Mangala Waman Karandikar (D) Tr. LRs v. Prakash Damodar Ranade - Synopsis
Ahir Mitra 30 Jul 2021

Mangala Waman Karandikar (D) Tr. LRs v. Prakash Damodar Ranade

2021 SCC OnLine SC 371

The Bombay High Court has allowed the respondent’s second appeal and has set aside the decree in favor of the appellant. Both the parties had entered into a contract, where the respondent was carrying out the business of stationery shopping which belongs to the appellant. The contract was extended from time to time. The appellant has eventually taken back the business and served the respondent with a notice to vacate the premises. The respondent claimed that the contract was a rental agreement at that time, prompting the appellant to bring a civil complaint at the Court of Joint Civil Judges, Junior Division, Pune. The respondent had simply taken over the running business from the appellant, according to the Trial Court, and had not taken the suit premises on a lease or license basis. The appeal before the Additional District Judge was dismissed.

The High Court allowed the second appeal holding that the respondent has entered into a license agreement under section 15A of the Bombay Rents. The Supreme Court concluded that it was obvious from a reading of the contract that the parties intended to transfer only the business from the appellant to the respondent during the contractual time, and that the transaction was not intended to constitute a lease or license. The Court further concluded that the High Court erred by considering extrinsic evidence under Section 95 of the Evidence Act since this would render Section 92.

The Court held that the matter would not fall within the ambit of the Act because the contract, in this case, was straightforward and the license was created for the continuation of an existing business rather than a license or lease of the shop premises, and thus allowed the appeal by setting aside the impugned order of the High Court and restoring the trial court decree.

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