IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION No. 3573 OF 2008 Berger Paints India Ltd. … Petitioners Vs. Steelcrete Pvt. Ltd. & Ors. … Respondents Mr. D. H. Mehta with Mrs. Geeta A. Jain i/b A. A. Jain, for the Petitioners. Ms. Ranjana Parikh i/b Mr. S. M. Shah, for the Respondent No.1. CORAM : A. A. SAYED, J. DATE : JUNE 23, 2008 PC : 1. Heard. Rule. By consent, rule made returnable forthwith and the petition is heard finally. 2. By this petition, petitioners seek to challenge the order dated 31-03-2008 of the Appellate Bench of Small Causes Court at Mumbai, whereby the Appeal of the petitioners against the order dated 4th December 2002 decreeing the suit of the respondent No.1, came to be dismissed and the petitioners were directed to hand over vacant and peaceful possession of the suit premises to the respondent No. 1. 3. The petitioners were the tenants of the respondent No.1 in respect of the suit premises viz: office No.4, on the first floor of Apeejay House, situate at Dinshaw Vachha Road, Mumbai-400 020, admeasuring about 2500 Sq.ft. Under an Indenture of Lease dated 28th December 1956, the suit premises were initially let out to British Paints (India) Ltd. for business purposes, commencing from 1st August 1956 to 31st July, 1961. The said British Paints (India) Ltd. continued to be in possession of the suit premises. In 1983, the name of the company was changed from British Paints (India) Ltd. to Berger Paints India Ltd. i.e. the petitioner herein. 4. On 31st March 2000, the Maharashtra Rent Control Act 1999 came to be enacted, repealing the earlier Rent Act of 1947 and Section 3(1)(b) was introduced whereby the premises which were interalia let to companies having paid up share capital of Rs. One crore or more, were exempted from the provisions of the Rent Act. On or about 16th April 2001 the respondent No. 1 terminated tenancy of the petitioners with effect from 31st May 2001 and called upon the petitioners to vacate and hand over peaceful possession of the suit premises to the respondent No. 1. 5. The respondent No. 1, thereafter, filed a suit in the Court of Small Causes, Mumbai being T.E.& R. suit No. 482/509 of 2001, for possession of the suit premises and mesne profits. The said suit came to be decreed by the Trial Court and the petitioner was directed to vacate the suit premises. The matter was carried in appeal and the appellate Bench Court of Small Causes, was pleased to dismiss the appeal by the impugned order which gave rise to the present petition. 6. The learned counsel for the petitioners at the outset submitted that the provisions of Section 3(1)(b) of the Maharashtra Rent Control Act 1999 (‘the MRC Act’ for short) are unconstitutional and ultra vires and violate Art. 14 of the Constitution of India. He submitted that though this issue about the constitutional validity of this section was decided by the Division Bench of this Court in the case of M/s Crompton Greaves Ltd.vs. State of Mahrarashtra in AIR 2002 Bombay 65, holding that section 3(1)(b) of the said Act was intra-vires, however, according to him, the matter was carried to the Apex Court and the SLP in respect thereof was admitted and pending in the Apex Court. The learned counsel for the petitioners has relied upon the case of Central Bank of India Vs. Vrajlal Kapurchand Gandhi in 2004(1) Bom.C.R.141, wherein the Hon’ble Supreme Court has observed thus - “though a Division Bench of the Bombay High Court has upheld the validity of the provisions of section 3 (1)(b) of the Act, there were several matters which have been admitted by the Apex Court and the validity of the section was being examined by the Apex Court.” Relying upon the aforesaid decision, the Ld. Counsel submitted that since this issue is pending before the Apex Court, no eviction order can be passed against the petitioners. 7. The learned Counsel for the petitioners then contended that the Small Causes Court, Mumbai had no jurisdiction to entertain the suits categorized in section 19 of the Presidency Small Causes Court Act 1882. According to him, after the notice of termination of tenancy, the status of the petitioners was that of trespassers in respect of the suit premises and therefore, under the provisions of section 41 of the Presidency Small Causes Court Act 1882, a suit against the trespasser was not maintainable in Small Causes Court and therefore, Small Causes Court does not have jurisdiction to entertain and try the suit. 8. The learned Counsel then referred to sections 289 to 291 of the Companies Act, 1956 and sought to argue that under section 289 of the Companies Act 1956, it is provided that no resolution shall be deemed to have been duly passed unless the same has been approved by all the directors. He submitted that the suit in the present case has not been properly and validly filed, inasmuch as the circular in respect of the filing of the suit by the respondent No. 1 was issued on 30th August 2001 and the resolution was passed only on 28th September 2001, whereas the suit was filed on 10th September 2001, and therefore, at the relevant time when the suit was filed there was no resolution for the purpose of filing the suit. He therefore, submitted that on this count alone the impugned order is required to be set aside. 9. It is next contended that during the course of evidence, the petitioner had applied to the Court to recall one of the witnesses of the respondent No. 1 i.e. Mr. Lotlikar for further cross-examination. However, the same was rejected by the Trial Court, and therefore, no opportunity was given to the petitioners to cross-examine the said witness. It is submitted that the said witness had placed on record Memorandum and Articles of Association of petitioners and it was necessary to recall the said witness for putting some pertinent questions to him, which was wrongly rejected by the Court. 10. Placing reliance in the case of Dattaram Tukaram Bordekar Vs. Prakash Dattatraya Tiwatane, in 1992 Mh.L.J. 944, wherein the Single Judge of this Court has held that in proceedings for seeking recovery of possession from sub-tenant the applicant must satisfy the Court that he had acted reasonably and fairly, the Ld. Counsel for the petitioners submitted that merely because the petitioners have lost protection under the MRC Act, does not mean that the respondent No.1 can seek eviction of the petitioners at their will and that the respondent No. 1 is required to act reasonably and fairly. He submitted that the courts below have not considered the fact that the respondent No.1 has acted arbitrarily and unreasonably and no sooner the Act came into force, the notice of termination was sought to be sent and there was no justification in terminating the tenancy of the petitioners on the ground that the petitioners had lost protection in the suit premises when the petitioners were occupying the suit premises since 1956. 11. It is further sought to be argued that even after the alleged termination of tenancy, the respondent No. 1 has accepted the rent in respect of the suit premises and therefore a fresh tenancy was deemed to have been created between the parties. It is also contended that no notice of termination as provided under section 106 of the Transfer of Property Act 1882 was received by the petitioners in respect of the suit premises and therefore the suit was not tenable. 12. The Ld. Counsel for petitioners lastly submitted that this court in exercise of its writ jurisdiction can take into consideration the factual aspects of the matter also. The learned counsel has relied upon the decision in the case of Rakesh Kumar Joshi Vs. Narendra Kumar in 2008(1) RCJ 2144(SC), and invited my attention to the portion wherein it is observed by the Apex Court that the High Court should take into consideration the factual aspect of the matter also, when the finding of the appellate court requires a closer scrutiny. He therefore urged that the petition be allowed and the impugned order be set aside. 13. Per contra, the Ld. Counsel for the respondent No.1 has, at the outset pointed out that the issue of validity of Section 3(1)(d) is no longer res- integra. The Ld. Counsel has placed reliance upon the decision of the Apex Court in the case of Saraswat Co-Op. Bank Ltd. Vs. State of Maharashtra in 2006(2)RCR 290, wherein, while dealing with bunch of cases including the case of M/s. Crompton Greaves Ltd. referred by the Ld. Counsel for the petitioners, the Apex Court has upheld that constitutional validity of section 3(1)(b) of the Maharashtra Rent Control Act 1999. The Ld. Counsel for the respondent No. 1 therefore submitted that, it is not open to the petitioners to raise the point of constitutional validity of section 3(1)(b) of the MRC Act. 14. The learned counsel for the respondent No. 1, placing reliance on the decision in the case of Nagin Mansukhlal Vs. Haribhai Manibhai in 1979 Bom.C.R.348, wherein it has been held by a Division Bench of this Court that under the Presidency Small Cause Courts Act, 1882 the Small Causes Courts have exclusive jurisdiction to try suits between the licensor and the licensee, submitted that the contention of the petitioners that the Court of Small Causes have no jurisdiction, ought to be rejected. The Ld. Counsel pointed out that the observations in paragraph 9 of the said decision, wherein the Division Bench observed thus - “the fallacy in this argument lies in this that since the very Act of filing the suit would be a termination of the licence, the suit cannot be said to be a suit between a licensor and licensee between whom such relationship is subsisting. Further to put such a construction upon Section 41 and to confine it only to suits of this one particular class would be to render the section meaningless so far as suits between landlords and tenants for the recovery of possession provided for in the said section are concerned, because under the law a tenancy cannot be determined in the manner in which a licence can be determined where there is no period provided for the licence and the licence is revocable at will. The use of the words “a licensor and licensee” and “a landlord and tenant” in the said section 41 has no such particular significance or effect...” Relying upon the aforesaid decision, the learned counsel for the respondent No.1 submitted that it is the Small Causes Court alone who would have jurisdiction in the matter. 15. Insofar as the contention of the petitioners that the suit was not validly filed inasmuch as there was no proper authority for filing of the suit the resolution in relation to the filing of the suit being not valid, the Ld. Counsel for the respondent No. 1 submitted that Section 289 of the Companies Act, 1956, permits resolutions being passed by circulation and that accordingly the relevant resolution came to be circulated and approved before the filing of the suit and the resolution was also pasted in the minute book which was passed at the next meeting of the Board recording the fact of the resolution having been passed by circulation. The Ld. Counsel for the respondent No. 1 submitted that the contention of the petitioners was therefore not tenable. 16. In answer to the contention of the petitioners that a fresh tenancy was created upon the respondent No. 1 having accepted the rent after termination of tenancy, the Ld. Cousel for the respondent No. 1 relied upon the decision in the case of Sarup Singh Gupta Vs.Jagdish Singh in JT 2006(4) SC 277, wherein the Apex Court held that “mere acceptance of rent cannot amount to waiver of notice to quit unless there is other evidence to prove or establish that the landlord so intended. In this regard, the Ld. Counsel has also referred to the decision in the case of Ramchandra Jamandas Katariya vs. Nuruddinbhai Mazhar Ali in 2005(1) RCR 273 wherein a Single Judge of this Court has held that acceptance of rent by the landlord during the pendency of the suit would not amount to waiver of notice and that waiver of notice is a question of fact to be decided from the intention of the parties. 17. Responding to the contention of the petitioners that landlord is required to act reasonably and fairly as observed in the decision in the case of Dattaram (supra) relied upon by the petitioners, the Ld. Counsel for the respondent No. 1 submitted that in that case the respondent was a public authority; being so, it was required to act reasonably and fairly. He submitted that in the instant case the property belongs to the petitioners who are a private limited Company and it is their will and desire whether action against any tenant should be taken or not. The Ld. Counsel for the respondent No. 1 relied upon the decision in the case of Suresh Kumar Jain Vs. Shanti Swarup Jain in 1997(1) RCR 411, wherein the Apex Court in para 29 observed thus - “after giving out careful consideration to the facts and circumstances of the case and the submissions of the respective party, it appears to us that the premises Tenancy Act is a beneficial legislation intended to protect the tenant from being evicted by the landlord at his will or on flimsy ground. The pleasure doctrine implicit in the Transfer of Property Act entitles the landlord to evict his tenant by determining the tenancy by appropriate notice. For such eviction, the landlord does not owe any explanation to the tenant. The action for eviction is basically actuated by the desire to evict the tenant”. 18. The Ld. Counsel further relied upon the decision in the case of Jiwan Dass Vs. Life Insurance Corporation of India in 1995(1) RCR 530, wherein the Apex Court has held that “Section 106 of the Transfer of Property Act does not contemplate of giving any reason for terminating the tenancy.” He therefore submitted that contention of the petitioners that the respondent No.1 should act fairly and reasonably and that there was no justification in the respondent No. 1 having taken action for eviction against the petitioners, ought to be rejected. 18. The Ld. Counsel for the respondent No.1 also relied upon the decision in the case of Parwati Bai Vs. Radhika in 2003(2)RCJ 4(SC) wherein the Apex Court has held that “an objection as to invalidity or infirmity of notice should be raised specifically and at the earliest; else it will be deemed to have been waived even if there exists one. 19. I have heard the Ld. Counsel for the parties and perused the material on record including the impugned order. 20. It would be necessary at this stage to refer to section 3 of the Maharashtra Rent Control Act, 1999, which reads as under: “3. Exemption.—(1) This Act shall not apply,— (a) to any premises belonging to the Government or a local authority or apply as against the Government to any tenancy, licence or other like relationship created by a grant from or a licence given by the Government in respect of premises requisitioned or taken on lease or on licence by the Government, including any premises taken on behalf of the Government on the basis of tenancy or of licence or other like relationship by, or in the name of any officer subordinate to the Government authorised in this behalf; but it shall apply in respect of premises let, or given on licence, to the Government or a local authority or taken on behalf of the Government on such basis by, or in the name of, such officer; (b) to any premises let or sub-let to banks, or any public sector undertakings or any corporation established by or under any Central or State Act or foreign missions, international agencies, multinational companies, and private limited companies and public limited companies having a paid-up share capital of rupees one crore or more. Explanation.—For the purpose of this clause the expression ‘bank’ means,- ….” 21. In the present case, the petitioners are admittedly a Company having a paid up capital of more than Rs. One crore, therefore the Maharashtra Rent Control Act 1999, would not apply to them. Moreover, after the coming into force of the Maharashtra Rent Control Act 1999 on 31-03-2000, the petitioners have also lost protection afforded by the Bombay Rents Hotel and Lodging House Rates Control Act, 1947 which stands repealed as per section 58 of the Maharashtra Rent Control Act, 1999. 22.The Hon’ble Supreme Court in the case of Saraswat Coop. Bank Ltd. v. State of Maharashtra,(2006) 8 SCC 520 has upheld the validity of section 3 of the Maharashtra Rent Control Act, 1999. Paragraphs 3, 4 and 5 of this decision reads thus – “3. Of the several writ petitions filed in the Bombay High Court, the writ petition of M/s Crompton Greaves Ltd. was taken up for decision and it was held that the classification made in Section 3 with regard to different types of tenants was on the basis of an intelligible differentia having nexus with the object sought to be achieved by the Act. It was held that the provisions of the new Act were intra vires and did not offend Article 14 of the Constitution. 4. Several writ petitions were thereafter decided on the basis of the decision arrived at in the aforesaid writ petition filed by M/s Crompton Greaves Ltd. and some of them have been carried to this Court by way of special leave petitions which are now being analogously heard as civil appeals along with a writ petition filed under Article 32 of the Constitution, being No. 164 of 2003, wherein also the vires of Section 3(1)(b) of the new Rent Act have been challenged. 5. The common grievance in all these appeals and in the writ petition is with regard to the constitutionality of Section 3(1)(b) of the Maharashtra Rent Control Act, 1999 which inter alia replaced the Bombay Rents, Hotel and Lodging House Rates Act, 1947.” In paragraph 36 and 37 of the above judgment the Apex Court held as under: “36. The issues raised before us have been elaborately considered by the High Court, and, in our view, no fault can be found with the findings arrived at by the High Court. The provisions of Section 3 (1)(b) of the Maharashtra Rent Control Act, 1999, are intra vires and as has been held by the Bombay High Court, they do not violate Article 14 of the Constitution. 37. In our view, there is no merit in these appeals nor in the writ petition and the same are accordingly dismissed.” 23. Pertinently, the decision relied upon by the petitioners viz. Crompton Greaves (supra) has also been specifically referred to in para 4 of the above decision of the Hon’ble Supreme Court. Thus, having lost protection of the Rent Act, the petitioners have limited scope in the facts of the case in hand considering that the notice of termination was duly served upon them as discussed hereinbelow. The petitioners have sought to raise technical pleas, which have been by and large answered by the Counsel for the respondent No. 1 in the form of binding judicial pronouncements. Moreover it is seen that the impugned order has elaborately dealt with the facts which need hardly be gone into in writ jurisdiction of this Court, particularly when the petitioners have chosen not to enter into the witness box and having failed in their endeavour to dislodge the case of the respondent No. 1 and to substantiate their pleas in their written statement. The case of Rakesh Kumar Joshi (Supra) relied upon by the petitioners to contend that the High Court can look into factual aspects of the matter would not apply to the case in hand inasmuch as in that case the Appeal Court had set aside the order of the Trial Court, whereas in the present case, there are concurrent findings of facts against the petitioners. 24. To prove the service of notice of termination the respondent no. 1 have examined their witness who served the notice by hand-delivery to the petitioners and taken acknowledgment under the stamp of the office of the petitioners. Significantly, the petitioners have impliedly admitted the service of the notice of termination, when in paragraph 19 of their written statement they have denied that they have not replied to the Notice and have further stated as follows – “These Defendants say that by its Advocate’s letter dated 17th April 2001, the Defendants did not admit the contents of the said Notice”. Thus the Appeal Court in it’s impugned order have rightly concluded that it can be safely said that notice was served and service is proper. 25. The respondent No. 1 being a private limited Company, do not owe any explanation to justify their having acted reasonably and fairly in taking action for eviction of the petitioners from the suit premises. In this regard the petitioners have rightly placed reliance upon the decisions in the cases of Suresh Kumar Jain (Supra) and Jiwan Dass (Supra). The decision in the case of Dattaram Tukaram Bordekar (Supra) relied upon by the petitioners would not be applicable inasmuch as in that case the respondents were a public body who were required to act reasonably and fairly. In so far as the plea of the petitioners that there was no valid authority or power to file the suit at the relevant time, it is seen that Section 289 of the Companies Act does permit passing of resolutions by circulation. In the instant case, admittedly the circular was issued prior to the filing of the suit and the same has thereafter been approved. Moreover, undisputedly, the minute book containing the resolution and the Memorandum and Articles of Association was produced by the witness on behalf of the respondent no. 1 in his evidence. Pertinently the application of the petitioners for recalling the said witness was refused by the Trial Court and that order had attained finality as the same was not challenged. The Appeal Court by their impugned order has dealt with the pleas of the petitioners in respect of alleged non-compliance of section 7 rule 11(e) and the lack of jurisdiction of the Small Causes Court under section 41 of the Presidency Small Causes Act and has rightly rejected the same. A Division Bench of this Court in the case of Nagin Mansukhlal (Supra) relied upon by the respondent No.1 has elaborately dealt with the aspect of jurisdiction of the Small Causes Court and came to the conclusion that Small Causes Court would have exclusive jurisdiction in such cases and I respectfully agree with the same. Insofar as the contention that upon acceptance of the rent after the alleged notice of termination, a fresh tenancy has come into being, it is to be stated that no such contention has been taken in the grounds of the petition and rightly so, because this ground was sought to be incorporated by the petitioners in Appeal by filing an Int. Application which came to be refused by an order dated 11-07-2007 and this order had attained finality as the same was not carried any further. 26. In view of the aforesaid discussion, I find no illegality or infirmity in the impugned order and the impugned order cannot be faulted and does not warrant any interference in exercise of writ jurisdiction of this Court. Consequently the petition is dismissed with costs quantified at Rs. 5,000/- to be paid by the petitioners to the respondent No. 1. 27. At this stage, learned Counsel for the petitioners seeks 12 months time to vacate the suit