1 cra819.odt IN THE HIGH COURT OF JUDICATURE OF BOMBAY CIVIL APPELLATE JURISDICTION. Civil Revision Application No. 819 of 2009 Mrs. Rehmat alias Mrs. Betty Chunilal Kapadia 2. Ms. Dimple Chunilal Kapadia 3. Mr. Suhail Chunilal Kapadia 4. Karan Rajendra Sethi address at Ground Floor, Bungalow No. 1, Birla Lane, Juhu, Mumbai 400 054 ....Applicants v/s. M/s. Laxmi Properties Ltd. Industry House, Bombay 400 020. 2. M/s. Killick Nixon Ltd regd.office at Killick House, Home Street, Fort, Bombay 400 001. ....Respondents Mr. P.S.Dani for the appellant. Mr. P.K. Dhakepalkar, Sr. Counsel with Simil Purohit and Mr. Sandip Vimadalal and Mr. Gauraj Shah i/b. Vimadalal & co. for respondents CORAM: R.M. BORDE, J. RESERVED ON: 17th December, 2011 PRONOUNCED ON: 22nd December, 2011 JUDGMENT The legal heirs of original defendant no.2 are taking exception to the 2 cra819.odt order passed by the Additional Chief Judge, Small Causes Court, Mumbai, Bandra Branch in Appeal No. 92/2006 in L.E.& C. Suit No. 446/600 of 1978. The plaintiff is a limited company incorporated under Indian Companies Act and owns a Bungalow known as Juhu Bungalow No. 1, Birla Lane, Bombay. It is the case of the plaintiff that in the month of April 1973 defendant no.1 approached the plaintiffs and requested for grant of leave and license to them for the use and occupation of their Managing Director for a period of 11 months commencing from 1st May, 1973. The defendant no.1 is also a company incorporated under the Companies Act. A leave and license agreement was entered into between the plaintiff and defendant no.1 on 17th September, 1973 with retrospective effect from 1st May, 1973. It was agreed between the parties that the monthly compensation shall be paid at the rate of Rs. 2000/- per month. The possession was already taken over on 1st May, 1973, however, it was decided to execute the formal agreement at later stage and same was executed on 17th September, 1973. The period of lease as stated in the agreement was for a period of 11 months. After expiry of period of license on 31st March, 1973 the occupation of the defendant no.1 turned out to be wrongful. It is stated that license has expired by efflux of time, however, the plaintiff issued a notice and revoked the license on 12th July, 1977. The notice was duly served on defendant no.1. The suit was initially presented only against defendant no. 1. However, defendant no.2 Chunilal Kapadia made an application for his impleadment which was allowed, and after his demise his legal heirs are 3 cra819.odt brought on record. It is contended by the plaintiff that Shri P.C. Kapadia was friend of late Mr. R.D. Birla and in order to accommodate late P.C. Kapadia for a period of 11 months the suit premises were given on leave and license basis. There was no intention of the parties to create tenancy in respect of suit premises. The defendant no.1 had presented a suit being R.A.E. & R. Suit No. 1002/3165 of 1981 against Chunilal Kapadia alleging that he is monthly tenant of defendant no.1 and is defaulter in payment of rent. 2. In the first written-statement filed by defendant, it was only averred that Chunilal Kapadia is in possession of the suit premises as sub-tenant of defendant no.1. However, such a story was put forth in a suit presented by defendant no.1 which shows collusion between defendant no .1 and defendant no.2. Mr. Chunilal Kapadia also filed an application being R.A.N. Application No. 353/SR of 1981 for fixation of standard rent in respect of suit premises. The plaintiff was not joined as party in the said application. Defendant No. 1 has not claimed tenancy rights prior to filing of the written statement. There is no privity of contract between plaintiff and Chunilal Kapadia who according to plaintiff is an unlawful occupier and has been inducted in suit premises without permission of the plaintiffs and as such he cannot seek protection under Bombay Rent Act. It is the specific case of the plaintiff that Chunilal Kapadia was not in possession of the suit premises on 1st February, 1973 and, therefore, he is neither a licensee nor a sub-tenant. The plaintiff also claims that 4 cra819.odt defendants are liable to pay Rs. 28,095/- as mesne profit over and above the compensation as stated in the agreement. 3. The Defendant No. 1 appeared and resisted the suit by filing written- statement. It is denied by defendants that they requested the plaintiff to grant leave and license to them for a period of 11 months in respect of suit premises. It is contended that the suit premises were let out to defendants on monthly rent of Rs. 2000/- and defendants were put in exclusive possession of the same. The defendants paid Rs. 6000/- as deposit and have been in exclusive and continuous use and enjoyment of the premises from 1st May, 1973. The suit premises were let out for use of defendant company and it was open for the defendant company to give premises to any of its Directors/officers. According to defendant the relationship between the plaintiff and defendant is that of landlord and tenant. It is contended that on expiration of period of agreement no fresh agreement was executed which is indicative of the fact that intention of the parties was not to create leave and license. Defendant no. 1 filed an additional written-statement on 17th April, 2000 and contended that the agreement dated 17th September, 1973 was entered into to circumvent the provisions of Bombay Rent Act. It is admitted by defendants that premises were taken for residence of its Managing Director late Mr. P.C. Kapadia. However, there was no such restriction that only P.C. Kapadia and his family members can use the premises. It is contended that the defendant no.2 was 5 cra819.odt already in possession of the suit premises prior to December 1974. Initially plaintiff had agreed to give the suit premises to M/s. Hingir/Rampur Coal Company and an agreement was prepared on paper dated 29th December, 1972. It is contended that M/s. Hingir Rampur Coal Co. had appointed defendant no.1 as their attorney for performing various ministerial and administrative work, therefore, an agreement dated 17th September, 1973 was executed wherein name of Mr. P.C. Kapaida was mentioned as Managing Director of the defendant. It is contended that the premises were let out to the defendant on tenancy basis and the agreement was not of leave and license. The defendant, therefore, prays for dismissal of the suit. 4. Defendants 2a to 2d presented their written-statement and opposed suit claim. According to these defendants the Court has no jurisdiction to entertain and try the suit as the relationship of the plaintiff and defendant is that of landlord and tenant and a suit presented under Section 41 of the Presidency Small Causes Court is not maintainable. It is contended that wedding ceremony of defendant no. 2b was performed in the suit premises in the month of March 1973 and prior thereto the family of Defendant no.2 consisting of himself and his children was in occupation of the suit premises prior to 1st February, 1973. According to defendants Mr. P.C.Kapadia was not occupying the suit premises and did not occupy the same even for a day. The defendants contend that notwithstanding the recitals contained in the agreement dated 17th 6 cra819.odt September, 1973 the plaintiff did not exercise his right to revoke the alleged agreement even after expiry of period of 11 months. It is denied that premises were given on leave and license basis to the defendant no.1 company for Mr. P.C. Kapaida for temporary period of 11 months. The liability in respect of payment of Rs. 28,095/- is also denied by the defendants. 5. Learned trial Judge after recording evidence of the parties was pleased to held that defendant no.2 is a gratuitous licensee and in view of the judgment of the Division Bench of the High Court in the case of Ramesh Dwarkadas Mehra vs. Indravati Dwarkadas Mehra 2001 (4) Mh.L.J. 483, the suit between gratuitous licensor and licensee is exclusively triable by the Civil Court and is not maintainable before the Small Causes Court. In the judgment a finding is also recorded by the trial Court that neither the defendant no.1 nor defendant no.2 has established that there is a relationship between the defendants 1and 2 as licensor and licensee prior to 1st February, 1973 nor it is established that defendant no.1 has a legal right in respect of the suit premises prior to 1st May, 1973. The trial Court has also recorded finding that the story put up by defendant no. 2 that he is a protected licensee of the suit premises on 1st February, 1973 and that he was paying compensation to defendant no.1 also gets demolished. The trial Court thus dismissed the suit by judgment and order dated 13th September, 1995. The original plaintiff being aggrieved by the judgment and order passed by the trial Court preferred an appeal bearing no. 7 cra819.odt 92/2006 to the Division Bench of the Small Causes Court which came to be allowed by an order dated 6th October, 2009. The judgment and order passed by the Division Bench of the Small Causes Court directing evicting of defendants is subjected to challenge in this revision application by the legal heirs of deceased defendant no.2. 6. It is the case of the plaintiff that leave and license agreement came to be executed in favour of defendant no.1 on 17th September, 1973 which was to operate retrospectively from 1st May 1973. The monthly compensation prescribed was Rs. 2000/- One Mrs. Rashmi was the General Manager of the defendant no.1 company who is examined before the Court who has admitted execution of the agreement. It is also further admitted by the witness that a resolution was also adopted in the meeting of Board of Directors of the Company on 23rd August, 1973 for taking the suit premises on leave and license basis. The document i.e. the leave and licence agreement was drafted by the defendant no.1 company. Although the defence is raised that it was not the intention to enter into leave and license agreement but, however, it was a lease created between the plaintiff and defendant no.1, said contention is not capable of being acceptance for the reason that agreement which is executed between the parties is backed by resolution of the Company and the same is admittedly drafted by defendant no.1 company. The plaintiff and defendant no.1 are limited companies and as such those incorporated companies speak through 8 cra819.odt resolutions. The resolution adopted by the company i.e. Defendant no.1 is in respect of creation of leave and license and as such a contrary stand adopted by the defendant no.1 in the written-statement is not acceptable and has not been accepted by the First Appellate Court rightly. The agreement is not only executed between the parties but is also acted upon. There is a material on record to show that defendant no.1 has paid compensation to the plaintiff by way of cheques. One cheque of Rs. 6000/- in respect of deposit amount and one cheque for an amount of Rs. 10,000/- towards rent for the period of 1st May, 1973 to 30th September, 1973 appears to have been issued. There is a reference in respect of the payment of amount by cheque in the document exhibit 5 which is dated 26th September, 1973. The said letter Exh-57 was written by defendant no.1 to plaintiff company in which there is a mention of payment of amount by way of cheques. The another circumstance to indicate that leave and license agreement has been acted upon is substantiated by a communication issued by the defendant no.1 company in favour of the plaintiff. On 21st September, 1975 the plaintiff company called upon the defendant no.1 company to pay permitted increase and in reply to the communication issued by the plaintiff company it was informed by defendant no. 1 company that as per clause 6(f) of the agreement dated 17th September, 1973 the amount claimed is required to be borne by the plaintiff company. Yet another circumstance is that, payment has been made made by defendant no.1 company by way of cheque towards compensation for the period between September 1978 to 9 cra819.odt March 1978 at the rate of Rs. 2000/- per month amounting to Rs. 14,000/-. The amount was accepted by the plaintiff company without prejudice to rights and contentions of the company to recover the possession of the suit premises. Thus there is not only an agreement entered into between the plaintiff and defendant no.1 but the same has been acted upon. 7. Although defence is raised that defendant no.2 Chunilal Kapadia was already residing in the premises at the time when the agreement was executed, from the evidence of DW1 Rehmat Kapadia more particularly para 20 of the evidence she has clearly stated that her husband was put in possession by M/s. Killick Nixon Ltd. i.e. Defendant no.1, as licensee in respect of suit premises. Thus the defendant no.2 is also claiming possession over the suit premises through defendant no.1 which is a company. Thus, the findings recorded by the first appellate Court that there was a leave and license agreement executed between plaintiff and defendant no.1 and the same has been acted upon appears to be correct and based on proper appreciation of evidence placed on record. 8. It is stated by witness for defendant no.2 that concerned defendant was residing in the suit premises since December 1972 and the marriage of Dimple Kapadia with Mr. Rajesh Khanna was solemnized on 27th March, 1973. Barat of Rajesh Khanna has come to suit premises on that day and marriage ceremony was performed at the suit premises. There is also a suit presented by 10 cra819.odt defendant no.1 for recovery of possession of the premises against defendant no. 2 being R.A.E. Suit No. 1002/3162/1981. The defendants 2a to 2d have also filed an application against defendant no.1 company for fixation of standard rent. Those proceedings are initiated after presentation of the present suit in the year 1978. Therefore, the first Appellate Court was justified in observing that litigation has been initiated only to avoid handing over of possession of the premises to the plaintiff company. In order to claim protection under Section 15(1) of the Bombay Rent Act it has to be proved that defendant no.2 was licensee on 1st February, 1973. Admittedly, no license was subsisting on 1st February, 1973 and leave and license was executed on 17th April, 1973 w.e.f. 1st May, 1973. The claim based on occupation of premises by the defendant no.2 on the relevant day, therefore, will not be helpful for the said defendant to claim protection under Section 15 A of the Bombay Rent Act. 9. The learned trial Judge has recorded a finding that defendant no.2 is gratuitous licensee, which is neither the case of the defendant no.2 nor the case pleaded by the plaintiff. The defendant no.2 has not claimed that he is residing there in the suit premises without paying any amount nor there is any document showing that defendant no.2 has paid rent or compensation to defendant no.1 at any time, as has been observed by the trial Court. The finding of the trial Court appears to be incorrect as DW2 in her evidence has claimed that her husband was paying Rs. 2000/- to first defendant from the month of December, 11 cra819.odt 1972. There is nothing on record to substantiate the finding arrived at by the trial Court that defendant no.2 is a gratuitous licensee. Moreover, defendant no.2 has not at all claimed that said defendant was gratuitous licensee at any point of time. The trial Court has recorded that defendant no.2 being gratuitous licensee, the Court has no jurisdiction in view of the judgment in the matter of Ramesh Dwarkadas Mehra vs. Indravati Dwarkadas Mehra 2001 (4) Mh.L.J. 483. The said judgment has been over ruled by the Full Bench of this Court in Prabhudas Damodar Kotecha Vs. Smt. Manharbala Jeram Damodar 2007 (4) ALL MR 651 and has adopted a view that suit by licensor against gratuitous licensee is tenable before Presidency Small Causes Court under Section 4. It is stated by the appellant that said judgment of the Full Bench is pending consideration in a Special Leave Petition presented before the Supreme Court. However, this revision application need be kept pending awaiting decision by the Apex Court on the issue as the defendant no.2 has not at any point of time claimed that he is a gratuitous licensee. Thus the question of bar of jurisdiction of the Court does not arise in the matter at all. 10. The trial Court has recorded the finding that neither defendant no.1 nor defendant no.2 has established that there is relationship between defendant no.1 and defendant no.2 as licensor and licensee prior to 1st February, 1973 nor it is established that defendant no.1 has legal right in respect of the suit premises prior to 1st May, 1973 and the story put up by the defendant no.2 that he is a 12 cra819.odt protected licensee of suit premises on 1st February, 1973 and is paying compensation to defendant no.1 has been demolished. The said finding recorded by the trial Court has been confirmed by the First Appellate Court. Thus, there is no relationship of defendant no.1 and defendant no.2 as licensor and licensee and, therefore, defendant no.2 cannot claim protection as a protected licensee in respect of the suit premises from 1st February, 1973. 11. The plaintiff has initiated proceedings for recovery of possession of the property against defendants 1 and 2 by presenting suit before the Court of Small Causes in the year 1978 and the suit was decided in the year 2005. The appeal against the judgment of the trial Court has been decided on 6th October, 2009. The plaintiff who is a lawful owner of the property is entitled to secure possession of the premises atleast after lapse of about 33 years from the date of presentation of the suit. 12. In my view there is no jurisdictional error committed by the First Appellate Court in deciding the Appeal nor the finding recorded by the first Appellate Court either on the question of fact or law, appear to be erroneous or perverse and, therefore, do no call for interference in exercise of revisional jurisdiction of this Court. 13. The Civil Revision Application is without any merit and the same stands 13 cra819.odt dismissed summarily. 14. The Counsel appearing for the petitioner seeks protection to enable the petitioner to approach the Supreme Court. 15. Ad-interim order operating in favour of the petitioner in the matter shall be continued for a period of 12 weeks from today. The petitioner shall not create third party interest during the aforesaid period and shall keep the premises in habitable condition. (R.M.BORDE, J)