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Letters Patent Appeal No. 7 of 1964, decided on 14th July 1964.
Ss. 42, 21 (d) & 56 (f)‑----Contract for catering on railway carriages‑--No definite room or buffet car allotted to contractor‑Contract in essence and substance one for personal service creating no right to any property‑Suit for declaration under S. 42 barred‑Such contract envisages revocable licence within meaning of S. 60, Easements Act, 1882‑No injunction can be granted‑Easements Act (V of 1882), S. 60.
Dominion of India v. R. B. Sohan Lal A I R 1950 East Pb. 40 and Hurst v. Picture Theatres Limited (1915) 1 K B 1. distinguished.
S. L. Kapoor v. Emperor A I R 1937 Lah. 547 held not applicable.
S. 1‑Restricted operation of Act as to territory‑Provision omitted by Governor‑General's Order No. 4 of 1949‑Act now applicable to whole of Pakistan.
S. 52‑Injunction ---Discretionary relief‑Not to be granted where interests of public health demand orther-wise‑Civil Procedure Code (V of 1908), O. XXXIX.
Mazahar Hassanain with S. M. Abbas for Appellant.
M. H. Khondker with Shahabuddin Ahmed for Respondents.
Dates of hearing: 15th, 16th, 17th, 18th, 19th and 23rd June 1964.
This appeal under clause 15 of the Letters Patent is by the plaintiff. The plaintiff filed a suit in the Court of a Munsif at Dacca for a declaration that the agreement between the plaintiff and the defendant‑respondent No. 1 still subsisted and for injunction restraining the defendants from interfering with the plaintiff's right of catering in terms of the agreement. The suit was decreed by the learned Munsif, but on appeal the decision of the learned Munsif was reversed and the second appeal by the plaintiff was also dismissed by a learned Judge of this Court who, however, granted leave to the plaintiff to prefer this appeal under clause 15 of the Letters Patent.
The plaintiff's case was that as proprietor of the Gulistan Restaurant of Dacca he acquired the rights of catering for a period of three years in the first instance in the upper class restaurant rooms and buffet cars of the defendant No. 1 under an agreement dated the 12th of December, 1953 (Exh. 1). In terms of clause 2 of the agreement, the contract was to continue in force for three years from the 18th of December 1953, and was terminable on not less than six months' notice by either party and after the first three years the agreement was to continue in force subject to termination at any time on a similar notice. The defendant No. 1, by a letter dated the 20th of September 1961, (Exh. 2) intimated to the plaintiff that his contract for catering would be deemed to have terminated on completion of six months from the date of issue of the said letter. The plaintiff-appellant contended that this notice did not terminate the contract and, that whatever might have been the purport of this notice, it was ultimately waived by Exh. 3‑A, which was a telegram dated the 19th of March 1962, sent to the plaintiff extending the contract by another six months from the 21st of March 1962, "on the terms and conditions of the existing contract". Thereafter by a letter dated the 6th of December 1962 (Exh. 4) the defendant No. 1 asked the plaintiff to make over the charge of the refreshment rooms and buffet cars to the individuals authorised in the said letter and finally on the 24th of December 1962, another notice (Exh. 4‑A) was issued under the caption "notice of termination of catering and contract" giving a list of firms and individuals including the plaintiff to whom the work had been distributed. The other firms were defendants Nos. 3 to 7 and the notice directed the plaintiff to hand over charge of the relevant rooms and railway cars to the said defendants Nos. 3 to 7. The plaintiff made several representations to vacate the order passed by the defendant No. 1 but to no effect and the plaintiff finally sent a letter (Exh. 5) through their lawyer on the 28th of December 1962 praying for one month's time and requesting to maintain the status quo, but this was turned down on the 31st of December 1962, and by a telegram (Exh. 3‑B) of that date the plaintiff was directed to hand over the restaurant rooms and buffet cars to defendants Nos. 3 to 7 by the 1st of January 1963. The plaintiff's contention was that the agreement with him had not been legally terminated and the order to make over charge was illegal and without jurisdiction and that the plaintiff would suffer irreparable loss if the defendants were allowed to oust the plaintiff.
The suit was contested by the defendant No. 1, the Railway Authorities, and defendant No. 1 (a), the Provincial Government, who contended, inter alia, that the suit was not maintainable; that the prayer for injunction was barred by estoppel, waiver and acquiescence; that the alleged loss of plaintiff was capable of assessment and adequate compensation in terms of money could be awarded; that defendant No. 1 and the plaintiff have unfettered right to terminate the contract with six months' notice in writing; that numerous complaints against the service of the plaintiff had been received; that the defendant had turned down the representations of the plaintiff; that the plaintiff submitted along others an application for fresh contract; that a portion of the whole contract had been allotted to the plaintiff; that a fresh deposit of earnest money for Rs. 500 had been made by the plaintiff; that the plaintiff having accepted the termination of the agreement by action and conduct, he was, by necessary implication, estopped from challenging the propriety of the termination order.
On those facts the parties have based their contentions with the result stated above.
Mr. Mazahar Hassanain, while placing the terms of the agreement before us, sought to argue, in the first place, that it should be held that the contract, Exh, was still subsisting as‑
(a) the original notice of the 20th of September 1961, had been waived by the telegram dated the 19th of March 1962 and that no other notice in terms of the contract was served;
(b) though the contract might be deemed to have expired, on the termination of the period granted by the telegram dated the 19th of March 1962, no steps under clause 21 of the agreement, which, he argued, related to a period following the termination of the contract had been taken by the defendant, and it was submitted that, in such a context, the contract was still subsisting and that he was entitled to a declaration thereto.
The next point that he placed before us was that the nature of the transaction effected between the parties amounted to a licence coupled with a grant which became irrevocable and, that, in the aforesaid premises, the prayer for injunction was maintainable.
Lastly, he argued that the status of the plaintiff was that of a servant under the Railway Authorities and as such he was entitled to the benefits attached to such relationship.
Mr. M. H. Khondker, learned Advocate appearing on behalf of the respondents argued‑
(a) that a declaration, as prayed for, was not maintainable as the contract did not give rise to any right to property;
(b) that even if the suit was maintainable, the prayer for injunction was not maintainable;
(c) that the transaction was either a lease or a licence and his contention was that it was a licence and that for a breach of such contract, if any, the remedy of the plaintiff was by way of damages; and
(d) that the suit was also not maintainable as the contract was that of personal service which was incapable of specific performance.
Thus, it will be apparent that the respondents are not anxious for a decision on merits only, but are interested in the larger issue, namely, the maintainability of the suit itself, as the decision will settle the question in a number of pending or threatened suits. We will, therefore, take up the question of maintainability of the suit first.
Strictly speaking, it is not permissible for Mr. Hassanain to press, in this Court, the contention that the plaintiff was entitled to maintain a suit for declaration as he had given up this point before the learned Single Judge who observed
"Mr. Hassanain having abandoned his prayer for declaration under section 42 of the Specific Relief Act by reason of his failure to establish that the contract conferred any legal character, I am left only with the question as to how far an injunction order would be justified in this case."
But, as Mr. Khondker has attacked the maintainability of the suit, both on the ground that the declaration, as prayed for, was incompetent as well as on the ground that the prayer for injunction was not maintainable, we allowed both parties to make their submissions.
Mr. Hassanain has sought to argue that the contract, Exh. 1, would amount to a licence coupled with a grant. He drew our attention to clause 4 of the agreement which reads thus:
"The General Manager shall allow the Contractors the use, of all buildings, premises as may in the opinion of the General Manager be necessary to the Contractors in connection with the supply of refreshments on the said Railway under this Agreement and the Contractors shall not use or suffer the same to be used for purposes other than those provided for by this Agreement, such rent per month shall be payable by the Contractors for each of the buildings used as refresh ment rooms as may from time to time be determined by the administration.
The Contractors shall in addition pay the actual cost of current consumed in each Refreshment Room at rates that may be fixed by the Administration from time to time."
This clause, in the opinion of Mr. Hassanain, created at least a right of occupation in the refreshment rooms of the respondents and as such the contract could be interpreted as an irrevocable licence which created a right to property.
Mr. Khondker, on the other hand, has in repelling such a construction, drawn our attention to clause 1 of the Agreement which reads thus:
"The Contractor shall carry on the work of Catering for the period of three years from the date aforesaid on the terms and conditions mentioned herein . . . . ."
He has argued that the agreement was only for catering and it did not create any right to any property of the respondents.
We fully agree with Mr. Khondker and hold that no right to property was created by this agreement. By the terms and conditions of the said agreement no definite room or buffet car was allowed to the plaintiff. Clause 4 of the agreement, on which Mr. Hassanain relies, only states that the General Manager shall allow the contractors the use of all buildings, premises as may, in the opinion of the said General Manager, be necessary to the contractors in connection with the supply of refreshments on the said Railway, etc. Therefore, no "interest" in any room or railway car was transferred or created in favour of the plaintiff. The accommodation was variable according to the opinion of the General Manager, and the plaintiff cannot say that he had acquired any "interest" to any definite building or property of the respondents. Moreover, the use was only for the purpose of the contract of catering. Clause 5 of the contract clearly established that the contractor would have no right whatsoever in the buildings or premises and "shall not at any time hereafter pull down or remove any such buildings or any part thereof or any fixtures which may at any time be made or put up on the said premises, buildings whether by the contractors or by the General Manager." Thus the contract cannot be held to be an irrevocable licence in the sense that it created a right to property.
Reading the agreement as a whole, we are led to the inevitable conclusion that the agreement created only a contract for catering and did not confer any right to property belonging to the respondents. Catering contract, as is well‑known, is, in essence and substance, a contract for personal service. The Railway being, at least, under a moral obligation to provide for the comfort of its passengers, had, instead of rendering the service themselves; invited contractors to undertake the service on their behalf but strictly under their supervision.
Mr. Hassanain has very rightly conceded that in this suit the plaintiff has not sought to establish a "legal character", which is an expression having a meaning and significance, inapplicable to this case. He has, however, argued that a contractual relationship has been created. This is true enough, but, a short answer to his contention is that the contract itself having created no right to property, the suit for declaration is barred under B section 42 of the Specific Relief Act. In holding this view, we are not unaware of decisions to the effect that section 42 is not exhaustive, but the view that we have taken regarding the contract precludes any other consideration.
The next argument of Mr. Hassanain as to the subsistence of the contract for which he is seeking a declaration is also not maintainable. It is admitted that the contract was revocable by six months' notice by‑either side. On the 20th of September 1961, by Exh. 2 respondent No. 1 gave such a notice. Although they were not bound to do so, yet respondent No. 1 had given some reasons for the notice which would have entitled them to give a notice for a shorter period of three months under clause 17 (a) of the agreement. The said notice was to expire on the 20th of March 1962. The validity of the said notice has not been seriously challenged before us. It is evident that the period of six months specified in the notice, dated September 21 1961, ended on the expiry of March 20, 1962. The reasons given in the said notice were said to be baseless. But we find that the plaintiff cannot raise that objection as the six months' notice, according to clause 2 of the contract, was to be a notice at will. Before the expiry of the period of the said notice, a telegram, Exh. 3‑A, was sent on the 19th of March 1962, to the plaintiff extending the contract by another six months from the 21st of March 1962, "on the terms and conditions of the existing contract". Mr. Hassanain has argued that during the extended period no further notice was given to which he was entitled and that in the absence of such notice, his contract still subsists. We are unable to accept this contention. The extension of the contract or the creation of a new contract from the 21st of March 1962, whichever way one may view it, was only for the limited period of six months and it came to an end on the expiry of six months and the reference to the existing terms and conditions must, of necessity, be held to mean that during the extended period the terms of the original contract would continue to apply. Whatever those terms might have been, the entire contract came to an end on the expiration of the six months. The "extended" contract or the creation of a "new contract", as stated above, was born with a limited and fixed life of six months. Therefore, like a "time‑bomb" it exploded on the expiry of the fixed term, namely, six months. On such expiry the entire contract, including its relevant terms, came to an end. Only the post‑termination conditions might continue to remain in operation.
Mr. Hassanain then fell back on clause 21 of the agreement in order to submit that mere termination of the agreement, by lapse of time or by notice, would not rescind the contract, as there was a further obligation on the part of the Railway Administration to give notice after the termination of the contract, to the plaintiff, that either the respondent No. 1 would take over all or any part of the furniture, equipments or tools of the contractor at a valuation or that the plaintiff should remove the same and would be afforded free transport for the purpose. The said clause 21 reads as follows:
"On the determination of this Agreement, the Governor -General may take over all or any part of the furniture and equipment and stores provided by the Contractors as aforesaid at a valuation mutually agreed upon. In the event of the Governor‑General not being desirous of taking over any part of the said equipment and stores, the Contractors shall forthwith at the determination of the agreement remove the same, and the same shall in such event be carried free to any station of the Eastern Bengal Railway required by the Contractors and the Contractors shall deliver up possession peacefully and quickly of the buildings and premises in their occupation under the terms of this agreement."
A careful reading of the said clause only establishes that respondent No. 1 would have the option either to take over the equipment or to provide free transport to the plaintiff for taking away the said equipment. On expiry of the notice on the 20th of March 1962, the only outstanding question was whether the respondent No. 1 would exercise their option. We have failed to find in the said clause 21 any indication that even after the termination of the contract the plaintiff would continue to be on the premises as if the contract was subsisting with all its terms and conditions. Clause 21 is, as noticed above, a post-termination clause which purports to come into operation after the determination of the contract. It is, what may be called a "post‑mortem" requirement, designed to meet situations which may arise when the contract comes to an end. It cannot be used to resurrect a dead contract. Therefore, on merits, also we have no hesitation in holding that the contention of the plaintiff, namely, that his contract still subsists, is not maintainable. On this ground also his suit fails.
Coming to the second branch of the argument regarding the maintainability of the prayer for injunction, it has been Strenuously argued by Mr. Khondker that even if a suit for declaration could be maintained, the prayer for injunction was not maintainable, It is his contention that the suit as framed was really a suit for injunction simplicitor. He has argued that the prayer for injunction is barred by section 56 (f) of the Specific Relief Act as the agreement amounted to a revocable licence. A revocable licence being incapable of specific per formance, it has been contended that no injunction could be granted to enforce such a licence.
In this connection, he has drawn our attention to section 21 (d) of the Specific Relief Act. Placing clause 2 of the contract, he has argued that the contract was revocable.
The transaction amounted to a lease or a licence, and, it cannot be gainsaid that the transaction was not a lease. Mr. Hassanain has argued that the transaction represented a licence coupled with a grant and, as such, it became an irrevocable licence. He has submitted that, in the aforesaid circumstances, he could pray for injunction. He has based his argument on the observations of Das, C. J., in the case of Dominion of India v. R. B. Sohan Lal (A I R 1950 East Pb. 40). He has referred to the passage in which the learned Chief Justice quoted a passage from the case of Hurst v. Picture Theatres Limited (1915 1 K B 1) in the following terms:
"Although many of the cases decided by the Chancery Courts prior to the Judicature Act as pointed out by Phillimore, L. J. in the last‑mentioned case, related to an interest given in land, that very case shows that in order to make the licence irrevocable, the grant need not necessarily amount to a transfer of an interest in the land itself and that a licence to enter ‑upon the grantor's close coupled with an interest, e.g., the right to take away the hawk or the deer or the fish killed or the stone of other mineral found or to enjoy any other privilege will also make the licence irrevocable. Thus, the licence to come upon the grantor's premises coupled with the right acquired for consideration to witness a performance there is equally irrevocable although there is no transfer of any interest in the premises or even to any particular seat."
In the present case Mr. Hassanain sought to argue that the plaintiff was entitled to claim the same right, that is, the right of an irrevocable licence, but he conceded that the licence was only for the purpose of catering and that no definite "interest" was created in any land or property as such, in accordance with the legal significance of the term "interest" in such a context.
He had to concede, furthermore, that the aforesaid observation was not applicable to the facts of this case. Before the learned Single Judge, in this Court, however, another portion of the same judgment was placed and we quote the same hereunder:
"According to the principles enunciated in Hurst v. Picture Theatres Ltd. (1915 1 K B 1 and 83 L J K B 1837), the Articles of Agreement before us does constitute a licence coupled with an interest and, therefore, is prima facie irrevocable.
The facts that the licence is for a term of 5 years certain, that it was granted for valuable consideration and that it contemplated even assignment of the licensee's rights under certain conditions and that it was provided that the licensee would peaceably enjoy the grant for the full term if it performed its obligations (clause 22) certainly tend to reinforce the prima facie conclusion that the licence was intended to be irrevocable."
But the learned Chief Justice himself proceeded to say, in respect of the case before him, that the General Manager was authorised, on certain contingencies, to revoke the licence which was, therefore, revocable. In the case before us, the revocability did not depend upon any contingency but was available to either party on giving a notice of six months.
Apart from what has been stated above, we wish to emphasise that, so far as we are concerned, this question, namely, whether a licence is revocable or irrevocable, is governed by the provisions of the Easements Act which is now applicable to the whole of Pakistan, including East Pakistan, inasmuch as the restriction as to the local extent of its operation, as imposed by section 1 of the said Act, has been omitted by the Governor‑General's Order No. 4 of 1949. Section 60 of the Easements Act reads' thus
"60. A licence may be revoked by the grantor, unless‑
(a) it is coupled with a transfer of property and such transfer is in force;
(b) the licensee, acting upon the licence, has executed a work of a permanent character and incurred expenses in the execution."
In the present case the licence is not coupled with "a transfer of property", nor can it be said that the licensee has executed "a work of a permanent character". We, therefore, hold that the contract envisages a revocable licence within the l meaning of section 60 of the Easements Act and that a revocable licence cannot be specifically enforced. This being so, no injunction can be granted in this case. See sections 21 (d) and 56 (f) of the Specific Relief Act.
We may add that a catering contract, like the one under our consideration, is so dependent on the personal qualification of the contractor as to partake the nature of a "personal service". Such a contract cannot be specifically enforced by an injunction. An injunction would tantamount to enforcing, in an indirect manner, a contract which cannot be specifically enforced.
Furthermore, such a contract involves the health and well- being of members of the public who constitute railway passengers. An injunction, which is an equitable relief, will not be; granted, in this case, in the interest of public health. The Courts will refuse to grant a discretionary relief in such a context.
This brings us to the point made by Mr. Hassanain that this case involves the ouster of a Railway Servant from a premises which was occupied by him without observing the formalities of law which are required to be observed in effecting such ouster. He has referred to the case of S. L. Kapoor v. Emperor (A I R 1937 Lah. 547), which, in our opinion, has no manner of application to the facts of the case before us. In that case the petitioner, S. L. Kapoor, a railway contractor, was in occupation of certain premises which formed a part of the Delhi Junction Railway Station under an agreement, which having expired, the Railway Authorities had given notice to him to vacate the premises. But, as he did not do so, a criminal case was started under section 138 of the Railways Act before the Additional District Magistrate, Delhi. The terms of the agreement were interpreted by Blacker, J., to have given the petitioner, Kapoor, the status of a Railway Servant within the meaning of section 138 of the Railways Act. It was not held that he had become a Railway Servant for all purposes. He was merely deemed to be such a servant, for a special purpose, within the mischief of section 138. One cannot read into the aforesaid decision anything more than what has been stated above. It is one thing to say that the petitioner, Kapoor, was a "railway servant" within the meaning of section 138 and another thing to hold that he was a "railway servant" in the sense in which that expression is understood in terms of "railway service".
It is not open to Mr. Hassanain to claim for his client the status and privileges of a railway servant. If one engages a carpenter to repair one's furniture, the latter cannot be held to have become one's servant so as to entitle him to the privileges of a servant. We hold that there is also no substance in this argument that was advanced on behalf of the plaintiff-appellant.
This disposes of all the points which have been mooted before us.
The result, therefore, is, that this appeal is dismissed with costs in this Court as also in all the Courts below. The connected Rule is also, for the same reasons, discharged without any order as to costs of the said application.
---‑I agree.
K. B. A. Appeal dismissed.
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