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Trustees of the Bombay Parsi Punchayet (BPP) are trying to browbeat residents of Parsi baugs under their control to "renew” leave and licence agreements which expired years ago. Should the residents sign such "renewal” agreements? No. Here’s why.
Legally, there is a distinction between the terms "new/fresh” agreements and "renewals.” The former is executed when parties first enter into a contract with each other, whereas a renewal contemplates the extension of a contract for a further period. A leave and licence which has expired has become "dead” and cannot be legally renewed.
What is the status of occupants who continue to reside in baugs after their leave and licence agreements have expired? Can they be termed trespassers who can be thrown out at the will of the trustees? Or are they entitled to protection under the Rent Control Act? The answer to this depends on what line of action the parties have taken after the licence period expired.
First, let us consider a situation where the trustees, on expiry of the licence period, have given notice to the resident to vacate and hand over possession of the flat and refused to accept the licence fee thereafter. In such a case, the trustees would be entitled to approach the competent authority for evicting the occupant and could double the licence fee for illegal occupation of the flat.
In the second scenario, no such action has been taken by the trustees. The allottees/occupants have continued to reside in the flat after the licence period has expired and the trustees have continued to accept the licence fee thereafter. The implication of this would be that it is the intent of the licensor (trustees) to create a tenancy but bypass the rent control legislation. The acceptance of the licence fee after expiry of the licence period would act as an estoppel against the licensor (trustees), and hence the trustees would not be entitled to claim that the premises were given on leave and licence after the licence period has expired. The allottee/occupant would, therefore, be deemed tenant and entitled to protection under the Maharashtra Rent Control Act.
In its judgment dated March 22, 2004 in Civil Appeal No. 1548 of 1999 delivered by the Bench of Justices R. C. Lahoti and Dr A. R. Lakshmanan in the case of C. M. Beena and Another (Appellants) versus P. N. Ramachandra Rao (Respondent), the Supreme Court has dealt with a case of a leave and licence agreement being executed to camouflage a tenancy. The apex court came down heavily on licensors/landlords who thus attempt to scuttle the provisions of the rent control legislation. The judgment lays down that regardless of the nomenclature or terminology used, the court would see the true and real intent of the document to determine whether it is a genuine licence agreement or a camouflaged tenancy. If it is found that the leave and licence agreement has been executed merely to bypass the Rent Control Act, the court would consider it a tenancy regardless of the terminology used in the agreement. (This judgment can be accessed on the Supreme Court’s website at:

 http://judis.nic.in/supremecourt/imgst.aspx?filename=20878.)
Since the BPP trustees are aware that they are doing something that is not legal or justified, they adopt the unethical modus operandi of "summoning” residents to the BPP office without giving them any inkling about why they are being called. The residents are made to wait for hours to exhaust them physically and mentally. Then they are called into the committee room where they are overawed at being surrounded by the trustees and other officials who frighten and browbeat them into doing what they are directed to do.
Allottees who have been given flats on leave and licence basis and continue residing in the colonies even after the expiry of their agreements must use the law to their advantage. They must refuse to sign any fresh agreement. Anybody being "summoned” must simply not go to the BPP office so that the trustees do not get an opportunity to pressurize them to execute an agreement which would be heavily loaded in favor of the BPP and against their own interests.

 

 

 

 

Jehangir Gai is a consumer activist who has received the Government of India’s National Youth Award for Consumer Protection. He may be contacted by email at: jehangir.gai.articles@hotmail.com

 

On May 17 Parsiana had written to the BPP chairman Dinshaw Mehta: "At Parsiana’s request consumer activist Jehangir Gai has written an article on the Bombay Parsi Punchayet’s policy regarding renewal of expired leave and license agreements... We felt as this was an important issue, Parsiana should focus on it. We wondered if the BPP would care to explain their stand... so that the readers get a balanced view on the subject.” Until June 14 Parsiana did not receive a clarification from the BPP.