1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO.266 OF 1987 M/s Lockwood Industrial ) and Transport Services, ) a registered Partnership ) Firm, having its business ) place at Great Social Building,) 60, Sir. P.M. Road, Bombay-1 ) ... Appellants (Original Plaintiffs) V/s M/s Victoria Timber Supplying ) Company, a Firm carrying on ) business as Timber Merchants) having its Office at 158/A, ) Victoria Road, Byculla, ) Bombay-27. ) ...Respondents. (Original Defendants) Mr. D.S. Sawant, advocate for the appellant. Mr. Cherag Balsara with M.S. Dehlvi i/b Negandhi, Shah & Himayatullah for respondents. CORAM: V. M. KANADE, J. DATE : 11th September, 2009 ORAL JUDGMENT: 1. Appellants are original plaintiffs and respondents are original defendants. Appellants are challenging the judgment and order passed by the City Civil Court, Bombay in Special Civil Suit No. 6405 of 1975 whereby the learned Judge of the City Civil Court was pleased to dismiss the suit filed by 2 appellants. 2. Brief facts are as under:- 3. Appellants (hereinafter referred to for the sake of convenience as “plaintiffs’) filed Special Civil Suit No. 6405 of 1975 against respondents (hereinafter referred to for the sake of convenience as “defendants”), seeking decree against defendants for eviction from the suit premises on the ground that they are trespassers, secondly, for damages to the tune of Rs 8,500/- and, thirdly, for mesne profit @ Rs 500/- per month for their illegal occupation of the said structures. 4. The Bombay Port Trust is the owner of the land bearing Survey Nos.11/671 and 12/671 of Margaon Division admeasuring about 1950 sq. yards. It is an admitted position that the Bombay Port Trust has leased out the said land to M/s Kothari Saw Mills (For short “KSM”) who had, when they were in possession of the said land, erected some structures on the said land. The structure shown with block “D” and 3 demarcated by words “WXYZ” in Exhibit-A annexed to the plaint is the subject matter of the suit. It is the case of plaintiffs that KSM accumulated arrears towards the lease rent and, as such, the lease was transferred from KSM to plaintiffs on/or about 01/11/1970 and, therefore, plaintiffs stepped into the shoes of KSM. According to plaintiffs, defendants were permitted by KSM to store their excess goods in the suit premises marked “D” as licensees. According to plaintiffs, the room above the suit premises marked “D-1” with staircase from premises “D” was previously used by KSM and after 1/11/1970 by plaintiffs. According to plaintiffs, there was one opening door for both the premises “D” and “D-1”. According to defendants access to the suit premises was through two doors; one was used by defendants and the other by plaintiffs. It is the case of defendants that they had independent access to the suit premises. According to plaintiffs, they had asked defendants to remove their goods since their license had come to an end. After the interest of KSM ceased in the premises, defendants claimed to be the tenants of KSM. 4 5. On 09/05/1971, there was a big fire on the property and most of the structures, including the suit premises “D” and “D-1” were destroyed. Plaintiffs, thereafter, filed suit No. 3893 of 1971. According to plaintiffs, though an interim order was passed in the said suit restraining defendants from storing their goods, they continued to do so and, as such, plaintiffs filed a comprehensive suit i.e present S.C. Suit No. 6405 of 1975 on the ground that defendants have no legal right and were illegally using and occupying the suit premises as trespassers and, therefore, they were liable to be evicted from the suit premises. 6. Defendants have filed their Written Statement in which they claimed that KSM had let out the suit premises to them on monthly rent of Rs 75/- and it was alleged that KSM had taken deposit of Rs 6500/- and issued receipt dated 9/1/1968. They also claimed that plaintiffs had granted them leave and license for storing and they had become statutory licensees. Defendants also relied on 16 receipts claimed to be issued by KSM during 1966 to 1970 as rent receipts. Trial Court recorded evidence of P.W.1, D.W.1, D.W.2, D.W.3 and 5 D.W.4. Trial Court dismissed the suit filed by plaintiffs. 7. Mr. Sawant, the learned Counsel appearing on behalf of appellants made following submissions:- (1) Firstly, he submitted that Bombay City Civil Court had no jurisdiction to try issue Nos. 4 and 6. Secondly, he submitted that in view of section 4(1) and & 4(4)(a) of the Bombay Rents, Hotels and Lodging House Rates Control Act, 1947 (For short “Bombay Rent Act) provisions of the Rent Act are not applicable to the vacant land held by any person from Government or local authority. He thirdly submitted that, in the present case, BPT had given vacant land on lease to KSM. Therefore, provisions of Bombay Rent Act are not applicable and, therefore, suit filed in the City Civil Court was 6 legal and proper. In support of the said submissions he relied upon following judgments:- Sr. No. Name of Parties Citations 1 Kanji Manji vs. The Trustees of the Port of Bombay AIR 1963 SC 468 2 Raizada Topandas vs. M/s Gorakhram Gokalchand AIR 1964 SC 1348 3 Maneklal and Sons vs. The Trustees of Port of Bombay and others AIR 1988 SC 832 4 Nagji Vallabhji & Co. vs. Meghji Vijpar & Co. 1988 Bom.R.C.380 (2) Secondly, he submitted that jurisdiction of the Court had to be ascertained on the basis of pleadings made in the plaint. In support of the 7 said submissions, he relied on the following two judgments:- Sr. No Name of parties Citations 1 Abdulla Bin Ali and others vs. Galappa and others AIR 1985 SC 577 2 Datta Devashtan Trust vs. Milind Govind Kshirsagar & Ors. (2007) 3 ALL MR 69 (3) Thirdly, he submitted that the City Civil Court had erred in declaring that defendants are tenants/protected licensees. He submitted that if plaintiffs had failed to prove that defendants are trespassers then, in that event, trial court should have simply dismissed the suit but no further declaration should have been given by 8 the City Civil Court that defendants are tenants/protected licensees. In support of the said submission he relied upon the judgment of the Apex Court in Sanwarmal Kejriwal vs. Vishwa Co- operative Housing Society Ltd and others, reported in AIR 1990 SC 1563. He then submitted that even assuming that KSM had granted leave and license to defendants, even then the moment BPT terminated lease of KSM, the alleged leave and license of defendants was automatically extinguished in view of section 62A of the Easement Act. He then submitted that plaintiffs were neither assignees nor bound by any arrangement between KSM and defendants. In support of this submission he submitted that (i) any assignment of lease of plot and ownership of structure would require a 9 registered deed of assignment which was not produced by defendants, (ii) defendants’ Exhibits-2 and 26 show grant of fresh lease by BPT, (iii) defendants were not entitled to protection under the Bombay Rent Act in view of their own evidence i.e. alleged occupation and license were only for portion 20’ x 20’ of the suit premises as deposed by D.W.2 which was admittedly admeasuring 27 1/2’ x 23 1/2’ and in view of the Bombay Rent Act, licensed premises not less than a room were protected by section 15A, (iv) defendants did not have exclusive possession of the suit premises and (v) defendants had not led cogent and sufficient evidence to prove their claim as tenants/protected licensees for the following reasons : 10 (a) Defendants had not produced the alleged leave and license agreement on record; (b) the rent receipts produced on record do not refer the description or number of the suit premises; (c) the account books, rent receipts are produced on record, but the contents of the same are not proved as per the provisions of the Indian Evidence Act; (d) there is contradiction in evidence of D.W.1 (John Mohammed Ismail) and D.W. 3 (Abubakar Ismail Memon). The D.W.1 had stated that the amount of Rs 65,000/- was paid towards deposit, while D.W. 3 had stated that it was paid as an advance rent. 11 (e) In the earlier suit No.3893 of 1971 one of the partners of KSM Mr. Narinchandra Kothari had stated on affidavit before the Court that defendants have been permitted occasionally to store their excess goods in suit premises and the evidence of D.W.2 Sureshchandra Kothari is contrary to this evidence and, as such, his evidence cannot be relied upon. It is, therefore, submitted that the order of the City Civil Court may be set aside and the appeal be allowed. 8. The learned Counsel appearing on behalf of respondents submitted that section sub-section 4(a) of section 4 of the Bombay Rent Act starts with non-obstante clause and, therefore, section 4(1) of the Rent Act would not be applicable and the respondents would be protected tenants 12 under section 4(4)(a) of the Bombay Rent Act. Reliance was placed by the Counsel appearing on behalf of respondents on the judgment of the Apex Court in Kanji Manji (supra) and Nagji Vallabhji & Co. (supra) The learned Counsel for respondents further submitted that the appellants’ witness Navneetlal Zaveri had no personal knowledge of the transaction which took place between the said KSM and respondents whereby respondents were put in possession of the suit premises and that the entire evidence given by him was a hearsay evidence. He relied on paragraphs 6, 7, 13 and 16 of his evidence. He further invited my attention to para 17 of his evidence and submitted that timber was stored by the appellants’ predecessor and could be stored on the property leased by the appellants’ predecessor from the BPT. He further invited my attention to the evidence of appellants’ witness Navneetlal Zaveri and more particularly paragraphs 19, 20, 21, 22, 23 and 25 and submitted that from the said evidence it is clear that the rent receipts had been admitted by appellants. He then invited my attention to the evidence led by one John Mohammed Ismail, partner of respondents particularly in paragraphs 1, 2, 10 and 13 in 13 which this witness has stated that an amount of Rs 6500/- was deposited with KSM who had issued receipt to that effect. He submitted that from the evidence of this witness, it is clear that there were two separate entrances to the premises and respondents were exclusively in occupation of the suit premises. He also invited my attention to the evidence of S.B. Kothari and more particularly paragraphs 2, 3, 6, 8, 10, 11 and 12 and also the evidence of Abubaker Ismail Memon, partner of respondent No.3. He submitted that from this evidence, it is clear that respondents are tenants in respect of the suit premises and, in any event, are protected licensees in respect of the suit premises in view of section 15A of the Bombay Rent Act. 9. I have heard the learned Counsel appearing on behalf of plaintiffs and defendants. 10. The following points fall for determination before this Court:- (1) Whether the provisions of the 14 Bombay Rent Act are not applicable to the suit premises in view of section 4(1) and 4(a) of the Bombay Rent Act? (2) Whether City Civil Court has jurisdiction to entertain the plaint and the suit in the present form is maintainable in the Civil Court? (3) Whether the plaintiffs prove that defendants are trespassers in the suit premises? (4) Whether City Civil Court could have given a finding that defendants are tenants/protected licensees under the Bombay Rent Act. 11. So far as the first submission made by the learned Counsel appearing on behalf of plaintiffs in respect of non- applicability of provisions of Bombay Rent Act is concerned, 15 in my view, the said submission cannot be accepted for the following reasons:- (i) Section 4 of the Bombay Rent Act lays down that the Act shall not apply to any premises belonging to the Government or the Local Authority. Section 4(1) of the said Act reads as under:- “4.(1) This Act shall not apply 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 authorized in this behalf;] but it shall apply in respect of [premises let, or given on licence, 16 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.] However, section 4(4)(a) carves out an exception to this rule and lays down that under certain circumstances the provisions of Bombay Rent Act would still apply in a case where the land belongs to Government or Local Authority, however, a building on the said land is erected by any person. Section 4(4)(a) and 4(4)(b) of the said Act read as under:- [(4)(a) The expression “premises belonging to the Government or a local authority” in sub-section (1) shall notwithstanding anything contained in the said sub-section or in any judgment, decree or order of a court, not include a building erected on any land held by any person from the Government, or a local authority under an agreement, lease, [licence] or other grant, although having regard to the provisions of such agreement, lease, 17 [licence] or grant the building so erected may belong or continue to belong to the Government or the local authority, as the case may be; and (b) notwithstanding anything contained in section 15 such person shall be entitled to create a tenancy in respect of such building or a part thereof [whether, before or after the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance, 1959.]. (ii) Conjoint reading of the aforesaid two provisions clearly reveals that if any person other than the Government or Local Authority, erects a building on the land which is given by State Government or Local Authority under lease which permits construction to be put up on the said land then in respect of the premises in the building, provisions of Bombay Rent Act would apply. In my view ratio of the judgment in Kanji Manji (supra) and in Nagji Vallabhji & Co. (supra) on which reliance is placed by the learned Counsel 18 appearing on behalf of respondents, would squarely apply to the facts of the present case. 12. Counsel appearing on behalf of plaintiffs has relied on number of judgments in support of his submission that the provisions of the Bombay Rent Act would not apply to the premises in question. In support of his submission he relied upon the judgment of the Apex Court in Kanji Manji (supra), Nagji Vallabhji & Co. (supra) and in Raizada Topandas & Anr. vs. M/s. Gorakhram Gokulchand, reported in AIR 1964 SC 1348. 13. In my view, the judgments in Kanji Manji (supra) and Nagji Vallabhji & Co. (supra) on which reliance is placed by plaintiffs, will not support the case of plaintiffs and that the ratio of the said judgment supports the submissions made by the learned Counsel appearing on behalf of defendants. The ratio of other three judgments will not apply to the facts of the present case. 14. Before dealing with the facts of the aforesaid cases and 19 discussing as to how the ratio of the judgments in Kanji Manji (supra) and Nagji Vallabhji & Co. (supra) supports the case of defendants and the ratio of the judgments on which reliance is place by plaintiffs will not apply to the facts of the present case, I shall first consider whether the Bombay Port Trust is a Local Authority. The learned Single Judge of this Court in Ram Ugrah Singh Girjarsingh and another vs. The Board of Trustees of the Port of Bombay, reported in 1983(2) Bom.C.R. 447 has, after considering the provisions of section 3(26) of the Bombay General Clauses Act, 1984 and number of judgments of the Apex Court and this Court, categorically held that the Board of Trustees of the Port of Bombay is a Local Authority. That being the position, the question which now will have to be seen is, whether the premises which are the subject matter of the proceedings in this case are exempted from the provisions of the Bombay Rent Act by virtue of the provisions contained in section 4 of the said Act. As noted by me hereinabove, the conjoint reading of two provisions viz section 4(1) and section 4(4)(a) of the Act, clearly indicates that before provisions of section 4(4)(a) can come into play, the premises should satisfy two 20 conditions viz. (i) the land must be held from the Government or Local Authority under the lease and (ii) lessee under the terms of the lease should have constructed or put up the premises. Only after the said two conditions are fulfilled, the premises in question would then come out of the purview of section 4(1) and to such premises, provisions of the Bombay Rent Act would become applicable. The circumstances under which section 4(4)(a) was introduced into the Act has been noticed initially by Chief Justice Chagla in Bhagwandas v. Bombay Corporation of the City of Bombay, reported in AIR 1956 Bom. 364 which was approved by the Apex Court in Kanji Manji (supra). The Apex Court in Kanji Manji (supra) in paragraph 11 has observed as under:- “(11) ..... The amendment achieved two different things. It enabled the lessee of the particular kind of building described in cl. (a) to create sub-tenancies in spite of the ban against sub-tenancies contained in S. 15. It also excluded from the operation of sub-sec. (1) the 21 building specified in cl. (a) of that sub-section. The amendment said nothing about the relationship of the Government or the local authority, on the one hand, and the lessee on the other, in respect of the land. The word “premises” in sub-sect. (1) could mean the land or the buildings or both. Sub-section (4)(a) dealt only with the buildings and did not deal with the land because it used the word “buildings” and not the more general word “premises”. The import of sub-sec. (4)(a) of S. 4 was thus limited to buildings and did not extend to land.” In the said judgment in para 13, the Apex Court has observed as under:- “(13) In our opinion, though the section is far from clear, the meaning given by the learned Chief Justice is the only possible meaning, regard being had to the circumstances in which this sub- section came to be enacted. Those 22 circumstances were : In a case in which the holder of the land from a local authority was seeking to evict his sub-tenants, it was held by the Bombay High Court that the matter was governed by the Rent Control Act. This Court held that sub-sec. (1) applied and the suit was not governed by the Rent Control Act. The amendment was enacted to cut down by a definition the operation of the words “any premises belonging to the Government or a local authority”, by excluding only buildings which were occupied by sub-tenants even though the buildings belonged to the Government or continued to belong to it. Clause (b) of sub-sec. (4) excluded also S. 15, which prohibited sub-letting by a tenant. That, however, was limited to the case of buildings only, and did not apply to the case of land. In this situation, any action by the Government or the local authority in respect of land falls to be governed by sub-sec. (1) and not sub-sec. (4) 23 (a), and sub-sec. (1) puts the case in relation to land entirely out of the Rent Control Act. The net result, therefore, is that if Government or a local authority wants to evict a person from the land, the provisions of the Rent Control Act do not come in the way. For the same reason, the suit for ejectment does not have to be filed in the Court of Small Causes, as required by the Rent Control Act but in the City Civil Court as has been done in this case.” The Apex Court, however, in the facts of the case which was before it in Kanji Manji (supra) came to the conclusion that the land alongwith buildings were leased out by Government and the lessees were given a concession that they were entitled to remove the buildings within one month after eviction. In view of these facts, therefore, it was held that it was not open to the assignees of the said lessees to claim that ownership of the Government extended only to the land and not to the buildings. The Apex Court, therefore, after laying down the law dismissed the appeal which was filed by 24 the appellants. 15. In the case of Maneklal & Sons (supra) the facts were that the Bombay Port Trust granted lease of the said plot of land to one Mustafa Husein for the purpose of erecting a godown for carrying on commercial activities at monthly rent of Rs 925/- which was later on increased to Rs. 1456/-. The said lessee Mustafa Husein erected permanent godwon of brick, mortar and cement. He then granted lease of the godown to the petitioners in the SLP. The Port Trust filed a suit against heirs of Mustafa Husein for eviction from the lease and for termination of the tenancy. A decree was passed by the City Civil Court. Petitioners obstructed execution of the decree. A Chamber Summons was filed by Port Trust in the High Court of Bombay for removal of obstruction under O.21 Rules 97 to 101 of the Civil Procedure Code. It was contended that Petitioners were lessees of the said Mustafa Husein and, therefore, were entitled to protection under the Bombay Rent Act as the said Act applied to the building erected by a lessee from the local 25 authority and as such the Petitioners’ right of possession was protected under the provisions of the Bombay Rent Act. In the said case, there was no material on record to show that the building lease was granted to the original tenant Mustafa Husein and no evidence was produced before the Trial Court and Division Bench of the High Court and even when the matter came up for admission before the Apex Court, no such lease was produced though time was granted for production of such evidence. In view of these facts, therefore, the Apex Court in para 11 of its judgment came to the following conclusion:- “11. In our opinion, in the instant case, in view of the fact that the original lease was only a monthly tenancy and not a building lease, the High Court was right in dismissing the objections on behalf of the petitioners. We find no reason, therefore, to interfere with the order of the High Court. The special leave petition therefore, fails and is accordingly dismissed without any order as to costs.” 26 Thus, in the said case also, in view of the facts of the said case and since it was not established that the lease in question was a building lease, the SLP was dismissed and the orders passed by the High Court and the Lower Court were affirmed. The facts of the said case being different, the ratio of the said judgment will not apply to the facts of the present case. 16. Even in the case of Ram Ugrah Singh (supra), an application