P L D 1962 (W (PLP)

FARUQUI, J.‑This is a second appeal against the judgment and decree passed by Mr. Mehdi Ali Siddiqui, Additional District Judge, Karachi in Civil Appeal No. 19/59 whereby he set aside the decree passed by Mr. Moazzam Ali, Sub‑Judge First Class, Karachi in Suit No. 146/58, by which the learned Sub‑Judge had dismissed the plaintiff's suit for possession of the premises in suit and compensation for use and occupation. The facts of the case are simple and are not in dispute. Abdullabhai and two others are the landlords of the shop premises in question situated on plot No. S. B. 4/6/3, Blenkin Street, Saddar, Karachi. These premises were let out by the landlords to one Muhammad Siddiq. On 16th June 1956 the landlords made an application before the Rent Controller, Karachi for a certificate under section 10 of the Karachi Rent Restriction Act upon the ground that Muhammad Siddiq had sublet the premises to someone without their knowledge and permission. Ahmed Din, the appel lant before us, intervened in these proceedings and claimed that he had really been a partner of Muhammad Siddiq, in whose name the tenancy of the premises stood. A compromise was then reached between the parties, the terms whereof were reduced to writing on 20th April 1957 and this was filed in the proceedings before the Rent Controller. This is signed by the landlords as well as by Ahmed Din, the intervenor and Muhammad Siddiq, the tenant. According to this compromise, it was recognized that Muhammad Siddiq had surrendered possession of the shop premises as and from 1‑3‑56 and had put Ahmed Din in posses sion thereof ; that the landlords after prolonged litigation agreed to treat Ahmed Din as a licensee and not as tenant from 1‑3‑

56. Ahmed Din agreed to pay a sum of Rs. 70 per month as com pensation for use and occupation of the premises and in case of default at the rate of Rs. 10 per day. This arrangement was to last till 31-12‑1959, and on the expiry of this period Ahmed Din undertook to give the landlords vacant and peaceful posses sion of the ‑shop premises. Ahmed Din also undertook to keep the premises in good and tenantable condition and not to make any additions or alterations without the permission of the land lords and not to sublet it to anyone.

2. Ahmed Din committed default in the payment of the monthly sum of Rs. 70 whereupon the landlords served him with a notice on 1‑11‑57 and claimed compensation from him at the rate of Rs. 10 per day with effect from 1‑12‑57, and when this was not done they treated the licence as having been forfeited arid filed a suit on 17‑1‑58 in the Court of Sub‑Judge, First Class, Karachi for possession‑ and for the recovery of money due on account of occupation of the premises by Ahmad Din. Ahmed Din filed a written statement, by which he denied to have com mitted the default in payment of the agreed sum of Rs. 70 per month. He further denied that he was liable to pay Rs. 10 per day which was really, a penal clause in the agreement: As to the nature of his right in the premises he asserted that he was a tenant and not a licensee. The learned Sub‑Judge considered the terms of the agreement and took note of the admission of P. W. 1 Abdur Rahim, one of the landlords, about the exclusive possession of Ahmed Din of the shop premises in question and the further admission that he could not enter the premises with out the permission of the defendant. Relying upon A I R 1930 Bom. 165 he held that the effect of the agreement of compromise dated 20th April 1957 was that the defendant Ahmed Din was holding the suit premises as a tenant and not as a licensee. He, therefore, rejected the plaintiff's claim for possession. With regard to the claim "for licence fee and compensation" he held that the term for payment of Rs. 10 per day was a penal clause and was only intended to operate in terrorem and the plaintiffs were not entitled to recover at that rate. Strangely enough, he also refused to grant the plaintiffs any relief with regard to the admitted amount of arrears at the rate of Rs. 70 per month. On appeal the learned Additional District Judge held that the agreement between the parties had merely created a licence and not a lease. It would be convenient to reproduce the conclusions of the learned Additional District Judge in his own words: "I, therefore, disagree with the view of the learned Sub‑Judge that mere exclusive possession in face of the very express terms of the agreement of the parties goes to prove that the agreement was a lease. We must see that the landlords were careful to put in a clause safeguarding not only a right to levy deterrent penalty but also putting in conditions to safeguard the interest of their neighbours. It is true that the circumstances of the case had brought them to terms. But it is also true that the parties entered into the agreement and choose the words of the agreement with eyes open. So there is no justification for reading into the agreement the terms of a lease. Apart from the fact that a licensor can terminate the license and re‑enter by notice such as given in this case, the period of the licence has also now expired. In the circumstances of the case, therefore, the appellants are entitled to succeed." With regard to the claim of compensation he also found that the landlords were not entitled to claim at the rate of Rs. 10 per day and they were merely entitled to recover at the rate of Rs. 70 per month either by means of licence fee or compensation. Upon these findings he set aside the judgment of the learned Sub‑Judge and granted the plaintiffs a decree for posses sion and for arrears of licence fee from 1‑12‑56 till the date of the decree at the rate of Rs. 30 per month with proportionate costs throughout and at the rate of Rs. 3 per day till vacant possession of the premises was handed over to the plaintiffs. The learned Additional District Judge relied upon a number of Indian decisions which were cited before him on behalf of the appellants. These are reported in (1) A I R 1925 Mad. 434 ; (2) 1954 B L R 365 ; (3) A I R 1957 All. 369 and (4) A I R 1959 S C (Ind.) 1259. He also noted with reference to the Bombay decision reported in 1954 B L k 365 that the trend of English decisions in recent years appeared to be to widen the scope of the licensee's right so that if a licensee is also given the right of exclusive occupation for a stated period this would not confer upon him the status of a tenant but would add certain contrac tual rights with the licence.

3. We have carefully read the judgment of the learned Additional District Judge and have heard Mr. Kotwal, the learned counsel for the respondent‑landlords, at some length but have not found it possible to agree with the finding' of the learned Additional District Judge on this part of the case.

4. Before we go on to discuss the case law on the subject it would be useful to refer to the relevant statutory provisions. `Lease' is defined by section 105 of the Transfer of Property Act, whereas a `licence' has been defined by section 52 of the Ease ments Act. These may be conveniently reproduced: "

105. A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered, periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms." * * * * * * * * * * * * * * * * * * * * * * "

52. Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in `or upon the immovable 'property of the grantor, something which would, in absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence." A comparison of the two provisions would show that whereas a lease involves a transfer of interest in immovable property, a licence expressly excludes that element. It is important to note this distinction, because in certain decisions the test of exclusive possession has been found not to be infalliable. It has been held that exclusive possession is not incompatible with licence, and the question as to what is the status of an occupant must be decided with reference to the true intention of the parties. The learned Additional District Judge observed that the real test was to see whether the parties to the document intended to create a lease or a licence, but in arriving at his conclusion in respect of this test he seems to have been greatly impressed by the actual expressions used in the document which is before us and in which the appellant has been described as a licensee and not a tenant, and the consideration for occupation has been termed as fee and compensation and not rent. But we have asked ourselves whether the intention has to be judged from the mere phraseology of the document or we have to take the substance of it. There can be little doubt that it is the substance of the agreement that matters and not the form, otherwise clever drafting can easily camouflage the real intention. We may with advantage quote a passage from Mulla's Commentary on Transfer of Pro perty Act at page 644 which reads as follows:‑ "Whether an instrument operates as a lease or as a licence is a matter not of words but of substance. If the effect of the instrument is not to give exclusive possession, it will take effect as a licence though called a lease or letting. On the other hand, if exclusive occupation is given, it matters not that it is subject to reservations and restrictions. But if it only gives the use of the property in a particular way or on certain terms while it remains in the possession and control of the owner, it will only be a licence." No exception was taken by Mr. Kotwal to the statement of law as contained in the above passage. In fact, in a number of deci sions which were relied upon by him at the hearing this position has been reiterated. In this view of the matter it is not possible to agree with the learned Additional District Judge in the reason ing upon which he has based his conclusion which has been reproduced above. The learned Judge conceded that this was a case of exclusive possession but observed that in fact of the express terms of the agreement of the parties it could not confer the status of a lease upon the occupant. He took note of the fact that the landlords were careful enough to put in a clause provid ing for their right to levy deterrent penalty and also put conditions to safeguard the interest of the neighbours. He further observed that it was true that the circumstances of the present case had brought the parties to terms, but went on to emphasise the fact that they entered into the agreement in question and chose the words thereof with eyes open. On these considerations he held that there was no justification for reading into the agreement the terms of a lease. In this the learned Judge was clearly in error, because if the terms of the agreement bring about the relationship of a lessor and the lessee the effect cannot be avoided by certain words a/id expressions used in the document. And if the terms of the agreement are clear the question of intention also becomes superfluous. That question only arises when either there is no document governing the case or there is some difficulty in its cons truction. But, where the terms are clear and in law they make out a case of lease, it can be of little assistance to the opposite party to plead different intention. If he had intended less and his acts exceeded his intention then by the consequences of his acts he must abide. The following passage from Halsbury's Laws of England, 3rd Edition, page 427, is clearly in point :‑ "The parties to an agreement cannot, however, turn a lease into a licence merely by stating that the document is to be deemed a licence or describing it as such ; the relationship of the parties is determined by law on a consideration of all relevant provisions of the agreement." These observations are based upon the decision in the case of Addiscombe Garden Estates, Ltd. v. Crabbe ((1957) 3 All E R 563).

5. In the case before us there is the compromise deed which clearly brings out all the terms between the parties and if the effect of these terms is to bring about the relationship of lessor and the lessee between the parties, no amount of dexterity of drafting can alter the position. We will have to look to the substance and not to the words or to certain legal phrases if the terms produce a different result. But before we go on to record our conclusions with reference to the terms in the compromise document we would like to deal with the following decisions which were cited at the Bar by Mr. Kotwal for the respondent and which have also been relied upon by the learned Additional District Judge.

6. The case reported in Acting Secretary, Board of Revenue v. The Agent, South Indian Railway Co. Ltd. (A I R 1925 Mad. 434) arose upon a reference made by the Board of Revenue under section 57 of the Stamp Act and the question which the Full Bench was called upon to decide was whether certain documents entered into between the South Indian Railway Co. and certain coal merchants by which the latter were given leave to stack coal on a small plot of land measuring 100 x 20 feet in station yards, were required to be stamped as leases or whether they were mere licences. The terms of the grant enabled the grantor free access at all times and the grantee was prohibited from subletting or trans ferring his right and the grantor had been given the right of re‑entry. Upon these facts, it was held that this was a case of licence and not a lease. It would, however, be useful to quote from the judgment of Sastri J. in this case. The learned Judge, after referring to the definition of `lease' in section 105 of the Transfer of Property Act and of `licence ' in section 52 of the Easements Act, observed as follows :‑ "In both cases certain rights are conferred on the lessee, or the licensee. 1n the case of a license something may be paid as consideration for allowing a person to do an act on another man's land. Both have several elements in common, but it seems to me that the difference between a lease and a license is that, in the case of a license there is no interest in immovable property transferred to the licensee ; while in the case of lease there is a transfer or carving out of the interest in favour of the person in whose favour the lease is granted. One chief consideration is whether there is any right of exclusive possession given. When a document is clear and unambiguous we cannot go outside its terms for the purpose of determining the stamp duty but where it is otherwise I think the question is whether, having regard to the purpose of the agreement and the terms in which it is expressed, the document can be said to confer any interest in the land on the licensees." We do not see how this decision advances the case of the respondent. The grantees in this case were merely permitted to stack their coal in a portion of the railway yards and the grantors had reserved to themselves a free access to the land so defined. No parallel, therefore, can be drawn between this case and the case before us.

7. In the case reported in 1954 B L R 365 which is equivalent to A I R 1954 Bom. 370 (Ramjibhai Virpal Shah v. Gordhandas Maganlal Bhagat) the facts were these: The landlord had determined the lease of the tenant and had sued to eject him. The landlord's claim was resisted by the tenant ; but ultimately a compromise decree was obtained by the parties. By reason of the compromise decree the defendant was allowed to remain in possession of the property for a stated period. At the end of this period the landlord sought to execute the compromise decree and claimed possession by the process of execution, in which proceedings the defendant urged that the compromise decree made him a tenant of the decree‑holder, and under the provisions of the Rent Restriction Act, LVII of 1947, it was not open to the landlord to obtain possession. Now, we can easily pass from this judgment as not being of any appreciable assistance to us upon the short ground that their Lordships of the Bombay High Court were dealing with a case in which there was a decree of a competent Court and of which execution was sought. Con siderations which arise in such a case are wholly different from the case where we are called upon to give effect to an agreement between the parties, such as is the case hear. It is true that this compromise was reached in the course of the proceedings before the Rent Controller but the Rent Controller under the Karachi Rent Restriction Act has no power to grant a decree for ejectment. He merely issues a certificate under section 10 which removes the bar which stands in the way of the landlord from going to Civil Court for the purpose of claiming possession of the demised premises. It is of interest to note that in the Bombay case their Lordships held that section 105, T. P. Act, does not apply to cases of a compromise decree. This is what their Lordships said :‑ "Section 2 (d), T. P. Act clearly excludes the application of the provision of section 105 to the relationship which has been created by a decree'' Reliance was placed by the learned counsel for the respon dent on certain observations in para. 4 of the judgment of Gajendragadkar, J. which are as follows :‑ "In determining the nature of the transaction itself, Courts have inevitably to take into account the words used by the parties, and in that sense it would be wrong to suggest that the words used in the document, such as `compensation' or `mesne profits' are of no consequence whatever." These observations cannot be used for the purpose of advancing an argument that even though from the actual terms of the document a relationship of lessor and lessee is brought about, the mere use of the words mentioned above would turn the relationship as one between a licensor and the licensee. In fact, the preceding observations of his Lordship are to the same effect. This is what he said :‑ "The substance of the transaction has no doubt to be determined, and if in substance the transaction appears to be one of lease, the fact that an effort is made to clothe the transaction with an appearance of licence by the use of ingenious and clever words would not alter the essential character of the transaction. In that sense, the use of words such as `mesne profits' or `compensation' can have no material effect." Therefore, it is the substance of the agreement which must determine the question and not the use in it of certain technical expressions.

8. The next case relied upon is reported in Kuber Nath Kandu v. Gorakh Prasad (A I R 1957 All. 369). The facts of this case were these. The land in dispute was situated in a bazar, of which the Raja of Majhauli was the proprietor. On one of the plots in this bazar the defendants and other persons had obtained from the Raja permission to construct stalls for keeping shops by entering into agreements with the Raja. It was agreed that the defen dants would construct temporary stalls for the purpose of keeping shops and that they would vacate the land if desired to do so by the Raja upon one week's notice to vacate, and so long the land was used for keeping the stalls the defendants would pay a certain amount which was described as `baithaki' for keeping the stalls. The entire arrangement was to be done by the Raja's officials. Upon these facts it was held that the defendants were licensees and not lessees. His Lordship observed that exclusive possession of land though prima facie an index of tenancy could not be held to be so if the circumstances negatived any intention to create a tenancy. If possession of the premises, clearly defined, was transferred as such and the restric tions on the use were mere impositions, the transaction would be a lease. His Lordship further observed that exclusive possession over immovable property did not necessarily indicate that the person in possession had some interest in the property because possession was not incompatible with a licence. It was observed that the difference between lease and licence was that while in the case of a lease an interest in the property is transferred, in a licence a right to do something is granted, which right does not amount to an interest in the property. The case of a temporary occupation of a piece of land in a bazar liable to be terminated by a week's notice where the arrangement in the bazar is expressly retained by the proprietor of the land, cannot be treated on the same level with a case where the premises of a landlord are by agreement given to a person for a definite term upon a monthly payment, such as is the case before us.

9. The last Indian decision referred to in the judgment is of the Supreme Court of India reported in Associated Hotels of India Ltd. v. R. N. Kapoor (A I R 1959 S C 1262). In that case the facts were these: The appellants, the Associated Hotels of India Ltd., were proprietors of Hotel Imperial, New Delhi. The respondent was in occupation of two rooms described as `Ladies and Gents' cloak rooms, in the hotel and carried on his business as a hairdresser. He had secured possession of the said room under a deed agreeing to pay a sum of Rs. 9,600 that is Rs. 800 per month. The respondent applied to the Rent Controller, Delhi alleging that the rent was excessive and, therefore, fair rent might be fixed under the Delhi and Ajmer Merwara Rent Control Act. It was the contention of the appellants that the Rent Act had no application ; firstly, because the premises in a hotel were exempted under section 2 of the said Act from its operation and also on the ground that under the aforesaid document the respondent was not a tenant but only a licensee. Upon these facts the majority decision was that the appellants were not exempted from the operation of the Rent Act. Sarkar J., who differed from the decision of the majority, held that the two rooms in question being rooms in a hotel were outside the operation of the Rent Act. He, however, refrained from express ing his opinion on the question whether upon the terms of the document the respondent was a tenant or only a licensee. We do not see how this case can be of any assistance to the respondent.

10. There is reference in the judgment of the learned Additional District Judge to the fact that the recent trend in the English decisions was to widen the scope of licence. Mr. Kotwal told us that this was with reference to two cases, namely, Marcroft Wagons Ltd. v. Smith ((1951) 2 K B 496) and Errington v. Errington ((1952) 1 All E R 149). We shall briefly deal with these cases. In the first case, the statutory tenant of a dwelling house died in 1938 and on his death his statutory tenancy devolved on his widow who until her death continued to live in the house as a statutory tenant with her daughter. On the death of the widow the daughter asked the landlord's agent to have the tenancy transferred into her name. This he refused to do. Even so he accepted a sum from the daughter equal to two weeks' rent and she continued thereafter to pay each week the same sum as the widow had paid for rent, After some time, the landlord brought proceedings for possession. The question which arose before the Court of Appeal was whether the daughter was a licensee even though she was in exclusive possession of the property and had in fact "been paying the same amount which had been paid by the widow who was the statu tory tenant. The learned Judges came to the conclusion that the daughter was no more than a licensee. Evershed M. R. in dealing with the main question observed as follows :‑ ". . . . . . Until in the present century the Rent Restrictions Act came into play, the law broadly speaking necessarily inferred, when exclusive possession was granted to one of the property of another at a rent payable to that other, that a tenancy had been created. The law did not recognize that those conditions were compatible with.: any other kind of relationship. That, I think, sufficiently appears from a passage in Halsbury's Laws of England (2nd Edn.), Vol. 20 at p.

8. But it is now clear that, to use the formula which I think has been applied, a new `monstrum horrendum, informe, ingens' has come into our ken‑the conception of a statutory tenancy‑the concep tion that a person may have such a right of exclusive possession of property as will entitle him to bring an action for trespass against: the owner of that: property but which confers no interest whatever in the land: such a person is unable to dispose of the land by grant or by testamentary disposition. It is, as has been said, a statutory right of irremovability.". Mr. Justice Roxburgh, in his concurring judgment, confessed his difficulty in describing the status or interest of the occupant in such a case, and went on to observe :‑ "It would, I think, be a pity to call it a `licence', because that word has, in connexion with the landlord and tenant, already been appropriated to quite different situations. It must, I think, be left to jurists to invent a new name for what the Master of the Rolls has so aptly called `monstrum . . . informe' Now, in the case before us we are not called upon to consider whether the introduction of the Rent Restriction Act has necessitated the revision of our notions regarding lease and licence. All that we are called upon to decide is whether the agreement between the parties in this case has created a lease or a mere licence4ithin the meaning of the statutory provisions which obtain in this country and which we have reproduced earlier. Even the learned Judges in this English case were in considerable difficulty about the precise status of the daughter. Mr. Justice Roxburgh was not quite prepared to call it a case of licence and wanted it to be left to the jurists to invent a new name for such a case. We would also like to point out that it is dangerous to take recourse to English decisions when there are express statutory provisions which obtain in this country. Doing so might lead to hazards against which the Privy Council has seriously cautioned.

11. In the next case which is that of Errington v. Errington a father had bought a house for his son and daughter‑in‑law in 1936. He paid Pound 250 in cash and borrowed Pound 500 from a building society on the security of the house. The house was in the father's name and he was responsible to the building society for the payment of the instalments. He told the daughter‑in- law that the Pound 250 was a present to her and to her husband, handed the building society book to her and said that if and when she and tier husband had paid all the instalments the house would be their property. From that date onwards the daughter- in‑law paid the instalments as they fell due out of money given her by her husband. In 1945 the father died and by his will left the house to his widow. Shortly afterwards the son left his wife. The mother‑in‑law then sued the daughter‑in‑law for possession and she was met with the plea that the daughter‑in- law had been constituted a tenant by virtue of the agreement between her father‑in‑law and herself. The Court repelled the plea of tenancy and held that the position of the daughter‑in -law was .no more than that of a licensee. It may be noted that the agreement on which the tenancy was pleaded in this case had imposed no obligation on the son or daughter‑in‑law to pay the instalments. It was a unilateral promise by the father‑in -law and there was no document executed in that behalf. Denning L. J., who wrote the leading judgment in the case, while con ceding that exclusive possession was a crucial test and which distinguished a lease from licence, went on to add that this test had often given rise to misgivings because it might not corres pond to realities. As an example he referred to the case of Howard v. Shaw (151 E R 973) in which a person was let into exclusive possession under a contract for purchase and though the majority view taken in the case was that this was a case of tenancy‑at‑will, Lord Abinger differed from the conclusion and observed: "while the defendant occupied under a valid contract for the sale of the property to him, he could not be considered as .. a tenant." Denning L. J. after considering various other decisions, came to the following conclusion:‑ . . . . . . . The result of all these cases is that, although a person who `is let into exclusive possession is, prima facie', to be considered to be a tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy. Words alone may not suffice. Parties cannot turn a tenancy into a licence merely by calling it one. But if the circumstances and the conduct of the parties show that all that was intended was that the occupier should be granted a personal privilege with no interest in the land, he will beheld only to be licensee."

12. The "recent trend" of English decisions to which the learned Additional District Judge has referred and of which the two cases mentioned above are an example, cannot provide any great assistance to us when we are considering the question with reference to section 105 of the Transfer of Property Act. The "recent trend" must be construed in view of the state of the law, as it stood in England and of which the aforesaid case of Howard v. Shaw is a typical example. In England from the factum of exclusive possession an incident of tenancy‑at‑will was deemed to follow as a result of the earlier decisions, in which the circumstances under which possession was given were not taken into consideration. In the above quoted decision there has been this advance, namely that the intention of parties became a factor to be considered in determining whether a transaction was a lease or a licence. This notion of tenancy‑at‑will by the mere fact of exclusive possession cannot be fitted into section 105 of the Transfer of Property Act, which requires other things apart from possession for the creation of a lease. We are, therefore, not faced with the "misgivings" to which expression was given by Denning L. J. in the case of Errington v. Errington in view of the clear statutory provision. We may, however, note that in a more recent decision of the Court of Appeal the dictum of Denning L. J. in the case of Errington v. Errington as to "the test of exclusive possession being, by no means decisive" was criticised. This decision is reported in Addiscombe Garden Estates Ltd. v. Crabbe. At page 571 of the report Jenkins, L. J. who wrote the leading judgment observed as follows:‑ "We were also referred by, counsel for the owners to Errington v. Errington & Woods (1952) 1 All E R 149 mentioned by Denning, L. J., in his judgment. In that case it was held that in very unusual circums tances a Lady was a licensee, and entitled to remain in occupation of premises so long as she paid the instalments on a certain mortgage ; and in the course of his judgment, Denning, L. J., said. The test of exclusive possession is by no means decisive'. I think that wide statement must be treated as qualified by his observations in Facchini v. Bryson (1952) 1 T L R at p. 1389 ; and it seems to me that, save in exceptional cases of the kind mentioned by Denning, L. J., '' in that case, the law remains that the' fact of exclusive pos session, if not decisive against the view' that there is a mere licence, as distinct from a tenancy, is at all events a considera tion of the first importance." Reliance on behalf of the appellant was placed on a number of decisions which emphasise the significance of exclusive posses sion as a pointer to the existence of a lease. These may be briefly noted. In two cases of the Bombay High Court reported in Janardhan v. Ramchandra (A I R 1927 Bom. 240) and Sharif Dadu Mianji v. Emperor (A I R 1930 Bom. 165) it was laid down that exclusive possession is an important ingredient of leasehold rights. In Glenwood Lumber Co. v. Phillips (1904 A C, 405.), Lord Davey observed that if the effect of the instrument was to give the holder an exclusive right of occupation of the land, though subject to certain reservations or to a restriction of the purposes for which it might be used, it was in law a demise of the land itself.

14. In Burmah Shell Oil Storage & Distributing Co. Ltd. of India (A I R 1933 All, 735) a Full Bench of the Allahabad High Court held that a document under which an oil company was to have the temporary use or occupation of a pi.‑‑cc of land of a monthly rent solely and entirely for the purpose of constructing and maintaining thereon a petroleum installation for the storage of petroleum, had created a lease though it was described as a document of licence. But this was a case in which the question was as to what stamp duty should be paid upon the document, and the determination of the question whether it was a lease or a licence depended largely upon the definition of the term " lease " found in section 2, sub clause (16) of the Stamp Act of 1899.

15. In a case decided by a Bench of this Court, to which one of us was a party, it was held that the essential feature which distinguishes a lease from a licence is the presence of exclusive possession in the case of lease and its absence to the case of licence Azim Khan v. Pakistan (P L D 1937 Kar. 892).

16. We may now summarise our conclusions the most distinctive feature between a lease and a licence is that, in the former there is a transfer of interest in immovable property whereas in the latter that element is expressly excluded. The transfer of interest in a case of a lease consists of the grant to the lessee the exclusive right of possession of the demised premises. This right, in the first instance, vests in the lessor and is one of the most important incidents of ownership In granting a lease the lessor transfers this important right to tile lessee. The right of exclusive possession involves an element of ouster and when the lessor grants this right to the Jesse; lie totally excludes himself from that right, though it may be only for a certain time. This right is assignable and heritable and constitutes property. On the other hand, in the case of a licence there is a total absence of transfer of interest in the immovable property. A licence is a personal right granted to an individual or to an ascertained number of individuals, to do or continue to do something in or upon the immovable property of the grantor, which in its absence would be unlawful. It is purely a permissive right and is neither assignable nor heritable. Notwithstanding the permission the grantor retains control over the property. The fact that a licensee occupies the property, that occupation does not confer upon him the right of exclusive possession as understood in law. Under the Transfer of Property Act, apart from the transfer of the right to enjoy property, there has to be also a consideration paid or promised and the lease has to be for a certain time. But these elements may often not be inconsistent with a case of licence. The mere fact that the occupant under the agreement pays a monthly sum to the owner may not be conclusive because a licence may be for consideration. Similarly, the mere fact that he was to cease to occupy the property by a certain date may not be decisive because a licence may be for a term. Therefore, when both these elements are present the factor which will decide the question whether the grant is a lease or a licence, would be the right of the grantee to exclusive pos session of the property in the sense indicated above. If there is such a right then the transaction is clearly one of lease because in it there has been a transfer of interest in the property. When there is a written instrument recording the transaction it is the substance of it and not the form which will govern the case. The question of intention arises only when the terms whether written or oral are not clear or when they are consistent both with the existence of a lease or a licence. It is only in such cases that the matter has to be decided with reference to the true intention of the parties deduced from all the circumstances o the case. The use of certain technical expressions in a document cannot turn a lease into a licence. Where, therefore, the nature of the transaction presents some difficulty in construing whether it amounts to a lease or a licence, the question, to be asked is, has the occupant acquired an " interest in land ", that is, has the owner transferred a certain right of ownership in a way which extinguishes the enjoyment by him of that right and vests the same exclusively in the transferee. If he has then it is a case of a lease and not of licence.

17. In the `case before us the terms of the agreement between the parties are clear and have been admitted by the defendant in evidence. There was a transfer of interest in the shop premises in favour of the appellant by the agreement in question because t before that date he had no such interest, the tenancy having been granted in favour of Muhammad Siddiq. The appellant admit tedly was given the right of exclusive possession of the premises and the respondent could not even enter it without his permission. There was also a‑ fixed term and a price. We do not see how this transaction can be anything but a lease. The use of expres sions such as ` licence ' instead of ` lease ' and fee and compen sation instead of rent in the document cannot alter its true character, The camouflage of phraseology cannot affect the, true nature of a transaction The terms agreed upon between the parties ‑in the present case axe clear, and there is thus no occasion to go upon a quest as to what their intention was.

18. For the reasons given above we hold that the agreement dated 20th April 1947 had conferred upon the appellant the status of a lessee. The lease was admittedly not determined when the suit was instituted. The plaintiff's suit based, as it was, on the plea of licence was, to the extent of the relief of possession claimed by him, bound to fail. We accordingly set aside the decree of the learned Additional District Judge in so far as it related to possession of the premises. To that extent the decree of the trial Court is maintained. We decree the plaintiff's claim for rent at the rate of Rs. 70 per month from 1‑12‑56 till 31‑12‑59 (the term of the lease) and thereafter for use and occupation at the same rate till the date of this judg ment. From this shall be deduced the two sums of Rs. 70 and Rs. 560 which the plaintiff-respondent has admittedly received from the defendant. As the success has been divided we order that the parties shall bear their own costs through. A. H. Order accordingly.