Krishna Kishore Firm Vs. Govt. of. A.P.
& Ors  INSC 300 (21 September 1990)
R.M. (J) Sahai, R.M. (J) Shetty, K.J. (J)
1990 AIR 2292 1990 SCR Supl. (2) 8 1991 SCC (1) 184 JT 1990 (4) 241 1990 SCALE
Cinemas (Regulation) Act, 1955/A.P. Cinemas (Regu- lation) Rules, 1970: Rule
11--Licensee applicant in physical control of cinema site--Acquiring interest
to hold by virtue of agreement of sale-- Possession--Nature of--Whether law- ful--Application
for renewal of license -- Whether maintain- able.
and Phrases: 'Lawful', 'legal' and litigious'--Conno- tation of.
11 of the A.P. Cinema (Regulation) Rules, 1970 flamed under the A.P. Cinemas
(Regulation) Act, 1955, as it stood at the relevant time, required a licensee
either for grant or renewal of license to file evidence of his lawful
possession of the site.
appellant-firm had been running a cinema since 1950 on a piece of land leased
by the then zamindar. The said lease was to expire on March 31, 1976. In the meantime the ownership of
the land changed hands. In 1975, when the appellant sought renewal of the
license the estate partner- ship, consisting of father, son and grandson
objected on the ground that it did not intend to renew the lease. However, on March 24, 1976 one of the co-lessors, the father,
entered into an agreement of sale with the appellant to sell his entire share
which was one-half for a consideration. He also executed lease of the remaining
half the next day in favour of the appellant as the managing partner of the
estate. and withdrew the objection filed before the licensing authority
question arose about the nature of appellant's posses- sion. The High Court
found that the co-lessor could not lease out the property on his behalf as the
partnership deed did not invest him with such an authority, and that the
agreement of sale was ineffective to make him the owner.
the possession of appellant was not lawful as last was neither a lessee nor an
the appeal, the Court, 9
1. When a person having physical control acquires an interest to hold or
continue by virtue of an agreement of sale it cannot be said that he had no
interest and his possession was forbidden by law. In the instant case, by
virtue of the transaction entered between the co-lessor and the appellant which
was not challenged by him nor any cloud was cast over it by creating any
subsequent interest the appellant may not have become owner but could certainly
claim lawful possession. In law last was entitled to file suit for specific
performance if there was any threat to its right or interest by the co-lessor.
Such right or interest could not be termed as litigious. [13A-C]
lessee may before expiry of lease acquire entire lessor's interest resulting in
drowning or sinking of infe- rior right into superior right. That is right of
one merges into another. It has been statutorily recognised by s. III(d) of the
Transfer of Property Act. Similarly, a tenant after expiry of period of lease
may be holding over and the lessor may acquiesce in his continuance expressly
or im- pliedly. That is from conduct of lessor the tenant's posses- sion may
stand converted into lawful. But where the lessor does not agree to renew the
lease nor he acquiesce in his continuance a lessee cannot claim any right or
interest. His possession is neither legal nor lawful. In the instant case, the
appellant had acquired some interest in part of the undivided property by
virtue of the agreement. It may not be a lessee, but its possession was not
without any excuse or forbidden by law. [12D-G] 3. The High Court erred in
equating lawful with legal.
is legal is lawful. But what is lawful may be so with- out being formally
legal. That which is not stricto legalo may yet be lawful. It should not be
forbidden by law. Al- though provision in Specific Relief Act empowering a
person or tenant to recover possession if he has been evicted forcibly by the
landlord, may be juridical and not lawful or a tenant holding over is not in
lawful possession unless landlord agrees or acquiesces expressly or impliedly
but that does not alter the legal position about possession of a person not
legal yet not without interest. The provision in Specific Relief Act is rounded
more on public policy than on jurisprudence. [11G; 12A-C]
licensing authority is directed to consider renewal of license in accordance
with law treating licensee to be in lawful possession. [13F] M.C. Chockalingam
v. M. Manichavasagam,  2 SCR 143 distinguished.
APPELLATE JURISDICTION: Civil Appeal No. 2674 of 1977.
the Judgment and Order dated 19.8.1977 of the Andhra Pradesh High Court in Writ
Appeal No. 527 of 1976.
Parasaran, Mr. A.D.N. Rao and A. Subba Rao for the Appellants.
T.S. Krishnamurthy Iyer, G. Prabhakar, A.T.M. Sampath and P.N. Ramalingam for
Judgment of the Court was delivered by R.M. SAHAI, J. Whether possession of a
lessee who ac- quires interest of one of the co-lessors, before expiration of
period of lease, is litigious or lawful? Litigious and lawful possession are
concepts of varying legal shades deriving their colour from the setting in
which they emerge. Epithet used itself indicates the field in which they operate.
The one pertains to dispute in which possession may be conterminous with
physical or de facto control, only, whereas the domain of other is control with
some legal basis. The former may be uncertain in character and may even be
without any basis or interest but the latter is rounded on some rule, sanction
or excuse. Dictionarily 'litigious' means "disputed" Concise Oxford
Dictionary or "disputable" Concise Oxford Dictionary" or
"marked by inten- tion to quarrel" Webster Third New International
Dictionary, "inviting controversy" Webster Third New International
Dictionary, "relating to or marked by litigation" Webster Third New
International Dictionary, "that which is the subject of law suit".
Black's Law Dictionary. Lawful on the other hand is defined as, "legal,
warranted or authorised by the law." Black's Law Dictionary.
Jurisprudentially a person in physical control or de facto possession may have
an interest but no right to continue whereas a person in pos- session, de jure,
actually or constructively has the right to use, enjoy, destroy or alienate
property. "Rights are interest protected or recognised by law. But every
interest may not be so. Its violation may not be wrong. Many interest exist de
facto and not de jure; they receive no recognition or protection from any rule
or right". Solmond on jurispru- dence.
this brief preface it may now be determined if posses- sion of 11 appellant who
had entered into an agreement of sale with one of co-lessors of his interest,
and has been found by High Court to have entered into his shoes, was lawful for
pur- poses of rule 11 framed under Andhra Pradesh Cinemas (Regu- lation) Act
1955 which required a licensee either for grant or renewal of license to file
all necessary record or' certified copies with the application, "relating
to his lawful possession thereof", if he was not the owner. That the
appellant has been running cinema not as owner but after obtaining lease in
1950 of 2038 2/3 sq. yds. out of 7000 sq. yds. from the then Zamindar is not in
dispute. Nor it is in dispute that ownership of land changed twice since then
and the last purchaser in July 1974 were one V. Venkatarathnam (in brief V.V.
since deceased) his son and grandson who formed a private partnership V.V.
Estates in September 1975 and objected to renewal of appellant's license in
December 1975 as the Estate did not intend to renew the lease in favour of
appellant which was to expire on 31st March 1976.
problem arose when on 24th March V.V. entered into an agreement of sale with appellant
to sell his entire share which was one-half for consideration of Rs. 14,000
cash and partnership of 1/8th in appellants' cinema business. He further
executed lease of remaining half on next day in favour of appellant as managing
partner of the Estate and withdrew the objection, filed before licensing
authority for renewal of appellant's license, unconditionally. Dispute however
arose as V.V.'s son on his behalf and on behalf of his nephew refuted authority
of his father to grant lease as he had already withdrawn his authority to act
on their behalf on 22nd March. Therefore the question arose about nature of
appellant's possession. The High Court found that even though it was not open
to the son to remove his father from position of managing partner yet V.V.
could not lease out the property on his behalf as the partnership deed did not
invest him with such authority. And so far the agreement of sale was concerned
it was ineffective to make him owner.
the possession of appellant was not lawful as he was neither lessee nor owner.
the appellant was neither owner nor lessee. Yet was his possession forbidden in
law? Was there no excuse for his possession? The error committed by High Court
was to equate lawful with legal. Legal and lawful, normally, convey same sense
and are usually interchangeable. What is legal is lawful. But what is lawful
may be so without being formally legal. "The principle distinction between
the terms 'lawful' and 'legal' is that former contemplates the substance of
law, the latter the form of law. To say of an act that it is lawful implies
that it is authorised, Sanctioned or at any rate not forbidden by law".
Black's Law Dictionary. Same thought about lawful has been brought out by
Pollock and Wright by explaining that "Lawful Possession" means a
legal possession which is also rightful or at least excusable. Pollock and
Wright Possession in the Common Law. Thus that which is not stricto legalo may
yet be lawful. It should not be forbidden by law. In fact legal is associated
with provisions in the Act, rules etc. whereas lawful visualises all that is
not illegal against law or even permissible. Lawful is wider in connotation
provision in specific Relief Act empowering a person or tenant to recover
possession if he has been evict- ed forcibly by the Landlord, may be juridical
and not lawful or a tenant holding over is not in lawful possession unless
landlord agrees or acquiesces expressly or impliedly but that does not alter
the legal position about possession of a person not legal yet not without
interest. The provision in specific Relief Act is rounded more on public policy
than on jurisprudence. But concept of lawful as opposed or in con- tradistinction
to litigious assumes different dimension.
v. M. Manichavasagam,  2 SCR 143 is of no help as it was concerned with
possession which could not be said to be warranted or authorised by law. Distinc-
tion between nature of possession of a lessee after expiry of period of lease
can better be explained by resorting to few illustrations. For instance a
lessee may before expiry of lease acquire entire lessor's interest resulting in
"drowning" or "sinking" of inferior right into superior
right. That is right of one merges into another. It has been statutorily recognised
by Section 111(d) of Transfer of Property Act. Similarly a tenant after expiry
of period of lease may be holding over and the lessor may acquiesce in his
continuance expressly or impliedly. That is from conduct of lessor the tenant's
possession may stand converted into lawful. The other may be where lessor may
not agree to renew the lease nor he may acquiesce in his continuance. Such a
lessee cannot claim any right or interest. His possession is neither legal nor
lawful. Such was the Chockalingam's case (supra). The Court held that
continuance of lessee's posses- sion after expiry of period of lease was not
lawful for purposes of renewal of licence under Madras Cinema Regula- tion Act
1955 obviously because lessee was left with no interest which could furnish any
excuse or give it even colour of being legal.
another illustration may be, not very common where, lessee acquires some
interest in part of the undivided property as in present case. Can it be said
in such a case on ratio of Chockalingam's authority that possession of such
lessee or to be more specific of appellant was unwarranted or contrary to law:
Share of V.V. in 7,000 sq. yds. was half. He had agreed to sell his half
interest. V.V. was joint owner with his son and grandson. He had "both
single possession and a single 13 joint right to possess" Pollock and
Wright. Whether such joint owner could transfer his share even when he was not
in exclusive possession and what would be effect of such trans- fer need not be
gone into as title suit is pending between parties but when a person having
physical control acquires an interest to hold or continue by virtue of an
agreement of sale it cannot be said that he had no interest and his possession
was forbidden by law. The High Court lost sight of the fact that by virtue of
the transaction entered be- tween V.V. and appellant which was not challenged
by him nor any cloud was cast over it by creating any subsequent inter- est the
appellant may not have become owner but he could certainly claim that he was in
lawful possession. In law he was entitled to file suit for specific performance
if there was any threat to his right or interest by V.V. Such right or interest
could not be termed as litigious. It was at least not without any excuse or
forbidden by law. In words and Phrases Permanent Edition Vol. 25A, 2nd reprint
1976 a somewhat similar situation was described as not litigious:
client conveyed undivided half-interest in land to attorney in consideration of
attorney's rendering services and paying court costs, giving irrevocable power
of attorney to sue, settle, or compromise, attorney received good title as
third person purchasing upon faith of public records, precluding reformation as
against attorney, on the strength of an instrument recorded after deed to
attorney and client claimed title, as against contention that attorney acquired
a "litigious right".
reasons stated above this appeal succeeds and is allowed. The order of High
Court and the licensing authority are set aside. The licensing authority is
further directed to consider renewal of license of the cinema in accordance
with law treating licensee to be in lawful possession.
suit has been filed between parties in respect of title it is clarified that
any observation made above shall not be treated as binding or deciding right of
parties except to the limited extent that appellant shall be treated to be in
lawful possession for renewal of license subject to final adjudication in suit,
which shall now proceed as, probably, the proceedings had been stayed. It shall
be disposed of expeditiously.
appellant shall be entitled to its costs in this Court and High Court.