Sunday, 3 February 2019

Whether small cause court has jurisdiction to try suit if tenancy is determined?

 In other words, whether it is a suit between the
licensor and the licensee or between the landlord
and the tenant, such types of suits fall under
Section 41 of the Small Cause Courts Act and are,

therefore, cognizable by the Courts of Small Causes,
Bombay.
30) This takes us to deal with the next argument
of Mr. Naphade, learned senior counsel for the
appellants that once the tenancy is determined such
suits would not come within the purview of Section
41 of the Small Cause Courts Act. This argument
was rejected by the Division Bench and, in our view,
rightly by placing reliance on the law laid down by
the Bombay High Court in the case of Nagin
Mansukhlal Dagli vs. Haribhai Manibhai Patel
(AIR 1980 Bombay 123) (Para 8 of the said decision
quoted in the impugned order). We approve the law
laid down by the Bombay High Court in the case of
Nagin Mansukhlal Dagli (supra) as laying down the
correct principle of law.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos.57535754
OF 2011

Mahadev P Kambekar Vs Shree Krishna Woolen Mills Pvt. Ltd. 
Dated:January 31, 2019
Abhay Manohar Sapre, J.
1) These appeals are directed against the final
judgment and order dated 19.07.2007 passed by
the High Court of Judicature at Bombay in Appeal
No.169 of 1999 in Suit No.503 of 1980 and in
Appeal No.199 of 1999 in Suit No.503 of 1980
whereby the Division Bench of the High Court
allowed both the appeals filed by the appellants
1
herein (defendant) and the respondent(plaintiff)
herein respectively.
2) In order to appreciate the controversy involved
in these appeals which lies in a narrow compass, it
is necessary to set out the relevant facts
hereinbelow.
3) The appellants are the legal representatives of
Mahadev Pandurang Kambekar, who was the
original defendant whereas the respondentShree
Krishna Woolen Mills Pvt. Ltd. is the plaintiff in the
Civil Suit out of which these appeal arise.
4) The dispute between the parties relates to the
land bearing survey Nos.58 and 60 (renumbered
as
CTS 741,741/1 to 741/7) situated at NahurBhandup
in Bombay suburban District (hereinafter
referred to as “the suit land”).
5) The plaintiff claims to be the lessee of the suit
land whereas the defendant claims to be the
owner/lessor of the suit land on the terms set out in
2
the indenture of the lease deed dated 20.06.1958
executed between the parties.
6) A dispute arose between the parties. This led
the defendant to determine the lease in question by
serving a quit notice dated 19.02.1980 to the
plaintiff requesting them to handover the leased
premises, which was in their possession, to the
defendant.
7) The plaintiff then filed a Civil Suit (No.503 of
1980) against the defendant on the original side of
the Bombay High Court claiming therein the specific
performance of the contract (lease deed) in relation
to the suit land.
8) The suit was based essentially on clause 7 of
the Lease Deed which, according to the plaintiff,
enabled them to elect and exercise their right to
purchase the suit land from the defendant on
fulfillment of the conditions set out therein.
9) The defendant on being served filed the written
statement. The defendant denied the claim and at
3
the same time also filed his counter claim against
the plaintiff seeking their eviction from the suit land
and the arrears of rent.
10) The Single Judge by judgment/decree dated
24.12.1998 decreed the plaintiff’s suit for specific
performance of contract and directed the defendant
to execute the conveyance deed in favour of the
plaintiff of the suit land. The Single Judge also
allowed the counter claim filed by the defendant and
accordingly passed the decree for possession of the
suit land and arrears of rent for three years against
the plaintiff.
11) The appellants (defendant) and the respondent
(plaintiff) both felt aggrieved by the judgment/decree
passed by the Single Judge and filed their respective
appeals before the Division Bench.
12) So far as the defendant's (appellants herein)
Appeal No.169/1999 was concerned, it arose out of
the decree passed against him for specific
performance of the contract, whereas so far as the
4
plaintiff's (respondent herein) appeal (No.199/1999)
was concerned, it arose out of the decree passed
against them for possession of the suit land and
arrears of rent.
13) By impugned judgment, the Division Bench
allowed both the appeals. So far as appeal
(169/1999) filed by the appellants (defendant) was
concerned, the Division Bench set aside the
judgment /decree and remanded the suit for retrial
to the Single Judge on merits afresh in accordance
with law.
14) So far as appeal (199/1999) filed by the
respondent (plaintiff) was concerned, the Division
Bench set aside the judgment/decree on the ground
that the counterclaim
was not maintainable in view
of Section 41 of the Presidency Small Cause Courts
Act, 1882 ( for short called “the Act 1882”) . In other
words, the Division Bench held that so far as
counterclaim
filed by the defendant against the
plaintiff is concerned, the Single Judge wrongly

entertained it as it had no jurisdiction on its original
jurisdiction to entertain counterclaim
of this nature
in the light of the provisions of Section 41 of the Act
1882.
15) The defendant (appellants herein), i.e., lessor
felt aggrieved by that part of the order of the
Division Bench which resulted in dismissal of his
counterclaim
and filed the present appeals by way
of special leave in this Court.
16) So far as the order of the Division Bench which
resulted in setting aside of the judgment/decree of
the Single Judge and remanding of the suit for retrial
on merits is concerned, it attained finality as a
result of dismissal of SLP filed by the plaintiff in this
Court.
17) The short question, which arises for
consideration in these appeals, is whether the
Division Bench was right in dismissing the
defendant's counterclaim
as being not
maintainable.

18) Heard Mr. Shekhar Naphade, learned senior
counsel for the appellants and Mr. Shyam Divan,
learned senior counsel for the respondent.
19) Mr. Naphade, learned senior counsel
appearing for the appellants (defendant) and Mr.
Shyam Diwan, learned senior counsel appearing for
the respondent (plaintiff) addressed the Court at
length. However, having heard both the learned
counsel and on perusing the record of the case, we
find no merit in these appeals.
20) In our considered opinion, the issue involved
in the present appeals remains no longer res integra
and is decided by this Court in the case of
Mansukhlal Dhanraj Jain & Ors. vs. Eknath
Vithal Ogale [(1995) 2 SCC 665].
21) In Mansukhlal case (supra), the question
arose as to whether the suit filed by the plaintiff
claiming to be the licensee of the premises on
monetary consideration and seeking permanent

injunction restraining the defendant (licensor) from
recovery of the possession of the premises is
cognizable by the City Civil Court, Bombay
constituted under the Bombay City Civil Court Act
or is cognizable by the Court of Small Causes
Bombay as per Section 41(1) of the Act, 1882.
22) It is this question, which was examined by this
Court in detail in the light of the relevant provisions
of the Bombay City Civil Court Act, the Presidency
Small Cause Courts Act, 1882 and the Bombay
Rents, Hotel and Lodging House Rates Control Act,
1947.
23) Having examined the question, their Lordships
speaking through Majmudar, J. held that such suit
is cognizable and thus maintainable in the Court of
Small Causes, Bombay.
24) It is apposite to refer the discussion contained
in paras 11, 12, 13, 16, 17 and 18 which read as
under:
8
“11. In order to resolve the controversy
posed for our consideration, it will be
appropriate to note the relevant statutory
provision 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 subsection
(2), the Court of Small Causes shall have
jurisdiction to entertain and try all suits
and proceedings between a licensor and
licensee, 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 subjectmatter
of such suits or
proceedings.”
12. A mere look at the aforesaid provision
makes it clear that because of the nonobstante
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 subsection
(2) of
Section 41 and hence we do not refer to
them. For applicability of Section 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 licensee and licensor; or
(ii) between a landlord and a tenant;

(iii) such suit or proceeding must relate
to the recovery of possession of any
property situated in Greater Bombay; or
(iv) relating to the recovery of the
licence fee or charges or rent thereof.
13. In the present case, we are not concerned
with the 2nd and 4th conditions, as the only
contention of the appellants is that the
present suits do not satisfy conditions 1 and
3 for attracting Section 41(1). The
respondents claim to the contrary. It is
obvious that if the present suits satisfy
conditions 1 and 3 they would clearly attract
the applicability of Section 41(1) of the Act
and such suits would be outside the purview
of regular civil court like the City Civil Court.
Therefore, the enquiry which becomes
relevant at this stage is to find out from the
averments in the plaints whether these are
suits between a licensor and a licensee and
whether they relate to the recovery of
possession of immovable property situated in
Greater Bombay.
16. It is, therefore, obvious that the phrase
“relating to recovery of possession” as found
in Section 41(1) of the Small Cause Courts
Act is comprehensive in nature and takes in
its sweep all types of suits and proceedings
which are concerned with the recovery of
possession of suit property from the licensee
and, therefore, suits for permanent
injunction restraining the defendant from
effecting forcible recovery of such possession
from the licenseeplaintiff
would squarely be
covered by the wide sweep of the said phrase.
Consequently in the light of the averments in
the plaints under consideration and the
prayers sought for therein, on the clear
language of Section 41(1), the conclusion is
inevitable that these suits could lie within

the exclusive jurisdiction of Small Cause
Court, Bombay and the City Civil Court would
have no jurisdiction to entertain such suits.
17. We may now refer to the relevant
decisions of this Court and other courts to
which our attention was invited by learned
counsel for both the sides. As some of the
decisions referred to a pari materia provision
as found in Section 28 of the Bombay Rents,
Hotel and Lodging House Rates Control Act,
1947 (hereinafter referred to as “the Bombay
Rent Act”), it will be necessary to refer to the
said provision. Section 28(1) of the Bombay
Rent Act reads as under:
“28. Jurisdiction of courts.—
Notwithstanding anything contained in
any law and notwithstanding that by
reason of the amount of the claim or for
any other reason, the suit or proceeding
would not, but for this provision, be
within its jurisdiction,—
(a) in Greater Bombay, the Court of Small
Causes, Bombay, (aa) in any area for
which, a Court of Small Causes is
established under the Provincial Small
Cause Courts Act, 1887, such Court and
(b) elsewhere, the Court of the Civil
Judge (Junior Division) having
jurisdiction in the area in which the
premises are situate or, if there is no
such Civil Judge, the Court of the Civil
Judge (Senior Division) having ordinary
jurisdiction,
shall have jurisdiction to entertain and
try any suit or proceeding between a
landlord and a tenant relating to the
recovery of rent or possession of any
premises to which any of the provisions
of this Part apply….”
18. When Section 41(1) of the Small Cause
Courts Act is read in juxtaposition with the
aforesaid Section 28 of the Bombay Rent Act,
it becomes clear that pari materia words are
used about nature of suits in both these

provisions for conferring exclusive
jurisdiction on Small Cause Courts, namely,
they alone can entertain such suits or
proceedings relating to recovery of
possession of premises. It is of course true
that Section 41 of the Small Cause Courts
Act deals with such suits between the
licensee and licensor while Section 28 of the
Bombay Rent Act deals with suits between
landlord and tenant. But the nature of such
suits as contemplated by both these sections
is the same, namely, it should be the suit
relating to the recovery of possession of
premises. Interpreting the phrase “relating to
recovery of possession” as found in Section
28 of the Bombay Rent Act, a Bench of three
learned Judges of this Court in the case of
Babulal Bhuramal v. Nandram Shivram6 held
that a suit for declaration that one of the
plaintiffs was the tenant of the defendant
landlord and the other plaintiffs were his subtenants
and they were entitled to be
protected from eviction squarely falls within
the exclusive jurisdiction of the Small Cause
Court, Bombay under Section 28 of the
Bombay Rent Act and jurisdiction of the City
Civil Court for entertaining such a suit is
excluded. Imam, J. speaking for the threeJudge
Bench in that case observed at page
374 of the report as under:
“The present suit filed in the City Civil
Court raised in substance a claim to the
effect that the plaintiffs were the
tenants of the premises within the
meaning of the Act. Such a claim was
one which arose out of the Act or any of
its provisions. The suit related to
possession of the premises and the right
of the landlord to evict any of the
plaintiffs was denied on the ground that
the first plaintiff was a tenant within the
meaning of the Act and the premises had
been lawfully sublet by him to the

second and third plaintiffs. The City
Civil Court was thus called upon to
decide whether the first plaintiff was a
tenant of the premises within the
meaning of the Act and whether he had
lawfully sublet the same to the second
and third plaintiffs. The City Civil Court,
therefore, had to determine whether the
plaintiffs had established their claim to
be in possession of the premises in
accordance with the provisions of the
Act.”
25) In the light of the law laid down by this Court
in Mansukhlal’s case (supra) which was later relied
on in Prabhudas Damodar Kotecha & Ors. vs.
Manhabala Jeram Damodar & Anr. [(2013) 15 SCC
358], we have no hesitation in affirming the view
taken by the High Court in the impugned judgment
which rightly held that the counterclaim
filed by
the defendant (appellants herein) is not
maintainable.
26) In our considered view, the law laid down in
these two cases has full application to the facts of
this case and we find no ground to take a different
view than what has been taken by the High Court.

27) The only distinction on the facts of the case of
Mansukhlal (supra) and the case at hand is that in
case of Mansukhlal (supra), the dispute was
between the licensee and the licensor in relation to
the land, whereas in the case at hand, the dispute
is between the landlord and the tenant.
28) This factual distinction, in our view, is of no
significance for deciding the issue in question
against the appellants by placing reliance on the law
laid down in the case of Mansukhlal (supra)
because both the category of cases, i.e., the one
arising between the licensor and the licensee and
the other arising between the landlord and the
tenant in relation to the land are governed by
Section 41 of the Small Cause Courts Act.
29) In other words, whether it is a suit between the
licensor and the licensee or between the landlord
and the tenant, such types of suits fall under
Section 41 of the Small Cause Courts Act and are,

therefore, cognizable by the Courts of Small Causes,
Bombay.
30) This takes us to deal with the next argument
of Mr. Naphade, learned senior counsel for the
appellants that once the tenancy is determined such
suits would not come within the purview of Section
41 of the Small Cause Courts Act. This argument
was rejected by the Division Bench and, in our view,
rightly by placing reliance on the law laid down by
the Bombay High Court in the case of Nagin
Mansukhlal Dagli vs. Haribhai Manibhai Patel
(AIR 1980 Bombay 123) (Para 8 of the said decision
quoted in the impugned order). We approve the law
laid down by the Bombay High Court in the case of
Nagin Mansukhlal Dagli (supra) as laying down the
correct principle of law. We, therefore, do not
consider it necessary to elaborate our reasoning
more than what we have said.

31) Before parting, we consider it apposite to
make it clear that though both learned senior
counsel in support of their respective submissions
referred extensively to the factual matrix of the case
from their respective list of dates, pleadings and the
documents but we have refrained from recording
any factual finding on any of the factual issues.
32) Indeed, in the light of what we have held supra
on legal question, it is not necessary. It is now for
the parties to raise all such factual issue(s) such as
how much area was leased out, how much area is
outside the lease, who are the owners of the leased
area and the areas adjacent to leased area and all
incidental questions arising therefrom before the
competent Court.
33) It is apart from the fact that these factual
issues were also not gone into by the Division Bench
and indeed rightly. It is for this reason, we find no
ground to deal with them for the first time in these
appeals else it will cause prejudice to the rights of
16
the parties while prosecuting their grievances before
the competent Court. Now, it will be for the
competent Court to come to its own conclusion on
their respective merits and pass appropriate orders
in accordance with law.
34) In view of the foregoing discussion and the
observations, we find no merit in these appeals.
The appeals thus fail and are accordingly dismissed.
………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[R. SUBHASH REDDY]
New Delhi;
January 31, 2019

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