1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. Notice of Motion No.586 of 2007 IN Suit No.390 of 2007 M/s.Jeevanlal (1929) Ltd. .. .. Plaintiff v/s. M/s.Deepak Enterprises & ors. .. .. Defendants WITH Notice of Motion No.1372 of 2007 IN Suit No.1076 of 2007 Deepak Jyoti Co-op. Housing Society.. .. Plaintiff v/s. M/s.Deepak Enterprises & ors. .. .. Defendants Mr.M.P.S . Rao i/by M/s.Chitnis Vaithy & Co. Plaintiff in N.M. No.586 of 2007 and for Deft.Nos.1 & 2 in N.M. No.1372 of 2007. Mr.Pradeep Sancheti with Mr.Birendra Saraf, Mr.Sachin Chandarana Mr.Hiten Dedhia and Ms.Priyanka Vegad i/by M/s.Manilal Kher Ambalal & Co. for Plaintiff in N.M.No.1372 of 2007 and for Deft. No.7 in N.M. No.586 of 2007. Mr.J.P . Sen with Ms.Meena Shah i/by M/s.Pandya & Co. for Deft.Nos.1 to 6 in N.M. No.586 of 2007 and for Deft.Nos.3 & 4 in N.M.1372 of 2007. ----- CORAM : SMT.ROSHAN DALVI, J. Dated : 3 rd February 2009 P.C. : 2 1. One Dharmsey Soonderdas and Gordhandas Soondardas executed a Lease on 16.4.1898 in favour of one Govindji Thakersey in respect of the suit property being land admeasuring about 16954 sq. yards at Parel Dr.Ambedkar Road, Mumbai- 400 012, for a period of 99 years at the monthly rent of Rs.145.75 . There have been various assignments between the lessees under the said lease and various parties. One Hussainbhai Jaffarbhai entered into the Indenture of Assignment with one Jeevanlal Motichand and another on 30.4.1930 with regard to the suit property. The said Jeevanlal has sued the lessors being the trustees of one Navanagar Sadavrat Trust who are the owners of the suit land. The said Jeevanlal entered into two Development Agreements with one Deepak Enterprises dated 18.6.1986 and 16.8.1986, who constructed 2 buildings on the suit land and registered Deepak Jyoti Co-operative Housing Society Limited. Jeevanlal has also sued the said Society. The said Society has further sued Deepak Enterprises, Jeevanlal as well as the aforesaid Trust and the Charity Commissioner under the Bombay Public Trusts, 1950 (BPT Act). 2. Consequently, there are 2 Suits filed by the lessees of the land and by the present assignees who are in possession of the suit land essentially against the lessors. 3 3. The lease initially created on 16.4.1898 has expired on 17.4.1997. The parties have essentially applied for renewal of the said lease for a further period of 99 years exercising their option to renew the lease as specified in the initial Indenture of Lease. 4. It is an admitted position that the initial lease was for 99 years from 16.4.1898. It allows the lessees to erect and construct buildings, dwelling houses, etc. at the expense of the lessees and to keep the premises in a state of good repair. It allows the lessees to renew the lease for a further period of 99 years from the expiration of the lease terms upon giving the lessors 3 calendar months' previous notice in writing and upon paying the rent reserved under the said lease and upon observing and performing the covenants contained therein. Under the said lease, the lessors have covenanted to execute a renewed lease upon the request and at the expense of the lessees for a further term of 99 years at the same yearly rent and subject to the same covenants, provisos and agreements contained in the lease, including the covenants for renewal thereof. The lessors are entitled during the continuance of the lease to sell the suit land upon giving the lessees a right of pre- emption to purchase the land at the same price and upon the same terms and conditions as would be offered to any bonafide purchaser of the suit 4 land. 5. The lessees have essentially sought to enforce the option to renew the lease. They have exercised the option within the time specified in the lease. It is exercised under the lessees' letter dated 9.10.1996 addressed to the trustees of the aforesaid Trust requesting them to renew the lease for a period of 99 years and executing a fresh Deed of Lease. The trustees called for records of the Trust and the original Lease Deed from the lessees by their letter dated 21.4.1997 which was forwarded as requested by the lessees' letter dated 5.5.1997. A reminder was sent on 5.6.1997. A cheque for the leasehold rent of Rs.1749/- at the agreed rate mentioned in the initial Indenture of Lease of 1898 itself was sent by the lessees to the lessors on 31.5.1999. The receipt was acknowledged by the lessors on 17.7.1999. In fact, it appears that rent of the previous period was not paid, which was requested. It is contended by the lessees that this amounts to deemed renewal of the lease. 6. However on 20.5.2005 the trustees gave the lessees the notice to quit. The correspondence that ensued between the Advocates and the parties contains the contentions of the parties in their respective lis. The lessors have filed a Suit for eviction in the Special Court which is the Rent Court on 5 18.4.2006. It is contended by the lessees as well as the assignees that that amounts to refusal of the request for renewal of the lease. 7. The execution of the aforesaid documents as well as the correspondence between the parties are admitted. The respective cases of the parties are based upon the interpretation of the documents and the law which governs the parties. 8. The lessees have applied for renewal of lease by exercising their option to renew the lease for a further period on the same terms and conditions as in the previous lease. They have made the offer of the lease rent which was fixed in the initial Deed of Lease. They contend that they are entitled to all the rights and privileges of the lessees upon exercising such options and offering the lease rent. They are prepared to incur expenses for the execution of the further lease as required under the Lease Deed of 1898. 9. It is contended on behalf of the lessors that they cannot renew the lease on the same terms and conditions as that would not be for the benefit of the Trust or in the interest of the Trust. They contend that they would not be able to obtain the permission of the Charity Commissioner 6 mandatorily required to be obtained under Section 36 of the BPT Act. The relevant part of Section 36 runs thus :- “ 36.(1) Notwithstanding anything contained in the instrument of trust (1) no sale, exchange or gift of any immovable property, and (b) no lease for a period exceeding ten years in the case of agricultural land or for a period exceeding three years in the case of non- agricultural land or a building, belonging to a public trust, shall be valid without the previous sanction of the Charity Commissioner. Sanction may be accorded may be accorded subject to such condition as the Charity Commissioner may think fit to impose, regard being had to the interest, benefit or protection of the trust; -(c) if the Charity Commissioner is satisfied that in the interest of any public trust any immovable property thereof should be disposed of, he may, on application, authorise any trustee to dispose of such property subject to such conditions as he may think fit to impose, regard being had to the interest or benefit or protection of the Trust. ” The marginal note of the said section reads thus :- “Alienation of immovable property of public trust.” 10. The permission to execute a fresh lease is required to be obtained by the trustees who own the land belonging to the Trust. No such application is made before the Charity Commissioner by the lessors. The lessors contend that since all the expenses for exercising option to renew the lease are to be incurred by the lessees, they are not obliged to incur 7 the expenses of making any such application. They contend that since the offer for renewal of the lease is made on the same rent as was fixed in 1898 and which is far too inadequate to be the lease rent for the suit land at the time of the execution of the fresh lease that being not in the interest of the Trust would not be permitted by the Charity Commissioner. They contend that they would not themselves apply for execution of any fresh lease upon such rent which is distinctly against the interest of the Trust and not for its benefit. They, therefore, contend that because of the specific bar upon execution of such a lease under Section 36 of the BPT Act, they would not be able to renew the lease as per the contractual requirement under the Deed of Lease. 11. The lessees contend that since the initial Indenture of Lease was executed in 1898, well prior to the BPT Act coming into force in 1950, their transaction is excepted from the provisions of the Act under Section 85 of the BPT Act. The relevant part of Section 85 runs thus:- “ 85. (1) The Religious Endowments Act, 1863, is hereby repealed. (2) On the date of the application of the provisions of this Act to any public trust or class of public trusts under sub- section (4) of Section1 (hereafter in this Section referred to 8 as the said date) the provisions of the Act specified in Schedule A which apply to such trust or class of trusts shall cease to apply to such trust or class of trusts. (3) Save as otherwise provided in this Section such repeal or cessation shall not in any way affect- (a) any right, title, interest, obligation or liability already acquired, accrued or incurred before the said date, (b) any legal proceedings or remedy in respect of such right, title, interest, obligation or liability or -(c) anything duly done or suffered before the said date.” The marginal note of the said section shows “repeal”. 12. Section 85, therefore, deals with the various statues which have been repealed by the BPT Act. The Religious Endowments Act, 1863, is repealed under sub- section (1). Other similar Acts like the Charitable and Religious Trusts Act, 1920, the Mussalman Wakf Act, 1923, the Bombay Public Trusts Registration Act, 1935, the Parsee Public Trusts Registration Act, 1936, the Baroda Public Institution Act and the Religious Endowments Act, 1863 are the ones shown in Schedule I, which are also accordingly repealed. Under sub- section (3), any such repeal would not affect the right, title, interest, obligation or liability created under the Acts which have been so repealed from the date on which the 9 BPT Act came into force. 13. It may be mentioned that no Acts other than the aforesaid have been repealed. The contention of the lessees that their transaction is exempt would have to be considered upon seeing under which of the aforesaid Acts their case falls. They claim under the Indenture of Lease. The lease is created under the Transfer of Property Act (T.P. Act). The T.P. Act is not repealed. The right, title, etc. created under the T.P. Act are, therefore, not saved. The lessees' contention that the rigours of Section 36 of the BPT Act would not apply to them is, therefore, incorrect. 14. Mr.Sancheti drew my attention to the case of Hasan Nurani Malak v. S.M. Ismail, Assistant Charity Commissioner, Nagpur & ors., AIR 1967 S.C. 1742 in a bid to show that contracts executed under the earlier Acts are saved. This case deals with the inquiry held under the Madhya Pradesh Public Trusts Act, 1951 (M.P. Act). The inquiry was held by the Registrar under that Act. After the BPT Act was made applicable in that State, it was held that fresh inquiry before the Assistant Charity Commissioner under the BPT Act could not be made since an inquiry was made before the Registrar which was a thing “duly done” under the BPT Act. In paragraph 10 of the judgment, the 10 Supreme Court has considered the words “anything duly done”. Mr.Sancheti would argue that this would include what the contracting parties in this case had done under the Indenture of Lease. That contention is incorrect. The judgment deals with what is duly done which is not affected under the BPT Act. The observations in paragraph 10, which deal with Section 6 of the General Clauses Act, 1897 relating to the saving clause of a statute run thus:- “ 10. The words “anything duly done” in sub- cl. (a) are very often used by the legislature in saving clauses such as we have in S. 86(3). Section 6 of the General Clauses Act, 1897 also provides that unless a different intention appears the repeal of an Act would not affect anything duly done or suffered thereunder. The object of such a saving clause is to save what has been previously done under the statute repealed . The result of such a saving clause is that the pre-existing law continues to govern the thing done before a particular date from which the repeal of such a pre- existing law takes effect.” (Emphasis supplied) Consequently, what the judgment considers is Acts which have been done under the repealed statute. The saving clause under the General Clauses Act also deals with the laws which existed before the repeal. Since upon repeal only that law gets obliterated from the statute book, this would not apply to any other laws which are not repealed. 11 15. Therefore, if the lessees seek to exercise the option to renew the lease and if the parties consider executing a fresh Deed of Lease, they would be statutorily barred from ultimately executing any such lease unless they obtain the permission of the Charity Commissioner under Section 36 of the BPT Act. The Charity Commissioner would not grant permission to create a fresh lease by renewal of the original lease upon the same terms and conditions that prevailed in 1898. It is a fact of which judicial notice is required to be taken that market rents of leasehold lands have far exceeded the rents which were prevalent in 1898. Excepting such rents in 1997 would be unconscionable. Besides, even if such lessors would be bound by such a contractual obligation, they would not be exempt from the provisions of the BPT Act since the suit property belongs to a Trust and the trustees must act only in the interest of the Trust. It may be mentioned that even otherwise the option to renew 99 years after the execution of the Deed of Lease upon the same terms and conditions as to the consideration payable under the transaction would not tantamount to adequate consideration which can be enforced in a Court of law, even if other terms and conditions with regard to keeping the lease property in a state of good repair, assigning the premises and constructing thereupon etc. would hold good 12 without amendments. 16. The lessees have assigned the suit land. The suit land is developed. 2 buildings have been constructed. A Co- operative Society is registered. Several flat purchasers are in possession of their respective flats. Their possession is protected under the provisions of the Maharashtra Ownership Flats Act (MOFA). The lessors concede their right of possession on the suit land, pending the Suit. 17. However the lessors contend that they are entitled, under the last clause of the Indenture of Lease, to sell the suit land to any party subject, of course, to the actual possession of the lessees and their assignees. This right of sale is subject to the right of pre-emption under the same clause of the Indenture of Lease. The right of pre- emption is to purchase the land at the same price and upon the same terms and conditions as would be offered to a bonafide purchaser. 18. The lessees as well as the assignees have been sued by the lessors in the Rent Court for ejectment under L.E. Suit No.133/153 / 2006. The lessees as well as the assignees have prayed for an injunction restraining the lessors from creating any third party rights, transferring or otherwise 13 disturbing the use, occupation and possession of the assignees in the suit land. The lessors do not desire to disturb their possession pending this Suit. They however claim the right to sell the suit land subject to the use, possession and occupation of the assignees therein. This is their contractual right under the Lease Deed of 1898. 19. The lessees have further required a mandatory order directing the lessors from accepting the arrears of lease rent from 1.4.1999. The lessors claim their right not to accept the arrears of lease rent, if they so desire. 20. The assignees have further prayed for the stay of L.E. Suit No.133/153 / 2006. The lessors claim that the prayer for stay of the ejectment Suit is malafide and only with a view to bind time so that the lessees as well as assignees who have no right to remain upon the suit land, continue to do so upon offer of payment of grossly inadequate lease rent. 21. It may be mentioned that this Suit is filed in the Civil Court. The jurisdiction of this Court is under Clause 12 of the Letters Patent. It is the Ordinary Original Civil Jurisdiction over properties within its territorial limits. It is co-ordinate with the jurisdiction of the City Civil Court in the city except upon specified pecuniary limits. It is also co- 14 ordinate with the jurisdiction of any other Civil Court outside its territorial limits. Rent Court is a Special Court. Even if it relates to a civil litigation, it is a Court of co-ordinate jurisdiction. The High Court in its original civil jurisdiction is not a higher Court than any other Civil Court with such original civil jurisdiction. It, therefore, cannot stay a Suit on another cause of action filed in the competent Court with regard to the property in dispute in this Suit. 22. Besides, on merits, it is seen that the lease has expired in 1997. The option to renew the lease is exercised upon the same terms and conditions, including the term of payment of consideration under the lease of 1898. The lease rent, as fixed in 1898, is only offered. The lessees as well as assignees have continued to hold over the suit property upon offer of grossly inadequate leasehold rent considering the present market price or even the market price that prevails on the date the option to renew was exercised. It is for the Rent Court to determine the merits of the ejectment Suit. It would be improper to stay that litigation which would determine the rent payable by the lessees holding over. Of course, it is true, as contended on behalf of the lessees as well as the assignees, that that Court would not have the jurisdiction to determine whether the option to renew can be exercised by the lessees and on what terms. This Court 15 would determine that aspect. 23. In these Notices of Motion, the lessees and/or assignees must make out a prima facie case for holding over upon payment of the same rent. They have not made out any such case. They have not shown that they are exempted under the saving clause contained in Section 85(3) of the BPT Act which deals with repeal of specified statutes. Hence, the following order:- ORDER (i)Mr.Sen on behalf of the lessors makes a statement that the lessors shall not disturb the possession, use and occupation of the assignees until orders are passed in L.E. Suit No.133/153 / 2006 already filed by the lessors and pending the hearing of this Suit. The statement is accepted. (ii)The lessors cannot be restrained from transferring, selling or creating any third party rights in respect of the suit land if that is subject to the use, occupation and possession of the assignees who are the the Plaintiffs in Suit No.1076 of 2007. Hence the prayer for grant of injunction in that behalf is refused except for protecting the possession of the assignees being Deepak Jyoti Co-op. Housing Society on the suit land pending this Suit. 16 (iii)The offer of arrears of lease rent made by the lessees is noted. If the lessors do not accept the arrears of lease rent at the rate offered by the lessees, they may deposit the said rent with the Prothonotary and Senior Master of this Court. (iv)The prayer for stay of L.E. Suit No.133/153 / 2006 is refused. 24. Both the aforesaid Suits are required to be tried together and disposed of by common evidence under common issues which arise in these Suits. All the parties have filed their respective Written Statements. Following issues are framed:- ISSUES (1)Whether the above Suits are barred by the Law of Limitation. (2)Whether the lessees of the suit land are entitled to exercise the option to renew the lease on the same terms and conditions mentioned in the Indenture of Lease dated 18th April 1898. (3)Whether the lessors are entitled to sell the suit land to any 17 purchaser as per the covenants contained in the Indenture of Lease dated 18 th April 1898. (4)Whether the sale, if any, by the lessors would be subject to the right of pre- emption of the lessees or the assignees as per the covenants contained in the Indenture of Lease dated 18 th April 1898. 25. Various documents executed by the parties as well as the correspondence that ensued between them are admitted. That may be relied upon by the parties for interpreting the same. 26. Mr.Sancheti as well as Mr.Rao agree and accept that the Suits can be disposed of upon interpretation of the documents and upon considering the law which governs the parties without further oral evidence. 27. Mr.Sen on behalf of the lessors applies for time to consider if any further oral evidence would be led by the lessors. 28. It is seen that the suit property is in the possession of the assignees. They have been in possession pursuant to the covenants contained in the Indenture of Lease. Their 18 possession is admitted. The lessors have sought to sell the land subject to their possession and occupation. The assignees have, at best, a leasehold interest in the suit land. The revisionary rights remain with the lessors which can be sold by the lessors subject to the right of pre- emption. The real dispute between the parties is only with regard to the extent of the lease rent or the purchase of the suit land upon the terms as would be obtained from a bonafide purchaser which implies the market value of the land at the time of sale. It would, therefore, be worthwhile for the parties to consider their options with regard to the extent of the rent or the price of the suit land by mediation . (SMT.ROSHAN DALVI, J.)