Whether Small cause court has jurisdiction to try suit between licensor and ex-licensee?

He relies on the judgment of a Division Bench of our Court in the cases of Nagin Mansukhlal Dagli v. Haribhai Manibhai Patel MANU/MH/0179/1980 : AIR 1980 Bombay 123.

5. As held by our Court in the case of Nagin Mansukhlal Dagli (supra), a suit for recovery of immovable property held by the licensee as well as for recovery of licence fee or charges may very well lie under Section 41 after such licence has come to an end; it is nonetheless a suit between a licensor and a licensee; and the argument that Section 41 must be confined only to suits where the licence has not been terminated earlier by the licensor, is fallacious. The expression 'licensees' used in Section 41 of the Presidency Small Causes Courts Act not only includes licensees whose licence is subsisting but also licensees whose licence has been terminated by the licensor prior to the filing of the suit. After the decision of the Division Bench in the case of Nagin Mansukhlal Dagli, the argument that the suit for recovery of possession could be filed by a licensor against a licensee only in a case where the relationship of licensor and licensee subsists as on the date of the suit, is no more res integra.

7. Accordingly, on the averments made in the plaint itself, it is clear that the present suit is between a licensor and a licensee and it relates to recovery of possession of premises which are the subject matter of licence and also for recovery of licence fee. This suit is exclusively within the jurisdiction of the Courts of Small Causes under Section 41 of the Presidency Small Causes Courts Act.

IN THE HIGH COURT OF BOMBAY

Notice of Motion No. 3139 of 2010 in Suit No. 886 of 2010 and Suit No. 886 of 2010

Decided On: 24.11.2015

Kirti Sohan Modi  Vs.  Creation

Hon'ble Judges/Coram:

S.C. Gupte, J.

Citation: MANU/MH/3282/2015

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Whether small cause court has jurisdiction to try eviction suit based on conducting agreement?

 The above averments itself are sufficient to consider such Ejectment proceedings before the Small Causes Court at Bombay in view of Section 41 of the Presidency Small Causes Court Act, 1882 (for short 'PSCC Act'). These averments further make it clear that the parties have also referred to the provisions of the Bombay Rents, Hotel Lodging House Rates Control Act, 1947 (for short 'The Bombay Rent Act') and raised the disputed issue about the protection, as available under the said Bombay Rent Act. The Trial Court, after considering the rival contentions framed the following Issue:

"Issue No. 5: Does the respondent prove that he is protected under the provisions of Section 15-A of the Bombay Rent Act in respect of the suit premises."

Therefore, the parties, based on the pleadings, invoked the provisions of the Bombay Rent Act. Having once invoked the provisions of the Bombay Rent Act and the protection as contemplated under the Bombay Rent Act has been prayed for, there remains no doubt that the Small Causes Court has jurisdiction to consider and deal with such application for Ejectment even though the basic possession of the premises has a foundation of a Conducting Agreement, as contemplated. In view of the above and in the facts and circumstances of the case, therefore, the preliminary objection as raised by the petitioners counsel and opposed by the counsel appearing for the respondent, is rejected.

Bombay High Court

Rasiklal Kumbha Gala, By His ... vs Manilal Ravji on 10 August, 2005

Equivalent citations: 2006 (1) BomCR 425, (2005) 107 BOMLR 40

Bench: A V Mohta

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Whether it is necessary to obtain leave of court prior to filing of eviction suit against company in liquidation?

 Having dealt with the aforesaid two preliminary contentions, let me now turn to the judicially recognised principle on which the question of grant of leave under Section 446 of the Companies Act is required to be considered. Based on the survey of the various judicial pronouncement, the general principle, on which the leave is to be granted in an action, may be shortly summarised as follows:

The leave of the court is not granted as a matter of course or merely for the asking. On a formal application being made, the court will examine the facts and circumstances of each case and exercise its discretion judicially and not in a capricious or arbitrary manner. In the exercise of its discretion, it may grant leave unconditionally or on terms or may refuse it absolutely.

The court has the power to incorporate any terms while granting leave, and this is explicit by the words "except by leave of the court and subject to such terms as the court may impose."

The object of the section appears to be to save the company which is being wound up, from unnecessary litigation and to protect the assets for equitable distribution among its creditors and shareholders. The consequence of the winding up order, therefore, is that no suit can be filed against the company without obtaining leave of the court. In dealing with the question of grant of leave, the Court has to necessarily consider the interest of the Company and to see that the assets are not wasted in unnecessary litigation. Leave to file suit should ordinarily be granted where the question at issue is such which cannot be gone into and decided in the winding up proceeding.

34. This Court, while considering the prayer for grant of leave has to bear in mind the aforesaid settled principles culled down from the various judgments of the various courts. Now, let me turn to the question whether the interest of the company would get affected, if the leave to file suit as prayed for by the applicant is granted. While considering this aspect, one has to keep in mind the law laid down by the Apex Court in the case of Nirmala R. Bafna v. Khandesh Spinning and Weaving Mills Company Limited (supra), wherein the Apex Court ruled that in addition to the factual situation there are two other circumstances which must be taken into consideration, namely, (a) the tenancy rights of the Company in the tenanted premises are not an asset for the purpose of liquidation proceedings; and (b) merely because the Company moves in liquidation and a Liquidator / Official Liquidator is appointed, the rights of the company vis-a-vis its landlord or tenants do not undergo any change. Keeping in mind these judicially recognised statements of law; if one turns to the reply filed by the Official Liquidator to oppose this application, it is amply made clear that the Official Liquidator does not need premises for its use and therefore the Official Liquidator has no objection for releasing the premises in favour of the Land Lord. If that be so, it would not be necessary for the Official Liquidator to incur expenses to defend the suit because the Official Liquidator does not need the suit premises and on the top of it tenancy rights, the Company had in the premises, are not the asset for the purpose of liquidation proceedings. So far as the sub-tenant is concerned, he would be the only contesting party to the suit. Therefore, the question of creating strain on the financial resources of the Company in Liquidation could not be a factor which should weigh with this Court while considering the application for grant of leave.

The issues involved in the suit and the reliefs claimed cannot be adjudicated upon or decided by this Court in exercise of company jurisdiction. That jurisdiction shall be with the court trying the suit. The interest of the company in liquidation is not at all involved in the said suit as already recorded hereinabove for the reasons stated. Therefore, the question of invocation of jurisdiction of the Small Causes Court either under Section 28 of the Bombay Rent Act or under Section 33 of the Maharashtra Rent Act or under Section 41 of the Presidency Small Causes Court Act is not relevant for the purpose of grant of leave because the question of jurisdiction of the court will have to be decided on the basis of the plaint pleadings.

42. The small Causes Court would be well within its right to decide its own jurisdiction. In the event; it comes to the conclusion that it has no jurisdiction to try a suit under the Presidency Small Causes Court Act, in that event, it would be open for that Court either to return or reject the plaint or permit the conversion of the suit. All these conflicting questions need not be gone into and adjudicated upon by this Court at the stage of grant of leave. Only this Court has to consider that the suit is not a frivolous suit, that the suit is not such which is bound to fail for the reasons apparent on the face of the record and the same is not going to create strain on the resources of the Official Liquidator. 

IN THE HIGH COURT OF BOMBAY

Company Application No. 720 of 2006 in Company Petition No. 201 of 1994

Decided On: 05.03.2007

 K.R. Steelunion Limited,  Vs. Poysha Industrial Company Ltd., Company through its Official Liquidator, High Court

Hon'ble Judges/Coram:

V.C. Daga, J.

Citation : 2007 (4)MhLj 280,2007(3) Bom CR 821

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Whether all consequential and incidental applications can be made before court having jurisdiction to try said suit?

The suit itself, I have held, is one under Section 28 of the Bombay Rent Act. The application for withdrawal of that suit therefore necessarily had to be made to the same Court viz. the Small Causes Court. It would be contrary to common sense to hold that the Small Causes Court while deciding the suit acts as a special Court under the Bombay Rent Act but while deciding the applications therein exercises jurisdiction as an other court. It does not. It continues to exercise jurisdiction as a special Court for the purposes of the applications made in such a suit. It follows logically that once it is held that the suit falls within the exclusive jurisdiction of the Small Causes Court under Section 28 of the Bombay Rent Act, all consequential and incidental applications made by the parties therein must be considered as made in such suit.

IN THE HIGH COURT OF BOMBAY

Civil Revision Application No. 4 of 2004

Decided On: 05.05.2004

Pacific Engineering Co. Pvt. Ltd. Vs. East India Hotels Ltd.

Hon'ble Judges/Coram:

S.J. Vazifdar, J.

Citation: 2004(40 ALLMR 330

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Whether Small cause court has jurisdiction to try suit if it involves agreement relating to conduct of business?

 After this Court dismissed the writ petition, it appears that the petitioner had amended the written statement wherein he has also raised among other things another issue that the suit is not maintainable. In short, even considering the aforesaid agreement as one for conducting the business, section 41 of the Presidency Small Cause Courts Act, 1882 cannot be invoked because the said section clearly expresses that it applies only to the immovable property. 
 The learned Counsel for the petitioner Mr. Desai has contended that having this Court interpreted the said agreement to be one for conducting the business, the Small Causes Court has no jurisdiction. 1 find substance in the contention. This Court has interpreted the agreement and found that what was agreed between the parties is for conducting the business of tailoring. Therefore, possession of the room has become consequential thing. It has become indivisible part of the contract that for conducting the business, occupation of the room is necessary. In view of this categorical finding of the courts below, which was confirmed by this Court in aforesaid Writ Petition No. 1728 of 1984, what has been contended by the learned Counsel for the petitioner is legal.
As I observed earlier, when this Court has found that the contract was for conducting the business, section 41 of the said Act cannot be invoked and the decree passed against the petitioner by the trial Court and confirmed by the Appellate Court, is only to be set aside.

Bombay High Court

Smt. Anusuyabai Narayanro Ghate vs Smt. Maktumbi S. Nadaf on 17 February, 1999

Equivalent citations: 1999 (2) BomCR 374, 1999 (1) MhLj 836

Bench: T C Das

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Whether a person who is permitted to reside as family member is gratuitous licensees?

 This being the broad definition of 'licence', it is difficult to exclude cases such as the present case. In fact such exclusion will be contrary to the legislative policy. The defendant was permitted to use the premises and he continued to do so. No consideration was exchanged. Defendant is neither a servant, customer or a trespasser. The distinction sought to be made that even though defendant otherwise fits the criterion of a gratuitous licencee, he cannot be held so as he was permitted as a member of family, has no legal basis. The only distinguishing factor in respect of the defendant is that he was related to the licensor. Once a consideration is not a criterion for treating a person as gratuitous licencee, then such occupation can be for variety of reasons such as love and affection, member of the family, being some of them.
Civil - Jurisdiction - Grant of Probate - Plaintiffs filed suit inspite of dismissal of Special Leave Petition, for grant of Probate in favour of Plaintiffs as executors of Will of deceased in view of non-cooperation of Defendant - Hence, this suit - Whether Defendant, who according to Plaintiff was allowed to use premises as family member, would be termed as gratuitous licensee, so as to oust jurisdiction of Civil Court - Held, gist of plaint was that mother of Plaintiffs, who had only life interest in property, permitted Defendant to use premises with her out of kindness - Defendant had continued to use it even after her death without there been any rights in his favour and without paying any amount - Defendant had been permitted to use flats as family member - There was permission to use premises or in general parlance, licence and there was no consideration involved - Thus it was theory of license and not of co-owner - Term 'licensee' includes 'gratuitous licensee' and consideration was not criteria for bringing person within ambit of 'gratuitous licensee' - Defendant was permitted to use premises and he continued to do so - No consideration was exchanged - Thus Defendant who was permitted to use premises would have to be considered as 'gratuitous licensee' on basis of averments made in plaint itself - Small Cause Court being only Court to try all such suits against gratuitous licensee, Civil Court would not have jurisdiction - Preliminary issue which was framed would have to be answered in favour of Defendant - Thus it held that Defendant had proved that High Court had no jurisdiction to try and dispose of suit - Hence notice of motion filed by Plaintiffs would not be taken up - Notice of Motion was rejected, as not maintainable and plaint was accordingly returned to be presented to proper Court - Suit disposed of.

Citation: 2013(6)ABR1009,2014(2) ALLMR 651 Bom

IN THE HIGH COURT OF BOMBAY

Suit No. 465 of 2011 and Notice of Motion No. 787 of 2011

Decided On: 15.10.2013

Appellants: John Francis Anthony
Vs.
Respondent: Colin M. Rebello

Hon'ble Judges/Coram:N.M. Jamdar, J.

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Bom HC: Jurisdiction of court is to be decided on the basis of pleading of plaintiff in plaint

In the present case, plaintiffs have come to the Court with a specific case that defendants are trespassers on the said property. No averment is made in the plaint that defendants are licensees or tenants. Therefore, merely because defendants make an averment in Written Statement that they are tenants or licensees, that by itself would not oust the jurisdiction of the Court. The Apex Court in Raizada Topandas v. Gorakhram reported in AIR 1964 SC 1348 in para 7 has observed as under:-

"(7) In answering this question it is perhaps necessary to refer to the general principle which admittedly governs the question of jurisdiction at the inception of suits. This general principle has been well explained in the Full Bench decision of the Allahabad High Court, Ananti v. Chhannu reported in (1929) I.L.R. All. 501, F.B. and has not been disputed before us. It was observed there (pp.507, 508):

"The plaintiff chooses his forum and 

files his suit. If he establishes the correctness of his facts he will get his relief from the forum chosen. If .... he frames his suit in a manner not warranted by the facts, and goes for his relief to a court which cannot grant him relief on the true facts, he will have his suit dismissed. Then there will be no question of returning the plaint for presentation to the proper court, for the plaint, as framed, would not justify the other kind of court to grant him the relief.

..... If it is found, on a trial on the merits so far as this issue of jurisdiction goes, that the facts alleged by the plaintiff are not true and the facts alleged by the defendants are true, and that the case is not cognizable by the court, there will be two kinds of orders to be passed. If the jurisdiction is only one relating to territorial limits or pecuniary limits, the plaint will be ordered to be returned for presentation to the proper court. If, on the other hand, it is found that, having regard to the nature of the suit, it is not cognizable by the class of court to which the court belongs, the plaintiff's suit will have to be dismissed in its entirety." 

Having regard to the general principle stated above, we think that the view taken by the High Court in this case is correct. Section 28 no doubt gives exclusive jurisdiction to the Court of Small Causes to entertain and try a suit or proceeding between a landlord and a tenant relating to recovery of rent or possession of any premises to which any of the provisions of Part II apply; it also gives exclusive jurisdiction to decide any application under the Act and any claim or question arising out of the Act or any of its provisions-all this notwithstanding anything contained in any other law. The argument of learned counsel for the

appellants is that the section in effect states that notwithstanding any general principle, all claims or questions under the Act shall be tried exclusively by the Courts mentioned in the section, e.g. the Court of Small Causes in Greater Bombay, and it does not matter whether the claim or question is raised by the plaintiff or the defendant. The argument is plausible, but appears to us to be untenable on a careful scrutiny. We do not think that the 

section says or intends to say that the plea of the defendant will determine or change the forum. It proceeds on the basis that exclusive jurisdiction is conferred on certain courts to decide all questions or claims under the Act as to parties, between whom there is or was a relationship of landlord and tenant. It does not invest those courts with exclusive power to try questions of title, such as questions as between the rightful owner and a trespasser or a licensee, for such questions do not arise under the Act. If, therefore, the plaintiff in his plaint does not admit a relation which would attract any of the provisions of the Act on which the exclusive jurisdiction given under s. 28 depends, we do not think that the defendant by his plea can force the plaintiff to go to a forum where on his averments he cannot go. The interpretation canvassed for by the appellants will give rise to anomalous results; for example, the defendant may in every case force the plaintiff to go to the Court of Small Causes and secondly, if the Court of Small Causes finds against the defendant's plea, the plaint may have 35

to be returned for presentation to the proper Court for a second time. Learned counsel for the appellants has argued in the alternative that the Court of Small Causes need not return the plaint a

second time, for his contention is that that Court has "exclusive" jurisdiction to decide the case whenever a claim is

made under the Act even though the

claim is found to be false on trial. We do not think that this contention can be accepted as correct, for to do so would be to hold that the Court of Small Causes has exclusive jurisdiction to decide questions of title, which is clearly negatived by s. 29-A. Anomalous results may not be a conclusive argument, but when has regard to the provisions in Part II it seems reasonably clear that the exclusive jurisdiction conferred by s. 28 is really dependent on an existing or previous relationship of landlord and tenant and on claims arising under the Act as between such parties."

Apex Court also approved the observations made by the Bombay High Court in the case of Govindram Salamatrai vs. 36

Dharempal reported in 53 Bom. L.R. 386.

Bombay High Court

M/S Lockwood Industrial vs M/S Victoria Timber Supplying on 11 September, 2009

Bench: V.M. Kanade

Citation: 2009(6)BomCR105, 2010(1)MhLj187

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