1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6266 OF 2009 WITH WRIT PETITION NO.6267 OF 2009 Ewart Investments Ltd., ] A Company incorporated under ] Indian Companies Act, having ] its registered office at ] Ewart House, Homi Mody Street, ] Fort, Mumbai 400 001. ].. Petitioners (in both the petitions) V/s. M/s.Kusha Traders Pvt.Ltd., ] A Company registered under ] the provisions of the Companies ] Act, 1956 and having its ] registered office at Ionic, ] D-1, 18, Arthur Bunder Road, ] Colaba, Mumbai 400 005. ].. Respondents (in both the petitions) Shri Aspi Chinoy, senior advocate a/w. Rahul Dwarkadas i/b Wadia Ghandy & Co for Petitioners Shri A.A.Kumbhakoni i/b. M/s.Thakore Jariwala & Associates, for Respondents. 2 CORAM :A.S.OKA,J. DATE : 6th November, 2009. JUDGEMENT:- 1] On 16th October, 2009, Judgment was reserved and accordingly, the Petitions have placed today for dictation of Judgment. These two Petitions can be disposed of by common judgment and order as they arise out of orders passed by the Competent Authority in the proceeding of the application under section 24 of the Maharashtra Rent Control Act, 1999 (hereinafter referred to as the said Act). The writ petition no.6266 of 2009 takes an exception to the order dated 22nd September 2008 passed by the Competent Authority by which an application made by the petitioner for recasting the issues has been rejected. The writ petition no. 6267 of 2009 has been filed for challenging the judgment and order dated 4th December 2009 passed by the Competent Authority by which the proceeding of the application under section 24 of the said Act filed by the petitioners was stayed till the final disposal of a declaratory suit filed by the respondents in the Court of Small Causes at Bombay. 3 2] The Petitioners claim to be the owners of the premises more particularly described in paragraph 1 of the application under section 24 which is flat no.3 on the first floor of Ashley House, Opposite Colaba Post Office, Mumbai 400 005. (hereinafter referred to as the said premises ). According to the case of the Petitioners, the Respondents were allowed to occupy the said premises as licensees for a period of 10 years commencing from 1st October,1984. The terms and conditions on which license was earlier granted have been set out in the agreement dated 8th September 1988. It must be stated here that the Petitioner had filed an application under the provisions of section 13(A) (2) of the Bombay Rents, Hotel & Lodging House Rates (Control)Act,1947.The said application was contested by the Respondents. In the said application, the Competent Authority framed an issue of jurisdiction. A finding was recorded by the Competent Authority that the agreement dated 8th September 1988 was still valid and subsisting. Therefore, the Competent Authority proceeded to dismiss the application filed by the petitioner. A revision application was filed by the petitioner in this Court for challenging the 4 order of the Competent Authority. This Court passed an order of remand and directed the Competent Authority to decide as to whether the issue of jurisdiction could be tried as a preliminary issue. On remand, the competent authority held that the issue of jurisdiction could be always tried as a preliminary issue .Thereafter, an order was passed by the Competent Authority holding that unless subsisting license expires, there is no jurisdiction vested in the said Authority to pass order of eviction. Accordingly , the application made by the petitioner for eviction was dismissed. A revision application was preferred by the petitioner for challenging the said order. The revision application was rejected by this Court by holding that the licence stood renewed till September 2004 and on the date on which the application was filed by the petitioner, the licence was subsisting. A Special Leave Petition was filed by the petitioner. The said petition was disposed of by the Apex Court by observing that certain observations made in the order of the Competent Authority shall not influence the Competent authority in any future proceeding taken by the petitioner. 5 3] By notice dated 11th February 2005 , the petitioners terminated the licence granted to the respondents. The respondents filed a suit in the Court of Small Causes at Mumbai for declaration of tenancy in respect of the said premises. On 19th December 2005, the petitioner filed an application under section 24 of the Maharashtra Rent Control Act, 1999 for eviction of the respondents. In the said application it was contended that the license had come to an end on 30th September 2004 by efflux of time. Without prejudice to the said contention, the petitioners submitted that by notice dated 11th March 2005 the license has been revoked. The Competent Authority granted leave to the respondents defend the application for eviction. A written statement was filed by the respondents. 4] Various issues were framed by the Competent Authority. The first issue was pertaining to the licensor-licensee relationship. An application was made by the petitioners praying for the deleting the said issue. The said application was rejected by the Competent Authority. In April 2007, an application was made by the petitioners praying that issue nos.1, 2, 4 and 7 be deleted or in the 6 alternative, the issues be recasted. By order dated 22nd September 2008, the Competent Authority rejected the said application. Writ petition no. 6266 of 2008 has been filed for challenging the said order. 5] An application was made by the respondents praying that the proceeding of the application for eviction filed by the petitioner be stayed till the final disposal of the declaratory suit filed by them in the Court of Small Causes at Mumbai. By order dated 4th December 2008, the said application has been allowed. By the said order, the Competent Authority stayed the eviction application till the final disposal of the suit. This is the order which is the subject matter of challenge in writ petition no.6267 of 2009. While passing the impugned order dated 4th December, 2008, it was held by the Competent Authority that in a situation where requirements of Section 10 of the Code of Civil Procedure, 1908 (hereinafter referred to as the said Code ) are not satisfied, a recourse to Section 151 of the said Code is permissible for staying a suit. 7 6] The learned counsel appearing for the Petitioner submitted that the order of stay passed by the competent authority is destructive of the public policy underlying section 24 of the said Act. He submitted that under the statute, a leave and license agreement has made conclusive evidence of the facts stated therein. He stated that the order of the Apex Court and the observations made therein have been completely misread by the Competent Authority. He submitted that neither section 10 nor section 151 of the said code could have been invoked by the Competent Authority. The learned counsel appearing for the Respondents supported the impugned order by submitting that though the agreement of leave and license may be treated as conclusive evidence of the facts stated therein, the Respondents in an application under section 24 of the said Act can always urge that the real relationship between the parties was in the nature of tenancy. He submitted that as a substantive suit for declaration of tenancy filed by the respondents in the Court of competent jurisdiction was already pending when the application under section 24 of the said Act was filed, the proceedings of the 8 application under section 24 of the said Act cannot proceed unless the suit for declaration was decided. He submitted that in the Special Leave Petition filed by the petitioners, the issue of tenancy raised by the respondents has been kept open. He submitted that the Competent Authority can exercise the jurisdiction only if the plea of tenancy of the respondents is finally rejected in the suit filed by the respondents. He submitted that the Competent Authority had rightly exercised the power to stay the proceeding. 7] The learned counsel appearing for the Petitioner in support of the writ petition no. 6266 of 2009 submitted that the issue nos.1,2,4 and 7 cannot be framed by the Competent Authority. He submitted that the first issue regarding relationship as licensor-licensee will not arise in view of the conclusive presumption under section 24 of the said Act. He submitted that the issue of res- judicata does not arise. He submitted that even the issue of jurisdiction could not have been framed. The learned counsel appearing for the respondents submitted that the issues framed by the Competent Authority arise from the pleadings and therefore no 9 interference is called for. 8] The question which arises for the consideration is whether Competent Authority could have stayed the proceeding of the application under section 24 of the said Act by invoking either section 10 or section 151 of the said Code. As far as this Court is concerned, the said issue is no longer res integra. The said issue came up for consideration of this Court in the case of Surendra B. Agarwal & Anr. v/s. AML Merchandising Pvt. Ltd., ( writ petition no.2682 of 2009) which was decided on 11th September, 2009. The same issue came up for consideration before this Court. This Court considered the entire scheme of section 24 and Chapter VIII of the said Act. The paragraphs 10 to 12 of the said decision read thus: 10. Thus, the special provision has been made under the said Act for evicting the licensees of premises given on licence for residence. A special procedure laid down under Chapter VIII governs the application made under section 24 of the said Act. The said Act contemplates a summary disposal of the applications. By the very nature of the proceedings as reflected from the aforesaid statutory provisions, the jurisdiction of Competent Authority is very limited. It can 10 decide a dispute between a landlord (lincesor) and the licensee. It is obvious that considering the summary nature of the proceedings, issue of title to the disputed premises can never be decided in such proceedings. The sub-section 1 of section 24 starts with non-obstante clause. Moreover section 39 of the said Act gives overriding effect to the provisions of Chapter VIII. Therefore, pendency of a suit governed by section 33 of the said Act or a suit on title cannot prevent the competent authority from deciding an application for eviction. There is no statutory power vesting the Competent Authority to stay the proceedings of the application under section 24 of the said Act on the ground of pendency of a civil suit relating to the property. 11. All that is required to be considered by the Competent Authority is whether the landlord has given the premises on licence for residence and whether on expiry of period of licence the licensee has not delivered the possession of the premises subject matter of licence. Sub-section 3 of section 24 of the said Act specifically prevents the Competent Authority from considering a claim of any stranger. The intention of legislature of making an Agreement of Licence in writing as a conclusive evidence of the facts stated therein cannot be altogether ignored. 12. Hence, once application under section 24 of the said Act is filed by the licensor, the Competent 11 Authority has to decide the said application in accordance with law. The Competent Authority is not really concerned with the title of the licensor. All that is required to be examined is whether the applicant is a licensor and whether the opponent is the licensee and whether there was a Leave and Licence Agreement for residential use of the suit premises. In a case where licensee is claiming some other rights in relation to the premises in dispute, adjudication of the said rights cannot be made by the Competent Authority. Therefore, if a suit relating to the title of the licensor is pending or if a suit for declaration filed by the licensee claiming declaration of rights is pending, that is no ground to detain the hearing of application under section 24 of the said Act. The pendency of suits in the Civil Court or other Competent Court relating to the premises in dispute does not affect the jurisdiction of the Competent Authority to decide the application. While deciding the application under section 24 of the said Act the Competent Authority cannot decide the issue of title. (emphasis added) This Court also considered its another decision in the case of Rajendra B. Nair V/s. Suresh D. Dyanmothe & Anr.,(AIR 2002 Bombay 382). In the said decision this court held thus: The pendency of the declaratory suit which has been filed by the respondent before the Small Causes Court cannot detract from the legal 12 position which ensues under S.13-A2 or affect the jurisdiction, statutorily conferred upon the competent authority of ordering the eviction of a licensee whose entitlement to occupy the premises has come to an end upon the expiry of the licence. The provisions of S. 13-A2 have effect, notwithstanding anything contained in the Rent Act. A licensee cannot claim an immunity from the obligation cast upon him by S.13-A2 to vacate the premises upon the expiry of the licence by the institution of a Declaratory Suit in the Small Causes Court. Nor can he claim an immunity from the jurisdiction of the competent authority to order him to vacate when he fails to do so upon the expiry of the licence. Section 13-A2 frowns upon such subterfuge and it is the plain duty and obligation of the Court to give effect to the legislative mandate. (Emphasis added) After considering the aforesaid decision, this Court in the case of Surendra B. Agarwal(supra) this Court proceeded to hold that: &&. the competent authority had no jurisdiction either under section 10 or 151 of the said act to stay the proceedings of the application under section 24 of the said act. (emphasis added) 13 9) It must be noted that while passing the impugned order, the Competent Authority has come to a conclusion that section 10 of the said Code is not applicable. However, the Competent Authority held that in a situation where requirements of section 10 of the said code were not satisfied, recourse to section 151 of the said code was permissible for staying the suit. This view is contrary to the law laid down by the Apex Court in the case of Manohar Lal Chopra v/s Seth Hiralal (AIR 1962 SC 527). 10] In view of the law laid down by this Court in the case of Surendra B. Agarwal (Supra) and Rajendra B. Nair (supra), the impugned order granting stay to the proceeding of application under section 24 of the said Act will have to set aside. 11] As far as merits of the other Writ Petition No.6266 of 2009 are concerned, as stated earlier, the challenge is to the order dated 22nd September, 2008 passed by the Competent Authority on application dated 7th April, 2007 made by the Petitioners. It is necessary to consider the prayers made by the Petitioners in the application on which impugned order has been passed. The first prayer is 14 for deleting the issue nos. 1, 2 , 4 and 7 and the second prayer is for re-casting the issues. The issue no.1 is on the existence of Licensor-licensee relationship. The issue no.2 is on the question whether the license period has expired. The issue No.4 is based on the contention of the respondents that the application was barred by res judicata as earlier application was dismissed. The issue No.7 is on the question of jurisdiction of the Competent Authority. The jurisdiction and powers of the competent authority are well defined. The issues have been framed on the basis of the contentions raised by the respondents in the written statement. Merely because certain issues are framed, the limited jurisdiction of the Competent Authority is not enlarged. The Competent Authority has not decided any issue on merits by rejecting the application for deletion of the aforesaid issues. 12] Moreover, the petitioners have invoked jurisdiction of this Court under article 227 of the constitution of India. The impugned order declining the prayer for deleting certain issues does not decide any controversy on merits. Notwithstanding the said order , all rights and contentions of the 15 parties remain open. The Petitioners can always point out to the Competent Authority the scope of adjudication in a proceedings under section 24 of the said Act. All questions in that behalf are kept open. This is not the case where the power of superintendence of this Court can be invoked to set aside the impugned order. 13] Hence, I pass following order:- (a) Writ Petition No.6267 of 2009 is hereby allowed and the impugned order dated 4th December, 2008 is quashed and set aside; (b) The competent authority will proceed with hearing of the eviction application filed by the Petitioners in accordance with the law. The competent authority shall expeditiously dispose of the application and in any event on or before 30th April, 2010; (c) Writ Petition No.6266 of 2009 is rejected. However, all contentions in this Writ Petition are kept open. 14] The learned counsel appearing for the Respondents prays that the proceeding before the competent authority be stayed for eight weeks. 16 15] The Competent Authority will not proceed with the hearing of the application till 15th January 2010. (A.S.OKA.J.)