REPORTED REPORTED REPORTED IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION APPEAL NO.283 OF 1995 APPEAL NO.283 OF 1995 APPEAL NO.283 OF 1995 IN IN IN SUIT NO.4000 OF 1990 SUIT NO.4000 OF 1990 SUIT NO.4000 OF 1990 Syndicate Bank, a Banking ) Company constituted and ) functioning under the ) provisions of Banking Companies ) (Acquisition and Transfer of ) Undertakings) Act, 1970 having ) its head office at Manipal, ) South Kanara District and also ) having its International )..Appellant Division at Maker Towers ’E’, ) (Orig. 2nd floor, Cuffe Parade, Colaba, ) Defendant) Bombay - 400 005. V/s. The East India Hotels Ltd., a ) Company registered under the ) Companies Act, having its ) office at 4, Mangoe Lane, ) Calcutta and Administrative )..Respondent/ office at Hotel Oberoi Towers, ) (Orig. Nariman Point, Bombay - 400 021. ) Plaintiff.) Dr.Virendra Tulzapurkar, senior Advocate with Harvinder Toor i/b. Crawfard Bayley & Co. for appellant. Mr.S.H.Doctor, senior Advocate with A.S.Doctor and S.C. Shah and Mrs. Chhaya Shah Gupta i/b. Bhasin & Co. for respondent. CORAM : R.M.LODHA AND CORAM : R.M.LODHA AND CORAM : R.M.LODHA AND J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. DATED : 12TH OCTOBER, 2004. DATED : 12TH OCTOBER, 2004. DATED : 12TH OCTOBER, 2004. ORAL JUDGMENT (PER J.P.DEVADHAR, J.) ORAL JUDGMENT (PER J.P.DEVADHAR, J.) ORAL JUDGMENT (PER J.P.DEVADHAR, J.) 1. This appeal arises out of the Judgment and order dated 24/2/1995 wherein the preliminary issue of jurisdiction raised by the appellant-defendant has been rejected by the learned Single Judge by holding that section 41 of the Presidency Small Cause Courts Act, 1882 is not applicable to the Suit No.4000 of 1990 filed by the respondent - plaintiff against the appellant - defendant and that the suit is maintainable in this Court. 2. For the sake of convenience the appellant is hereinafter referred to as ‘the defendant’ and the respondent is hereinafter referred to as ‘the plaintiff’. 3. The facts set out in the suit No.4000 of 1990 are that by an indenture of lease dated 12th August, 1971 the plaintiff took on lease from the Government of Maharashtra a plot of land situated at Nariman Point, Mumbai- 400 021 for a period of 99 years on terms and conditions as more particularly set out therein. On the said plot of land, the plaintiff was to construct a 5-star Deluxe Hotel called "The Oberoi Towers" (hereinafter referred to as ‘the hotel’). To -= : 3 :=- facilitate construction of the hotel, an agreement was arrived at between the parties hereto on 27-12-1974 wherein the defendant agreed to advance a loan of Rs.30 lakhs to the plaintiff with interest @ 12.5% per annum. As per the said agreement dated 27-12-1974 the plaintiff was to permit the defendant to use and occupy 15,000 sq. ft. on the mezzanine to the ground floor of the hotel (hereinafter referred to as ‘the said area’) for a period of 12 years commencing from 27-12-1974. The said agreement contained a clause that at the end of the period of 12 years the plaintiff shall, on an application made by the defendant in writing, renew the licence for another period of 12 years if the plaintiff so deems fit on the terms and conditions to be mutually agreed upon. Accordingly, the loan of Rs.30 lakhs was advanced by the defendant to the plaintiff and the defendant was put in possession of the said area. It is not in dispute that the said loan amount of Rs.30 lakhs has been repaid by the plaintiff to the defendant with interest within the period stipulated under the aforesaid agreement. 4. It is stated in the plaint that just before the expiry of 12 years, the plaintiff by a letter dated 18/19th April, 1986 called upon the defendant to vacate the said area on the expiry of 12 years as the -= : 4 :=- plaintiff intended to have the said area for its own purpose. The defendant, however by a letter dated 8-7-1986 sought renewal of the licence for a further period of 12 years as provided under the agreement dated 27-12-1974, but the same was rejected by the plaintiff. Thereafter, several meetings were held between the parties and during the course of one such meeting the representatives of the defendant pleaded for permission to use atleast 1/3rd of the said area, but the same was also rejected by the plaintiff. It is stated in the plaint that the defendant represented from time to time that arrangements are being made to move out of the said area to the defendant’s own premises at Maker Towers, Nariman Point, Mumbai. However, by its letter dated 22-7-1989 the defendant informed the plaintiff that the Board of Directors of the defendant have decided not to vacate the said area. It is the case of the plaintiff that ultimately when the fire broke out on the first floor of the Oberoi Hotel on 12-4-1990, the defendant vacated the said area. Lateron by a letter dated 26-5-1990 the defendant claimed back the possession of the said area but the plaintiff contended that the defendant having ceased to occupy the said area was not entitled to claim back possession of the said area from the plaintiff. -= : 5 :=- 5. The defendant thereafter filed a suit bearing No.2735 of 1990 in this Court against the plaintiff under section 6 of the Specific Relief Act, 1963 alleging forcible dispossession and sought restoration of possession of the said area. In the said suit both the parties agreed that only for the purposes of the said suit, the parties will proceed on the footing that the defendant herein has been forcibly dispossessed. Thereupon, by a Judgment and order dated 6-11-1990 the said suit was decreed by this Court and the plaintiff was directed to hand back possession of the said area to the defendant. The Court, however, stayed implementation of the said decree for 10 weeks to enable the plaintiff to obtain such orders as may be advised to protect its interest. 6. Accordingly, the above suit bearing No.4000 of 1990 was filed by the plaintiff against the defendant in this Court seeking the following reliefs:- a) That this Hon’ble Court be pleased to declare that the defendants have no right whatever in the said area more particularly described in Exhibit ‘A’ to the plaint in the Hotel Oberoi Towers and shown in red coloured line on the plan Exhibit ‘B’ to the plaint and that the plaintiffs are exclusively entitled to the same; -= : 6 :=- b) that this Hon’ble Court be pleased to declare that the decree dated 6.11.90 in High Court OOCJ Suit No.2735 of ‘90 is in -operative and incapable of execution except in so far as it directs the Plaintiffs herein to hand over to the defendants equipments, records, books of accounts, furniture, articles and other moveable property belonging to the bank; c) for an order of permanent injunction restraining the defendants by themselves, their officers, agents and servants from enforcing and / or executing the decree dated 6.11.‘90 passed in the High Court OOCJ Suit No.2735 of 1990 except in so far as it directs the Plaintiffs herein to hand over to the bank equipment, records, books of accounts, furniture, articles and other moveable properties belonging to the bank; d) that pending the hearing and final disposal of the suit the defendants by themselves, their officers, servants and agents be restrained by an order and injunction enforcing or executing or taking any steps in furtherance or in pursuance of the said decree dated 6.11.90 in High Court OOCJ Suit No.2735 of 1990 except in so far as it directs the Plaintiffs herein to hand over to the bank equipments, records, books of accounts, furniture, articles and other moveable property belonging to the bank; e) For Ad-interim reliefs in terms of Prayer (d) above; f) for costs of the suit; g) For such other and further reliefs as the nature and circumstances of the case may require. 7. In the meantime, the plaintiff had filed an appeal against the decree dated 6-11-1990 passed in Suit No.2735 of 1990 but the same was dismissed by a Division Bench of this Court. Against the said -= : 7 :=- decision the plaintiff filed Special Leave Petition before the Apex Court. While disposing of the said Special Leave Petition, the Apex Court by its order dated 21-9-1994 requested this Court to dispose of Suit No.4000 of 1990 expeditiously and directed that till the disposal of the suit No.4000 of 1990 the decree dated 6-11-1990 passed in Suit No.2735 of 1990 shall not be executed. 8. In the written statement filed in Suit No. 4000 of 1990, the defendant raised the plea of jurisdiction and contented that in view of section 41 of the Presidency Small Cause Courts Act, 1882 this Court has no jurisdiction to entertain and try the suit. Thereupon a preliminary issue was framed as follows:- "Whether this Court has no jurisdiction to entertain the suit in view of the provisions of section 41 of the Presidency Small Cause Courts Act, 1882 as contended in para 17 of the Written Statement." 9. After hearing both the parties, the learned Single Judge by the impugned Judgment and order dated 24-2-1995 held that this Court has jurisdiction to entertain and try the suit No.4000 of 1990 and that section 41 of the Presidency Small Cause Courts Act, 1882 is not applicable to the said suit. Being -= : 8 :=- aggrieved by the said Judgment the present appeal is filed by the defendant. 10. Dr.Tulzapurkar, learned senior advocate appearing on behalf of the appellant-defendant submitted that the suit filed by the plaintiff is in substance a suit between the licensor and the licensee and it relates to recovery of possession of the premises and, therefore, in view of the provisions of section 41 of the Presidency Small Cause Courts Act, 1882, the Small Cause Courts at Bombay alone has jurisdiction to entertain and try the suit. 11. Elaborating his contentions, Dr.Tulzapurkar submitted that in the present case, it is an admitted position that the plaintiff was a licensor and the defendant was a licensee. He submitted that the defendant was put in possession of the said area as licensee by the plaintiff and though the licence had expired on 31st December, 1986, the defendant continued to remain in possession and was entitled to remain in possession till the possession was recovered by due process of law. He submitted that as the plaintiff had dispossessed the defendant without due process of law, the defendant had filed suit No.2735 of 1990 under section 6 of the Specific Relief Act, 1963 and this -= : 9 :=- Court has decreed the suit and ordered the plaintiff to restore possession of the suit premises to the defendant. The right of the defendant to possession of the premises was recognised by the decree passed by this Court in the suit filed under section 6 of the Specific Relief Act and, therefore, the present suit which in effect seeks to recover legal possession of the suit premises from the defendant can be filed only in the Small Cause Courts and not in this Court. 12. Placing strong reliance on the Division Bench decision of this Court in the case of Nagin Nagin Nagin M.Dagli V/s. Haribhai Manilal Patel M.Dagli V/s. Haribhai Manilal Patel M.Dagli V/s. Haribhai Manilal Patel reported in A.I.R. A.I.R. A.I.R. 1980 Bom. 123, 1980 Bom. 123, 1980 Bom. 123, the counsel submitted that it is the substance of the plaint and not the form which is required to be considered. In the present case, the suit in substance relates to recovery of legal possession from the defendant and the relief in the suit is camouflaged in the guise of a suit for declaration and injunction. 13. Relying upon the Full Bench decision of this Court in the case of D.K.Jagam V/s. J.G.Gore D.K.Jagam V/s. J.G.Gore D.K.Jagam V/s. J.G.Gore reported in A.I.R. 1965 Bom. 177 A.I.R. 1965 Bom. 177 A.I.R. 1965 Bom. 177, the counsel submitted that the words ‘relating to recovery of possession’ appearing in section 41 of the Presidency Small Cause -= : 10 :=- Courts Act is wide enough to include any suit or proceeding in connection with or having direct bearing on the question of possession of the premises. He submitted that even if the suit is not for possession, if the relief claimed in the suit is in regard to or in respect of recovery of possession or the suit by the plaintiff to get rid of an order of his eviction by an injunction restraining the defendant from interfering with his possession, it will fall within the scope of section 41 of the Presidency Small Cause Courts Act. 14. Mr.Tulzapurkar relied upon the decision of the Apex Court in the case of M.D.Jain V/s. E.B.Ogale M.D.Jain V/s. E.B.Ogale M.D.Jain V/s. E.B.Ogale reported in A.I.R. 1995 S.C. 1102 A.I.R. 1995 S.C. 1102 A.I.R. 1995 S.C. 1102 and the decision in the case of Natraj Studios (P) Ltd. V/s. Navrang Natraj Studios (P) Ltd. V/s. Navrang Natraj Studios (P) Ltd. V/s. Navrang Studies Studies Studies reported in A.I.R. 1981 S.C. 537 A.I.R. 1981 S.C. 537 A.I.R. 1981 S.C. 537 and submitted that in the present case though the plaintiff is in physical possession, the plaintiff is trying to get a relief which has the effect of the defendant ceasing to have any right to possession and a relief preventing the defendant from enjoying the legal possession and, therefore, the present suit clearly relates to the defendant’s possession as licensee. The fact that the licence has expired makes no difference and as held by this Court in the case of Nagin M. Dagli (supra) the words ‘relating to recovery of -= : 11 :=- possession’ in section 41 of the Presidency Small Cause Courts Act would cover suits which affect the rights and obligations of the licensee arising under the existing relationship or under the erstwhile relationship of the licensor and the licensee. 15. The counsel submitted that the word ‘possession’ used in section 41 cannot be interpreted to mean only the actual or physical possession. It includes not only the physical possession but also the legal possession i.e. the possession which is recognised and protected as such by law. Referring to the meaning of the word ‘possession’ in the Halsbury Laws of England 4th Edition, Volume 35 (paras 1111, 1112, 1113), Butterworth’s "words & phrases legally defined", 2nd edition (pages 151,152, 153) and Salmond on Jurisprudence, 12th Edition (pages 275 & 276), it was submitted that legal possession may exist without defacto possession and physical possession is not always regarded as possession in law. The learned counsel submitted that the Courts have interpreted the word ‘possession’ to mean physical or legal or constructive, depending on the context in which it is used and the object of the Act itself. In this connection, the counsel relied upon the decisions in the case of Kailash Rai V/s. Jai Jai Ram [A.I.R. 1973 Kailash Rai V/s. Jai Jai Ram [A.I.R. 1973 Kailash Rai V/s. Jai Jai Ram [A.I.R. 1973 -= : 12 :=- S.C. 893], Seksaria Cotton Mills Ltd. V/s. The State S.C. 893], Seksaria Cotton Mills Ltd. V/s. The State S.C. 893], Seksaria Cotton Mills Ltd. V/s. The State of Bombay [A.I.R. 1953 S.C. 278], Gurucharan Singh of Bombay [A.I.R. 1953 S.C. 278], Gurucharan Singh of Bombay [A.I.R. 1953 S.C. 278], Gurucharan Singh V/s. Kamla [A.I.R. 1977 S.C. 5], Superintendent & V/s. Kamla [A.I.R. 1977 S.C. 5], Superintendent & V/s. Kamla [A.I.R. 1977 S.C. 5], Superintendent & Rembracer of Legal Affairs V/s. Anil Keman [(1979)4 Rembracer of Legal Affairs V/s. Anil Keman [(1979)4 Rembracer of Legal Affairs V/s. Anil Keman [(1979)4 S.C.C. 274], Ramesh Bejoy Sharma V/s. P.Rai [(1979) 4 S.C.C. 274], Ramesh Bejoy Sharma V/s. P.Rai [(1979) 4 S.C.C. 274], Ramesh Bejoy Sharma V/s. P.Rai [(1979) 4 S.C.C.27], Madan Lal V/s. State of Himachal Pradesh S.C.C.27], Madan Lal V/s. State of Himachal Pradesh S.C.C.27], Madan Lal V/s. State of Himachal Pradesh [(2003) 7 S.C.C. 465] and Megh Singh V/s. State of [(2003) 7 S.C.C. 465] and Megh Singh V/s. State of [(2003) 7 S.C.C. 465] and Megh Singh V/s. State of Punjab [(2003) 8 S.C.C. 666] Punjab [(2003) 8 S.C.C. 666] Punjab [(2003) 8 S.C.C. 666]. 16. The counsel submitted that in the present case, by virtue of the decree dated 6-11-1990, the defendant’s right to actual possession is recognised and the defendant is in legal possession. Thus, the plaintiff is in immediate possession and the defendant is in mediate possession of the suit premises. Although Salmond on Jurisprudence enunciates three categories of mediate possession, the counsel submitted that by virtue of section 6 of the Specific Relief Act, 1963, a fourth category of mediate possession is recognised and that category includes the case of a successful plaintiff in a suit under section 6 who has obtained a decree but has as yet not obtained physical possession. In the present case, the plaintiff without first restoring possession wrongfully obtained, is trying to extinguish through the Court of law the -= : 13 :=- mediate possession of the defendant and thereby is seeking legal possession. Such a suit which in effect relates to recovery of legal possession or mediate possession is triable only by the Small Cause Courts at Bombay. 17. It was submitted that in the present case the effort of the plaintiff is to be put in legal possession by depriving the defendant from the having legal possession and, therefore, the suit is directly covered by section 41 of the Presidency Small Cause Courts Act. In this connection, the learned counsel relief upon the decisions in the case of R.Pandit V/s. R.Pandit V/s. R.Pandit V/s. Jagtapsingh [A.I.R. 1964 Bom.85], Ranjit Chanbe V/s. Jagtapsingh [A.I.R. 1964 Bom.85], Ranjit Chanbe V/s. Jagtapsingh [A.I.R. 1964 Bom.85], Ranjit Chanbe V/s. Behram [64 Bom.L.R. 464], D.K.Jangam V/s. G.J.Gore Behram [64 Bom.L.R. 464], D.K.Jangam V/s. G.J.Gore Behram [64 Bom.L.R. 464], D.K.Jangam V/s. G.J.Gore [A.I.R. 1965 Bom.177], R.J.Mehta V/s. G.R.Nadkarni [A.I.R. 1965 Bom.177], R.J.Mehta V/s. G.R.Nadkarni [A.I.R. 1965 Bom.177], R.J.Mehta V/s. G.R.Nadkarni [(1989) Mah.L.J. 809], M.D.Jain V/s. V.Prakash [(1989) Mah.L.J. 809], M.D.Jain V/s. V.Prakash [(1989) Mah.L.J. 809], M.D.Jain V/s. V.Prakash [A.I.R. 1995 S.C. 1102], Babulal V/s. Nandram [A.I.R. 1995 S.C. 1102], Babulal V/s. Nandram [A.I.R. 1995 S.C. 1102], Babulal V/s. Nandram [A.I.R. 1958 S.C. 677] and Ramesh Mehra V/s. [A.I.R. 1958 S.C. 677] and Ramesh Mehra V/s. [A.I.R. 1958 S.C. 677] and Ramesh Mehra V/s. I.D.Mehre [(2001) 3 All MR 668] I.D.Mehre [(2001) 3 All MR 668] I.D.Mehre [(2001) 3 All MR 668]. 18. With reference to the declaration sought in terms of prayer clause (a) of the plaint, it was submitted by the learned counsel for the defendant that firstly, such a declaration can be sought under section 34 of the Specific Relief Act, 1963 only if the -= : 14 :=- position is denied and not otherwise and secondly, the declaration of title must be dehors the Act. In this connection, the learned counsel relied upon the decisions in the case of R.P.Chanbe V/s. Behram [64 R.P.Chanbe V/s. Behram [64 R.P.Chanbe V/s. Behram [64 Bom.L.R. 464] and D.K.Jangam V/s. J.G.Gore [A.I.R. Bom.L.R. 464] and D.K.Jangam V/s. J.G.Gore [A.I.R. Bom.L.R. 464] and D.K.Jangam V/s. J.G.Gore [A.I.R. 1965 Bom. 177] 1965 Bom. 177] 1965 Bom. 177]. 19. With reference to the relief of injunction in prayer clause (b) of the suit, it was submitted that in substance this is relief seeking recovery of legal possession and even such a relief is covered by section 41 of the Presidency Small Cause Courts Act as per the decision of this Court in the case of Nagin M.Dagli (supra at para 9 & 10). 20. The counsel for the defendant submitted that in a suit under section 6(1) of the Specific Relief Act, 1963, the question of title either of the plaintiff or of the defendant is irrelevant. The only question that is relevant is whether the plaintiff filing suit under section 6(1) has been dispossessed without due process of law. Such a suit is entertainable by a Civil Court and not by the Designated Court under the Bombay Rent Act or under section 41 of the Presidency Small Cause Court Act. Assuming that such a suit is by a tenant or by a -= : 15 :=- licensee against a licensor, such a suit is to be tried by a Civil Court as held in A.I.R. 1950 Bom.343 and A.I.R. 1984 Bom.290. 21. The counsel further submitted that it is not open to the plaintiff in the present suit to dispute the finding given by the Court in the earlier suit under section 6 by contending that the concession made by the plaintiff in the earlier suit under section 6(1) that the plaintiff in that suit was dispossessed without due process of law was a concession made only for the purpose of that suit. Whether a concession was made or not, the Court in that suit could never have passed a decree of restoration of possession unless the Court came to the conclusion that the plaintiff in that suit was dispossessed without due process of law. A finding given on concession or on merits is res judicata in the subsequent suit as regards that finding is concerned. The finding in the earlier suit regarding possession of the plaintiff in that suit is binding on the plaintiff in the present suit and he cannot reagitate the same issue by contending that the said finding was on a concession which was made only for the purpose of that suit. It is not the concession which makes the finding res judicata but the finding does. It is, therefore, not permissible for the -= : 16 :=- plaintiff in the present suit to contend that the admission was qualified meaning thereby the concession was only for the purpose of that suit. Implicit in the decree under section 6(1) in the earlier suit is the finding that the plaintiff in that suit who is the defendant in the present suit was dispossessed without due process of law. It was a jurisdictional issue in the earlier suit which was required to be decided before passing a decree for restoration of possession. It is immaterial whether that issue was answered on the basis of concession made or on any qualified admission or on evidence. Once a decree has been passed under section 6(1), in a subsequent suit for possession on the basis of title, the issue as to the dispossession without due process of law cannot be reagitated. The issue as to possession of the plaintiff in the earlier suit under section 6(1) becomes res judicata in the present suit filed by the plaintiff for possession on the basis of title. He submitted that it is not the second suit that is barred by the principles of res judicata but what is barred is the issue relating to possession. In this connection, the counsel relied upon the decisions reported in A.I.R. 1928 Calcutta 758 and A.I.R. 1933 Calcutta 923. 22. The learned counsel for the defendant -= : 17 :=- further submitted that the contention of the plaintiff that in the present case the preliminary issue is to be answered on the basis of averments in the plaint and that the concession made in the earlier suit was a limited concession, are totally untenable. The nature of the concession whether absolute or qualified is irrelevant once an issue has been answered regarding dispossession in the earlier suit. It is the answer to that issue that makes the present contention that the defendant in the present suit had handed over possession back to the plaintiff in the present suit and they