- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. APPEAL NO.169 OF 1999 IN SUIT NO.503 OF 1980 ... Mahadev Pandurang Kambekar since deceased through his heirs & legal representatives namely, 1A. Smt.Bhimabai Mahadeo Kambekar 1B.Narendra Mahadeo Kambekar 1C.Jayshree Mahadeo Kambekar 1D.Triveni Mahadeo Kambekar 1E.Kohinoor Mahadeo Kambekar 1F.Snehalata Madhukar Kini 1G.Smt.Chhaya Arjun Mukadam All residents of Mumbai ...Appellants v/s. Shree Krishna Woollen Mills ...Respondent - 2 - ... Mr.Uday Bobde i.b Y.R. Shah for the Appellants. Mr.Komal Bulchandani i/b Komal & Co. for the Respondent. WITH APPEAL NO.199 OF 1999 IN SUIT NO.503 OF 1980 ... Shree Krishna Woollen Mills ...Appellant v/s. Mahadev Pandurang Kambekar since deceased through his heirs & legal representatives namely, 1A. Smt.Bhimabai Mahadeo Kambekar 1B.Narendra Mahadeo Kambekar 1C.Jayshree Mahadeo Kambekar 1D.Triveni Mahadeo Kambekar 1E.Kohinoor Mahadeo Kambekar - 3 - 1F.Snehalata Madhukar Kini 1G.Smt.Chhaya Arjun Mukadam All residents of Mumbai ...Appellants ... Mr.Komal Bulchandani i/b Komal & Co. for the Appellant. Mr.Uday Bobde i/b Y.R.Shah for the Respondent. ... CORAM: D.K.DESHMUKH & J.H.BHATIA, JJ. DATED: 19TH JULY,2007 JUDGMENT: (PER D.K.DESHMUKH, J.) 1. Both these Appeals challenge the same judgment of the learned single Judge of this court passed in Suit No.503 of 1980. That suit was filed by Shree Krishna Woollen Mills, where Mr.Mahadev Pandurang Kambekar was joined as a Defendant. ( For the sake of convenience, in this judgment the parties are referred as Plaintiff and Defendant). - 4 - 2. The Plaintiff filed the suit for a decree of specific performance of the contract, where as in the same suit the Defendant filed a counter-claim seeking a decree of possession. The learned single Judge has decreed the claim of the Plaintiff and has passed a decree of specific performance in favour of the Plaintiff and has also allowed the counter claim and has passed a decree of possession in favour of the Defendant. Therefore, both the Plaintiff and the Defendant have challenged the judgment and decrees passed by the learned single Judge by filing these two Appeals. 3. Admittedly, the Defendant is the owner of the land being survey No.58 and survey No.60 at Nahur-Bhandup in Bombay Suburban District. After the City Survey, those survey numbers are numbered as CTS No.741, 741/1 to 741/7. The Defendant by an indenture of lease dated 20-6-1958 granted lease of the suit land in favour of the Plaintiff for a period of 99 years. The rent payable by the Plaintiff was Rs.410/- per month. Clause (7) of the lease deed provided that within 20 years from the date of the lease the Plaintiff can exercise an option for - 5 - purchasing the suit land for Rs.82,016/- by giving a notice of his intention to do so to the Defendant. Clause (4) of the lease deed provided that if the agreed rent is not paid by the Defendant for a period of 12 months or more and if the Plaintiff-lessee commits breach of any condition of the lease, the Defendant would be entitled to forfeit the lease and then would be entitled to the possession of the suit land. It is these two clauses of the lease deed which are really relevant and significant in so far as these Appeals are concerned. . In exercise of the option given to the Plaintiff by clause (7) of the lease deed, the Plaintiff addressed a letter dated 3-2-1978 to the Defendant calling upon him to make out a marketable title and execute a conveyance of the land in favour of the Plaintiff against payment of Rs.82,016/-. The response of the Defendant was that the land leased to the Plaintiff is only 14912 sq.yards, whereas the Plaintiff has encroached upon and is presently occupying the land admeasuring 21577.63 sq.yards., and therefore, the Defendant is willing to execute a sale deed of the land admeasuring 14912 sq.yards and that the Plaintiff should deliver possession 6666 - 6 - sq.yards of the land which is encroached upon by the Plaintiff to the Defendant. There was some correspondence between the parties in relation to carrying out joint survey of the land, but ultimately joint survey was not carried out. The Defendant also did not execute a conveyance, therefore, the Plaintiff filed the suit seeking a decree of specific performance of the agreement contained in clause 7 of the lease deed. 4. The Defendant filed written statement and a counter claim. The counter claim of the Defendant was that the Plaintiff has not paid the rent from 20th September, 1978 till 19th February, 1980, therefore, in terms of clause (4) of the lease deed the lease is forfeited. The lease stand terminated and therefore the Defendant is entitled to possession of the leased property. 5. The Plaintiff filed written statement to the counter claim filed by the Defendant. The defence of the Plaintiff was that after having exercised the option under clause (7) the Plaintiff was not liable to pay any rent and therefore, there is no question of there being any default committed by the Plaintiff - 7 - in payment of rent and therefore, there is no question of lease being forfeited, the Defendant raised some other defences also. 6. The parties, thereafter, filed some documents. The court on the basis of the pleadings framed following issues: I S S U E S 1. Does Defendant prove that Plaintiffs have committed breach of the agreement contained in lease by making default in payment of rent from 20th September, 1978, till 19th February, 1980, and thereby he has lawfully terminated the leave? 2. Does Defendant prove that the Plaintiff is in possession of excess land of 6666 sq.yards? 3. Whether Plaintiffs prove that they are/were ready and willing to perform their part of the contract and Plaintiffs performed the same is accordance with the stipulations in the lease agreement? - 8 - 4. Are Plaintiffs entitled to specific performance of the Agreement? 5. Whether Defendant is entitled to compensation at the rate of Rs.6000/- per month? 6. What decree or order in the suit as well as in the counter claim? 7. The Plaintiff led oral evidence of one Mr.Krishana R. Sood and the Defendant examined himself. The court decided the suit by its judgment dated 24-12-1998. In so far as the Plaintiff’s suit for decree of specific performance was concerned, the learned single Judge held that the only defence raised on behalf of the Defendant was that the Plaintiff has not been able to show that it is ready and willing to perform its part of the contract and therefore Plaintiff is not entitled to a decree of specific performance. However, according to the learned single Judge, the Plaintiff has proved that the Plaintiff was always ready and willing to perform - 9 - his part of the contract and therefore the learned single Judge passed a decree of specific performance in favour of the Plaintiff. The learned single Judge also held that the Defendant was not justified in saying that the Plaintiff has encroached upon any land belonging to the Defendant. . So far as the counter claim is concerned, the learned single Judge held that the Plaintiff was not justified in saying that after exercise of option under Clause (7), the Plaintiff ceased to be liable to pay the rent. It was held that the Plaintiff admits that the Plaintiff has not paid rent for a period of more than 12 months and therefore, the lease is forfeited. The counter claim of the Defendant, thus, was allowed and decree of possession was passed in favour of the Defendant. 8. Now, taking up the Appeal filed by the Plaintiff challenging the decree passed in the counter-claim filed by Defendant first for consideration, the learned counsel appearing for the Plaintiff urged several contentions including a contention based on provisions of Section 144 of the Transfer of Property Act. The learned Counsel also relied on a judgment - 10 - of the Supreme Court in the case of R.S.Lala Praduman Kumar v/s. Virendra Goyal (AIR 1969 SC 1349), where the Supreme Court has held that covenant of forfeiture of tenancy for non-payment of rent is merely a clause for securing payment of rent and unless the tenant has by his conduct disentitled himself to equitable relief the Courts should grant relief against forfeiture of tenancy on the tenant paying the rent due, interest thereon and costs of the suit. He also urged that because the counter claim of the Defendant was really a suit filed by the Defendant for a decree of eviction against the Plaintiff, considering the relationship of landlord and tenant between the parties, in view of the provisions of Bombay Rent Act, which was then in force, the suit would not be maintainable in this court. In the alternative, he submitted that in any case in view of the provisions of Section 41 of the Presidency Town Small Causes Court Act, the suit of the Defendant for decree of possession would not be maintainable in this court, as the Small Causes Court has exclusive jurisdiction to try a suit filed by a landlord for a decree of possession against a tenant. 9. The learned Counsel appearing for the Defendant, - 11 - so far as first submission made by the learned counsel appearing for the Plaintiff is concerned, submitted that because of the conduct the Plaintiff has disentitled himself to any equitable reliefs from the court. So far as the submission of the Plaintiff that the suit would not be maintainable in this court because of the provisions of the Bombay Rent Act is concerned, the learned Counsel submits that in the written statement filed to the counter claim the Plaintiff did not urge that the relationship between the parties will be governed by the provisions of the Bombay Rent Act and therefore, the Plaintiff cannot be permitted to urge that contention for the first time in this court. The learned Counsel submitted that had that contention been raised in the written statement, it was possible for the Defendant to show that considering the purpose for which the lease has been granted, the relationship between the parties is not governed by the provisions of the Bombay Rent Act. So far as submission of the learned Counsel appearing for the Plaintiff that the suit is not maintainable in view of the provisions of Section 41 of the Presidency Small Cause Courts Act is concerned, the learned Counsel firstly submitted that this contention has also not been raised by the - 12 - Plaintiff in his written statement filed to the counter claim. He also submits that under Section 41 of the Presidency Small Cause Courts Act, the suit filed by the landlord against the tenant is maintainable, however, relying on the judgment of Supreme Court in the case of R.V.Bhupal Prasad v/s. State of Andhra Pradesh and ors., AIR 1996 SC 140, he submitted that a tenant whose tenancy has been forfeited does not remain a tenant and therefore, a suit against him for a decree of eviction would be maintainable in this court. 10. We propose to take up the third submission made by the learned Counsel appearing for the Plaintiff for consideration first. It is true that in view of the provisions of Section 41 of the Presidency Small Cause Courts Act, the counter claim of the Defendant for a decree of eviction against the tenant is not maintainable in this court is not raised by the Plaintiff in the written statement to the counter claim. However, in our opinion, despite that the Plaintiff is entitled to urge that contention in appeal for the first time because the facts that are necessary for deciding that contention can be culled out from the counter claim filed by the Defendant - 13 - himself. In the counter-claim filed by the Defendant, the Defendant admits the relationship between the parties. The Defendant admits that the Defendant is the owner of the property and that the Defendant has granted lease of the property for a period of 99 years in favour of the Plaintiff. Thus, so far as characters of the parties are concerned, i.e. landlord and tenant are admitted by the Defendant himself. Thus, this is a suit filed by a landlord for a decree of eviction against the tenant/lessee. Whether after forfeiture of the lease or termination of the lease the Plaintiff continues to be a tenant for the purpose of Section 41 of the Presidency Small Cause Courts Act or not is a different question and for deciding that question pleadings of the parties are not really relevant. For the purpose of deciding this contention the pleadings in the counter claim of the Defendant can be taken at their face value and therefore, in our opinion, the Plaintiff is entitled to urge this contention. For the purpose of deciding this question following facts are relevant, a) that the Plaintiff in the counter-claim is the owner of the land which was given on lease to the Defendant in the counter claim, therefore, the Plaintiff in the - 14 - counter-claim is the landlord; b) that the Defendant in the counter-claim was given the land on lease by the owner, therefore, the Defendant in the counterclaim is a lessee//tenant of the Plaintiff in the counter claim; c) that the Plaintiff in the counter claim has sought a decree of possession against the Defendant in the counter-claim on an allegation that the lease of the Defendant in the counter-claim is forfeited or terminated. All these aspects are stated by the Defendant himself in his counter-claim. So far as the jurisdiction of this court to entertain civil suits is concerned, it is governed and regulated by Clause 12 of the Letters Patent. Clause 12 of the Letters Patent reads as under:- 12. Original jurisdiction as to suits And We do further ordain that the said High Court of Judicature at Bombay, in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try, and determine suits of every description, if, in the case of suits for land or other immoveable property such land or property shall be - 15 - situated, or in all other cases if the cause of action shall have arisen, either wholly, or, in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits, except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Cause Court at Bombay, or the Bombay City Civil Court. (emphasis supplied) 11. Perusal of above quoted clause 12 of the Letters Patent shows that this court has the jurisdiction to entertain civil suits of all description, but that jurisdiction does not extend to the civil suits which are within the jurisdiction of the Small Causes Court. So far as jurisdiction of the Small Causes Court to entertain the suit is concerned, for the purpose of these Appeals it is sub-section 1 of - 16 - Section 41 of the Presidency Small Cause Courts Act which is relevant. It reads as under:- S.41(1) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, but subject to the provisions of sub-section (2), the Court of Small Cause shall have jurisdiction to entertain and try all suits and proceedings between a licensor and licensee, or a landlord and tenant, relating to the recovery of possession of any immovable property situated in Greater Bombay, or relating to the recovery of any licence fee or charges or rent therefore, irrespective of the value of the subject-matter of such suits or proceedings. 12. Perusal of the above quoted provision of Section 41(1) of the Presidency Small Cause Courts Act shows that jurisdiction is conferred by that section on the Small Cause Court to entertain and try all suits between the landlord and tenant relating to recovery of possession of any immoveable property situated in Greater Bombay. There is no dispute that the suit property is immovable property and that it is - 17 - situated in Greater Bombay. The only dispute is whether even after termination of the lease of the Plaintiff by the Defendant, does the Defendant continue to be the landlord and the Plaintiff continue to be the tenant for the purpose of Section 41 of the Presidency Small Cause Court Act. So far that question is concerned, that question is no more res-intigra in as much as, that question has been clearly considered and decided by the Division Bench of this Court in the case of Nagin Mansukhlal Dagli v/s. Haribhai Manibhai Patel, AIR 1980 Bombay 123. Observations made by the court in paragraph 8 of that judgment are relevant. They read as under:- 8. The next point urged before us by Mr.Sanghavi was that Section 41 in terms applies to a licensor and a licensee and does not refer to the case of persons who once held the relationship of licensor and licensee but such relationship had come to an end either by the period of the licence expiring by efflux of time or by the termination of the licence. With respect to this submission the first point to be noted is that the section applies not only to suits between licensors and licensees but also between landlords and tenants in cases where the Rent Act does not apply. Further, the section does not refer to only one category of suits but to several categories. These categories are: (1) suits between a licensor and licensee relating to the possession of any immovable property situated in Greater Bombay. - 18 - (2) Suits between a landlord and tenant relating to the possession of any immovable property situated in Greater Bombay. (3) suits relating to the recovery of the licence fee or charges in respect of such immovable property, and (4) suits relating to the recovery of rent in respect of such property. Now, a suit for the recovery of licence fee or charges may lie either when a licence subsists or after it has come to an end, and similarly a suit for the recovery of rent may lie either when the tenancy subsists or after it has come to an end, but it is difficult to envisage a case where during the subsistence of a licence a licensor can file a suit for the recovery of immovable property from the licensee or where during the subsistence of a tenancy a landlord can file a suit against his tenant for the recovery of immovable property given or tenancy to his tenant. If a licensor or a landlord wants to recover possession of the property, his right to do so arises only on the termination of the licence or the tenancy, as the case may be, or upon the licence or the tenancy determining by efflux of time subject to the provisions of the Bombay Rent Act. Mr.Sanghvi, however, submitted that so far as licensors and licensees were concerned, a suit for the recovery of possession could be filed by a licensor even during the subsistence of the licence where the licence was revocable at will and had not been determined by a prior notice given by the licensor to the licensee, in which case, in Mr.Sanghvi’s submission, the filing of the plaint would operate as a determination of the licence. 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 - 19 - 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 "a landlord and tenant" in the said Section 41 has no such particular significance or effect as canvassed for by Mr.Sanghavi. These words have been used in accordance with a very well-settled and normal legislative drafting practice. In various statutes dealing with rights and obligations arising out of jural or contractual relationship and enforcement of such rights and obligations the parties are described by the legal character they bear. Thus, S.108 of the Transfer of Property Act, 1882, which deals with the rights and liabilities of lessor and lessee, by cl. (h) provides that "the lessee may even after the determination of the lease remove, at any time whilst he is in possession of the property leased but not afterwards, all things which he has attached to the earth...." Clause (i) of the said S.108 provides that "when a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and egress to gather and carry them." Clause (h) and (i) use the word "lessee" in connection with the rights of a lessee even after the determination of the lease, because these rights which the lessee possesses in his character as a lessee and which came, into being by reason of the lease given to him. Certain rights he had during the continuance of the lease. Certain rights accrued to him on the determination of the lease. Rather than use the word "lessee" while the lease subsists and a clumsy terminology or a circumlocution to describe the same person after the lease has determined, following the well-settled legislative drafting practice, clauses (h) and (i) of Sec.108 refer to that - 20 - person in both eventualities by the word ’lessee’. Similarly, in various Matrimonial Acts when dealing with the grant of permanent alimony to a wife after divorce, these Acts provide that the Court may grant such alimony to the wife either at the time of the passing of the decree for divorce or on a subsequent application made to it for that purpose. The words used in the sections of the Matrimonial Acts are ’husband’ and ’wife’, even though after divorce the relationship of husband and wife between the divorced parties does not subsist. Examples of this will be found in S.37 of the Special Marriage Act, 1954; S.25 of the Hindu Marriage Act, 1955; S.37 of the Indian Divorce Act, 1869; and S.40 of the Parsi Marriage and Divorce Act, 1936. Words which describe a person’s legal character- the character which he either holds or has once held- are used in statutes as a means of identification or a label to point out the particular rights and obligations which arise out of such relationship either during its subsistence or after its termination, that is, either are existing relationship or are erstwhile relationship. In the case of a lease, except where a tenant is a protected tenant under the Rent Act, there is an obligation upon the lessee to hand over possession of the property to the lessor on the expiry of the lease by efflux of time or its determination. Similarly, in the case of a licence there is an obligation upon a licensee to remove himself from the immovable property, in respect of which he has been given the licence, and to hand over possession of such property to his licensor. These are