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First Appeal No. 71 of 1964 and Civil Rule No. 34(5) of 1964, decided on 12th May 1964.
, S. 60‑Licence‑Bare licence and licence coupled with grant or interest‑Incidents of two‑Bare licence, without anything, more, always revocable at will and pleasure of licensor‑Revocation of bare licence not affected by fact that licence had been given for valuable consideration‑Licence prima facie irrevocable, may, neverthe less, be revocable if parties had, expressly or by implication, agreed that licence shall be revocable‑Breach or threatened breach of licence‑Remedy, in case of revocable licence, lies in damages and not by way of injunction‑Both remedies open in case of irrevocable licence‑Specific Relief Act (I of 1877), Ss. S, 21 & 52.
A licence may be of two kinds, namely, a bare licence which is purely a matter of personal privilege and a licence coupled with a grant or interest. A bare licence without more is always revocable at‑ will and pleasure of the licensor. The power of revoking a bare licence is not affected by the fact that the licence had been given for valuable consideration. On the other hand, if a licence is coupled with a grant or interest then the grantor cannot in general revoke it so as to defeat the grant to which it is incident.
A licence is revocable unless it is coupled with a grant or interest or the licensee acting upon the licence has spent money in executing works of a permanent nature.
Where a licence is prima facie irrevocable either because it is coupled with a grant or interest or because the licensee had erected works of a permanent nature, there is nothing to prevent the parties from agreeing expressly or by necessary implication that the licence nevertheless shall be revocable.
There is, on the same reasoning, nothing to prevent the parties from agreeing expressly or impliedly that a licence which is prima facie revocable being not within either of the categories of irrevocable licence should nevertheless be irrevocable.
Where a licence is revocable, the licensee is entitled to reasonable notice. If, however, the licence is revoked without such notice, the remedy is by way of damages and not by way of injunction.
Where, however, the licence is irrevocable and its enjoyment is obstructed by the licensor, the remedy of the licensee is either by way of injunction or in damages.
Where, therefore, a person entered into agreement with the Railway and acquired a revocable contract to carry on the works of catering and the Railway had allowed the use of the Railway premises merely for enabling him to fulfil his contract for catering which was subsequently terminated:
Held, the right of user of the Railway premises had no existence by itself independently of the contract of catering. There was no transfer of property; there was no lease. There was not even a licence coupled with interest. The contractor had no interest in the licence to use the premises except that of fulfilling the contract. He could not say that he had an interest of cooking and catering although the contract of catering was terminated and at an end. If the main contract of catering of which the user of the premises was only an incident, fell, there was nothing left to the contractor. There was thus .no irrevocability in the licence and, therefore, there was no case for injunction for the purpose of restraining the Railway from evicting the contractor.
Dominion of India v. R. B. Sohan Lal A I R 1950 E P . 40; Hurst v. Picture Theatres Limited (1915) 1 K B 1 and Muhammad Ziaul Haque v. Standard Vacuum Oil Company 55 C W N 232 ref.
Mazahar Hassanain, S. M. Abbas and Md. Ants for Appellant.
M. H. Khandakar with Shahabuddir Ahmed for F. A. Mannan for Respondents Nos. 1 and 3.
Nurullah for Syed Ishtiaq Ahmed for Respondents Nos. 4, 6 and 8,
This Second Appeal is directed against the decision of Mr. M. Ahmed, Subordinate Judge, Dacca, setting aside the judgment and decree of the Munsiff, 1st Court, Dacca.
The appellant instituted the suit for a declaration that the agreement between the plaintiff and the defendant‑respondents for catering in the upper class refreshment rooms of different stations of the P. E. Railway and buffet cars still subsisted and for injunction restraining the defendants from interfering with the plaintiffs' right of catering in terms of agreement.
Plaintiff's case was that he was the proprietor of the M/s. Gulistan Restaurant and Bar at Gulistan Building, Dacca, and that by virtue of an agreement dated 12‑l2‑53 with the said Railway, the plaintiff acquired a contract to carry on the works of catering for a period of three years on the terms and conditions mentioned in the agreement and that was still in, force. The plaintiff paid the licence fee from year to year and carried out the catering business in terms of agreement to the satisfaction of all concerned at Chittagong and other stations of the Railway and also in the buffet cars running between Dacca‑Chittagong, Mymensingh‑Chittagong and Chittagong‑Sylhet. The plaintiff had to invest a huge amount of money in connection with his contract and a large amount still remained to be realised.
In terms of clause 2 of the agreement, the agreement was to continue in force for three years from 18th December 1953 and be terminable on 17th December 1956 on not less than six months previous notice by either party and after the expiry of the first three years, the agreement was to continue in force subject to termination at any time in any subsequent year on not less than six months notice in writing by either party. The defendant No. 1, Chairman of the Pakistan Eastern Railway Board, by his letter dated 20‑9‑61 intimated to the plaintiff‑appellant that his contract of catering will 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 whatever might have been the purport of the notice, it was ultimately waived by Exh. 3 (a) telegram dated 19‑3‑62 extending the contract by another six months from the 21st March 1962, on the terms and conditions of the existing contract":
The allegations as to the unsatisfactory service as made in this letter, were false, which the plaintiff categorically denied in his letter dated 10‑10‑61; but nevertheless, plaintiff effected further improvement in the quality of service and provision. After this, no other notice was served on the plaintiff terminating the contract and the plaintiff carried on the catering business without any interference. But the defendant‑respondents by their letter dated 6‑12‑62 asked the plaintiff to make over the charge of all upper class refreshment rooms and buffet cars run by the plaintiff appellant by 31‑12‑62 to the individuals authorised in the said letter, who were alleged to have been appointed by the Railway Adminis tration and then on 24‑12‑62 issued another notice under the caption "Notice of termination of catering and contract" giving a list of firms and individuals who were defendants Nos. 3‑7 and directed the plaintiff‑appellant to hand over the charge of the refreshment rooms and buffet cars of different stations and trains to the firms and individuals mentioned in the list. The appellant by letter made several representations to the respondents to vacate their order and finally sent a letter through their lawyer on 28‑12‑62 praying for one month's time and requesting to maintain status quo but this was turned down on 31‑12‑62 and by a telegram of that date the appellant was directed to hand over the restaurant and buffet cars to defendants Nos. 3‑7 in course of the same day. The appellant'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 defendant No. 1 and defendant No. 1(a) contending, inter alia, that the suit was not maintainable ; that the prayer for injunction was barred by estoppel, waiver and acquiescence acid the alleged‑loss of the plaintiff was capable of assessment and adequate compensation by money ; that the defendant No. 1 as well as the plaintiff had absolutely an unfettered right to terminate the contract with six months' notice in writing and the defendant had no duty to put forward any excuse or ground to terminate the contract in terms of clause 2 of the agreement and that the notice dated 20‑9‑61 was a valid and effective notice and the same, was never waived. It was further contended that the catering service of the appellant had been ' never satisfactory and volume of complaints were received in relation thereto from different quarters ; but the appellant failed to improve in spite of the repeated warnings and reminder. So, the defendants were obliged to terminate the contract under the provisions of clause 2 of the agreement serving written notice dated 20‑9‑61, allowing six months' time. That it was true that the plaintiff sent a representation on 10‑10-61 ; but the defendants by their letter dated 21‑12‑61 informed the appellant that the order of termination shall stand. At the same time, the defendants also invited applications for issuing fresh contract for catering service by newspaper advertisements and the appellant along with others submitted applications in response thereto. The authorities also considered the appellant's case and allotted some of the catering contract to the appellant. The appellant made a fresh deposit bf Rs. 500 as earnest money along with the application and after allotment requested the defendants to accept the licence fee by adjustment out of his previous deposit. The appellant thus 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 learned Munsiff held that the appellant was entitled to have a declaration and injunction as prayed for.
On appeal by the Railway, the learned Subordinate Judge allowed the same holding that the appellant was not entitled to any declaration or injunction, as prayed for. Hence this appeal by the plaintiff.
Mr. Mazahar Hassanain for the appellant has urged grounds Nos. 2, 3, 4, 5, 14 and 15 of the Memo. of Appeal which are as under :‑
"2. For that the learned Subordinate Judge has erred in holding that the relief for declaration sought, is outside the scope of section 42 of the Specific Relief Act and that the relief for injunction is not maintainable and is hit by the provision of Specific Relief Act. The learned Subordinate Judge should have held that the suit was maintainable and should have dismissed the appeal with costs to the appellant.
(3) For that .the learned Subordinate Judge has erred in holding that the contract (Exh. 1) in question is a licence and is revocable. The learned Subordinate Judge should have held that the contract Exh. 1 was irrevocable and it could not be terminated without a legal and valid notice as provided under the contract Exh. 1.
(4) For that the learned Subordinate Judge has erred in making out a new case for the defendants Nos. 1 and 1 (a) that the contract in question was a revocable licence and was revoked by letter dated 6‑12‑1962 and that the telegram dated 19‑3‑62 was a fresh notice which has never been the case of the defendant‑appellant in written statement.
(5) For that the learned Subordinate Judge has committed error of record in holding that the learned Munsif has found the agreement as a licence and is not correct in saying that the respondent's Advocate also conceded that the right of use and occupation of the Refreshment rooms and buffet cars was only ancillary to contract of catering and not lease hold right of these things. The learned Munsiff held that the plaintiff acquired under the agreement a licence or grant to carry on the catering business at the Station. Submission was made on behalf of the plaintiff that whatever right he acquired under the agreement, the plaintiff was entitled to use and enjoy the refreshment rooms and buffet cars as of right till such time his agreement was not cancelled or terminated by a valid and legal notice Viand he continued paying rent to the Railway Administra tion for such use and occupation and that the defendants were under obligation not to interfere with the catering and right of possession without lawful and valid termination of the agreement Exh. 1.
(14) For that the learned Subordinate Judge has misread and misconstrued the telegram Exh. 3 and has erred in relying on the same as a fresh notice in terms of clause 2 of the agreement Exh. 1. It has never been relied as such by the contesting defendants 1 and 1 (a) and it could not be used and treated as fresh notice and it has not terminated the agreement Exh. 1.
(15) For that the learned Subordinate Judge has erred in making out entirely a new case that the letter dated 6‑12‑62 Exh. 4 and the telegram dated 21‑12‑62 Exh. 3(b) operated as the repudiation and revocation of the agreement Exh. 1 and that in spite of the breach of the provision of clause 2 of the agreement Exh. 1, the contract did not subsist and it stood withdrawn which was neither the case of the defendants 1 and 1 (a) in the written statement nor argued on their behalf in the Courts below."
It appears prima facie that the right of user of the Railway premises in the present case is for enabling the appellant to fulfil his contract of catering with the Railway Administration. It has no existence by itself independently of the contract of catering. There is no transfer of property ; there is no lease. This is not even a licence coupled with interest. The appellant has no interest in the licence to use the premises except that of fulfilling the contract. The appellant cannot say that he has an interest of cooking and catering, although the contract of catering is terminated and at an end. If the main contract of catering of which the user of the premises is only an incident, falls, there is nothing left to the appellant.
It seems that there is thus no irrevocability in the licence and if that position is correct, there is no case for injunction for the purpose of restraining the opposite‑parties from evicting the appellant.
So far as the declaration that the contract subsists and is continuing, the contract seems to be a revocable one, although the method of revocation has been laid down in the agreement itself. The contract is revocable under clause 2, also under clause 17 (a) and also under clause 22 of the agreement, which are as under:‑
"2. That this agreement shall come into force and have effect from the 18th December, 1953 and shall unless determined under any provision hereinafter contained in that behalf remain in force for three years and be terminable on the 17th December, 1956 on not less than 6 (six) months' previous notice in writing by either party to this agreement to the other. If not determined on the 17‑12‑56 this Agreement shall continue in force subject to termination‑at any time in any subsequent year on not less than 6 (six) months' notice in writing being given by either party desiring to revise or cancel it.
17 (a). The Contractors shall pay the maximum penalty of Rs. 50 (Rupees fifty) for each substantiated serious complaint against them. Should complaints be very frequent and the work of the Contractor be found generally unsatisfactory, the General Manager reserves the right to terminate the agreement at any time after service of three months' notice.
(22) The Contractors shall not without the previous sanction of the said General Manager in writing assign, transfer or sublet the benefits of this Agreement or any part thereof to any person or persons. Any breach of those conditions shall entitle the Governor‑General to determine the Agreement forthwith."
As it will appear, clause 2 provides for revocation by either side on six months' notice for which no cause needs be assigned.
Clause 17 (a) which is of penal nature, provides for revocation on three months' notice. Clause 22 provides for revocation forthwith.
Here in the present case the revocation has been stated to be under clause 2, although the opening part of the letter terminating the contract seems to indicate that the termination was of a penal nature in which case notice of three months would be sufficient. The contents of this letter of the 20th September, 1961 are as under:
"Despite issue of repeated warnings and imposition of fines there has been no improvement in catering and service with the result that the Railway Administration has been receiving frequent complaints and thereby earning a bad name.
Please take notice that in terms of para. 2 of the Agreement your contract for running Upper Class Refreshment Rooms and Buffet cars will be deemed to have terminated on completion of six months from the date of issue of this letter. This is without prejudice.
You should clear all railway dues before termination of the above contract.
Please acknowledge receipt."
The deed of agreement states inter alia "Deed of Agreement between the Governor‑General, Pakistan of the one part and Messrs Gulistan (Restaurant Bar hereinafter called the Contractor of the other part."
The other clauses of the deed also refer to the appellant as contractor and not at all as licensee, which is significant.
If the notice of termination is less than six months which perhaps it is, then there is a breach of the terms of the contract as embodied in clause 2. The appellant may seek for damages for pecuniary loss sustained by reason of the irregular and premature revocation.
It is a revocation right or wrong and once there is revocation, one could hardly say that the contract continues. At any rate, the Court will not hold the Railway Administration to the contract so as to force them to continue to receive the services of an unsatisfactory caterer.
The extension given by six months may in a way be treated as a confirmation of the repudiation, although it has been stated that the extension is on the existing terms and conditions.
It could not be argued that an extension by six months would necessitate a notice of six months for its termination.
It would be normal to accept that what existing terms and conditions here implied were that during the extended period also, the other clauses of the contract would continue to apply.
Mr. Hassanian 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.
Numerous decisions have been cited on both sides. Of these decisions, the decision in the case of Dominion of India v. R. B. Sohan Lal (A I R 1950 East Pb. 40), a decision by S. R. Das, C. J. and Soni, J., makes an exhaustive discussion of all the relevant case laws on the subject as cited at the Bar, including that of the case of Hurst v. Picture Theatres Limited ((1915) I K B 1) showing the modern position under the English law. I propose to deal with this decision in detail, the facts being very similar to the present' one and the principles laid therein being based upon a consideration of all the relevant authorities on the subject.
This decision along with one other, namely, Muhammad Ziaul Haque v. Standard Vacuum Oil Company (55CWN232), which referred to and relied on the East Punjab decision, have been relied upon by both sides.
I propose to discuss the East Punjab decision in the light o f the contentions of both‑ sides, on the side of the appellant that the licence is an irrevocable one and thus an injunction could be had and on the side of the opposite‑party defendant‑respondents that the licence and the contract is revocable and as such, it is not a case calling for or fit for injunction for the purpose of preventing the revocation.
In this East Punjab decision it was in substance held:‑----
"Under the English law, a licence may be of two kinds, namely, a bare licence which is purely a matter of personal privilege and a licence coupled with a grant or interest. A bare licence without more is always revocable at the will and the pleasure of the licensor and is not assignable although section 56, Easements Act permits the assignment of a licence to attend a public place of entertainment in the absence of any contrary intention. The power of revoking a bare licence is not affected by the fact that the licence had been given for valuable consideration. Nor does an "exclusive licence" differ in its incidents from an ordinary licence. On the other hand, if a licence is coupled with a grant or interest then the grantor cannot in general revoke it so as to defeat the grant to which it is incident. ‑ Since the Judicature Act, even if the grant be defective in law, e.g. for want of a deed under seal, the licence will still be regarded as irrevocable and relief will be granted by all Courts in England on equitable principles. Further a bare licence becomes irrevocable when the licensee acting upon the licence, executes a work of a permanent character 'and incurs expenses in doing so. The Indian Easements Act incorporated these principles in a somewhat restricted form. In order to be irrevocable under section 60 of that Act, the licence has to be coupled with a transfer of property, whereas under the English eases t is enough if it is coupled with a grant or interest in the nature of profit. The two tests of irrevocability established by the English cases or by the Indian Easements Act will, however, give way to the special agreement, if any, of the parties. Thus although a licence is prima facie irrevocable either because it is coupled with a grant or interest or because the licensee has erected works of a permanent nature, there is nothing to prevent the parties from agreeing expressly or by necessary implication that the licence shall be revocable.
As regards the remedy, even where the licence is revocable the licensee is entitled to a reasonable notice before the licence is revoked. If, however, the licence is revoked without reason able notice, the remedy of the licensee is by way of damages and not by way of an injunction. Even if the licence is obtained for consideration, yet if it is otherwise revocable and is revoked the remedy of the licence is damages. If, however, the licence is irrevocable and its enjoyment is obstructed by the licensor the remedy of the licensee is either by way of injunction or in damages. An irrevocable licence for a term implies an undertaking on the part of the licensor not to revoke it during its term and even if the licence be not specifically enforceable for any reason, a threatened breach of the licence may be prevented by enforcing this implied negative covenant by means of an injunction‑a remedy which really gives effect to the irrevocability of the licence."
Certain Articles of Agreement were made between the licensor, the Governor‑ General‑in‑Council acting through the North Western Railway Administration and the licensee whereby the licensor granted to the licensee .who agreed to accept, the sole and exclusive right to sell to the travelling public newspapers, books, periodicals and the usual travellers' requisites and to erect bookstalls for the purpose on station premises under the control of the North‑Western Railway Admi nistration wherever the licensor might consider necessary. The agreement was to remain in force for a period of 5 years renew able at the option of the licensor, for a further period of 5 years on the same terms and conditions. The licence was to terminate on the expiry of 5 years without any formal notice unless it was renewed by the licensor. In consideration of the grant of the licence, the licensee agreed to pay to the licensor yearly a sum of Rs. 36,200 and to deposit a sum of Rs. 10,000 as security for the due and proper fulfilment on his part of the conditions of the agreement. Clause 11 of the agreement provided that if the sum yearly payable or the fresh security or part thereof was not paid by the licensee on the date fixed or if the licensee wilfully committed any breach of the understandings or if his work proved in any way to be unsatisfactory, or if he was found unable to conduct the business as bookstall contractor of which the General Manager be the sole judge, it would be lawful for the licensor to determine the agreement by giving one calendar month's notice to the licensee in writing. Under clause 22 on the licensee paying the yearly lump sum and performing and observing the several conditions stipulated in the agreement, the licensor agreed that the licensee should peaceably hold and enjoy the benefits and rights granted by the licensor. The licensor having determined the contract in terms of clause 11 of the agreement, the licensee instituted a suit for an injunction restraining the licensor from terminating the contract and obtained an interim injunction restraining the licensor from terminating the contract and obtained an interim injunction:
Held, that the agreement created only a licence which, as it did not fall either within clause (a) or clause (b) of section 60, Easements Act, must be regarded, prima facie to be a revocable licence. If clause 22 had stood alone, it could have been held that the parties by their special contract made the licence irrevocable ; but reading clauses 11 and 22 together the position was that the licence was irrevocable if the licensee performed his obligations but if he failed to do so it would be lawful for the licensor to revoke it. In the absence of any charge of fraud or actual misconduct against the General Manager personally, and of any proof on record his decision in determining the contract could not be challenged in any Court; and such being the position, this was not a case where a perpetual injunction could possibly be issued at the hearing and therefore on principle no temporary injunction should have been granted in the case.
Held further that the position would not be any different if the Easements Act did not apply and if the matter had to be governed by the general principles of law."
On the point of specific performance and injunction, it was observed :‑
"Learned counsel for the respondent urges that even if the contract cannot be specifically enforced, as it implies a negative covenant, that negative covenant ought, under section 57, Specific Relief Act, to be enforced by injunction. This argument overlooks the effect of the revocability of the contract. An implied covenant is but a term of the contract and if the contract is revocable, the contract with all its terms, positive and negative, is at an end and there can be no question of enforcing any of its terms by way of a specific performance or by injunction."
These latter observations it is to be noted, were made in spite of the guarantee of sole and exclusive right to sell, which guarantee is not present expressly ir, our present case.
Mr. Mazahar Hassanain has drawn particular attention of the Court to the following lines of this decision :‑---
"According to the principle enunciated in Hurst v. Picture Theatres Ltd. ((1915) 1 K B 1: 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 clauses 11 and 19 to which reference has been made appear to me to completely change the position by providing that, on the happening of certain contingencies of which the General Manager was to be the sole judge, it should be lawful for the licensor to revoke the licence. For the reasons already stated, this makes the licence revocable and the opinion of the General Manager cannot be challenged in any Court in the absence of any charge of fraud or actual misconduct on his part personally as to which there is no iota of evidence on the affidavits. Even on this basis the licence being revocable, the remedy cannot be by way of injunction for, there can be no question of preventing a person from doing what by special contract it is lawful for him to do. It is thus quite clear, whether the Indian Easements Act applies or not, that the Articles of Agreement in suit properly construed constitute only a revocable licence and the revocation thereof cannot be prevented by injunction. What other remedy the licensee may have does not require consideration in this appeal and I express no opinion in that behalf. It is enough, for the purpose of disposing of this appeal, to say that it is not a case for perpetual injunction and consequently no interlocutory injunction should have been made. This aspect of the matter which I have been considering at some length does not appear to have been brought to the notice of Falshaw, J."
It will be noticed that though the feature of the licence being for five years certain and the provision that the licensee would peaceably enjoy the grant for the full term if the obligations were performed, were there in that case, nevertheless, the licence was held to be a revocable one when taken together with clauses 11, 19 and 22 of the agreement thereof which provided :‑
"11. If the half yearly lump sum of Rs. 36,200 or the fresh security or part thereof is not paid by the licensee on the date or within the periods laid down in clause 3, whether the same shall have been legally demanded or not, or if the licensee wilfully commits any breach of the undertakings herein contained, or if his work proves in any way to be unsatisfactory, or if he is found unable to conduct the business as bookstall contractor of which the General Manager shall be the sole judge, it will be lawful for the licensor to determine this argument by giving one calendar month's notice to the licensee in writing of the intention of the licensor to determine this agreement at the expiration of the notice, but without prejudice to any rights of the licensor accruing under this agreement against the licensee or any obligation to return the sum of rupees ten thousand (10,000):
Provided further that in the event of the termination of the agreement in terms of this clause the annual lump sum of Rs.‑ 36,200 deposited by the licensee in advance shall be forfeited by the licensor and the licensee shall not be entitled to the refund of the same or any part thereof.
19. Within one month from the date of the determination of this agreement, under any of the conditions of this agreement, the licensee shall remove all bookstalls together with all ad vertisements thereon or other materials or erections which may have been placed upon the property or premises of the North- Western Railway under the provisions of this agreement without any objection or claim for compensation whatever. In the event of default by the licensee, it shall be lawful for the licensor to remove or cause to remove the said stalls and materials and to sell them by auction and recover any amount due from the licensee under the terms of this agreement from the sale- proceeds, placing the balance, if any, at the credit of the licensee to be paid to them on demand.
22. On the licensee paying the yearly lump sum herein reserved and performing and observing the several conditions stipulated in this agreement the licensor agrees that the licensee shall peaceably hold and enjoy the benefits and rights granted by the licensor."
In our present case the very second clause shows that it was for three years and revocable by both sides on six months' notice without assigning any cause. There is in addition clause 17(a) and clause 22 as mentioned before which make the contract or the licence clearly revocable.
The main feature of irrevocability, namely, five years certain, as in the other case, is not here, nor is there in our present case the express promise of peaceable enjoyment.
The facts of the next case which are very similar to our present case were that on the 8th February, 1946 an agreement was made between the Railway Administration and Rai Sahib M. Gulab Singh & Sons printers, publishers and booksellers. The Railway Administration was called the licensor and Gulab's sons being called the licensee. The licensor granted to the licensee the sole and exclusive right to sell to the travelling public newspapers, books, periodicals and other travellers' requisites and to erect bookstalls for the purpose on station premises under the control of the Railway Administration. The agreement was for a period of five years renewable at the option of the licensor, for a further period of five years on the same terms and conditions and the licensee was to terminate on the expiry of five years without any formal notice unless it was renewed by the licensor. As consideration for the licence, the licensee agreed to pay to the licensor an advance each year and‑to deposit a sum of Rs. 10,000 as security for the due and proper fulfilment of the condition of the agreement.
Pursuant to this licence, the licensee set up bookstalls in different Railway stations and the licensee also laid out considerable capital.
It was alleged that between April 1947 and September 1948 the Railway Administration received several complaints against the licensee from the public, high railway officials and even from some member of the Railway Board and gave numerous warnings to the licensee. The licensee contended that these complaints were not well‑founded and that the Railway Administration must have considered the explanations of the licensee sufficient, for the matter was dropped and no further step was taken against the licensee. The Railway Administration, however, contended that no drastic step had been taken on the previous occasions as it intended to give the licence a chance to improve matters but finding that the licensee was paying no heed to the warnings, the Railway issued notice upon him stating that as the latter's work had been unsatisfactory, it was decided to determine the contract in terms of clause 11 of the agreement and notifying that the contract would stand terminated from 31st December, 1948. In reply to a letter of the licensee, the Hon'ble Shri K. Santhanam, the Minister of State for Transport and Railway,, wrote on the 29th October, 1948 stating that the termination of the contract was the result of a decision taken by the Central Advisory Council for Railways: On the 29th October 1948 the licensee through its Advocate served a notice under section 80 of the Code of Civil Procedure on the Dominion of India stating that the allegations in the notice dated the 5th October 1948 were absolutely incorrect and contending that the purported termination of the contract was illegal and mala fide and the contract could not, therefore, be terminated before 30th June, 1951. The notice concluded with the intimation that after the expiration of two months the licensee would institute a suit for an injunction restraining the Railway from terminating the contract and taking any action in pursuance of the alleged termination.
The advocate of the licensee having taken objection that the last mentioned notice under section 80 of the Code of Civil Procedure was not issued by a competent authority, a fresh notice of termination was issued on the 18th November 1948 from the Railway Administration. It was alleged over again that the licensee's work was unsatisfactory and that it was found that the licensee‑was unable to conduct the business, that pursuant to clause 11 of the agreement the Governor‑General gave the licensee final notice of termination of the said agreement.
In the meantime on the 5th November 1948 the licensee submitted an application offering 12 % of the gross sales for the grant of a fresh licence for bookstalls on‑ the Delhi Station for which tenders had been invited by advertisements, a fact which had been relied upon as evidencing the licensee's acquiescence in and acceptance of the termination of the previous agreement.
Our clause 2 only lays down the method of revocation and that does not make the contract or licence an irrevocable one at best it makes it irrevocable except by six months' notice.
There is a world of difference between an irrevocable contract and a contract that can be revoked only in a particular fashion laid down in the agreement itself. As stated before, there is no promise either of peaceable enjoyment in the present case as in the other.
Whatever the observations of S. R. Das, C. J. were, even in the face of the facts of that case which were clearly more deserving of injunction, the learned Judges ultimately vacated the existing injunction order in that case. The circumstances of our, present case are surely not better. Here the appellant is "Contractor" although, whereas in the case cited the stall- vendors were characterised as licensee, although the terms and conditions of terminations in the two cases are more less similar. In that case the stall itself was erected by the licensee while in this present there was no erection of any kind by the contractor.
The case being one of licence in that case and the area being Delhi where the Easements Act applied, it was observed that if the licence was an irrevocable one an injunction might be had. It was also observed incidentally that the position would not be different even if the Easements Act did not apply in a particular area, if the licence was otherwise an irrevocable one.
Our present case is not strictly one of licence but of contract revocable by both sides.
The Railway Administration only extended to the appellant the right to carry on business in the station premises; but there was no transfer of property in the sense that any interest in the station premises had been transferred thereby, nor is it the case that the appellant has done any work of permanent character.
The decision in the case of Muhammad Ziaul Haque v. Standard Vacuum Oil Company, as 53 C W N 232 does not call for elaborate treatment inasmuch as it accepted the principles laid down in the East Punjab decision.
Suffice to state that it was held therein following the East Punjab decision that a licence is revocable unless it is coupled with a grant or interest or the licensee acting upon the licence has spent money in executing works of a permanent nature.
Where a licence is prima facie irrevocable either because it is coupled with a grant or interest or because the licensee had erected works of a permanent nature, there is nothing to prevent the parties from agreeing expressly or by necessary implication that the licence nevertheless shall be revocable.
I There was, on the same reasoning, nothing to prevent the parties from agreeing expressly or impliedly that a licence which was prima facie revocable being not within either of the categories of irrevocable licence should nevertheless be irrevocable.
Where a licence is, revocable, the licensee is entitled t reasonable notice. If, however, the licence is revoked without such notice, the remedy was by way of damages and not by way of injunction.
Where, however, the licence was irrevocable and its enjoyment was obstructed by the licensor, the remedy of the licensee was either by way of injunction or in damages.
It was also observed in this case that the trend of the decisions of the Calcutta High Court was to the effect that even in the case of revocation of an irrevocable licence, the only remedy was by way of damages.
The case resulted in the interim injunction being dissolved. I think that these two decisions are decisive in the facts and circumstances of our present case.
The appeal is, therefore, dismissed. In the circumstances of the case, however, there will be no order as to costs.
The connected Rule stands discharged.
Leave under clause 15 of the Letters Patent, as prayed for, is granted.
K. B. A. Appeal dismissed. .
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