Case: Laxmi &amp; Co Vs. Dr. Anant R. Deshpande &amp; Anr

4. The appellant is a firm owning lease hold rights in an immovable property known as "Lokmanya Department Stores" situate at Dadar in Bombay. The appellant became owner of that property in the month of August, 1960. The previous owner of that lease hold property was Department Service Stores. The respondent Deshpande is a medical practitioner. He had come to occupy under what is described as a "leave and licence" Agreement dated 1-11-1952 a portion of the ground floor of the annexe to that property on payment of Rs. 250/- per month or 2% of the gross income of the clinic whichever was higher. The agreement was with the previous lease-holder Departmental Service Stores for a period of five years with an option of renewal for a further term of five years5. The appellant filed an ejectment application on 23 July, 1964 against the respondent Deshpande under Chapter VII of the 1882 Act in the Court of Small Causes at Bombay. A summons was issued to Deshpande. The summons was returnable on 22 August, 1964 calling upon him to show cause why he should not be compelled to deliver up the ground floor of the annexe in his occupation. The respondent Deshpande caused his appearance filed through his Advocate. The ejectment application was postponed for hearing on 22 September, 1964. It was again adjourned to 17 November, 1964 to enable the respondent Deshpande to file his defence. He filed his defence. The ejectment application was adjourned to 3 December, 1964 for scrutiny. After scrutiny the matter was transferred to what is described in the Bombay Small Courts as non-priority warned list. In September, 1966 the ejectment application appeared on the monthly board. On 10 October, 1966 the matter was placed before Court in Court Room No. 12 in the Court of Small Causes at Bombay for the purpose of giving a fixed date for hearing. Advocates on behalf of both the parties were present in Court on 10 October, 1966 when the date for hearing was fixed for 23 November, 1966. On 23 November, 1966 the matter was called out for hearing. No one on behalf of the respondent Deshpande was present in Court. The matter was passed over and was again called out in the afternoon. No one on behalf of the respondent Deshpande was present. The matter was called out for the third time at about 4.30 p.m. Neither the respondent Deshpande nor his Advocate was present on any of the occasions when the application was called out. The application was heard ex-parte. Evidence was led on behalf of the appellant. The Small Cause Court passed an ex-parte decree on 23 November, 1966 in favour of the appellant directing the respondent Deshpande to deliver possession of the premises6. The appellant in the month of January, 1967 made an application for execution of the decree. Possession was delivered up to the appellant by the bailiff7. The appellant thereafter agreed to let out the premises to the second respondent V. B. Gandhi8. On 14 January, 1967 the appellant was served with an ex-parte order passed by the Small Causes Court, Bombay on respondent Deshpandes application for setting aside the ex-parte decree restraining the appellant from executing the ex-parte decree dated 23 November, 1966. In view of the fact that the appellant had already obtained possession through the bailiff the respondent Deshpande requested the appellant to allow the respondent Deshpande to use the ground floor for his professional work between certain stated hours. The appellant allowed the arrangement as a temporary one and without prejudice to the rights and contentions of the parties9. In the application dated 14 January, 1967 for setting aside the ex-parte decree the respondent Deshpande alleged that he was ill on 23 November, 1966 and could not attend the Court and he did not know that an ex-parte decree was passed on that day. The respondent Deshpande affirmed his second affidavit on 16 January, 1967 that his prior statement that he was ill on 23 November, 1966 was incorrect. In the second affidavit the respondent Deshpande said that after 10 October, 1966 when the date was fixed for hearing of the ejectment application the respondent Deshpandes Advocate had misplaced his brief and that the matter had escaped the attention of his Advocate and accordingly no one remained present in Court on 23 November, 1966. The Small Cause Court said that the respondent Deshpande had made a false affidavit on 14 January, 1967 with a view to obtaining an ex-parte injunction order and the Small Causes Court vacated the interim injunction and refused on 6 February, 1967 to set aside the ex-parte decree dated 23 November, 196610. The respondent Deshpande thereafter moved the High Court under Section 115 of theCode of Civil Procedure. The respondent Deshpande contended that Small Causes Court acted without jurisdiction in passing an ex-parte decree without framing and determining the preliminary issue as to whether the respondent Deshpande was a tenant in respect of the premises. It was particularly contended that framing of such an issue and its determination was obligatory on the Small Causes Court even in an ex-parte matter by reason of provisions contained in Section 42A of the 1882 Act11. The respondent Deshpande also made a Civil Revision Application under Section 115 of theCode of Civil Procedure against the order dated 6 February, 1967 refusing to set aside the ex parte decree dated 23 November, 196612. Both the applications were heard by the learned Single Judge of the High Court of Bombay who arrived at these conclusions. It was the duty of the trial Court even when the occupant did not appear before the Court to frame an issue as to whether the occupant was or was not the tenant of the premises and protected bythe Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (referred to as the 1947 Act) and to decide the same as a preliminary issue on the next date of hearing. After framing the preliminary issue the Court would adjourn that matter for the hearing of preliminary issue. The trial Court had not framed any preliminary issue, had not recorded a finding on that issue, but proceeded straightway to pass an order of ejectment. The learned Single Judge of the High Court set aside the ex parte decree and sent it back to the Small Cause Court with a direction that the preliminary issue be framed as contemplated under Section 42-A of the 1882 Act and to give opportunity to the parties to lead evidence. No order was passed on the other application for setting aside the ex parte decree.

Court's reasoning:
17. It is correct that the pleadings will have an important bearing on the question as to whether the occupant contests the right of the applicant to possession. That contest has to be based on his tenancy within the meaning of the 1947 Act. In the present case, the occupant respondent Deshpande stated in his defence that he was a lawful tenant. The words "lawful tenant" by themselves do not expand as to how the occupant is a lawful tenant. Section 42-A speaks of tenancy within the meaning of the 1947 Act and protection under that Act. One has to claim the benefit and protection of the Act. The claim of protection under the Act will become an issue at the hearing of the case. The word "appearance" cannot be equated with the filing of the written statement. After pleadings are complete the Court appoints a date for hearing. It is at the hearing that the occupant will assert his tenancy and claim protection against eviction. It is then that the Court will enquire whether an issue is to be struck between the applicant on the one hand and the occupant on the other by reason of denial by the applicant of the occupants claim. It is, therefore, clear from the provisions of the statute that the word "appear" in Section 42-A of the 1882 Act means appearance at the date of the hearing18. The High Court was wrong in the conclusion that it was obligatory on the trial Court to frame a preliminary issue on the appointed day irrespective of the appearance of the occupant27. It is true that the Court can take notice of subsequent events. These cases are where the court finds that because of altered circumstances like devolution of interest it is necessary to shorten litigation. Where the original relief has become inappropriate by subsequent events, the Court can take notice of such changes. If the court finds that the judgment of the Court cannot be carried into effect because of change of circumstances the Court takes notice of the same. If the Court finds that the matter is no longer in controversy the court also takes notice of such events. If the property which is the subject-matter of suit is no longer available the court will take notice of such event. The court takes notice of subsequent events to shorten litigation, to preserve rights of both the parties and to subserve the ends of justice. Judged by these principles it is manifest that in the present case suits are pending. On the one hand the appellant has challenged the decree obtained by Ashar and others as also the warrant of execution. On the other hand, the suit instituted by Ashar and others against inter alia the appellant in 1965 for possession is pending. This Court cannot say with exctitude that any final decision has been reached on the respective and rival rights and claims of the appellant and the respondent. It is, therefore, neither desirable nor practicable to take notice of any fact on the rival versions of the parties as to subsequent events.