Case: East India Hotels Limited Vs. Syndicate Bank

3. The East India Hotels Ltd. (hereinafter referred to as the Company) took a loan of Rs 30 lakhs from the Syndicate Bank. By an agreement dated December 27, 1974 the amount of Rs 30 lakhs was advanced to the company on interest at the rate of 12.5 per cent per annum and the amount was repayable in ten years. The Syndicate Bank executed a leave and licence agreement in favour of the company in respect of 15, 000 sq. ft. on the mezzanine to the ground floor of the hotel Oberoi Towers situated at Nariman Point, Bombay on a monthly compensation of Rs 60, 000 per month, belonging to the company, for a period of 12 years. The leave and licence agreement inter alia provided that at the end of the said period of 12 years, the company shall, on the application of the licensee in writing, renew the licence for another period of 12 years if the company so deems fit on the terms and conditions to be mutually agreed upon. Admittedly the company repaid the entire loan and interest within the scheduled period. The company by a letter dated September 17, 1984 reminded the bank that the agreement was going to expire on December 31, 1986. The company also stated that as they were cramped for space, the bank should vacate the premises at the end of the term. The company by another letter dated April 18, 1986 again requested the bank to vacate the premises by the end of December 1986. The bank by its letter dated July 8, 1986 requested the company that the period of license may be renewed for a further period of 12 years. The company by its letter dated August 9, 1986 informed the bank that the request for renewal of licence was not acceptable and again requested the bank to hand over vacant possession on the expiry of the term. The bank did not hand over vacant possession of the premises even after December 1986 and sent the monthly compensation to the bank (sic company). The company did not accept the amount nor acquiesced in the continuance of possession of the bank after the expiry of the period of licence which came to an end on December 31, 1986. Some correspondence went on between the parties but the company did not agree for the extension of the period of licence. The company ultimately served a legal notice through their advocate on January 22, 1990 calling upon the bank to hand over vacant possession. The bank through their advocates sent a reply dated February 12, 1990 stating as under"I am gathering necessary instructions in the matter and shall revert to you with my clients reply within a reasonable timeIn the meantime, I am instructed to state that my clients did not admit any of the contentions raised by your clients in your letter." *4. On April 12, 1990 a fire broke out in Oberoi Towers and as a result of which not only the bank but all the other shop owners had to vacate the premises. Thereafter, again some correspondence took place between the parties but the only circumstance necessary to be mentioned is that the bank started functioning its business at another place but its papers, furniture, fixtures etc. continued to remain in the premises. Initially the company permitted the staff of the bank to visit the premises on three days in a week but subsequently with effect from July 1990 the company did not permit them to enter the premises at all. In the above circumstances the bank filed a suit under Section 6 of the Act on August 29, 1990 on the original side of the Bombay High Court. The company filed a written statement and contested the suit. A notice of motion was issued for interim reliefs and it reached for hearing on November 1, 1990. On that date after the arguments of Mr Tulzapurkar, learned counsel for the plaintiff bank were over, Mr Nariman appearing for the defendant company made a "without prejudice offer" that he was prepared to treat the hearing of the notice of motion as a trial of the suit. He further stated that for the purposes of the suit the defendants were willing to proceed on the footing that the plaintiffs had been dispossessed as alleged in the plaint. In view of this statement, it was agreed between the parties that the hearing of the notice of motion be treated as the hearing of the suit. Thereafter, the arguments were heard and the suit was decreed by judgment dated November 6, 1990. Aggrieved against the judgment the defendant company has come in appeal to this Court

Court's reasoning:
It is well settled that the plaintiff cannot be allowed to go against its own pleadings and the case as set up in the plaint. The agreement which is an admitted document also shows in unmistakable terms that it was an agreement of leave and licence. The High Court also has held that the plaintiff was a licensee in the premises and the period of licence had expired on December 31, 1986 and thereafter the company had not allowed any extension of the period of licence. It is also an admitted position in the case that the period of licence though had come to an end on December 31, 1986 but the company never took law into its own hands much less used any force in order to dispossess the bank from the premises. The company in a lawful manner served a legal notice asking the bank to vacate the premises on or before December 31, 1986. The company acted in a lawful manner and the bank though bound to hand over possession of the premises to the company before December 31, 1986, continued to remain in unlawful possession as aclearly goes to show that the bank was not doing any business in the premises on or after April 12, 1990 and in this manner had to vacate the suit premises on account of fire as the premises were no longer fit for continuing any business by the bank. Thereafter, according to the plaintiffs a new lock was fixed by the company on the main entrance in July 1990 and thereafter did not permit the officials of the bank to enter the premises. The plaintiff bank wrote a letter to the company on May 26, 1990. The aforesaid letter is reproduced inthe present case in our view the plaintiff has not been dispossessed by using any force. Admittedly the bank is a licensee and the period of such licence came to an end on December 31, 1986 and thereafter its possession was that of a trespasser. On account of fire having broken out on April 12, 1990 the bank had to stop its business and in fact it has started its business at some other place. In case the intention of the company would have been to dispossess the bank by force, it could have done so soon after the expiry of the period of licence, but admittedly nothing was done for more than three years till the fire broke out on April 12, 1990. The question now is whether the plaintiff bank who is admittedly a licensee and having become a trespasser after December 31, 1986 could claim recovery of possession against thecannot be any dispute with this settled proposition. However, in the present case the title of the company as well as the position of the plaintiff bank that its possession was as a licensee is an admittedEven otherwise to grant or not to grant relief under the Specific Relief Act lies in the judicial discretion of the Court. I am thus clearly of the view that in the facts and circumstances of the case which are admitted, the plaintiff bank is not entitled to any decree under Section 6 of theare told that after the decision of the High Court the company has already filed a suit for permanent injunction on the basis of title restraining the bank from obtaining possession and an application for temporary injunction has also been filed for an interim relief. That being the position the result of granting any decree in this litigation under Section 6 of the Act would not serve the ends of justice and at the same time it would unnecessarily prolong litigation between the parties which would be a waste of public money as well as the valuable time of the courts. We cannot lose sight of the fact that the plaintiff bank is an instrumentality of the State and it should honour its commitments and not indulge in futile litigation at the cost of publicposition of such licensee is not better than a trespasser and if the true owner comes into possession of the premises without using any force or on account of fire or other act of vis major, in my view it would not be in the interest of justice to grant a decree for possession in favour of such licensee under Section 6 of theThus in my view the plaintiff bank in the facts and circumstances of the present case is not entitled to any decree under Section 6 of the Act.