M/S P E Manning Consultants Pvt Ltd Through Its Director Shri R K Beniwal vs National Insurance Company Limited
- Court
- Bombay High Court
CNR No : HCBM020243752024
2026:BHC-OS:23484
901-ia-7681-2025-coms-135-2025.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION NO. 7681 OF 2025
Varsha
IN
COMMERCIAL SUIT NO. 135 OF 2025
M/s. P.E. Manning Consultants Pvt. ]
Ltd, through its Director Sh. R.K. ]
Beniwal, having its office at 36, Sector ]
5, Chandigarh – 160009. ] … Applicant/
Orig. Defendant No.3.
IN THE MATTER BETWEEN
National Insurance Company Ltd., ]
Having its Mumbai Regional Office No. III ]
rd
At National Insurance Building, 3 floor, ]
14, J. Tata Road, Churchgate, ]
Mumbai – 400 020, Maharashtra ]… Plaintiff
V/s.
Digitally
signed by
VARSHA
VIJAY
RAJGURU
Date:
2026.10.29
19:58:01
+0530
1. Municipal Corporation of Greater ]
Mumbai, through its Commissioner, ]
Having its Head Office at Mahaplika ]
Marg, CST Fort, Mumbai 400 001. ]
VARSHA
VIJAY
RAJGURU
2. Assistant Commissioner of Municipal ]
Corporation of Greater Mumbai ]
G/South Ward, having its Head office at ]
N.M. Doshi Marg, Lower Parel, Mumbai- ]
400 013. ]
3. M/s. P.E. Manning Consultants Pvt Ltd ]
through its Director Sh. R.K. Beniwal ]
having its office at 36, Sector 5, Chandigarh ]
- 160009. ]
4. Station Head Officer ]
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Worli Police Station, Dr. Annie Besant ]
Road, Worli, Mumbai – 400 018. ] … Defendants
Mr. Pradeep Sancheti, Senior Advocate a/w. Mr. Amandeep Singh,
Mr. Abhijit Ranjan, Ms. Pallavi Bali, Ms. Rithika Yerra i/b. Mr. Jayesh
Desai for the Plaintiff.
Mr. Gaurav Joshi, Senior Counsel a/w. Ms. Smita D. i/b. Mr. A. Shah
for defendant no.3/Applicant in IA.
Ms. Madhavi Nallure a/w. Ms. Pooja Yadav i/b. Ms. Komal Pujari for
defendant no. 1 BMC.
CORAM: GAURI GODSE, J.
th
RESERVED ON: 20 JULY 2026
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PRONOUNCED ON: 29 OCTOBER 2026
JUDGMENT:-
1) This application is filed by defendant no. 3 under Order VII Rule
11 of the Civil Procedure Code, 1908 (“CPC”) for rejection of the
plaint at the threshold on the ground that it is barred under Section
41(1) of the Presidency Small Cause Courts Act, 1882 (“said Act”).
2) The suit is filed for mandatory injunction directing defendant no.
1 (“the Corporation”) to enter the plaintiff’s name as ‘sub-lessee’ in
respect of the land. The plaintiff has also prayed for a declaration that
the plaintiff is the bona fide sub-lessee by virtue of a registered
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indenture of sub-lease dated 15 February 1965 and a registered
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deed of assignment dated 26 March 1971.
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BASIC FACTS AS PER THE PLAINT:
3) The suit property is described as a plot of land bearing 254-C,
Scheme No. 52 of Worli Estate of Municipal Corporation of Greater
Mumbai situated at Dr. Annie Besant Road, Worli, Mumbai,
admeasuring 4480 square yards, owned by the corporation. By a
th th
Deed of Indenture dated 8 May 1963, registered on 12 November
1963, the corporation granted a lease in perpetuity to Blackwood
Hodge (India) Private Limited. Blackwood Hodge executed a sub-
th
lease in respect of the suit property on 15 February 1965, registered
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on 18 August 1966, in favour of M/s Ghai Lamba Pvt. Ltd. for 97
years, also granting development rights and the right to rent out the
construction. Ghai Lamba constructed a building. Under the sub-
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lease dated 15 February 1965, a portion of about 8000 square feet
was leased to Blackwood Hodge on the top floor of the building.
Thus, Blackwood Hodge was the original lessee of the land and
became a sub-lessee in respect of the constructed portion of 8000
square feet.
th
4) By an indenture of lease dated 8 April 1965, Ghai Lamba
leased out an area of 72,000 square feet on the first, second, third
and fourth floors of the building to Indian Oil Corporation (“IOCL”). By
rd
an indenture of lease dated 23 February 1966, Ghai Lamba leased
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an additional 3,910 square feet to IOCL.
5) In 1966 and 1970, Ghai Lamba obtained a loan form M/s India
Reinsurance Corporation Limited and mortgaged its rights in the land.
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On 20 November 1969, Blackwood Hodge assigned its leasehold
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rights in the land to defendant no. 3. On 26 March 1971, Ghai
Lamba assigned all its sub-leasehold rights in the land and the
building to India Reinsurance Corporation for the balance term of 97
years. In 1972, under the General Insurance Business
(Nationalisation) Act 1972, India Reinsurance Corporation Limited
merged into the National Insurance Company Limited (“the plaintiff”).
th
Under the terms of the Indenture of lease dated 15 February 1965,
the plaintiff claims sole right to receive rent from the occupants of the
building constructed on the suit land.
6) The property card records only the name of Blackwood Hodge
as lessee, with remarks recording that an indenture of assignment
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dated 26 March 1971 was executed in favour of M/S India
Reinsurance Corporation Limited. While the plaintiff’s request for
entering the name in the property card was pending, the corporation
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issued a notice dated 20 April 2019 under Section 353B of the
Mumbai Municipal Corporation Act calling upon the plaintiff and
defendant no. 3 to submit a fresh structural report of the building. The
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Corporation issued a notice dated 6 November 2019 under Section
354 of the Mumbai Municipal Corporation Act, stating that the building
is unsafe and must be vacated and demolished.
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7) Thereafter, by issuing a notice dated 13 November 2019,
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defendant no. 3 illegally terminated the sub-lease dated 15 February
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1965 and also disputed the Assignment dated 26 March 1971. It was
also alleged that the plaintiff did not pay rent towards the land to
defendant no. 3 from September 2000. Without prejudice to its rights
and contentions, the plaintiff issued a cheque towards the alleged
non-payment of rent. The plaintiff informed the corporation that
defendant no. 3 was likely to illegally dispossess the plaintiff. The
building was demolished, and the plaintiff paid the demolition charges
st
to the corporation on 21 March 2023. A dispute arose between the
plaintiff and defendant no. 3 over the ownership of the salvage
material. The corporation allowed defendant no. 3 to dispose of the
salvage material. The plaintiff claims lawful constructive possession.
Hence, this suit is filed.
SUBMISSIONS ON BEHALF OF DEFENDANT NO. 3:
8) Learned senior counsel for defendant no.3 submits that the
scope of the suit falls within the jurisdiction of the Small Causes
Court, in view of Section 41 of the said Act. Once the suit is filed for
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protection of sub-lease rights in respect of the suit property, the same
would attract the provisions of Section 41(1) of the said Act. Learned
senior counsel for defendant no. 3 relied upon the relevant averments
in the plaint to support his submissions that, from the plain reading of
the plaint, the plaintiff’s right under the sub-lease has been pleaded in
detail. The allegations against defendant no. 3 also pertain to the
termination of the sub-lease by defendant no. 3, and the allegations
made against defendant no. 3 show that the plaintiff had objected to
issuing NOC to defendant no. 3. Thus, according to the learned
senior counsel for defendant no. 3, all the contentions raised in the
suit pertain to the leasehold rights which would fall within the
jurisdiction of the said Act.
9) Learned senior counsel for defendant no. 3 submitted that the
plaintiff also claims to be in constructive possession of the suit
property based on the right of sub-lease which stood terminated by
th
defendant no. 3 vide notice dated 13 November 2019. Therefore,
only the Court of Small Causes would have jurisdiction to try and
entertain the suit. He submitted that the Small Causes Court has
jurisdiction to decide suits not only between landlord and tenant but
also between the lessor and lessee. To support his submissions, he
relied upon the decision of this court in the case of Dattatrya Krishna
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1
Jangam Vs. Jairam Ganesh Gore .
10) Learned senior counsel for defendant no. 3 submitted that if
such a suit falls within the sweep of Section 41(1), it would be
entertained only by that court. To support his submissions, learned
counsel for defendant no. 3 relied upon the Apex Court’s decision in
2
Mansuklal Dhanraj Jain and Ors Vs. Eknath Vithal Ogale and this
Court’s Full Bench’s decision in Central Warehousing Corporation,
3
Mumbai Vs Fortpoint Automotive Pvt. Ltd . He submits that the words
‘relating to’ appearing in Section 41(1) of the said Act are of a wide
amplitude, and the grievance made that defendant no. 3 is
threatening to illegally recover possession would also fall within the
purview of Section 41(1) of the said Act, as the suit appears to be for
protecting such possession which is based on a sub-lease. To
support his submissions, learned counsel for defendant no. 3 relied
upon this Court’s decision in Anjanabai Sonawane Vs Hindustan
4
Construction Co. Ltd .
11) On similar propositions, the learned counsel for defendant no. 3
relied upon the Apex Court’s decision of Mahadev Kambekar Vs.
5
Shree Krishna Woolen Mills Pvt Ltd . Learned senior counsel for
1 AIR 1965 BOM 177
2 (1995) 2 SCC 665
3 2010 (1) Mh.LJ 658
4 (2014) 6 AIR BOM R 273
5 (2020) 14 SCC 505
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defendant no. 3 submitted that in a dispute between the plaintiff, who
claimed to be a lessee, and a defendant, who claimed to be a lessor,
the Apex Court in Prabhudas Damodar Kotecha Vs. Manhabala
6
Jeram Damodar , confirmed the decision of the Full Bench of this
Court and held that disputes between a lessee and a lessor relating
to land are governed by Section 41 of the said Act.
12) To support his submissions regarding jurisdiction over the
subject matter of the dispute under Section 41(1) of the said Act,
learned senior counsel for defendant no.3 also relied upon the
decisions of the learned Single Judge in Bombay Forging Limited Vs.
7
Manilal and Son and also this Court’s Division Bench in Bombay
8
Forging Limited . He submits that the suit, seeking a mandatory
injunction and challenging termination, falls within the scope of
Section 41(1) of the said Act. Since the primary relief is barred,
consequential reliefs of injunction would not confer jurisdiction on the
civil court to decide the dispute between the lessee and lessor.
13) Learned counsel for defendant no. 3 submits that the
jurisdiction clause and supporting pleadings in the plaint to invoke
jurisdiction of the civil court are the result of clever drafting by seeking
6 (2013) 15 SCC 358
7 2015 SCC Online Bom 5793
8 2016 SCC Online Bom 2859
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ancillary reliefs which can be prayed for in the civil suit. He submits
that such cleverly drafted pleadings would not make the suit
maintainable, which otherwise would not be maintainable in view of
the bar under Section 41(1) of the said Act. To support his
submissions, learned counsel for defendant no. 3 relied upon the
decision in the case of Sree Surya Developers and Promoters Vs. N.
9
Sailesh Prasad and Others .
14) In view of Chapter VII of the State amendment to the said Act,
Section 45 provides for suits involving title; however, because of the
non-obstante clause in Section 41(1), Section 45 will not apply in the
present case. To support his submissions, learned senior counsel for
defendant no. 3 relied upon this Court’s decision in ING Vysya Bank
10
Limited Vs Modern India Limited and Nikhilesh, Kesarichand Jhaveri
11
Vs New Era Fabrics Limited .
15) In view of the implied bar under Section 41 of the said Act, the
plaint must be rejected against all the defendants. Since the reliefs
sought against the other defendants are consequential and ancillary,
the suit can be rejected against all the defendants. Without prejudice
to the prayer for rejection of the plaint against all the defendants, the
9 (2022) 5 SCC 736
10 2008(2) Mh LJ 653
11 2024 SCC Online Bom 1318
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plaint can be rejected only against defendant no. 3. To support his
submissions, learned counsel for defendant no. 3 relied upon the
decision of the Apex Court in Church of Christ Charitable Trust and
12
Educational Charitable Trust Vs Ponniamman Educational Trust
and this Court’s decision in Sheela Ram Vidhani Vs S.K.Trading
13
Company . In the alternative, learned counsel for the defendant no. 3
submitted that where a suit is not maintainable or barred on the
ground of lack of jurisdiction relating to territorial limits or pecuniary
limits, the plaint can be ordered to be returned under Order VII Rule
10 of CPC. However, under Rule 283 of the Bombay High Court
(Original Side) Rules, 1980, the plaint may be returned for
presentation before the court having jurisdiction. To support his
submissions, learned counsel for defendant no. 3 relied upon this
Court’s decision in Nagin Mansukhlal Dogli V/s Haribhai Manibhai
14
Patel .
16) Learned senior counsel for defendant no. 3 therefore submits
that the substantial prayer in the suit falls within the jurisdiction of the
said Act and therefore the plaint is liable to be rejected at the
threshold or returned for presentation before the Court having
12 (2012) 8 SCC 706
13 2021 SCC Online Bom 864
14 1979 SCC Online Bom 29
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jurisdiction.
SUBMISSIONS ON BEHALF OF THE PLAINTIFF:
17) Learned senior counsel for the plaintiff submitted that Sections
19, 41 and 45 of the said Act must be read harmoniously. Section 41
cannot override Section 45; on the contrary, Section 45 overrides
Section 41 so far as the issue of suit is concerned. Unlike a civil court,
which has inherent jurisdiction, the Small Causes Court exercises
powers conferred on it under the said Act. In a given case, while
dealing with possession under Section 41, even if the Small Causes
Court is allowed to consider title as an ancillary or incidental issue,
that decision is not conclusive and does not operate as res judicata.
Even in such a case, a party concerned who wants to establish title
would be entitled to file a suit on title in view of express saving under
Section 45.
18) In a long-term lease, the lessee has title to the property for the
duration of the lease, and issues relating to that title are governed by
Sections 105 to 114 of the Transfer of Property Act and tried by the
Civil Court. If a suit seeks to challenge the termination and thereby
seeks a declaration of title as lessee, it can file a suit in Civil Court,
and in that suit the lessee can also seek relief for protection of its
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possession. Even in such a situation, the lessee can file a suit on title,
even after the decision of the small causes court, where it incidentally
decides the issue of title. Thus, by following the settled principle that
possession follows title, the Civil Court will have jurisdiction to grant
possession and/or protection of possession. Learned senior counsel
for the plaintiff submitted that the Civil Court’s jurisdiction is not
excluded in disputes arising under the Transfer of Property Act. He
relied upon the Apex Court’s decision in Vidya Drolia Vs Durga
15
Trading Corporation .
19) Learned senior counsel for the plaintiff submitted that, as a sub-
lessee, the plaintiff has an interest and title to the property recognised
under the Transfer of Property Act, as held by the Apex Court in B M
16
Lall v. Dunlop Rubber Company, India Limited . Learned counsel for
the plaintiff submitted that a lease operates as a conveyance and
creates an interest in the property in favour of the lessee upon
execution of the lease document. The rights of a sub-lessee are the
same as those of a lessee. To support his submissions. Learned
counsel for the plaintiff relied upon the Apex Court’s decisions in
17
Associated Hotels of India V/s R.N. Kapoor and Puran Singh Sahni
15 (2021) 2 SCC 1
16 1967 SCC Online SC 77
17 AIR 1959 SC 1262
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18
Vs Sundari Bhagwandas Kripalani .
20) Learned senior counsel for the plaintiff submitted that under the
terms and conditions of the sub-lease, the plaintiff's predecessor was
permitted to construct a building, which is now owned by the plaintiff
and an area of 8000 sq ft of constructed area was given on a tenancy
basis to defendant no. 3, and the remaining area was given to IOCL
on a tenancy basis. However, defendant no. 3 issued a termination
notice and called upon the plaintiff to hand over possession. The
plaintiff challenged the validity of the termination notice, seeking a
declaration that it is illegal and void and that it does not affect the
plaintiff's right to continue in possession during the balance period of
the sub-lease.
21) Learned senior counsel for the plaintiff relied upon Section 19(s)
of the said Act, which provides that the Small Causes Court shall
have jurisdiction in suits for declaratory decrees. Section 41 is part of
Chapter VII, and it deals only with suits relating to recovery of
possession. However, Section 45 expressly provides that nothing
contained in Chapter VII shall be deemed to bar a party to the suit
from suing in a competent court to establish his title to such property.
18 1991(2) SCC 180
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22) Learned senior counsel for the plaintiff submitted that
destruction of a leasehold property does not amount to loss of
possession by the lessee. To support his submissions, he relied upon
the decision of the Apex Court in Shah Ratansi Khimji and sons V/s
19
Kumar Sons Hotel Pvt Limited . He submitted that, in the present
case, after the suit building was demolished because it was in a
dilapidated condition, the Apex Court decided the issue of entitlement
to demolish the building and held that the corporation shall demolish
the building and that the cost will be equally borne by both parties.
However, the Apex Court did not expressly address the issue of title.
23) A plaint cannot be rejected partially for some of the reliefs.
Hence, in the present case, the plaint cannot be rejected on the
ground of jurisdiction. He relied upon the Apex Court’s decision in
20
Central Bank of India Vs Prabha Jain . Learned senior counsel for
the plaintiff relied upon the relevant averments in the plaint to support
his submissions that the suit is well within the powers of the civil
court. Hence, the plaint in the present case cannot be rejected at the
threshold as barred by law.
LEGAL POSITION:
19 2014 (14) SCC 1
20 (2025) 4 SCC 38
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24) In Associated Hotels of India the Apex Court explained the
marked distinction between a lease and a license by referring to
Section 105 of the Transfer of Property Act and then compared it with
Section 52 of the Easements Act, 1882. It is observed that Section
52 of the Indian Easement Act defines a licence, which gives only a
right to use the property in a particular way or under certain terms,
while it remains in possession and control of the owner thereof, and it
does not create any estate or interest in the property in favour of the
licensee.
25) In Puran Singh Sahni , the Apex Court held that a lease has
been defined in Section 105 of the Transfer of Property Act and the
relationship of lessor and lessee is one of contract and when the
agreement vests in the lessee a right of possession for a certain time,
it operates as a conveyance or transfer and is a lease. It is further
held that the Bombay Rents, Hotel and Lodging House Rates
(Control) Act, 1947 (“Rent Act”) has not defined a ‘lease’ and the Rent
Act makes the ‘tenant’ one of status and not of contract, and the
licensee has been conferred the status of a tenant under Section 15A
of the Rent Act.
26) In Dattatraya Krishna Jangam, the Full Bench of this Court was
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dealing with the jurisdiction of the City Civil Court to entertain a suit
for a declaration of a sub-tenancy after the coming into force of the
Rent Act, and for an injunction restraining the defendant from
interfering with his possession as a sub-tenant. The Full Bench was
also considering the issue of jurisdiction to entertain a suit for a
declaration of tenancy or sub-tenancy and for an injunction under
Section 41 of the said Act. While answering these questions in the
negative, the Full Bench held that Chapter VII of the Presidency
Small Cause Courts Act containing Sections 41 to 49 provides a
summary procedure for obtaining expeditious possession from a
tenant whose tenancy had been terminated or from a licensee whose
licence had been revoked. With reference to the issue of tenancy and
Section 28 of the Rent Act, it is held that, assuming that a claim to a
tenancy or a subtenancy can be regarded as a question of title, it is a
title other than a title of a landlord, tenant or sub-tenant, whether such
title is acquired or is alleged to have been acquired under a contract
or under the provisions of the Act. If, therefore, in a suit or a
proceeding under Section 28 a person's claim relating to possession
on the basis of his being a tenant or a sub-tenant has been
negatived, he cannot file a suit under Section 29A to again try and
establish his rights as a tenant or a sub-tenant as the case may be.
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27) In B. M. Lall , the challenge before the Apex Court was against
an order of the Calcutta High Court setting aside the trial court’s
decree dismissing the suit for eviction on the ground of bona fide
requirement. The Apex Court, while dealing with the question
whether the occupier under the agreement in question was a tenant
or a licensee, considered the distinction between a lease and a
license. It is held that Section 105 of the Transfer of Property Act
defines a lease and Section 52 of the Indian Easement Act defines a
license. It is held that a lease is the transfer of a right to enjoy the
premises, whereas a license is a privilege to do something on the
premises which otherwise would be unlawful. The transaction is a
lease if it grants an interest in the land, and a license if it gives a
personal privilege with no interest in the land.
28) In Nagin Mansukhlal Dogli, the plaintiff was a monthly tenant of
a flat who granted the defendant leave and licence to occupy the said
flat for a period of 11 months under the leave and licence agreement,
which was renewed. The defendant alleged that before the expiry of
the second agreement in or about January 1970, an oral agreement
was arrived at between the plaintiff and the defendant under which it
was agreed that the defendant would continue as a licensee for so
long as he desired and that the said licence was subsisting on
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February 1, 1973, on which date, by reason of the amendment to the
Bombay Rent Act, the defendant became a protected licensee. The
defendant contended that by reason of section 41 of the said Act this
Court had no jurisdiction to entertain or try this Suit. The issue of
jurisdiction was referred to a Division Bench for determination. This
Court held that the words used in Section 41, “relating to the
possession of any immovable property”, are wider than the phrase
“for the recovery of possession of any immovable property.” The
words “relating to” are used in Section 41 not to confine the section
only to a suit for the recovery of possession of immovable property
but also to permit to be included within the ambit of such a suit all
other reliefs which the plaintiff can claim in a suit for the recovery of
possession of immovable property on the termination of a licence or a
tenancy.
29) In Mansukhlal Dhanraj Jain, the Apex Court held 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
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the licensee-plaintiff would squarely be covered by the wide sweep of
the said phrase. It is further held that when Section 41(1) of the said
Act is read in juxtaposition with the aforesaid Section 28 of the Rent
Act, it becomes clear that pari materia words are used about the
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 further observed that Section 41 of the said 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 contemplated by both sections is the
same, namely, a suit relating to the recovery of possession of
premises.
30) In ING Vysya Bank Ltd. , this Court held that sub-section (2) of
section 41 carves out certain legislation where an exclusive or special
provision is made for regulating the juristic relationship of landlord
and tenant or licensor and licensee. It is held that the words “or any
other law for the time being in force” must be construed in the context
in which they occur, or else the important public purpose underlying
the conferment of exclusive jurisdiction on the Small Causes Court
will be defeated.
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31) In Central Warehousing , the question for consideration before
the Full Bench of this Court was whether the jurisdiction of the Small
Causes Court under the said Act would be ousted in view of the
provision of section 5 of the Arbitration and Conciliation Act, 1996, if
any Agreement between Licensor and Licensee contains a clause for
arbitration. The Full Bench held that, despite an arbitration agreement
between the parties and the non-obstante clause in section 5 of the
Arbitration Act, the Small Causes Court's exclusive jurisdiction to try
and decide the dispute specified in section 41 of the Act of 1882 is
not ousted.
32) In Prabhudas Damodar Kotecha, the Apex Court considered
whether a suit filed by a licensor against a gratuitous licensee under
Section 41(1) of the said Act, as amended by the Maharashtra Act 19
of 1976, was maintainable before a Small Cause Court. The Apex
Court confirmed the view of the Full Bench of this Court that the
clubbing of the expression “licensor and licensee” with “landlord and
tenant” in Section 41(1) of the said Act and clubbing of causes
relating to recovery of licence fee is only with a view to bring all suits
between the “landlord and tenant” and the “licensor and licensee”
under one umbrella to avoid unnecessary delay, expenses and
hardship.
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33) In Bombay Forging Limited, the Division Bench of this Court
confirmed the rejection of the plaint on the ground that the suit was
barred under Section 41(1) of the said Act. The Division Bench
referred to the decision of this Court in the case of Nagin Mansukhlal
Dogli, which held that, as far as the words used in sub-section (1) of
Section 41 of the said Act “relating to the recovery of possession” are
concerned, they are wide enough to include all other reliefs the
plaintiff can claim in a suit for recovery of possession or the
termination of licence or tenancy. The Division Bench also referred to
the decision in ING Vysya Bank , which dealt with the question
whether the provisions of Section 41 of the said Act would bar
jurisdiction of an Arbitral Tribunal to entertain a claim for specific
performance of an agreement of renewal contained in an agreement
of licence executed between a licensor and a licensee. It was thus
held that the words used in sub-section (1) of Section 41 of the said
Act, “relating to the recovery of possession” are wide enough to
include all other reliefs the plaintiff can claim in a suit for recovery of
possession or the termination of licence or tenancy.
34) In Anjanabai Sonawane , the plaintiff claimed to be a tenant, and
the dispute was between the landlord and the tenant for possession.
This Court held that the suit related to recovery of possession of
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immovable property and, therefore, Section 41 of the said Act would
squarely apply. This Court also accepted the defendants' submissions
that, even assuming the claim is for protection under the Maharashtra
Rent Control Act, 1999, that issue must be decided only by the Court
of Small Causes. Hence, this Court returned the plaint to the plaintiff
to be presented to the appropriate forum.
35) In Mahadev Kambekar , the plaintiff claimed to be the lessee
and the defendant claimed to be the owner/lessor of the land on the
terms set out in the indenture of the lease deed executed between
the parties. The defendant determined the lease by serving a notice
to quit. The plaintiff filed a civil suit on the Original Side of this Court,
claiming specific performance under a clause of the lease deed
which, according to the plaintiff, enabled the plaintiff to elect and
exercise his right to purchase the land from the defendant upon
fulfilment of the conditions set out therein. The defendant filed a
counterclaim seeking eviction and arrears of rent. The Single Judge
decreed the suit for specific performance and also allowed the
defendant's counterclaim, and accordingly passed the decree for
possession and arrears of rent. Hence, both parties preferred
separate appeals. The Division Bench allowed both appeals, set
aside the decree for specific performance, and remanded the suit for
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retrial. At the appellate stage, it was held that the lessor's
counterclaim was not maintainable under Section 41 of the said Act,
as the civil court lacked jurisdiction to try the claim for eviction and
arrears of rent. Hence, the lessor's eviction suit was dismissed. Both
parties approached the Apex Court. The Apex Court dismissed the
plaintiff’s SLP and confirmed the remand order.
36) In Mahadev Kambekar, the Apex Court confirmed the Division
Bench's view in light of the law laid down in Mansukhlal Jain , which
was later relied on in Prabhudas Damodar Kotecha . It was held
that the only distinction in the facts of Mansukhlal Jain was that the
dispute was between the licensee and the licensor in relation to the
land, whereas in Mahadev Kambekar the dispute was between the
landlord and the tenant. It was further held that the factual distinction
was of no significance because both categories 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. The Apex
Court rejected the licensor's argument that, once the tenancy is
determined, such suits would not fall within the purview of Section 41
of the said Act, confirming this Court’s view in Nagin Mansukhlal
Dogli. In Nagin Mansukhlal Dogli it was held that a suit for the
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recovery of licence fee or charges may lie either when a licence
subsists or after it has come to an end, and similarly a suit for the
recovery of rent may lie either when the tenancy subsists or after it
has come to an end.
37) In Vidya Drolia , a three-judge bench considered the legal ratio
21
in Himangni Enterprises v. Kamaljeet Singh Ahluwalia , which held
that landlord-tenant disputes governed by the Transfer of Property
Act, 1882, are not arbitrable as this would be contrary to public policy.
The three-judge bench of the Apex Court overruled the ratio laid
down in Himangni Enterprises and held that landlord-tenant disputes
are arbitrable, as the Transfer of Property Act does not forbid or
foreclose arbitration; however, landlord-tenant disputes covered and
governed by rent control legislation would not be arbitrable when a
specific court or forum has been given exclusive jurisdiction to apply
and decide special rights and obligations and such rights and
obligations can only be adjudicated and enforced by the specified
court/forum, and not through arbitration.
38) In Nikhilesh Kesarichand Jhaveri, this court accepted the
submissions that the issue of title only for the purpose of deciding the
issue of recovery of possession would fall within the jurisdiction of the
21 (2017) 10 SCC 706
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Court of Small Causes and that while ordering eviction of a tenant,
the Small Causes Court may undertake an enquiry, in an appropriate
case, to determine as to which of the persons, claiming to be
landlords, are entitled to seek possession of the tenanted premises;
however, it was held in the facts of the case that it was not necessary
for the Small Causes Court to undertake that enquiry.
39) In Shah Ratansi Khimji & Sons , the Apex Court held that a
lease of immovable property is a transfer of the right to enjoy such
property in consideration of the price paid, as per Section 105 of the
TP Act and that once the right of lease is transferred in favour of the
lessee, the destruction of a house/building constructed on the lease
property does not determine the tenancy rights of the occupant,
which is incidental to the contract of the lease which continues to
exist between the parties.
40) In Central Bank of India , the Apex Court held that even if one
relief survives, the plaint cannot be rejected under Order VII Rule 11
of the CPC. The Apex Court in Church of Christ and the learned
Division Bench of this Court in Sheela Ram Vidhani held that rejection
of a plaint in its entirety qua a particular defendant is permissible
when the pleadings disclose no cause of action against such
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defendant.
41) In Sree Surya Developers, the Apex Court held that a mere
clever drafting would not permit the plaintiff to make the suit
maintainable which otherwise would not be maintainable and/or
barred by law and that if clever drafting of the plaint has created the
illusion of a cause of action, the court will nip it in the bud at the
earliest so that bogus litigation will end at the earlier stage. It is further
held that in exercise of powers under Order VII Rule 11( d ) of the CPC
the Court cannot enter into the merits, which is not permissible at the
stage of deciding the application under Order VII Rule 11 of the CPC
and the issue which is required to be considered by the Court is on
the reading of the plaint whether the suit would be maintainable or
not.
CONSIDERATION OF SUBMISSIONS AND ANALYSIS:
42) As discussed in the above paragraphs, the suit is filed on the
pleadings that a valid sub-lease document was executed in favour of
the plaintiff. The owner of the land is the Corporation, which leased
out the land in perpetuity to Blackwood Hodge, who is not a party to
this suit. Ghai Lamba constructed the building under the terms of the
sub-lease in their favour executed by Blackwood Hodge for 97 years.
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Ghai Lamba is also not a party to this suit. Blackwood Hodge
thereafter assigned its leasehold rights in the land to defendant no. 3.
Ghai Lamba created a sub-lease in favour of Blackwood Hodge in
respect of a portion of the constructed area and also leased out other
portions to other parties. Ghai Lamba assigned all its sub-leasehold
rights to India Reinsurance Corporation, i.e. the predecessor in
interest of the plaintiff. Thus, the plaintiff claims sub-lease rights in the
land and ownership of the construction through Ghai Lamba and
refers to defendant no. 3’s claim of leasehold rights through the
original lessee Blackwood Hodge. The pleadings in the plaint show
that Ghai Lamba carried out the construction and owned it, and was
also permitted to rent out the constructed area under the sub-lease.
43) The corporation declared the construction as C1 category and
demolished it as it was dilapidated. The dispute arose as defendant
no. 3 issued a termination notice to the plaintiff, and there was also a
dispute between the plaintiff and defendant no. 3 on the ownership of
the salvage material after the demolition. With this background, the
plaintiff pleaded a running cause of action in paragraph 16 of the
plaint. The first cause of action is pleaded when the sub-lease rights
of India Reinsurance Company through Ghai Lamba stood
transferred to the plaintiff when the India Reinsurance Company was
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merged into the plaintiff. The next cause of action is pleaded when,
time and again, the plaintiff requested the corporation to record the
plaintiff’s name as sub-lessee of the land and owner of the
construction, as the corporation recognised the rights by raising tax
invoices in the plaintiff's name. The termination notice issued by the
defendant no. 3 is also pleaded as a cause of action. The plaintiff
also pleaded a cause of action when defendant no. 3 tried to forcibly
dispossess the plaintiff and then when the corporation issued no
objection in favour of Ghai Lamba and defendant no. 3 for demolition,
and the orders passed by this court and the Apex Court in the
litigation pertaining to demolition, as the construction was declared as
C1 category. The plaintiff has pleaded that its sub-lease rights are still
valid and subsisting and therefore, it also owns the salvage material
after demolition. Hence, the cause of action also arose when the
corporation permitted defendant no. 3 to remove the salvage material
after demolition.
44) It is therefore necessary to determine whether the suit, based
on leasehold rights and possession, falls within the jurisdiction of the
Small Causes Court and whether the civil court’s jurisdiction is
impliedly barred. The plaintiff has relied upon various letters
requesting defendant no. 1, i.e. the corporation, to record its name in
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the property record maintained by the corporation. The prayers in the
plaint are for (i) mandatory injunction directing the corporation to
record the plaintiff’s name as sub-lessee, (ii) declaration that the
plaintiff is a bona fide sub-lessee, (iii) restrain the corporation from
granting construction permission to defendant no. 3, (iv) restraining
the corporation and also defendant no. 3 from dispossessing the
plaintiff and restraining defendant no. 3 from creating third-party
interest (v) declaration that the termination notice issued by
defendant no. 3 is illegal and (vi) restrain the corporation from
removing the salvage material or directing defendant no. 3 to remove
it.
45) Chapter VII of the said Act is substituted by the state
amendment applicable to the state of Maharashtra. Under Section
41(1) of the said Act, the Small Causes Court has jurisdiction to
entertain and try all suits or proceedings between licensors and
licensees or landlords and tenants relating to the recovery of
possession of immovable property or the recovery of license fee,
charges, or rent. Under Section 9 of the CPC, Civil Courts shall try all
civil suits except those expressly or impliedly barred. Therefore, to
oust this Court's jurisdiction to try and entertain the present suit, the
conditions under Section 41(1) of the said Act must be satisfied. The
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first condition is that the suit must be between licensors and licensees
or landlords and tenants. If it is a suit between licensors and
licensees or landlords and tenants, it must be relating to the recovery
of possession of immovable property or the recovery of license fee,
charges, or rent.
46) At the stage of exercising powers under Order VII Rule 11 of the
CPC, the nature of the suit can be determined only by reading the
plaint and the documents referred to in the plaint. As per the plaint,
the plaintiff claims sub-lease rights through Ghai Lamba, and it refers
to defendant no. 3’s is claim of leasehold rights through the original
lessee Blackwood Hodge. However, neither Ghai Lamba nor
Blackwood Hodge is a party to the suit. The plaintiff claims to be a
sub-lessee of the land and owner of the construction. The plaintiff,
though claiming sub-lease rights in the land, does not claim to be a
sub-lessee of any of the defendants.
47) With reference to the termination notice issued by defendant no.
3, the plaintiff has pleaded that, without prejudice to the rights and
contentions, the rent amount claimed by defendant no. 3 is paid. The
plaintiff has pleaded that it requested the corporation to substitute the
plaintiff’s name in place of Ghai Lamba on the ground that the plaintiff
has sub-lease rights in the land and is the owner of the structure in
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view of the deed of Assignment executed by Ghai Lamba. Thus, in
view of the terms of the sub-lease in favour of Ghai Lamba, the
plaintiffs also claim ownership of the construction and contends that
the occupants, including defendant no. 3, are the tenants in respect
of the structure. However, the suit is not between the plaintiff and
defendant no. 3 as landlord and tenant of the structure.
48) The suit is for a declaration of sub-lease rights in the land and
ownership of the construction through Ghai Lamba, who is not a party
to the suit. Merely because it is pleaded that defendant no. 3 is
claiming to be assignee of the original lessee, it can be concluded at
this stage that the suit is between landlord and tenant as
contemplated under Section 41(1) of the said Act. The plaintiff has
also pleaded that defendant no. 3 had shown a desire to transfer its
right, title and interest as lessee in favour of the plaintiff. Nothing is
pleaded by the plaintiff that will indicate at this stage that the suit is
between a landlord and tenant.
49) Much was argued on the meaning of a license and lease. Both
parties relied on a number of judgments on the scope of the Small
Causes Court's jurisdiction, provisions of the Rent Act and the
meaning of a license and lease. However, the present application
does not turn on whether the plaintiff’s title is based on a license or a
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lease. The point to be considered is whether the suit is between a
landlord and tenant or licensor and licensee. The Rent Act is a
protective statute in relation to eviction, assignment, subletting and
possession. However, the Rent Act does not apply in the present
case. The plaintiff is claiming rights as a sub-lessee of the land and
owner of the construction. Under a contract of lease not governed by
the Rent Act, the provisions of the Transfer of Property Act and the
Specific Relief Act would apply, and the case would be decided on the
terms and conditions of the contract. Thus, there is no difference
between the terms landlord – tenant and licensor – licensee within
the meaning of Section 41 of the said Act.
50) The question is not whether it is a lease or a license, but
whether this suit is between landlord and tenant or a lessor and
lessee. A relationship of lessor and lessee is one of a contract. In the
present case, nothing is pleaded that there is any contract between
the parties to the suit. Thus, I do not find any substance in the
submissions on behalf of defendant no. 3 that because the
contentions in the plaint are of a sub-lessee and the grievance is
regarding termination notice by defendant no. 3, the suit to protect
sub-lease rights is governed under Section 41 of the said Act. At the
stage of deciding the application under Order VII Rule 11 of the CPC,
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the question is whether the plaint shows that the suit is between a
landlord and tenant. If the first condition under Section 41 of the said
Act is satisfied, only then would the question be whether the suit
relates to recovery of possession or recovery of rent as contemplated
under Section 41(1) of the said Act.
51) A plain reading of the plaint and the supporting documents does
not indicate that the suit is between a landlord and tenant. Therefore,
the question of whether the saving provision under Section 45 of the
said Act applies is not the question that arises at this stage, while
deciding the application under Order VII Rule 11 of the CPC. If, based
on the rival pleadings, any such issue arises in the future, it can be
considered at the appropriate stage of the suit. Accordingly, it is
unnecessary to discuss whether the plaint can be partially rejected or
whether it can be returned under Order VII Rule 10 of the CPC.
52) In the cited decisions, the dispute related to a contract between
the parties to the suit and was between landlord and tenant;
therefore, the legal propositions regarding “relating to the recovery of
possession” having wide amplitude are discussed in that context. At
the stage of deciding the application under Order VII Rule 11 of the
CPC, the crux is to first determine, from the reading of the plaint,
whether the suit is between landlord and tenant. In the present case,
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on careful reading of the plaint, at this stage it is not possible to
record a finding that the suit is between a landlord and tenant or
licensor and licensee, inasmuch as the plaintiff neither pleads that it is
a sub-lessee of any of the defendants, nor pleads any contract
between the parties. The pleadings also does not indicate that it is
cleverly drafted only to avoid the implied bar under Section 41(1) of
the said Act.
53) The legal principles governing the rejection of a plaint under
Order VII Rule 11 of the CPC are no longer res integra. The Hon’ble
22
Apex Court in Dahiben v. Arvindbhai Kalyanji Bhanusali , held that
the power conferred on the court to terminate a civil action is a drastic
one and thus the conditions enumerated under Order VII Rule 11 of
the CPC must be strictly adhered to. In the present case, it is not
possible to conclude at this stage that the suit satisfies the conditions
under Section 41(1) of the said Act to oust this Court's jurisdiction.
Hence, the plaint cannot be rejected under clause (d) of Rule 11 of
Order VII of the CPC on the ground of implied bar under Section
41(1) of the said Act.
54) Therefore, the interim application is rejected.
(GAURI GODSE, J.)
22 (2020) 7 SCC 366
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