order to decide whether the relationship between the parties is one of landlord and tenant or merely that of licensor and licensee, the main consideration would be the intention of the parties, which has to be ascertained from the terms of the agreement. When there is no written agreement, the intention of the parties has to be necessarily inferred from the circumstances and conduct of the parties. When the above principle is applied to the present facts of the case, it has to be necessarily held that the relationship between the appellant and the respondent was one of lessor and lessee and certainly not of licensor and licensee. True it is there is no written agreement between the parties. Exs. A1 and A2 would clearly reveal that the
possession of the said piece of vacant land was handed over to the respondent by the appellant municipality only on lease. Ex. A1 reads as follows:
Ex. A2 reads as follows:
It is found in Ex. A.3 to A8 receipts issued by the municipality to the respondent that”
9. The learned counsel for the appellant relied on Exs. A9 to A16 receipts and would contend that they would clearly speak of the licence issued to the respondent. A comparison of the receipts found under Exs. A3 to A8 and the receipts under Exs. A9 to A16 would make it abundantly clear that the first set of receipts from Exs. A4 to A8 were the receipts issued by the appellant municipality for recovery of rental from the respondent while the amounts received under the second set of receipts from Ex. A9 to Ex. A16 would represent the licence fee recovered by the municipality from the respondent for the conduct of his business in the said shop. In order to substantiate his case, the plaintiff examined himself as PW1 through whom all the above documents were marked. The Revenue Inspector attached to the appellant municipality who was examined as DW1 has categorically admitted in his evidence that the vacant site in question was given to the respondent on lease renewable every year. Thus the evidence adduced by both sides as narrated above, would clearly and clinchingly prove that the vacant site was leased out by the appellant-municipality. During the pendency of the proceedings in the lower appellate court, the respondent has filed a writ petition in W.P. No. 5222 of 89 for a writ of certiorarified mandamus to quash the proceedings in Na. Ka. No. 1824 of 1989 as dated 21.3.89. This court had an occasion to consider the merits of both sides and has passed an order in W.P.5222 of 1989 as follows:
“Having regard to these submission, as soon as the construction of the stalls for running beef stalls at Dharapuram Road is completed, the petitioner would be informed of the same and on a direction given to him to shift his stall to one of the stalls in that complex at Dharapuram Road the petitioner should shift within one week of receipt of such intimation. On such shifting, the petitioner would be
entitled to run his beef stall without let or hindrance subject to his complying with all the Rules and Regulations regarding the running of the stall. In the meanwhile, the petitioner is enable to run the stall at Rajendra Road on a licence duly issued for that purpose.”
10. It is an admitted position that the respondent continues to be in possession of the suit property and as per the directions of this Court in the said writ petition, the appellant municipality after the completion of the construction has not allotted one of the stalls in that complex at Dharapuram Road in favour of the respondent. The first appellate court has granted the permanent injunction as asked for. But the court is of the view that the said permanent injunction granted by the first appellate court has to be modified to the effect that the peaceful possession of the respondent should not be interfered with by the appellant municipality except by due process of law.
11. In the result, this second appeal is dismissed. But the judgment of the lower appellate court is modified and a permanent injunction that the/respondent should not be interfered with by peaceful possession of the appellant except by due process of law is granted. No costs.