Friday, 19 February 2021

Is finding recorded by small cause court upheld by the high court is binding on the party before city civil court in a parallel proceeding?

 The Trial Court dealt with the orders passed by the Small Causes

Court in the declaratory suit filed by the defendants, order passed by the

Appellate Bench of the Small Causes Court and the order passed by this

Court in Writ Petition No. 3521 of 1999 filed by the original defendant

recording various findings in favour of the plaintiff herein and against the

defendants. The Trial Court, accordingly, rightly held that the original

defendant was judicially held to be just conductor of the business and

nothing more, which finding had attained the finality. In view of the fact that

various issues which were raised by the defendants in this Suit were already

concluded by the Small Causes Court and upheld by the Appellate Bench

and this Court, those submissions made by both parties were rightly not

considered by the Trial Court once again in the impugned judgment and

decree. In my view, the findings rendered by the Small Causes Court,

Appellate Bench of the Small Causes Court and this Court in respect of the

suit premises were binding on the parties in the parallel proceedings raising

similar issues.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

FIRST APPEAL NO. 1791 OF 2007

Shri Purshottam Shankar Shetye  Vs  Abhay Shridhar Shetye


CORAM : R.D. DHANUKA, J.


PRONOUNCED ON : 19th MAY 2020

Citation: 2020(6) MHLJ 86


 By this First Appeal, the appellants (original defendants) have


impugned the judgment and order dated 20th March, 2007 passed by the

Bombay City Civil Court at Bombay, thereby decreeing the suit filed by the

respondent no.1 (original plaintiff) inter-alia praying for recovery of the

business premises and for other reliefs and directing the appellants to deliver

the said business premises described in the plaint. Some of the relevant facts

for the purpose of deciding this First Appeal are as under :-

2] Mrs. Malati Rajaram Parshetye was the original respondent no.1 and

was the original plaintiff before the Trial Court whereas the Mr. Purshottam

Shankar Shetye was the original defendant. Upon demise of the original

defendant his legal heirs were brought on record. It was the case of the

respondent no.1 that she is the widow of late Shri Rajaram Appa Parshetye

who expired on 26th March, 1967. Her late husband was carrying on business

of selling Pan, Bidi and Cigarette etc. in the name and style of “Masrice Bidi

Works” as owner thereof at Shop No.5, admeasuring 9’x15’, Ground Floor,

Choksi Building, Ranade Road, Dadar, Mumbai – 400 028 (hereinafter

referred to as “the suit premises and its business” for short). The husband of

the respondent no.1 was the tenant of the suit premises. It is the case of the

respondent no.1 that her tenancy right in the suit premises are still intact and

subsisting after demise of her husband. Parties in this judgment are referred

to as per their original status before the trial court.


3] It was the case of the plaintiff that in the year 1965, her late husband

was suffering from illness and was not able to run his business personally in

the suit premises and thus decided to give his business for conducting to

some needy and fit person who was able to conduct the said business on the

basis of Conducting Agreement for the period of 11 months only.

4] It was the case of the plaintiff that Mr. Purshottam Shankar Shetye the

original defendant had approached her husband and requested him for giving

the said business being run in the suit premises for conducting on the basis

of a Conducting Agreement. The late husband of the plaintiff accepted the

said request of the original defendant and told him to enter into a Conducting

Agreement for a period of 11 months. Late husband of the plaintiff and the

original defendant entered into a Conducting Agreement on 2nd January,

1966 for a period of 11 months commencing from 2nd January, 1966 to 1st

December, 1966. It was the case of the plaintiff that the original defendant

started conducing the business of the husband of the paintiff as per the terms

and conditions recorded in the said Conducting Agreement dated 2nd

January, 1966. The original defendant handed over the possession of the said

business run in the said suit premises to the husband of the plaintiff after

conducting period of 11 months was over on 2nd December, 1966.

5] The husband of the plaintiff and the original defendant executed

another Conducting Agreement for a period of 11 months commencing from

1st July, 1967 to 31st May, 1968 in respect of the said business being run in

the said suit premises. On 10th September, 1970, the husband of the plaintiff

and the original defendant entered into another Conducting Agreement for

conducting the said business in the said suit premises for the period of 9

months. Last Conducting Agreement executed between the plaintiff and the

original defendant was for the period of 11 months commencing from 1st

March, 1986 to 31st January, 1987.

6] It was the case of the plaintiff that the original defendant had handed

over possession of the said business to the plaintiff. The plaintiff thereafter

declined to give her business for conducting to the original defendant. The

plaintiff however considered the request of the original defendant

subsequently and told him to prepare a Conducting Agreement once more

and for the last time commencing from 5th February, 1987 to 14th January,

1988. The original defendant however prepared an agreement in the form of

a letter on Rs.10 stamp paper which was treated as Conducting Agreement

by the parties. On 10th December, 1987, the plaintiff issued a notice upon the

original defendant which was delivered to the original defendant for handing

over of the business of the plaintiff being carried on in the suit premises. The

original defendant however did not hand over the business of the plaintiff

being conducted in the suit premises.


7] The original defendant on the other hand filed a Declaratory Suit

bearing No. 649 of 1988 in the Small Causes Court at Bombay against the

plaintiff for declaration of his alleged tenancy rights in the suit premises.

The original defendant filed an application (Injunction Notice No. 934 of

1988) for various reliefs. The plaintiff fled an application for appointment of

Court Receiver and to take possession of the business of the plaintiff being

carried on in the suit premises. By an order dated 20th July, 1989, the Small

Causes Court at Bombay disposed of both the applications by a common

judgment. The Small Causes Court granted reliefs in favour of the original

defendant in the said Injunction Notice and rejected the application filed by

the plaintiff for appointment of Court Receiver. The plaintiff preferred an

appeal from order before the Appellate Bench of the Small Causes Court at

Bombay.

8] It was the case of the plaintiff that the Establishment License of her

business in the suit premises was initially in the name of her late husband

and after his demise was transferred in her name. The plaintiff was paying

monthly rent of the suit premises to the landlord during the period

mentioned in the Conducting Agreement. It was the case of the plaintiff that

she being poor and old widow was unable to run her business personally and

therefore had permitted the original defendant to run the said business on

Conducting Agreement basis from the said suit premises. The right of the

original defendant to conduct the business of the plaintiff in the suit


premises expired after 14th January, 1988 and has no right, title and interest

of any nature whatsoever to use, occupy and conduct the said business of the

plaintiff in the suit premises.

9] On 30th January, 1990, the plaintiff filed Short Cause Suit No. 979 of

1990 against the Purushottam Shankar Shetye inter-alia praying for an order

and declaration that the original defendant was trespasser and had no right,

title and interest in the suit premises and her business being carried therein

after the period given under the Conducting Agreement dated 14th January,

1987 executed by and between the parties was over. In prayer clause (b), the

plaintiff also prayed for an order and direction against the original defendant

to vacate the suit premises and its business being carried on the suit

premises. In prayer clause (c), the plaintiff prayed for mense profit @

Rs.3,000/- p.m. form the original defendant.

10] On 17th April, 1990, the original defendant filed a written statement in

the said suit before the City Civil Court. In the said written statement, the

original defendant raised a plea of lack of jurisdiction before the City Civil

Court to entertain the said suit by invoking the Section 9A of the Code of

Civil Procedure, 1908 on the ground that the suit filed by the plaintiff for

possession of the suit premises was not maintainable in view of the

provisions of Section 41 of the Presidency Small Causes Court Act and also

brought on record that the suit filed by the original defendant for declaration that he was a tenant in respect of the suit premises was then pending before

the Small Causes Court. The original defendant also contended that the suit

filed by the plaintiff subsequently in point of time was liable to be stayed

under Section 10 of the Code of Civil Procedure, 1908.

11] On 3rd August, 1995, the Small Causes Court at Bombay dismissed

the R.A.D. Suit No. 649 of 1988 filed by the original defendant inter-alia

praying for declaration of alleged tenancy of the original defendant in the

suit premises. The original defendant thereafter preferred an Appeal bearing

no. 370 of 1995 against the judgment and decree passed by the Small Causes

Court in the said R.A.D. Suit No. 649 of 1988 on 11th September, 1995. On

12th October, 1998, the Appellate Court of the Small Causes Court at

Bombay dismissed the said Appeal No. 370 of 1995 filed by the original

defendant against the decree of dismissal of suit passed in R.A.D. Suit No.

649 of 1988.

12] On 9th August, 2005, Writ Petition bearing No. 3521 of 1999 filed by

the original defendant in this Court inter-alia impugning order dated 12th

October, 1998 passed by the Appellate Court of the Small Causes Court at

Bombay and judgment and decree dated 3rd August, 1995, came to be

dismissed. The original defendant did not file any Special Leave Petition

against the said order passed by the learned Single Judge of this Court

dismissing the said Writ Petition on 9th August, 2005.


13] Both the parties led oral and documentary evidence before the Trial

Court. On 20th March, 2007, the Trial Court decreed the said Short Cause

Suit No. 979 of 1990 filed by the plaintiff and directed the defendants to

deliver the business and the premises described in the plaint to the plaintiff

and granted time till 20th June, 2007 to handover possession to comply with

the directions issued in the said judgment and further directed not to part

with the possession of the suit premises in favour of any third party in

respect thereof. The Trial Court also directed the defendants to continue to

deposit whatever amount they had been depositing in compliance to the

earlier orders of the said Court. The Trial Court ordered enquiry in respect of

the mesne profit under Order 20 Rule 12 of the Code of Civil Procedure,

1908 from the date of institution of the suit till actual delivery of the

business and the suit premises to the plaintiff. Being aggrieved by the said

decree passed by the Trial Court, the defendants preferred this First Appeal

which came to be admitted on 16th July, 2007.

14] Mr. R.A. Thorat, learned Senior counsel for the defendants, invited

my attention to some of the paragraphs from the pleadings filed by the

parties, oral and documentary evidence by both the parties, various findings

rendered by the Trial Court in the Declaratory Suit filed by the predecessor

of the defendants before the Small Causes Court, judgment of the Appellate

Bench of the Small Causes Court at Bombay dismissing the appeal preferred


by predecessor of the defendants, order passed by this Court in the Writ

Petition dismissing the said Writ Petition, findings rendered by the Trial

Court in the suit filed by the plaintiff, prayers in the plaint filed by the

plaintiff before the City Civil Court and the defence raised by the plaintiff in

the written statement in the suit filed by the predecessors of the defendants.

15] Mr. Thorat, learned senior counsel for the defendants invited my

attention to the averments made in paragraph 12 of the plaint in respect of

the valuation of the suit claim and would submit that the plaintiff had valued

prayer clause (a) for an order and declaration that the defendants were the

trasspasser and have no right, title and interest in the suit premises after the

period given in the conducting agreement was over at Rs.1,140/- and prayer

(b) for seeking an order and direction against the defendants to vacate the

suit premises and its business. He submits that even though the suit claim

was valued at Rs.1,140/- and Rs.17,150/-, only the Small Causes Court had

exclusive jurisdiction to entertain, try and dispose off the suit filed by the

plaintiff. He invited my attention to the paragraph 2 of the written statement

filed by his clients before the Trial Court raising an issue of jurisdiction. He

submits that the suit was for possession of the suit premises and was not

maintainable in view of the provisions of Section 41 of the Presideny Small

Cause Courts Act, 1882. He submits that under the said provision, the Small

Causes Court only has exclusive jurisdiction regardless of the valuation of

the suit claim made by the plaintiff in the plaint. The suit was for relating to recovery of possession filed by the plaintiff who was a licensor and the

defendants who were the licensee of the suit premises. He submits that under

Section 41 of the Small Causes Court Act, 1882 in view of the non-obsante

provision, only the small causes court could have entertained the said suit

filed by the plaintiff. The suit was totally without jurisdiction.

16] Learned senior counsel placed reliance on the judgment of this Court

in case of Nagin Mansukhlal Dagli v/s. HaribhaiManibhai Patel, AIR

1980 Bom 123 and in particular paragraphs 2, 4, 8, 9 and 11, in support of

his submission that only the Small Causes Court in view of Section 41 of the

Presidency Small Causes Courts Act had jurisdiction to entertain the said

suit filed by the plaintiff. He also placed reliance on Sections 18 and 19 of

the said Act and would submit that Section 19 of the said Act has to be read

with non-obstante provision prescribed under Section 41 of the said Act.

Since, the suit was valued less then Rs.25,000/-, even otherwise the suit was

maintainable only before the Small Causes Court and not before the City

Civil Court.

17] Learned senior counsel placed reliance on the judgment of this Court

in case of Sagir Ahmed Nanhe v/s. Mania P. Gonsalives, 2003 (4) Bom

Cases Reporter 635 and in particular paragraphs 2 and 7 in support of the

submission that the suit between a licensor and licensee for recovery of

possession was maintainable only before the Small Causes Court and not before the City Civil Court. He submits that the City Civil Court has acted

without jurisdiction and has passed a decree against the defendants and in

favour of the plaintiff without having jurisdiction. Learned senior counsel

also placed reliance on the judgment of this Court in case of Rasiklal K.

Gala v/s. ManilalRavji, 2005 (4) ALL MR 798 and in particular paragraphs

2 to 7 in support of this submission.

18] Learned senior counsel invited my attention to the issues framed by

the City Civil Court and would submit that the issue of jurisdiction was not

framed by the City Civil Court. Issue of jurisdiction can be argued by his

clients even at this stage. In support of this submission, he invited my

attention to the issues at page 16 of the First Appeal, which are highlighted

by the learned Trial Judge in the impugned judgment. He also invited my

attention to various clauses of last conductor’s agreement entered into

between the parties.

19] Learned senior counsel invited my attention to the judgment delivered

by full bench of this Court in case of Prem Ratan Vohara v/s. Lalit Kumar

DayaljiKakhani, 1988 Mah. Gen. 321 and in particular paragraphs 9 and 10

and would submit that this judgment was considered by the Trial Court in

the impugned judgment. He also invited my attention to the order passed by

the City Civil Court in the Chamber Summon filed by the defendants interalia

praying for recast of the issues framed by the Trial Court. He submits


that the defendants had prayed before the Trial Court in the said Chamber

Summon to frame the issues ‘whether the plaintiff had properly valued the

suit ?’ ‘Whether City Civil Court had pecuniary jurisdiction to try and

entertain the suit ?’ ‘Whether the plaintiff proves that she has put the

defendant in possession of the suit shop by conducting agreement dated 15th

December, 1987 ?’ He submits that the learned Trial Judge dismissed the

said Chamber Summon by an order dated 30th April, 2005. He submits that

the Trial Court gave a finding on the issue as to whether the plaintiff has

properly valued the suit and whether the Trial Court had pecuniary

jurisdiction to try and entertain the suit and that the valuation was done

properly. In so far as the issue as to whether the plaintiff had put the

defendant in possession of the suit shop by conducting agreement or not, the

Trial Court held that the Trial Court had already framed an issue as to

whether the plaintiff proves that the defendant was trespasser.

20] It is held by the Trial Court that while cross-examining the witnesses

of the plaintiff on that issue and while leading evidence contrary to that

issue, the defendants can establish that they have stated in the proposed issue

nos. 3 and 4. There was thus no necessity of framing proposed issue nos. 3

and 4 also. The defendants had also prayed for framing an additional issue as

to whether the defendants prove that he was in exclusive possession of the

suit shop continuously since 1958 and was doing his own business.

21] Learned senior counsel invited my attention to the order dated 12th December, 2005 passed by this Court in Writ Petition No. 4672 of 2005 filed

by his clients impugning the said order dated 30th April, 2005 passed by the

City Civil Court dismissing the Chamber Summon filed by the defendants

seeking recast of the issues. He submits that this Court while dismissing the

said writ petition made it clear that the High Court had not interfered with

the order passed by the Trial Court on the ground that the procedural and

interlocutory order in the course of the trial should not be interfered with in

writ jurisdiction under Article 227 of the Constitution of India. This Court

clarified that all issues were kept open to be decided when the final orders

are passed in the matter.

22] Learned senior counsel for the defendants submits that the issues of

net income to be considered for the purpose of suit valuation and for the

issue of jurisdiction is not pleaded by the plaintiff in the plaint. The said

concept has been adopted only on the basis of the judgment of full bench of

this Court. The Trial Court thus could not have conferred jurisdiction on

itself based on the net income issue not pleaded by the plaintiff in the plaint.

Mr. Singh learned counsel for the plaintiff on the other hand strongly placed

reliance on Section 41(2) of the Presidency Small Cause Courts Act, 1982

and would submit that the said provision would clearly apply to the facts of

this case. He also placed reliance on Section 75 of the Maharashtra Rent

Control Act, 1999 and would submit that even the definition of licensee

clearly indicates that the licensee does not include the person conducting a running business belonging to the licensor. The expression licence, licensor

and premises given on licence have to be construed accordingly. He submits

that the husband of the plaintiff had given business to the original defendant

on conducting basis. The original defendant or the defendants subsequently

impleaded in the suit who are the legal heirs of the original defendant were

not licensee within the meaning of licensee prescribed under Section 7(5).

He submits that in any event since the business was given to the original

defendant on conducting basis, the same is specifically excluded under

Section 7(5) of the Maharashtra Rent Control Act, 1999.

23] It is submitted by the learned counsel that since the year 1988

onwards, it was not the case of the original defendant that he was the

licensee of the premises or that the suit premises was given to him on licence

by the original plaintiff. Learned counsel invited my attention to various

averments made by the defendant in the written statement filed before the

Trial Court and would submit that even in the said written statement, there

was no averment that the defendant was the licensee of the plaintiff in

respect of the premises. It was also not the case of the plaintiff in the plaint

that the premises were given on licence to the original defendant by the

plaintiff.

24] It is submitted that the averments in paragraph 2 of the written


statement filed by the defendant is false averment. The suit filed by the

plaintiff was not between the licensor and licensee in respect of the suit

premises. He invited my attention to the averments made in paragraph 11 of

the plaint filed by the original plaintiff and would submit that the plaintiff

has not admitted the relationship of a licensor and licensee between the

plaintiff and the defendant in the plaint. The defendant had also prayed for

stay of the suit in the written statement and more particularly in paragraph 1

on the ground that the issues involved in the suit filed by the defendant for a

declaration that he was a sub-tenant of the suit premises and the suit filed by

the plaintiff in the City Civil Court were identical.

25] Learned counsel for the plaintiff invited my attention to the prayers in

the declaratory suit filed by the defendant seeking a declaration that the

defendant (the plaintiff in the said declaratory suit) was a sub-tenant of the

plaintiff in this suit. Learned counsel placed reliance on Section 14(1) of the

Bombay Rent Act, 1947 and would submit that these defendants cannot be

allowed to change its stand now and to contend that the original defendant

was a licensee of the plaintiff in respect of the suit premises. Learned

counsel placed reliance on Section 14(2) of the Bombay Rent Act, 1947.

Learned counsel for the plaintiff invited my attention to paragraph 15 of the

written statement filed by the defendant and would submit that it was the

case of the defendant that the suit filed by the plaintiff was between the

licensor and licensee. It was not the case of the plaintiff that the defendant


was a licensee of the plaintiff in respect of the suit premises.

26] Learned counsel for the plaintiff invited my attention to the issues

framed by the Small Causes Court in the declaratory suit filed by the

defendant herein. One of the issues framed by the Small Causes Court was

whether the defendant therein proves that the plaintiff was conductor of her

business being conducted in the suit premises. He submits that by a detailed

judgment delivered by the Small Causes Court, the said declaratory suit filed

by the original defendant herein came to be dismissed. He also invited my

attention to the order passed by the Appellate Bench of the Small Causes

Court and more particularly the points for determination framed by the

Appellate Bench and would submit that various issues have been decided by

the Appellate Bench of the Small Causes Court also in favour of the plaintiff

herein and against the defendant herein.

27] By a detailed judgment delivered by the Appellate Bench of the Small

Causes Court, the appeal filed by the defendant herein came to be dismissed.

He also invited my attention to the order passed by this Court in the Writ

Petition No. 3521 of 1999 filed by the defendant herein impugning the

judgment and decree passed by the Single Judge of the Small Causes Court

and the Appellate Bench of the Small Causes Court. He submits that the

Writ Petition filed by the defendants herein also came to be dismissed. The

decree passed by the Trial Court dismissing the suit for declaration of the


defendant herein as alleged sub-tenant of the plaintiff in respect of the suit

premises has attained finality. The findings rendered by the Trial Court,

Appellate Bench and this Court on the issue of sub-tenancy and licence

attained finality.

28] Learned counsel for the plaintiff invited my attention to prayer clause

(a) of the plaint filed by his client before the City Civil Court. He submits

that it was the case of the plaintiff that the original defendant was a

trespasser. The plaintiff had applied for mandatory injunction against the

defendant in prayer clause (b) for vacating the premises under Section 39 of

the Specific Relief Act, 1963. Prayer clause (c) was for mesne profit against

the defendant.

29] Learned counsel for the plaintiff placed reliance on Section 19 of the

Presidency Small Cause Courts Act and would submit that the said provision

clearly provides as to which suits can be filed before the Small Causes Court

and which suits cannot be tried by the Small Causes Court. He relied upon

Section 19(i), (s) and (w) and would submit that all the prayers in the plaint

filed by his client would fall under those provisions and thus those suits were

barred to be tried by the Small Causes Court in view of Section 19(i), (s) and

(w). It is submitted that the question as to whether the defendant was a

trespasser or not could not be decided by the Small Causes Court and could

be tried only by the City Civil Court.


30] Learned counsel for the plaintiff relied upon Section 39 of the

Specific Relief Act and would submit that the plaintiff was entitled to seek a

mandatory injunction against the defendant to prevent the breach of an

obligation to compel performance of the requisite acts. He submits that the

conducting agreement entered into between plaintiff and the defendant had

already expired. The defendant was thus bound to vacate the premises and

the business given to the defendant on conducting basis. Section 39 of the

Specific Relief Act was thus applicable in so far as prayer clause (b) of the

plaint is concerned.

31] It is submitted by the learned counsel that the stand taken by the

plaintiff in both the suits i.e. in the suit filed by the plaintiff herein and in the

suit filed by the defendant before the Small Causes Court was same. He

invited my attention to the written statement filed by the plaintiff in the

declaratory suit filed by the defendant herein. He submits that in paragraph 1

of the written statement itself, it was averred by the plaintiff herein that the

defendant herein was given the suit premises on conducting basis to run the

business of the plaintiff. In the said written statement the plaintiff herein had

also referred to the suit filed by the plaintiff before the Small Causes Court

for various reliefs. Learned counsel for the plaintiff placed reliance on

Section 41(1) of the Small Causes Court Act and would submit that since the

suit filed by the plaintiff before the City Civil Court was neither between


landlord and tenant nor between licensor and licensee, Section 41(1) was not

applicable to the parties. Section 41(2) of the Small Causes Court Act was

applicable to the parties.

32] It is submitted that Bombay Rent Act, 1947 does not apply to the

facts of this case. Section 28 of the said Act therefore did not apply. He

relied upon Section 5(8) of the said Act which defines premises. He submits

that the definition of premises even under the said Act does not include the

business for conducting. Definition of premises under Section 7(q) of the

Maharashtra Rent Control Act is in pari materia with the definition of

premises under the provision of the Bombay Rent Act. He submits that since

the business run by the husband of the plaintiff was given to the defendant

prior to 1999, the provisions of Bombay Rent Act, 1947 has to be

considered.

33] Learned counsel for the plaintiff placed reliance on the Section 9 of

the Code of Civil Procedure and would submit that in view of the said

provision only Bombay City Civil Court has jurisdiction to entertain the said

suit filed by the plaintiff for the reliefs prayed and not the Small Causes

Court under the provisions of the Presidency Small Cause Courts Act, 1882.

Learned counsel for the plaintiff placed reliance on the judgment of this

Court in case of Anusuyabi Narayanrao Ghate v/s. Maktumbi S. Nadaf,

1999 (2) Bom Cases Reporter 374 and in particular paragraphs 4, 5 and 7 in


support of the submission that in view of the conducting business permitted

under the agreement by the owner of the business to the other party, Section

41 (1) of the Presidency Small Cause Courts Act could not be invoked.

34] Learned counsel for the plaintiff also placed reliance on the judgment

of this Court in this case of Fatimabai Noor Mohamed v/s. M. Khallil

Ahmed and Anr., 1992 Mah. Gen. 1605 and in particular paragraph 7 in

support of the submission that under Section 5(4A) of the Bombay Rent Act,

1947 make it abundantly clear that the permission given for conducting the

‘pan beedi’’ business in the suit premises does not fall within the definition

of word ‘licence’ and therefore there was no question of protection the

respondent under the Bombay Rent Act. He submits that the both these

judgments clearly would apply to the facts of this case.

35] Learned counsel for the plaintiff distinguished the judgment of this

Court in case of Nagin Mansukhlal Dagli (supra) relied upon by the learned

senior counsel for the defendant on the ground that the premises given on

leave and licence in the said matter were residential premises whereas in this

case the business of ‘pan beedi’ was given by the plaintiff to the original

defendant on conducting basis. He invited my attention to paragraph 4 of the

said judgment which refers to the prayers in the said suit which was subject

matter of the said judgment.

36] Learned counsel for the plaintiff also distinguished the judgment of this Court in case of Sagir Ahmed Nanhe (supra). He invited my attention to

paragraphs 6 and 7 of the said judgment which records that the plaintiff had

given the premises to the defendant on licence. No such averments are made

in the plaint filed by the plaintiff in this case. Learned counsel distinguished

the judgment of this Court in case of Rasiklal K. Gala (supra) relied upon

by the learned senior counsel for the defendant. He invited my attention to

the paragraphs 2, 3 and 6 of the said judgment and would submit that the

averments in respect of the premises in the plaint which was subject matter

of the said judgment were totally different. He submits that paragraph 6 of

the said judgment would assist the case of the plaintiff and not the

defendant. Learned counsel distinguished the judgment of this Court in case

of Prem Ratan Vohara (supra) relied upon by the learned senior counsel for

the defendant on the ground that the said judgment is not applicable to the

facts of this case and is clearly distinguishable in the facts of this case.

37] In so far issue of pecuniary jurisdiction of the City Civil Court raised

by the defendant is concerned, learned counsel for the plaintiff submits that

the defendants had filed a Chamber Summons bearing No. 216 of 2005 in

the said suit filed by the plaintiff inter-alia praying for recast of the issues

and for framing additional issues. Learned counsel invited my attention to

the affidavit in reply filed by the plaintiff herein in the said Chamber

Summon. He submits that the plaintiff had specifically averred in the said

affidavit in reply that the monthly royalty was fixed at Rs.700/-. Out of the


said amount the plaintiff was spending Rs.500/- per month. The plaintiff was

getting only a sum of Rs.105/- per month from the suit business. Applying

the principles of Annual Rack Rent and multiplying the said amount of

Rs.105/- by 150 months rent, the value for the jurisdiction of the City Civil

Court was rightly arrived at Rs.15,750/-. The jurisdiction of the Bombay

City Civil Court at the relevant time was Rs.50,000/- which is now increased

to Rs.1 crore.

38] Learned counsel for the plaintiff invited my attention to the order

passed by the City Civil Court in the said Chamber Summon and would

submit that the said Chamber Summon filed by the defendant herein came to

be dismissed. It was specifically held by the City Civil Court that the

valuation of the suit claim was done properly by the plaintiff. The expenses

incurred by the plaintiff were required to be deducted from the compensation

agreed to be paid by the defendant under the said conducting agreement. He

submits that this Court however while dismissing the said writ petition filed

by the defendants made it clear that all issues were to be kept open.

39] Learned counsel for the plaintiff invited my attention to issue no.3B

on valuation. He submits that the burden to prove that the suit property is

not properly valued had shifted on the defendants. The defendants however

did not enter the witness box. Mr.Thukral who had filed an affidavit in lieu

of examination in chief on behalf of the defendants did not remain present


for the cross examination. The defendants filed a pursis before the trial

court. In view of the defendants giving up the evidence of the said witness,

the City Civil Court passed an order cancelling the evidence of the said

witness (DW-1).

40] The defendants thereafter examined Mr.Arvind Bhaskar who had

submitted a valuation report on the suit claim. Learned counsel invited my

attention to the said valuation report submitted by the said witness and

would submit that the said report was submitted on the basis of claim of subtenancy

made by the defendants and not on the basis of conducting licence.

In the said report, the learned valuer had also not considered the expenses

incurred by the plaintiff out of the compensation received from the

defendants and did not consider the net income in the hands of the plaintiff.

It is submitted by the learned counsel that on the contrary, the plaintiff had

paid more amount of court fees than payable on the claim valued in the suit.

He relied upon section 14 of Bombay Court Fees Act and would submit that

dispute in respect of the valuation of suit claim and the payment of court

fees has to be decided by the court. The decision of the court is final. The

appeal court however can correct the amount. He submits that his client had

given an undertaking to pay the differential amount of court fees if found

payable by the trial court. He furnishes the same undertaking also before

this court. Undertaking rendered by the learned counsel is accepted.

41] Learned counsel for the plaintiff placed reliance on section 21(2) of


the Code of Civil Procedure, 1908 and would submit that since there was no

case of consequent failure of justice, the suit filed by the plaintiff could not

be dismissed on the ground of alleged deficit of payment of court fees.

Learned counsel for the plaintiff placed reliance on sections 102 and 103 of

the Indian Evidence Act and also section 3 and would submit that the burden

of proof that the suit was not properly valued by the plaintiff was on the

defendants. The plaintiff had already discharged the initial burden cast on

her. The defendants however did not discharge the burden shifted on them.

42] Learned counsel for the plaintiffs placed reliance on the judgment of

Supreme Court in case of Ishwarbhai C. patel Vs. Harihar Behera and anr.

- (1999) 3 SCC 457 and in particular paragraph nos. 17, 22 to 23 and 29 in

support of the submission that since the defendants did not enter the witness

box to prove the contents of the written statement, an adverse presumption

shall be drawn against the defendants by this court.

43] Mr.Thorat, learned senior counsel for the defendants in rejoinder

would submit that even if the licence fee was considered as Rs.700/- per

month, the valuation of the suit claim made by the plaintiff was not done

properly and even with such amount under consideration, the City Civil

Court did not have pecuniary jurisdiction to entertain the said suit filed by

the plaintiff. He submits that there was no averment made in the plaint by

the plaintiff that though the compensation received by the plaintiff was in

the sum of Rs.700/- per month, the net income in the hands of the plaintiff

was only in the sum of Rs.150/- per month. He invited my attention to the

averments made by the plaintiff in paragraphs 9 and 12 of the plaint insofar

as issue of valuation is concerned. He submits that in prayer clause (b) of

the plaint, the plaintiff had specifically asked for possession of the suit

premises and thus the valuation shown by the plaintiff insofar as prayer

clause (b) is concerned is not correct. The trial court ought to have

considered this aspect before entertaining the suit. He submits that even in

the affidavit of evidence filed by the plaintiff, there was no deposition that

the plaintiff had valued the suit claim on the basis of the net income in the

hands of the plaintiff.

44] Learned senior counsel invited my attention to paragraph 13 of the

impugned judgment and decree and would submit that the trial court has

considered the earlier order passed by the trial court in chamber summons

filed by the defendants without considering the fact that there was no

pleading in the plaint and has erroneously rendered a finding on net income.

He submits that pleadings does not include the affidavits filed in the

chamber summons and thus the trial court could not have considered the

affidavit in reply filed by the plaintiff to the chamber summons filed by the

defendants alleging that the net income in the hands of the plaintiff was

Rs.150/- per month and not Rs.700/-. He submits that though this court had

kept all the issues raised by the defendants in the writ petition open, the

learned trial judge did not consider the order passed by this court in the said

writ petition. Learned senior counsel placed reliance on section 5 of the

Small Causes (Enhancement of Pecuniary Jurisdiction) Act, 1986 and would

submit that the pecuniary jurisdiction of the Small Causes Court was

enhanced from Rs.10,000/- to Rs.25,000/- by the said amendment. The

Small Causes Court only thus have jurisdiction to entertain, try and dispose

of the said suit filed by the plaintiff.

45] Mr.Singh, learned counsel for the plaintiff submits that section 5(4A)

of the Bombay Rent Act applies to the parties in the facts and circumstances

of this case. The definition of premises under the said provision does not

include the person conducting a business on the basis of conducting

agreement.

REASONS AND CONCLUSIONS

46] It is undisputed position that on 2nd January 1966, the husband of the

plaintiff had given his running business for conducting on security deposit

and monthly royalty to the predecessor of the defendants for a period of 11

months from 2nd January 1966 to 1st December 1966. After demise of the

husband of the plaintiff, the plaintiff executed various agreements with the

original defendant No.1, who was predecessor of the defendants from time

to time. The period for conducting business in the last Conducting

Agreement expired on 14th January 1988. It is also an admitted position that

the original defendant filed a Declaratory Suit bearing No. 649 of 1988 in

the Small Causes Court at Bombay inter alia praying for a declaration that

the said original defendant was a lawful sub-tenant of the plaintiff in the suit

before the City Civil Court in respect of the suit shop. The said suit was

resisted by the husband of the defendant herein by filing a written statement.

Both the parties had led oral as well as documentary evidences before the

Small Causes Court in the said Declaratory Suit.

47] The Small Causes Court had framed nine issues in the said suit

including the issue of jurisdiction of the Small Causes Court to try the said

suit filed by the original defendant. Issue No.4 was “Does the plaintiff prove

that the suit premises was let out to him by the deceased husband of the

defendant in the year 1958 as the sub-tenant?” Issue No.5 was “Does the

plaintiff prove that since 1958 he is in exclusive use, occupation and

possession of the suit premises?” Issue No.6 was “Does the defendant prove

that the plaintiff is conductor of her business in the suit premises?”

48] Insofar as Issue No.4 is concerned, the Small Causes Court, in the

judgment and order dated 3rd August 1995 held that the predecessor of the

defendants herein (original plaintiff in the suit) admitted in his evidence that

the shop given by the husband of the plaintiff therein was for conducting.

The plaintiff therein had not pleaded the case of the protected licensee in

respect of the suit premises. The said plea however, was raised in the written

statement. The Small Causes Court, after considering the oral and

documentary evidence, recorded the finding that the possession of the

plaintiff therein was not as a Licensee but as conductor of the business.

Possession of the suit premises is consequential to conducting the business

and therefore, merely because the said plaintiff was in possession of the suit

premises was not protected under Section 15-A of the Bombay Rent Act,

1947. The execution of the agreement of conducting was admitted by the

plaintiff therein himself. The Small Causes Court, accordingly, held that the

plaintiff therein had failed to prove his case that the deceased husband of the

defendant herein (defendant in the said suit) had let out the suit premises to

him in the year 1958. The Small Causes Court also held that the plaintiff

therein was conductor of the business and thus, was not entitled to

declaration that he was lawful sub-tenant of the suit premises.

49] The plaintiff in that suit, thereafter, filed an appeal bearing No.

Appeal No. 370 of 1995 before the Appellate Bench of the Small Causes

Court. The Appellate Bench also formulated various points for

determination. The Appellate Bench, after considering the oral and

documentary evidence and also the pleadings of the parties, dismissed the

said appeal preferred by the plaintiff in that suit and held that the business

was given by the deceased husband of the plaintiff in this case, who was

defendant in that suit, to the plaintiff therein for conducting.

50] The plaintiff in that suit before the Small Causes Court, thereafter

filed Writ Petition bearing Writ Petition No. 3521 of 1999 before this Court

impugning the judgment and decreed passed by the Small Causes Court and

also by the Appellate Bench thereafter. This Court passed a detailed

judgment in the said writ petition on 9th August 2005 dismissing the said

writ petition filed by the plaintiff therein. It has been specifically held by this

Court in the said judgment that the plaintiff therein was allowed to conduct

the said business on the terms and conditions as agreed between the parties.

It was made clear in the agreement entered into between the parties that the

owner of the suit premises was in possession of the said Beedi shop in

question. This Court also recorded the finding that there was nothing in the

agreement entered into between the parties which had created any interest in

the property in question.

51] This Court held that the clauses in the agreement entered into between

the parties were clear enough to reflect the intention of the parties that it was

the agreement whereby the plaintiff therein was allowed to conduct the

running business in the name and style as “Masrice Bidi Works”. It was

never intended to create any lease or license in the premises or any interest

in the premises as sought to be contended by the plaintiff therein. It was

specifically held that the possession of the premises of the plaintiff therein

was based on the agreement, if taken note of that it was only agreement of

conducting business and therefore, there was no question of creating any

lease or license in favour of the original plaintiff. The plaintiff therein was


thus not entitled to be granted any protection under the provisions of the

Rent Act in respect of the suit premises. There was no Special Leave

Petition filed by the plaintiff therein before the Hon’ble Supreme Court

impugning the said judgment dated 9th August 2005 delivered by this Court

dismissing Writ Petition No. 3521 of 1999 and upholding the judgment and

decree passed by the Small Causes Court as well as by the Appellate Bench

thereafter.

52] It is thus clear beyond reasonable doubt that the case of the original

defendant in these proceedings that an interest was created in his favour in

respect of the suit premises as licensee or sub-tenancy thereof was totally

disbelieved by the Small Causes Court which judgment and decree is upheld

by this Court. Various findings of fact rendered by the Small Causes Court

that the suit premises was given to the defendant in these proceedings and

the plaintiff in the proceedings before the Small Causes Court were purely

on conducting basis and no interest of any nature whatsoever including

licensee was created in his favour in respect of the suit premises.

53] It is not in dispute that the period of such Conducting Agreement

ultimately expired on 14th January 1988. The original defendant was thus a

trespasser in respect of the suit premises. The plaintiff, accordingly, filed a

separate Suit bearing Suit No. 979 of 1990 inter alia praying for declaration

and for other reliefs. In prayer clause (a) of the plaint, the plaintiff had prayed for an order and declaration that the defendants are trespassers and

they have no right, title and interest in the suit premises and her business

being carried therein after the period given under the Conducting Agreement

dated 14th January 1987 was over. In prayer clause (b), the plaintiff prayed

for an order and direction against the defendants, the heirs and legal

representatives, to vacate the suit premises and its business being carried

therein. In prayer clause (c), the plaintiff prayed for an order and direction to

pay sum of Rs.3000/- per month towards mense profit.

54] The said suit was resisted by the original defendant initially and

thereafter by his legal heirs by filing written statement. The legal heirs of the

original defendant adopted the written statement filed by the original

defendant. In paragraph 2 of the said written statement, the defendants

contended that the plaintiff having prayed for possession of the suit shop

was not maintainable before the City Civil Court in view of the provisions of

Section 41 of the Presidency Small Cause Courts Act, 1882 and thus, the

plaint was liable to be returned to the plaintiff for presentation in proper

Court. The defendants also prayed for framing an issue of jurisdiction under

Section 9A of the Code of Civil Procedure, 1908 as a preliminary issue.

55] The Trial Court framed various issues. When those issues were

framed by the Trial Court initially, the suit filed by the defendants herein

before the Small Causes Court for declaration of his alleged sub-tenancy was

pending. The defendants, thereafter, filed Chamber Summons in the suit

before the City Civil Court inter alia praying for recast of some of the issues

and for framing additional issues. The defendants prayed for framing

following additional issues:

(1) Whether the plaintiff has properly valued the suit ?

(2) Whether this Court has pecuniary jurisdiction to try and

entertain the suit ?

(3) Does the plaintiff prove that she has put the defendants in

possession of the suit shop by Conducting Agreement dated

15th December 1987 ?

(4) Does the defendant prove that he is exclusive possession of the

suit shop continuously since year 1958 and he is doing his

business ?

56] The said Chamber Summons was resisted by the plaintiff by filing

affidavit-in-reply. In the affidavit-in-reply filed by the plaintiff in the said

Chamber Summons, it was contended that the plaintiff had valued her suit

rightly on the basis of annual rack rent of the suit premises tentatively and

had undertaken to pay the additional court fees as and when it is demanded

by the City Civil Court. It was contended that out of Rs.700/- recovered by

the plaintiff from the defendants as and by way of royalty per month, she

was spending Rs.500/- every month towards maintenance of her suit

premises and to keep the business in good conditions and Rs.95/- was

incurred towards monthly rent to the landlords. The plaintiff was thus in

effect getting Rs.105/- per month towards the income from the suit business.

If the income of Rs.105/- was multiplied by 115 months, the suit valuation

would have come to Rs. 15,750/-. The plaintiff also relied upon the

provisions of Bombay City Civil Court and the Bombay Court of Small

Causes (Enhancement Pecuniary Jurisdiction and Amendment) Act, 1986,

thereby increasing the pecuniary jurisdiction of the City Civil Court from

Rs.50,000/- to unlimited amount. However, due to law on infrastructural

facility, the said Act could not be implemented till then.

57] By an order dated 30th April 2005, the City Civil Court dismissed the

said Chamber Summons filed by the defendants. It was held by the learned

Trial Judge that by consent of parties in the Notice of Motion filed by the

plaintiff for recasting the issues, original issue Nos.1,2,4,6 and 7 were

deleted and issue No.3(a) was framed, i.e., “Does plaintiff proves that the

defendants are trespassers ?”

58] The learned Trial Judge considered the issue whether valuation of the

suit was properly done by the plaintiff or not. After following the judgment

delivered by the Full Bench of this Court, in a case reported in 1988 (2)

Bom.CR 210, it is held by the learned Trial Judge in the said order that the

valuation of the suit was done properly by the plaintiff. The expenses have

to be deducted. There was, thus, no necessity of framing Issue Nos.1 and 2 as suggested by the defendants. Insofar as Issue Nos.3 and 4 suggested by

the defendants are concerned, the learned Trial Judge has held that while

cross-examining the witness of the plaintiff from Issue No.3(a) and while

leading evidence contrary to the said issue, the defendants can establish what

they have stated in the proposed Issue Nos.3 and 4 and thus there was no

necessity for framing proposed Issue Nos.3 and 4 also.

59] By an order dated 12th December 2005 passed by this Court in Writ

Petition No. 4672 of 2005 including the said order dated 30th April 2005

dismissing the Chamber Summons by learned Trial Judge. This Court held

that such a procedural and interlocutory order in the course of trial should

not be interfered with in writ jurisdiction under Article 227 of the

Constitution of India. This Court made it clear that all issues were kept open

to be decided when the final orders were passed in the matter.

60] In view of deletion of Issue Nos.1,2,4,6 and 7 by consent of the

parties, the learned Trial Judge decided the remaining issues in the

impugned judgment and decree. The learned Trial Judge rendered the

finding in affirmative on the issue whether the plaintiff proves that

Conducting Agreement dated 15th February 1987 came to an end on 13th

January 1988. The Trial Court also held in affirmative that the plaintiff

proves that the defendant was a trespasser. Insofar as Issue No.3(b) is

concerned, the Trial Court answered the said issue, i.e., “whether the

defendant proves that the suit is not properly valued and on its proper

valuation, it is beyond pecuniary jurisdiction of this Court”, in the negative.

The Trial Court held that the plaintiff was entitled to the reliefs prayed in the

plaint and also mense profit as prayed for.

61] The Trial Court dealt with the orders passed by the Small Causes

Court in the declaratory suit filed by the defendants, order passed by the

Appellate Bench of the Small Causes Court and the order passed by this

Court in Writ Petition No. 3521 of 1999 filed by the original defendant

recording various findings in favour of the plaintiff herein and against the

defendants. The Trial Court, accordingly, rightly held that the original

defendant was judicially held to be just conductor of the business and

nothing more, which finding had attained the finality. In view of the fact that

various issues which were raised by the defendants in this Suit were already

concluded by the Small Causes Court and upheld by the Appellate Bench

and this Court, those submissions made by both parties were rightly not

considered by the Trial Court once again in the impugned judgment and

decree. In my view, the findings rendered by the Small Causes Court,

Appellate Bench of the Small Causes Court and this Court in respect of the

suit premises were binding on the parties in the parallel proceedings raising

similar issues.

62] Both the learned counsel appearing in this matter, however, dealt with

the issue whether the City Civil Court had jurisdiction to try, entertain and

dispose of the suit filed by the plaintiff for the reliefs claimed therein or not

or whether such Suit should be tried only by the Small Causes Court,

Bombay under Section 41(1) of the Presidency Small Cause Courts Act,

1882 or not. The provisions of Maharashtra Rent Control Act, 1999 were not

applicable to the facts of this case.

63] Section 5(4A) of the Bombay Rents, Hotel and Lodging House Rates

Control Act, 1947 (for short Bombay Rent Act) defined expression

“licensee” which does not include a person conducting running business

belonging to the Licensor. The Small Causes Court as well as this Court has

already recorded a finding the said proceedings filed by the defendants

herein had failed to prove the alleged sub-tenancy. The husband of the

plaintiff during his lifetime and thereafter by the plaintiff had given running

business belonging to them to the original defendants on conducting basis.

64] Section 41(1) of the Presidency Small Cause Courts Act would apply

only to the suit and proceedings between the licensor and licensee or

landlord and tenant relating to recovery of the possession of any immovable

property situated in Greater Bombay or relating to the recovery of license

fees or charges or rent therefor irrespective of the value of the subject matter

of the suit suits or proceedings. In my view, since the Small Causes Court

has already recorded the finding that the suit business was given by the husband of the plaintiff to the predecessor of the defendants on conducting

and there being no relationship of a landlord and tenant or licensor or

licensee, Section 41(1) of the Presidency Small Cause Courts Act, 1882

would not apply to the facts of this case. Perusal of the prayers in the plaint

and more particularly, prayer clause (a) clearly indicates that the plaintiff

had applied for declaration that the defendants were trespassers and have no

right, title or interest in the suit premises or in her business after the period

prescribed under the Conducting Agreement was over. In prayer clause (b),

the plaintiff had prayed for an order and direction against the defendants to

vacate the suit premises and its business being carried therein.

65] In my view, the reliefs sought in prayer clause (b) is incidental to the

prayer clause (a) and more particularly, would depend upon whether the

plaintiff had given the suit business to the defendants on conducting suit

business. The premises were given to the defendants for conducting the suit

business. In my view, prayer clause (b) thus, even otherwise could not be

considered as a suit for recovery of possession of the licensee premises. The

period of Conducting Agreement was admittedly over much before the date

of filing suit by the plaintiff. The alleged rights and interest claimed by the

defendants in the suit premises were already rejected by the Small Causes

Court by recording detailed findings of fact which findings have admittedly,

attained finality. The defendants thus being trespassers in respect of the suit

business and also the premises, the Suit filed by the plaintiff for various reliefs claimed in the plaint was thus maintainable.

66] This Court in case of Anusuyabi N. Ghate (Supra) has held that since

there was a Conducting Agreement between parties for running business of

Tailoring, the possession of the room given to such party had become

consequential and had become indivisible part of the contract and that for

conducting business, occupation of the room was necessary. This Court,

accordingly, held that Section 41 of the Presidency Small Cause Courts Act

could not be invoked by the conductor of the business. In my view, the

principles laid down by this Court in the said judgment would apply to the

facts of this case. I am respectfully bound by the said judgment.

67] This Court in case of Fatimabai Noor Mohamed (supra) interpreting

Section 5(4A) of the Bombay Rent Act, 1947 held that the said provision

makes it abundantly clear that the permission given for conducting Pan

Beedi business in the suit premises does not fall within the definition of

word ‘license’ and therefore there is no question of protection of the

respondent therein under the Bombay Rent Act. The provisions coupled with

agreements produced by the parties would make it further clear that the

dominant intention of the parties was to create conducting license for

conducting the said Pan Beedi business and incidentally the premises was

allowed to be used by the respondents as permissive user and, therefore, the

case of the respondent therein would fall within the exception of the word


‘licensee’ as mentioned in Section 5(4A ) of the Bombay Rent Act. In my

view, the principles laid down by this Court in case of Fatimabai Noor

Mohamed (supra) squarely applies to the facts of this case. Since the person

who has been given a business for conducting basis by the owner of the

business to be conducted in premises which is incidental to run the said

conducting business does not fall within the definition of ‘licensee’ under

Section 5(4A) of the Bombay Rent Act, Section 41 (1) of the Presidency

Small Cause Courts Act would not apply to the suit filed by the plaintiff for

the reliefs claimed therein in any manner whatsoever.

68] Insofar as the judgment in case of Nagin M. Dagli (supra) relied upon

by Mr. Thorat, learned Senior Counsel for the defendants, in support of the

submissions that only Small Causes Court did have jurisdiction to entertain

the said Suit filed by the plaintiff is concerned, a perusal of the said

judgment clearly indicates that the relationship of the parties as licensor and

licensee was not disputed in that matter. The Suit therein was not for a

declaratory decree, but was for recovery of possession on determination of

license. In my view, the said judgment is clearly distinguishable in facts of

this case and would not assist the case of the defendants.

69] Insofar as the judgment of this Court in Sagir Ahmed Nanhe (supra)

relied upon by the learned Senior Counsel for the defendants is concerned,

the said judgment is also clearly distinguishable in the facts of this case. This

Court in the said judgment held that the immovable property was used

incidental to the business. The Suit was not excluded from cognizance of the

Small Causes Court under Section 19(1)(d) of the Presidency of Small Cause

Courts Act. In this matter, the Small Causes Court had already rendered

finding in favour of the plaintiff that the plaintiff had given running business

to the defendants for conducting. The said finding has, admittedly, attained

finality.

70] Insofar as the judgment of this Court in Rasiklal K. Gala (supra)

relied upon by the learned Senior Counsel for the defendants is concerned,

this Court in the said judgment has specifically held that the word “licensee”

referred in Section 5(4A) of the Bombay Rent Act specifically excludes the

conducting business and thus occupant or such person is not entitled for

protection as available under the Bombay Rent Act either as licensee or subtenant.

In my view, the said judgment would not assist the case of the

defendants, but on the contrary would assist the case of the plaintiff.

71] Insofar as the judgment delivered by the Full Bench of this Court in

Prem Ratan Vohara (supra) and the judgment of the Hon’ble Supreme

Court in case of Prabhudas D. Kotecha and anr. Vs. Manharbala J.

Damodar and the judgment of Hon’ble Supreme Court in the matter arising

out of the judgment delivered by this Court reported in (2013) 15 SCC 358

are concerned, the issue before this Court and also before the Hon’ble

Supreme Court was whether the expression “licencee” would include a

gratuitous licensee and accordingly, suit filed by a licensor against a

gratuitous licensee would be maintainable before the Small Causes Court or

not. In facts of this case, admittedly, the predecessor of the defendants in the

declaratory suit filed before the Small Causes Court could not prove his

claim of the alleged sub-tenancy or even licensee in respect of suit premises.

Since Section 41(1) of the Presidency Small Cause Courts Act would not

apply, the principles laid down by this Court and upheld by the Supreme

Court in case of Prabhudas Kotecha (supra) would not apply to the facts of

this case and would not assist the case of the defendants.

72] Insofar as unreported judgment of this Court in case of Kasturi

Shethi (supra) relied upon by the learned Senior Counsel for the defendants

is concerned, the said judgment was delivered in a Suit filed before this

Court. In my view, Mr. Singh, learned counsel for the plaintiff, rightly

distinguished this judgment on the ground that it was not the case of the

defendants that they are licensees or claiming license under Section 41(A)

of the Presidency Small Cause Courts Act. The case of the defendants before

the Small Causes Court was that the original defendant was sub-tenant in

respect of the suit premises. The said judgment would thus not assist the

case of the defendants.

73] Mr. Thorat, learned Senior Counsel for the defendants, also raised an

issue of pecuniary jurisdiction of the City Civil Court to entertain the Suit on

the ground that the plaintiff had not valued the suit properly. He vehemently

urged before this Court that the plaintiff had not pleaded before the Trial

Court that the suit claim was valued on the basis of net rack rent but had

only relied upon the judgment of Full Bench of this Court in case of Prem

Ratan Vohara (supra) . He submits that the issue of valuation decided by the

learned Trial Judge while dismissing the Chamber Summons filed by the

defendants were admittedly kept open by this Court while dismissing the

writ petition filed by the defendants. It was also vehemently urged that even

in the affidavit in lieu of examination-in-chief filed by the plaintiff also, the

plaintiff did not depose as to how the suit claim was valued and the amount

actually earned by the plaintiff out of royalty recovered under the said

conducting business.

74] The Full Bench of this Court in case of Prem Ratan Vohara (supra)

has clearly held that the net income calculated on the basis of compensation

minus the charges indicated therein and not rent of the premises should form

the criterion for determining the market value of the premises. The Trial

Court, in my view, has rightly applied the principles laid down by the Full

Bench of this Court, which was binding on the parties as well as the learned

Trial Judge. I do not find any infirmity in this part of the judgment and

decree passed by the Trial Court.

75] The plaintiff had already discharged his burden that the suit claim was

valued properly for the purpose of jurisdiction. The defendants though

examined the valuer as witness, the said valuer in his report clearly admitted

that the valuation report was given by him on the basis of claim of subtenancy

of the defendants. He had not considered the principle of net rack

rent in the said valuation report. The other witness had though filed affidavit

in lieu of examination-in-chief on behalf of the defendants, but did not turn

up for the cross-examination. The Trial Court thus rightly cancelled the

evidence of the said witness from the record.

76] In my view, there is no merit in any of the submissions made by

learned Senior Counsel for the defendants. The Trial Court, as a matter of

record, by consent of parties, had already deleted Issue Nos.1,2,4,6 and 7

including the issue whether the defendant proves his lawful sub-tenancy in

respect of the suit shop, whether the plaintiff proves that the plaintiff is

entitled to possession in respect of suit business and the suit shop. In my

view, the Trial Court has rightly recorded the finding that the defendants had

failed to prove that the suit was not property valued and on its proper

valuation, it is beyond pecuniary jurisdiction of the Trial Court. The Trial

Court rightly held that the plaintiff had proved that the defendants were

trespassers.

77] In my view, the Trial Court, after considering the overall evidence

placed on record by the parties and considering the provisions of the law

and the pleadings, has rightly decreed the suit in favour of the plaintiff and

against the defendants. The First Appeal is totally devoid of merits.

78] I, therefore, pass the following order:

(a) First Appeal No. 1791 of 2007 is dismissed.

(b) The appellants (original defendants) are directed to deliver

the business and the suit premises to the plaintiff within eight

weeks from the date of uploading of this judgment. During this

period, the appellants (original defendants) are directed not to

part with possession of the suit premises in favour of any third

party and shall not create any third party interest in respect

thereof and shall continue to deposit whatever amount they

have been depositing in deference to the orders passed by the

Trial Court.

(c) The Trial Court is directed to proceed with the enquiry into

mense profit under Order 20 Rule 12 of Code of Civil

Procedure, 1908 expeditiously.

(d) There shall be no order as to costs.

(e) Office is directed to transmit the records and proceedings of

the trial Court received by the office, if any, to the concerned

trial Court expeditiously.


79] This judgment will be digitally signed by the Private Secretary

of this Court. Sheristedar of this Court is permitted to forward the appellant

and the respondents copy of this order by e-mail. All concerned to act on

digitally signed copy of this order.

(R. D. DHANUKA, J.)


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