1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.1403 OF 2007 Sadanand Shetty and another………………………………………..Petitioner versus Laxman Deju Shetty and others………………………Respondents Mr.M.C.Hegde for Petitioner Mr.N.R.Walawalkar i/b Mr.S.R.Bhalerao for respondent no.1 CORAM : A.S.OKA, J. DATE : 29th January 2010 JUDGMENT :- 1. By This Writ Petition under article 227 of the Constitution of India, the petitioners have challenged the judgment and order dated 22nd November 2006 passed by Appeal Bench of the Court of Small Causes at Bombay in an appeal preferred by the first respondent. By the impugned judgment and order, the Appeal Bench of the Court of Small Causes at Bombay dismissed the suit filed by the petitioners on the ground that the Court of Small Causes (hereinafter referred to as "the Small Cause Court") had no jurisdiction to entertain and try the suit. 2 With a view to understand the submissions made by the 2 learned counsel appearing for the parties, it will be necessary to briefly refer to the facts of the case. The petitioners and the second to ninth respondents are claiming to be the owners of Krishna Bhuvan Hindu Restaurant at Bombay. The case of the petitioners is that one Mrs .Girija Adappa Shetty the third respondent herein for herself and on behalf of petitioners and second and fourth to ninth respondents entered into an agreement by which the first respondent was allowed to conduct the business of the aforesaid restaurant. Before the period provided under the agreement dated 1st June 1978 expired, the first respondent sought extension of the period of the agreement. However, the petitioners and others did not accept the request. Therefore, the first respondent filed a declaratory suit in the Small Cause Court in the Year 1986 claiming a declaration of tenancy in respect of the restaurant premises (hereinafter referred to as the suit premises). The petitioners filed a suit in the City Civil Court at Bombay praying for possession of the suit premises and the business carried out therein. The first respondent contested the suit by filing a written statement. The first respondent contended that he was granted irrevocable licence in respect of suit premises and therefore, the City Civil Court had no jurisdiction to entertain and try the suit. The first respondent contended that in view of section 41 of the Presidency Small Cause Courts Act, 1882 (hereinafter referred to as “the said Act”), the Small Cause Court had exclusive jurisdiction to entertain the suit. Accordingly a preliminary issue was framed in the suit. The parties were permitted to lead evidence. The City Civil Court passed an order on 29th 3 January 1999 by which the plaint was returned to the petitioners for presentation to the Small Cause Court. The petitioners accepted the said order and filed the plaint in the Small Cause Court. The first respondent filed a fresh written statement. The parties adduced evidence. The learned trial judge decreed the suit filed by the petitioners. In the appeal preferred by the first respondent, by the impugned order, Appeal Bench held that the case made out in the plaint was that the suit premises was given to the first respondent predominantly for running the business and incidentally he was in possession of the suit premises. It was held that the suit was essentially for recovery of possession of the business which is not covered by section 41 of the said Act. It was held that even if the suit is treated as the one for recovery of possession of immovable property, the valuation of the suit exceeds a sum of Rs. 10,000/- which was the upper limit of the jurisdiction of the Small Cause Court at the relevant time. It was observed that after the plaint was returned by the City Civil Court, the petitioners have not amended the plaint. 3 The learned counsel appearing for the petitioners has invited my attention to the judgment and order dated 29th of January 1999 by which the plaint was ordered to be returned by the City Civil Court. He pointed out the finding that the agreement dated 1st June 1978 for conducting the restaurant business was a colourable and camouflage document and the real transaction was that the first respondent was the licensee. He pointed out that the City Civil Court observed that the prayer 4 was for possession of the suit premises and the prayer for recovery of business was incidental. He submitted that in view of the said finding, the Small Cause Court had Jurisdiction under Section 41 of the said Act. He criticized the finding recorded by Appeal Bench of the Small Cause Court that the plaint proceeds on the footing that the suit premises was given by the petitioners predominantly for running the business. He pointed out that the Appeal Bench had no business to record a finding that the suit is for removal of the first respondent from the business conducted in the suit premises. He submitted that it was not open for the Appeal Bench to record a finding that the suit was for possession of a running business. He submitted that the findings recorded in the impugned judgment and order are contrary to the findings recorded by the learned judge of the City Civil Court which has attained finality holding that it is the Small Cause Court which has exclusive jurisdiction to try the suit in view of section 41 of the said Act. He, therefore ,submitted that the impugned order deserves to be quashed and set aside. 4 The learned counsel appearing for the first respondent submitted that in view of well settled law the reasons recorded by the City Civil Court for declining jurisdiction are not binding on the parties. He placed reliance on a decision of Privy Council in the case of Upendra Nath v. Lall (AIR 1940 Privy Council 222). He submitted that though a finding was recorded by the City Civil Court that the real transaction between the parties was of a grant of a licence in respect of the suit premises, the 5 petitioners did not amend the plaint in which the prayer was essentially for possession of running business. He submitted that in view of the law laid down by this court in the case of Anusuyabai Ghate v. Smt Makumbi Nadaf ((1999) 101 (2) Bombay Law Reporter 61), the suit was not maintainable before the Small Cause Court. He relied upon another decision of this Court in the case of Sagir Ahmed v.Maria Piedade Gonsalves (2003 (4) Bombay Cases Reporter 635). He submitted that the petitioners ought to have amended the plaint and prayed for possession of the suit premises on the ground that the first respondent was the licensee in respect of the suit premises. However that was not done. He submitted that as the plaint stands today, obviously the same is not governed by section 41 of the said Act. He submitted that no interference was called for. 5 I have given careful consideration to the submissions. It will be necessary to consider the averments made in the plaint. In paragraph 2 of the plaint there is a description of the restaurant and the business carried out therein. The restaurant is referred to as the suit premises and the business carried on therein has been referred to as the suit business. It is stated that one Adappa Shetty was the sole proprietor of the restaurant during his lifetime. The petitioners and second to ninth respondents are the legal representatives of the said Adappa (since deceased). In paragraph 4 of the plaint it is stated that the third respondent with the consent of all the members of the family, placed the second petitioner in the charge and management of the suit business. It is stated that there was a dispute 6 between second petitioner and the second respondent over the suit business. The said dispute was later on settled. In paragraph 5 of the plaint it is stated that to eliminate any possibility of any dispute in the family over the suit business, it was decided that the suit business should be entrusted to the care of a third party for conducting for a specific period in consideration of payment of royalty to the family of the petitioners. In paragraph 5 it is further stated as under : “5. .....Pursuant to the said decision and upon the request of the Defendant No.1 abovenamed and at the instance of one R.C. Shetty Advocate who is related to him and also known to the family of the Plaintiffs, it was therefore agreed to permit the said defendant No.1 to conduct the suit business for a period of eight years against payment by him monthly royalty charges during the said period and upon certain terms and conditions to be specified and reduced to writing. As agreement of conducting was accordingly executed on the 1st June, 1978 by and between the said Defendant No.1 as Conductor and Defendant No.3 as owner of the suit business as well as by Plaintiff No.2 acknowledging under his signature thereon the receipt of the security deposit amount as the constituted attorney of the said Defendant No.3. By the said Agreement dated 1st June, 1978 the said Defendant No.1 who was appointed as the Conductor of the suit business of hotel for a period of eight years from the date of the agreement was permitted to conduct the said business and for that purpose exclusively to enter into and remain in the suit premises of that business; by the terms of that agreement the Defendant No.1 was not only enjoyed to perform and observe the terms and conditions set out therein but had also specifically undertaken not to claim any interest of whatsoever nature in the suit premises which, in any event was never intended to be created in his favour as his entry into and occupation of those premises was strictly necessary for and incidental to the management by him of the suit business as a Conductor thereof.” 7 Thereafter, in paragraph 7, the petitioners have referred to the declaratory suit filed by the first respondent in the Small Cause Court. In paragraph 9 of the plaint, the petitioners have stated that "The plaintiffs therefore, with the concurrence of the other defendants, seek the removal of the said defendant No.1 from the suit business and for directions to him to handover to them the suit business together with all the furniture and articles of trade and other paraphernalia entrusted to him as conductor of the business, and are therefore, filing this suit for the purpose." In the same paragraph the petitioner has alleged that the first respondent has rendered himself liable to be removed from the conduct of the suit business and from its business premises. In paragraph 13 of the plaint, the suit has been valued at Rs. 39,150/- being the compensation for a period of hundred months at the rate of Rs. 261 per month. The valuation of the furniture and articles of trade belonging to suit business has been made at Rs. 5900/-. The prayer (a) in the suit reads thus: “(a) that the Defendant No.1 be ordered and decreed to remove himself from the premises of Shop No.4 Devkaran Mansion, 79/F, Princess Street, Bombay 400 002 and to handover to the plaintiffs, the business of Shri Krishna Bhavan Hindu Restaurant being carried on therein together with all the furniture, utensils, articles of trade and all other paraphernalia of the said business;” 6 In the evidence recorded before the Small Cause Court, the second Petitioner deposed and stated that the Hotel business was given to 8 first respondent on conducting basis. There is no assertion that any license was created in respect of the suit premises. It is a settled law that the issue of jurisdiction of a Court has to be decided on the basis of averments made in the plaint. The issue of the forum of suit is always decided on the basis of averments made in the plaint. In the case of Dattatraya Krishna Jangam v. Jairam Ganesh Gore (AIR 1965 Bombay 177), a full bench of this Court dealt with the issue as to how issue of jurisdiction of the special court like the Small Cause Court is to be decided. In paragraph 5 of the decision, the full bench held thus: “5. The position therefore is that in order to determine which Court has jurisdiction to try a suit, the Court should read the plaint as a whole and ascertain the real nature of the suit and what in substance the plaintiff has asked for. Whatever may be the form of relief claimed, if on a fair reading of the plaint it becomes apparent that the plaintiff has alleged the relationship of landlord and tenant between him and the defendant and the relief claimed in substance relates to recovery of rent or possession or raises a claim or question arising out of the Rent Act or any of its provisions, then it is the special Court alone that will have jurisdiction to decide the suit. If a dispute is subsequently raised by the defendant about the existence of relationship of landlord and tenant, the continuance of the suit in the Special Court will depend on the decision of the Court on that issue. Similarly if the plaint does not allege the relationship of landlord and tenant and no claim or question arises out of the Act or any of its provisions, then it will be the ordinary civil Court and not the special Court that will have jurisdiction to entertain the suit.” 7 In the present case, the petitioners have invoked jurisdiction of the Small Cause Court under section 41 of the said Act. Under the said 9 provision the said Court gets exclusive jurisdiction to entertain a suit filed by a licensor or against a licensee for possession of the premises. In the case of Mansukhlal Dhanraj Jain v. Eknath Vithal Ogale, (1995) 2 SCC 665, the Apex Court held thus : “it will be appropriate to note the relevant statutory pro- vision having a direct bearing on this question. Section 41(1) of the Small Cause Courts Act reads as under: “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 Causes shall have jurisdiction to entertain and try all suits and proceedings between a licensor and li- censee, 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 the licence fee or charges or rent thereof, irrespective of the value of the subject-matter of such suits or proceedings.” 12. A mere look at the aforesaid provision makes it clear that because of the non-obstante clause contained in the section, even if a suit may otherwise lie before any other court, if such a suit falls within the sweep of Section 41(1) it can be entertained only by the Court of Small Causes. In the present proceedings we are not concerned with the provisions of sub-section (2) of Section 41 and hence we do not refer to them. For applicability of Sec- tion 41(1) of the Small Cause Courts Act, the following conditions must be satisfied before taking the view that jurisdiction of regular competent civil court like City Civil Court is ousted: (i) It must be a suit or proceeding between the li- censee and licensor; or (ii) between a landlord and a tenant; (iii) such suit or proceeding must relate to the recov- ery of possession of any property situated in Greater Bombay; or 10 (iv) relating to the recovery of the licence fee or charges or rent thereof.” In this case there is no averment in the plaint regarding Licensor-licensee relationship. As held by the full bench of this Court in the case of Dattatraya (supra), the plaint will have to be read as a whole. The allegation in the plaint is that the first respondent was not a licensee in respect of the suit premises, but according to the petitioners, he was allowed to conduct the suit business. It is alleged that the first respondent specifically undertook not to claim interest of whatsoever nature in the suit premises, which in any event, was never intended to be created in his favour. It is alleged that his entry into the suit premises was for the management by him of the suit business as a conductor thereof. Paragraph 9 of the plaint makes it very clear that the relief sought from the Court was for removing the first respondent from the conduct of the business and for a direction to him to handover the suit business together with all the furniture and articles and other paraphernalia entrusted to him as a conductor of the suit business. At no place in the plaint, the petitioners have alleged existence of licensor and licensee relationship between them and the first respondent. On the contrary , the entire plaint proceeds on the footing that the first respondent was merely allowed to conduct the business in the suit premises. Therefore , taking the averments made in the plaint as correct and considering the plaint as a whole it is obvious that the petitioners have not alleged existence of licensor -- licensee relationship 11 between them and the first respondent. The suit is filed essentially for recovery of the suit business from the first respondent of which the first respondent was appointed as the conductor. Therefore, merely because in prayer clause (a) a decree is sought against the first respondent to remove himself from the suit premises, the suit cannot be treated as the one under section 41 of the said Act. Even in prayer (a), the emphasis is on handing over possession of the suit business together with all the furniture, utensils ,articles of trade and other paraphernalia. Such a suit cannot be entertained under section 41 of the said Act. In the circumstances, Appeal Bench has taken a correct view. 8 The learned counsel appearing for the petitioners heavily relied upon the judgment of the City Civil Court by which plaint was ordered to be returned. In paragraph 10 of the said decision, while returning the plaint, the learned judge of the City Civil Court observed thus: “10. In the circumstances, it is amply clear that the paramount intention of the Plaintiffs was to give the suit premises to the deft.1 to conduct the hotel business therein and the articles of agreement dt.1/6/78 for conducting the hotel business appears to be colouring and camouflage to real transaction of inducting the deft. 1 in the suit premises on license and according to prayer (a) in the present suit, the present suit has been filed by the Plaintiffs for the recovery of possession of the suit premises and the claim of handing over of hotel business from deft. 1 to plaintiffs therein is incidental thereto, and therefore, the City Civil Court, Bombay shall have no jurisdiction to entertain and try the present suit, in view of very text of provisions of section 41 of the Presidency Small Causes Court Act, 1882.....” 12 On this aspect, the learned counsel appearing for the first respondent has rightly relied on a decision of the Privy Council in the case of Upendra Nath (supra). In paragraph 7, the Privy Council held that "A Court which declines jurisdiction cannot bind the parties by its reasons for declining jurisdiction : such reasons are not decisions and are certainly not decisions by a Court of competent jurisdiction. It would indeed be strange if on a dispute as to jurisdiction of a Court to try an issue, that Court by its reasons for holding that it had no jurisdiction, could, upon the principle of res judicata, decide and bind the parties upon the very issue which it was incompetent to try." Therefore, the aforesaid findings recorded by the City Civil Court are not binding on the parties. Therefore, the petitioners cannot rely upon the findings recorded by the City Civil Court while returning the plaint for presentation to proper court. The petitioners have not chosen to amend the plaint after reinstituting the same in the Small Cause Court. The appellate Court was right when it came to the conclusion that the suit will not be governed by section 41 of the said Act. The Petitioners have purported to value the suit premises in the plaint at Rs. 39,150/-. Assuming that the suit can be entertained under section 18 of the said Act by treating it as a suit for possession of the suit premises, as the valuation exceeds Rs. 10,000/-, in view of Section 19 (d ) of the said Act, the suit for possession of Immovable property will not be maintainable in the Small 13 Cause Court. 9. Thus, the finding of the Appeal Bench on the issue of jurisdiction is correct. It must be stated that after the petition was fully argued, an adjournment was granted to the petitioners to enable them to consider whether they want to amend the plaint. As the learned counsel appearing for the petitioners stated that the petitioners do not desire to amend the plaint, the writ petition was posted for judgment. 10 Hence, the writ petition is dismissed. The rule is discharged with no orders as to costs. JUDGE