Central Cottage Industries Corporation ... of India Ltd. v. M /s. United Corporation

Judgment

2. Heard the learned senior counsel for the respective parties. The revision takes exception to the judgme nt and decree dated 26th Novem ber 2008 passed by the Division Bench of the Small Causes Court in Appeal No. 579 of 2003, whereby the petitioner’s appeal

was dis missed, conseque ntly, the trial Court’s decree of eviction ca me to be confirmed. The dispute is about the pre mises i. e. Ground, base ment - 2 - a nd m ez n naine floors, ad measuring in aggregate 13,750 Sq. ft. in a b uilding “Narang House” situate at Chhatrapati Shivaji Maharaj Appolo Bundar, Mu m bai (hereinafter, for the sake of brevity, to be referred as the “suit pre mises”). The responde nt is a partnership firm, registered u n der the Indian Partnership Act and is a tenant in respect of the suit pre mises. The petitioner is a co m pa ny incorporated on 5th February 1976, u n der the Indian Com pa nies Act, 1956, having paid u p share capital of Rs. 10,85,00,000 /-. The responde nt by an agree me nt dated 27th January 1970 had granted leave and license in respect of the suit pre mises to Central Cottage Industries Association, a society registered u n der the Society Registration Act, 1860. The said Society was dissolved a nd ceased to exist on or about March 1976 a nd the petitioner was inducted as a tenant of the suit pre mises.

3. The responde nt filed L.E. Suit 123 /151 of 1988 against the petitioner in the year 1988 for the recovery of possession of the suit pre mises as well as for recovery of payme nt of arrears of co m mission a nd m esne profits. The petitioner in the said suit ha d filed written- state me nt and pleaded protection u n der the provisions of Bombay Rent Act, 1947. Said suit is pe n ding in the Small Causes Court.

4. With effect from 31st March 2000, the Bombay Rent Act 1947 ca me to be repealed and the Maharashtra Rent Control Act, 1999 has co me into force. As petitioner is a p u blic limited co m pa ny, having paid u p share capital of Rs.10,85,00,000 /-, the protection is not available u n der the Maharashtra Rent Control Act, 1999, in view of provisions of Section 3(1)(b) of the said Act. The responde nts therefore, without - 3 - prejudice to their rights and contentions in earlier suit na mely L.E. Suit 123 /151 of 1988 proceeded on the basis that the petitioner is a tena nt in respect of the suit pre mises, as contended by the petitioners the mselves in their written state me nt in L.E. Suit 123 /151 of 1988. The responde nt accordingly by notice dated 11th July, 2000, u n der Section 106 of Transfer of Property, pointed out to the petitioner that the Bombay Rent Act, 1947 had been repealed and Maharashtra Rent Control Act, 1999 is not ap plicable to the suit pre mises, and ter minated the petitioner’s m o nt hly tenancy in respect of the suit pre mises and called u po n the m to ha n d over vacant possession of the sa me; and thereafter filed the present suit being T.E. & R. Suit No. 117 /147 of 2000.

5. The learned Single Judge of the Small Causes Court by his judgme nt a nd decree dated 13th June 2003, decreed the suit and the petitioners were directed to deliver vacant possession of the suit pre mises to the responde nt. The petitioners were further directed to pay arrears of rent at the rate of Rs.4,20,000 /- per year u pto 14th August 2000. The petitioners were further directed to pay m es ne profits to the responde nt from 15th August 2000 till filing of the suit, as arrears of m es ne profits a nd also directed the petitioners to pay future m es ne profits from 30th August 2000 till responde nt receives possession of the suit pre mises.

6. The petitioner challenged the above decree of the learned Single Judge of the Small Causes Court before the Division Bench by filing Appeal No. 579 of 2003. The Division Bench of Small Causes Court, as stated above, dis missed th appeal, a nd therefore, petitioners filed the - 4 - present revision, u n der Section 115 of the Code of Civil Procedure.

7. Mr. Thorat, learned senior counsel for the petitioner sub mitted that there is no relationship of landlord and tena nt between petitioner and the responde nt, for want of privity of contract between the m. He further sub mitted that in the absence of said relationship, the suit u n der Section 41 of the Presidency Small Causes Courts At, was not m aintainable. In the alternative it is sub mitted that the transaction was p urely of co m mercial nature. He lastly sub mitted that the suit filed by responde nt for eviction of the petitioner is pre mature. In order to substantiate his co ntention, learned cou nsel pointed out that the pleadings of the respondent in the earlier suit na mely L.E. Suit 123 /151 of 1988, claiming the petitioner to be m ere licensee, and not entitle for protection, u n der Section 15-A of the Bomaby Rent Act, 1947. He also pointed out the contents of notice u n der Section 106 of the Transfer of Property Act, u n der which it is alleged that responde nts have not accepted the petitioner as a tena nt. He also pointed out the aver ments in the present suit in which it is contended by the responde nt that present suit is filed without prejudice to their rights and contentions raised in the earlier suit being L.E. Suit 123 /151 of 1988. He also invited my attention to the evidence of the responde nt wherein it is alleged to have ad mitted by the respondent that there is no agree me nt between responde nt and the petitioner.

8. Mr. Naphade, learned senior cou nsel appearing for the responde nt, per contra, sup ported the impugned judgme nt and decree. He relied u po n the petitioner’s ad mission in paragraph 8 of the written- - 5 - state me nt in the present suit to the effect that the transaction between petitioner and the responde nt was that of landlord and tena nt. He further relied on ad mission in paragraph 9 of the written-state me nt in the present suit to the effect that Central Cottage Industries Association was m erely converted into petitioner co m pa ny. He sub mitted that in paragraph 3 of the plaint in the present suit, the responde nt accepted the petitioner as tenant of the suit pre mises. He invited my attention to the written stateme nt of the petitioner in earlier suit being L.E. Suit 123/151 of 1988 in which it was stand of the petitioner that they are tena nt of the suit pre mises. He relied u po n the docu me nts at page 262 to 264 and 274 to 276 in co m pilation i.e. receipts of rent of the suit pre mises. Regarding petitioner’s objection regarding the validity of the ter mination of notice a nd m aintainability of the suit, the learned cou nsel for the responde nt sub mitted that in view of a me nd me nt to Section 106 of the Transfer of Property Act, this grou nd is not is available to the petitioner. He also sub mitted that this point was not argued by the petitioner before the lower Courts.

9. Having heard the learned senior cou nsel for the parties, and having gone through m e m o of the revision along with a n nexures thereto a nd the docu me nts in separate co m pilation, I a m of the considered view that there is no m erit in the revision application. There is no dispute that the petitioner is a co m pa ny, registered u n der the Indian Com pa nies Act, having paid u p share capital of Rs.10,85,00,000 /-. It was also not seriously disputed that protection u n der the Maharashtra Rent Control Act, 1999 is not available to the petitioner in view of Section 3(1)(b) of the - 6 - said Act. The objection to the decree of eviction is taken m ainly on the grou nd of m aintainability of the suit u n der Section 41 of the Presidency Small Causes Courts Act. This objection was taken on the pre mises that there is no landlord-tena nt relationship between petitioner and the responde nt. In the alternatively it is conte nded that tra nsaction was of p urely co m mercial nature.

10. There is no dispute that agree me nt for leave a nd license was executed between responde nt and Central Cottage Industries Association on 27th January 1970. The petitioner specifically ad mitted in paragraph 9 of their written-state me nt in the present suit that the said Association was converted into petitioner co m pa ny. The petitioner in paragraph 8 of their written state me nt in the present suit also asserted that the tra nsaction between petitioner and responde nt was that of landlord and tena nt. In a written-state me nt filed in the earlier suit being L.E. Suit 123 /151 of 1988 in paragraph 6, the petitioner has averred as u n der- “The Defenda nts sub mit that accordingly they have continued in exclusive possession and occupation of the said pre mises as the sub-lessees / licensees of the Plaintiffs. The defenda nts sub mit that even considering their status as that of Licensees, the said Agreement dated 27.01.1970 was in force and subsisting on 01.02.1973 and the Defendants therefore, beca me the Dee med Tena nts of the Plaintiffs in respect of the said grou nd floor pre mises.” This aver me nt u neq uivocally reveals that petitioners claimed to be the - 7 - dee med tena nt with effect from 1st October 173. Even in paragraph 1 of the said written-state me nt, the petitioners have clearly claimed that they are tenant / dee med tenant of the responde nt in respect of the suit pre mises. The respondent in paragraph 4 of the plaint in the present suit asserted that the Central Cottage Industries Association was dissolved a nd the petitioner was inducted by the said Association as tenant and p ut into possession of the suit pre mises and there is no change of identity.

11. In view of assertion of the petitioner that the said Central Cottage Industries Association was converted into petitioner-co m pa ny. I find no m erits in the sub mission of learned cou nsel for the petitioner that there is no privity of contract between responde nt a nd petitioner, in as m uc h as as, ad mittedly there was an agree me nt of leave and license between responde nt a nd predecessor in title of the petitioner. I also do not find a ny m erit in the sub mission that there is no relationship of landlord and tena nt between responde nt and the petitioner, as the said relationship is ad mitted by the petitioner in the written-state ment filed in the earlier suit as well as written-state ment filed in the present suit.

12. The petitioner’s sub mission that the nature of transaction is co m mercial, is also devoid of any substa nce, in view of the docu me nts filed in separate co m pilation at page 274 to 280. The docu me nt at page 274 is covering letter by the petitioner to the responde nt along with a cheque for an a mou nt of Rs.3,36,000 /- towards rent for a period between 24th Septem ber 1998 to 23rd Septe mber 1999; docu me nt at page 275 is For m No. 16-A i.e. certificate of deduction of tax at source u n der section - 8 - 203 of the Inco me-Tax Act, 1961, wherein nature of the above payment shown as rent; the docu me nt at page 276 is covering letter by the petitioner to the responde nt along with cheque for an a mo u nt of Rs. 3,27,600 /- towards rent of the suit pre mises from 24th Septe m ber 1999 to 23rd Septe mber 2000; the docu me nt at page 277 is again a Form No. 16-A in which nature of payment was shown as rent; docu me nt at page 278 is again a covering letter along with cheque for a n a mou nt of Rs.3,27,600 /- towards rent of the suit pre mises for the period between 24th Septe m ber 2000 to 23rd Septe m ber 2001; docu me nt at page 279 is again Form No. 16-A, showing nature of above payme nt as a rent; docu me nt at page 280 is a copy of covering letter along with cheque for an a mou nt of Rs. 3,34,320 /- towards rent of suit pre mises for a period between 24th Septe m ber 2001 to 23rd Septe mber 2002. These docu me nts clearly goes to show that the petitioner from time to time had deposited with the responde nt an a mou nt of rent and therefore, I do not find any substa nce in the contention of the petitioner that nature of tra nsaction was no n- co m mercial and not co m mercial.

13. The last sub mission of the learned cou nsel for the petitioner that the notice was issued on 11th July 2007 and tena ncy was ter minated by the en d of August 2000 i.e. by 31st August 2000, however, suit was filed on 31st August 2000 and therefore, the sa me is pre mature, is devoid of any substance, for the reason that- firstly this point was not argued by the petitioner in the lower Court. Finding to that effect is recorded by the trial Court in paragraph 61 of the Judgme nt; and secondly the suit cannot be invalidated on this grou nd in the absence of - 9 - a ny statutory provision to that effect. Even otherwise also, in view of a me n d me nt to section 106 of Transfer of Property Act, ter mination notice cannot be said to be invalid.

14. Taking over all view of the m atter, I find that the lower Courts have correctly arrived at conclusion. I do not find any error in impugned decree of eviction, so as to enable m e to interfere in my jurisdiction u n der section 115 of the Code of Civil Procedure. Revision is accordingly dis missed.

15. Mr. Thorat, learned cou nsel for the petitioner, at this stage, seeks four m o nt hs time to vacate the suit pre mises. Mr. Nafade, learned cou nsel for the responde nt has no objection if reasonable time to vacate the suit pre mises is granted to the petitioner.

16. Taking into consideration the sub missions and in the interest of justice three m o nt hs time is granted to the petitioners to vacate the suit pre mises, subject to filing us ual u n dertaking within a period of six weeks from today in the trial Court. Sd /- [ R. V. MORE, J.]