Bombay High Court
M/S Amarjeet Resorts Pvt. Ltd. Nagpur ... vs Shri Ajit S/O Bhaiyyasaheb Mulik And ... on 18 March, 2025
2025:BHC-NAG:2693
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
CIVIL REVISION APPLICATION NO. 52 OF 2024
APPLICANTS 1. M/s Amarjeet Resorts Pvt. Ltd. through its
Managing Director, having office at Hotel
Airport Centre Point, Mulik Layout,
Wardha Road, Nagpur.
2. Shri Sutinderpal Singh Arora,
Aged about 68 years, Occupation :
Director in M/s Amarjeet Resorts Pvt. Ltd.,
Hotel Airport Centre Point, Mulik Layout,
Wardha Road, Nagpur.
(ORIGINAL DEFENDANTS)
-VERSUS-
RESPONDENTS 1. Shri Ajit s/o Bhaiyyasaheb Mulik,
Aged about 73 years, Occupation:
Business.
2. Smt. Jayshree Devendra Mulik,
Aged about 64 years, Occupation:
Business.
3. Shri Mansingh s/o Devendra Mulik,
Aged about 42 years, Occupation:
Business.
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4. Shri Prithviraj s/o Devendra Mulik,
Aged about 39 years, Occupation:
Business. All the Respondents are
residents of "Daulat", Rahate Colony, Jail
Road, Nagpur -440022.
(ORIGINAL PLAINTIFFS)
--------------------------------------------------------------------------------------------
Mr. Subodh Dharmadhikari, Senior Counsel assisted by Mr.
Chinmay Dharmadhikari, counsel for applicants.
Mr. Masood Shareef, counsel for respondent Nos. 1 to 4.
--------------------------------------------------------------------------------------------
CORAM : URMILA JOSHI-PHALKE, J.
DATE OF RESERVE : 20/02/2025
DATE OF DECISION : 18/03/2025.
ORAL JUDGMENT :
1. Heard.
2. Admit. Heard finally with the consent of learned
Senior Counsel Mr. Subodh Dharmadhikari, assisted by
Mr. Chinmay Dharmadhikari, counsel for applicants and Mr.
Masood Shareef, counsel for respondent Nos. 1 to 4.
3. By this revision application, the challenge is to the
order passed by the 2nd Additional Judge, Small Causes Court,
Nagpur, rejecting the application under Order VII Rule 11(D) of
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the Code of Civil Procedure, 1908 (for short 'the Code') in RCS No.
46/2023, dated 30/01/2024.
4. The brief facts which are necessary for disposal of the
revision application are as under:-
The respondent Nos. 1 to 4 are the original plaintiffs
who filed the suit for eviction, possession, arrears of occupation
charges, mesne profit, damages, and perpetual injunction. The suit
property bearing Khasra No. 131/1, C.T.S. No. 372, Sheet No.
341/30, admeasuring 1583.67 Sq. Meters, situated at Mouza
Somalwada, Wardha Road, Nagpur, together with the structure
standing thereon and open space surrounding the structure
commonly known as "Hotel Airport Centre Point" situated on
Wardha Road, Nagpur, is owned by the plaintiff. Defendant No. 1
is a Company, and defendant No. 2 is the Managing Director of
defendant No. 1. The defendant No. 1 is presently occupying the
suit property as lessee, and the lease with respect to the suit
property was valid upto 23/02/2023. The plaintiff issued a legal
notice to the defendant on 09/11/2022 under Section 106 of the
Transfer of Property Act, 1882, thereby terminating the lease and
calling the defendant to quit and vacate the suit property by
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23/02/2023 or in three months. The defendants replied to the
notice claiming ownership over the hotel structure. The defendants
claims that they are entitled to continue in possession of the land
in question by claiming that the lease created with respect to the
said land was an irrevocable and perpetual lease.
5. It is further contention of the plaintiffs that originally
Khasra Nos. 21/2, 131/1-2-3-4, and 133/2 of Mouza - Somalwada
were originally owned by late Shri Shankarrao Mulik. The said
land was within the Urban Agglomeration, and accordingly, the
proceedings under the Urban Land Ceiling Act were registered,
wherein the original owner had filed returns. The original owner
had also submitted a proposal for exemption of the said land
under Section 20 of the Urban Land Ceiling and Regulations Act,
1976 (for short, 'the ULC Act, 1976') to the Competent Authority,
Nagpur. The Competent Authority ULC approved the said scheme
by an order passed by it. The original owner duly submitted the
scheme by way of submitting the information given in the
statement under Sections 8, 9 of the ULC Act, 1976, to the
Competent Authority, which was approved and sanctioned by the
Competent Authority.
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6. The original owner had sold the "retainable share" of
1583.61 Sq. Mts. in "Mulik Lay Out" to Shri Ajit Bhaiyyasaheb
Mulik (the Plaintiff No. 1) and the ancestral of Plaintiff Nos. 2 and
3, Shri Devendra Mulik, jointly by way of sale-deed dated
26/05/1988. Thus, plaintiff Nos.1 to 4 became the absolute
owners of the suit property. After becoming the owner of the said
land, the owner, Shri Ajit Bhaiyyasaheb Mulik and Devendra
Mulik, had executed "Lease-Deed" on 24/02/1993 and leased out
the said piece of land to "M/s Mulik Hotels Pvt. Ltd.," a company
duly incorporated under the Companies Act, 1956. For the period
of 30 years commencing from 24/02/1993 and ending on
23/02/2023. The monthly rent payable by the lessee with respect
to the said land was Rs. 500/-. An amount of Rs. 5,00,000/- was
paid by the said company towards a lease deposit for use of said
land for the full period of the lease. The lease deed was executed
by the owner in favour of the said company for the period of 30
years and was valid upto 23/03/2023. As per the terms and
conditions of the said lease, the taxes in respect of the lease
premises were payable by the lessor during the subsistence of the
said lease. By the said lease, the lease period was fortified upto 30
years from the date of the lease deed, during which the lessee was
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entitled to use and enjoy the lease premises for the purpose of
setting up a hotel. As per the said period of lease, which comes to
an end on 23/02/2023, the plaintiff issued a notice, asking the
defendants to hand over the possession. However, the defendants
have not handed over the possession and therefore, preferred a
suit for declaration, injunction and possession.
7. After service of notice, the defendants filed an
application under Order VII Rule 11-D of the Code for rejection of
the plaint, on the ground that most of these reliefs cannot be
granted by the Small Causes Court, the same being barred under
various provisions of the Provincial Small Causes Court Act, 1887
(for short, 'the Act of 1887'). The plaintiffs have categorically
prayed for a declaration that the occupation of the defendants over
the suit property after the alleged expiry of the lease on
23/02/2023 is illegal and that the plaintiffs, being landlords, are
entitled to evict the defendants from the suit property and delivery
of vacant possession of the suit property.
8. The further ground raised by the defendants is that
unless and until the question/issue of the title over the suit
premises, i.e. the land and the hotel structure standing thereon, is
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not decided, prayer clause (a) cannot be granted. The declaration
that the occupation of the defendants for the suit property after
the alleged expiry of the lease on 23/02/2023 cannot be granted
by the Small Causes Court.
Section 15 of the Act of 1887 categorically provides
that a Court of Small Causes shall not take cognizance of the
category of the suit specified in the Second Schedule, which is
appended thereto, as suits exempted from the cognizance of a
Small Causes Court. Similarly, the prayer clauses (c) and (d) in the
plaint, if perused, would reveal that plaintiffs have also paid for a
decree of perpetual mandatory injunction, which also cannot be
granted by the Small Causes Court, and therefore, the plaint
deserves to be rejected.
9. The application of rejection of the plaint is opposed
by the plaintiffs on the ground that the contention of the
defendants that the suit is barred under the provisions of the Act
of 1887 is misplaced and misleading, as the suit of the plaintiffs is
absolutely within the four corners of the Act and squarely covered
by the provision of Section 26 of the Act of 1887. It is the Small
Causes Court, alone, which had jurisdiction to try and decide the
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suit of the present nature, as the same relates to the recovery of
possession of the immovable property situated within the
jurisdiction of the Court. Section 26 of the Act, 1887, has an
overriding effect, and it would apply, irrespective of anything
contained elsewhere in the said Act, which is evident from the
plain reading of the provision of Section 26 of the Act, 1887, and
prays for rejection of the plaint.
10. After hearing both sides and on perusal of the
averments in the plaint, the learned trial Court rejected the
application, observing that as the rights and interests were raised
out of the lease agreement. Now, the applicants are in the shoes of
lessee, this Court has jurisdiction to decide all the questions
relating to relationships of lessor and lessee.
11. Learned Senior Counsel Mr. Subhodh Dharmadhikari
for the applicants submitted that the suit for declaration of title
cannot be decided by the Court of Small Causes. The Small Causes
Court would have no jurisdiction to adjudicate upon a question of
title, in view of the provision of Section 19(s) of the Presidency
Small Causes Court Act 1882. Moreover, Section 45 stipulates that
nothing contained in Chapter 7 (which would include Section 41)
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shall be deemed to bar a party to a suit in which the question of
title to any immovable property arises and is determined from
suing in a competent Court to establish his title to such property.
12. He further submitted that the procedure adopted in
the trial of the case before the Small Causes Court is summarily in
nature. The Small Causes Court had a limited jurisdiction. Certain
suits in which the dispute which can be decided summarily can
only be decided by the Small Causes Court. The Small Causes
Court cannot adjudicate upon the issue of title. In the instant case,
the issue of title is involved before deciding the issue of title. The
other reliefs claimed by the plaintiff cannot be granted.
13. He further submitted that it is evident from the
pleadings of the plaintiffs that the plaintiffs are seeking a
declaration of his ownership regarding the suit property. The Small
Cause Court cannot adjudicate upon the issue of title. The Small
Causes Court cannot determine the question relating to rights of
ownership of the party, as the Small Causes Court has limited
jurisdiction to decide as to whether there exists the relationship of
owner and tenant between the parties or not.
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14. He further submitted that, by this revision, the
applicants have challenged the order dated 30/01/2024 passed by
the learned 2nd Additional Sessions Judge, Small Causes Court,
Nagpur, invoking Section 25 of the Act of 1887. The application
was filed by the applicants under Order VII Rule 11-D of the Code,
read with Section 23 of the Act of 1887, despite the fact that, in
deciding the rights of the plaintiffs and granting the relief claimed
by them, the Court will have to decide finally the issue of granting
of the suit property. The subject land, bearing Khasra No. 131/1,
admeasuring 1583.61 Sq.Mtrs, is situated in Mulik Layout, Mouza
Somalwada, Nagpur was retainable land by the original owner,
Shri Shankarrao Mulik, who subsequently sold it to Ajay Mulik.
The plaintiff No. 1 and Shri Devendra Mulik, the predecessor-in-
title of Respondent Nos. 2 to 4, acquired rights over the property
through a sale-deed dated 26/05/1988. Thereafter, the said Ajit
Mulik and Devendra Mulik leased out the said land under a lease
deed dated 24/02/1993 to M/s. Mulik Hotel Private Limited, a
private limited company, for the purpose of construction of Hotel
Structure. It is a matter of record that, for the construction of the
structure of the hotel, M/s. Mulik Hotels Private Limited obtained
financial assistance from SICOM (previously known as City
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Industrial and Finance Corporation of Maharashtra Limited) and
Maharashtra State Finance Corporation (MSFC). In order to secure
financial assistance, M/s Mulik Hotels Private Limited created an
equitable mortgage on the land in favour of the said financial
institutions. The said company constructed hotel structures out of
the funds secured from the aforesaid financial institutions. The
entire hotel structure that stands today has been erected by M/s
Mulik Hotels Private Limited and therefore modified from time to
time by the applicants to remove the irregularities carried out by
the plaintiffs. The aforesaid financial institutions are not to
transfer the lease land, the structure of the hotel constructed by
M/s Mulik Hotels Private Limited, and all the furniture and
equipment standing thereon to any interested party. The applicant
no. 1 has purchased the said hotel in a public auction in the year
2002 for the valuable consideration of Rs. 1,45,21,000/-, and on
account of the said fact, the irrevocable leasehold rights for the
subject land created in favour of M/s Mulik Hotels Private Limited
are also kept aside in favour of applicant no. 1. The lessee, namely
the present applicants, are undisputedly the owners of the
structure of the hotel. The respondents merely owned the subject
land, which was leased to M/s Mulik Hotels Private Limited, and
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after the construction of the permanent structure of the hotel
standing thereon by M/s Mulik Hotels Private Limited, the same
was earlier owned by the said Mulik Hotels Private Limited and is
now owned by the applicant No. 1, making the said lease
irrevocable.
15. In support of his contention, he placed reliance on the
case of Bishan Das and others vs. State of Punjab and others [AIR
1961 SC 1570], wherein it is held that a person who bonafide puts
a construction on land belonging to others with their permission
would not be a trespasser, nor would the buildings so constructed
vest in the owner of the land.
16. He further submitted that Section 26 contained
therein confers jurisdiction upon the Court of Small Causes to try a
suit between the licensor/landlord and licensee/tenant for
recovery of possession of immovable property or recovery of
license fees. Therefore, for the application of Section 26 of the Act,
1887, it is mandatory that a suit must be between a licensor /
landlord and licensee/tenant for recovery of the possession of the
licensed premises and/or for recovery of license fees thereon. It is
only when a decree or order is made by a Court of a Small Cause
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by exercising jurisdiction conferred under Section 26 of the Act,
1887, that the same can be challenged in appeal under Section
26-A of the Act, 1887. The suit property comprises two parts, one
being the open plot leased by the respondents and the other being
the hotel structure owned by the applicants. A bare reading of the
description of the suit property mentioned in para-1 of the plaint
in RCS No. 46/2023 would reveal that it includes the structure of
the hotel in addition to the lease plot. To the extent of the
structure of the hotel, admittedly, the plaintiffs do not satisfy the
definition of the licensor/landlord, and the applicants do not
satisfy the definition of licensee/tenant. Thus, the Small Causes
Court does not have any jurisdiction under Section 26 of the Act,
1887, to decide the suit, and therefore, Section 26-A would not be
applicable.
17. When the right of the plaintiffs and the relief claimed
by the Small Causes Court depend upon the proof or disproof of a
title to immovable property, the Court may return the plaint to be
presented before a Court having jurisdiction to determine the title.
Since the right and relief claims necessarily involved a final
determination of the title of the respondents to the suit property,
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the applicants preferred an application under Order VII Rule 11D
of the Code read with Section 23 of the Act, 1887, for rejection of
the plaint, the same being barred by law. These submissions are
based purely on the averments of the plaint, and therefore, the
application deserves to be allowed.
18. In support of his contention, learned Senior Counsel
for applicants placed reliance on following decisions;
a] Smita Rajeev Sah and another Vs Roop Narain Sah
and another [2013 (5) Mh.L.J.211]
b] Ramji Gupta and another Vs Gopi Krishan Agrawal
(dead) and others [(2013) 9 SCC 438]
c] Nirmal Jeet Singh Hoon Vs Irtiza Hussain and others
[(2010) 14 SCC 564
d] Laxmipat Singhania Vs Larsen and Toubro, Ltd., [1949
SCC OnLine Bom 11]
e] Bishan Das and others Vs State of Punjab and others
[1961 SCC Online SC 136]
19. Per contra, learned counsel for the respondents
submitted that against the order passed by the Small Causes Court,
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the remedy of an appeal before the District Judge is provided
under Section 26-A of the Act of 1887, and an equally efficacious
remedy is available to the applicants. The applicants for the first
time is coming with a case that instant revision is one under
Section 25 of the Act of 1887 and not under Section 115 of the
Code. The suit does not involve the alleged question of title.
20. It is well settled that for the purposes of rejection of
the plaint, only the plaint averments are to be looked into, and the
defence of the applicants is irrelevant. The contention sought to be
raised by the applicants with regard to the title of the respondents
is a matter of defence, which they would be required to establish
at the final determination of the issues after recording the
evidence. The question of applicability of the provision of Section
23 of the Act of 1887 to the facts and circumstances arises only
after defence is set up by the defendant by way of a written
statement. The applicability of the provision of Section 23 of the
Act of 1887 cannot be looked into for consideration while deciding
the application under Order VII Rule 11 of the Code, as the same is
a disputed question.
21. From the bare perusal of the plaint, nowhere its
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suggest that the issue of the title of the plaintiffs with respect to
the suit property is involved. From the facts demonstrated in the
pleading, it can very well be seen that there is no lease in
perpetuity created in favour of the applicants in as much as the
deed of assignment executed in favour of the applicants by SICOM
was only limited to the unexpired period of lease, and the same
does not confer any title in favour of the applicants. Thus, the
alleged contention that the suit involves adjudication of the
question of title is therefore unsustainable. The contention of the
applicants that the suit property comprises two parts is also
misleading and unsustainable. The structure over the land came to
be erected in pursuance of the lease deed executed in favour of the
original lessee, inasmuch as the said structure is a part of the lease
land and is inseparable. The lease does not provide that by
erecting the structure over the land, the lessee would become the
owner of the structure. In view of that, the Small Causes Court has
rightly rejected the application under Order VII, Rule 11 of the
Code.
22. In support of his contention, learned counsel for the
respondents placed reliance on the following decisions;-
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a] State of U.P. and others Vs Lalji Tandon (dead)
through Lrs [(2004) 1 SCC 1];
b] Dilip s/o Bidesh and others Vs Shivgopal s/o
Madangopal Chaurasia [2005(4) Mh.L.J. 967];
c] Urdu Education Society Vs Dinshaw Naoraji Printer
[1994 Mh.L.J. 1650];
d] Sheikh Ahmad Sheikh Chand Mohamad Vs Kazi
Nasiruddin s/o Kazi Ikramuddin [2005(1) Mh.L.J.
1179];
e] Bhartiben Shah vs Gracy Thomas and others [2013(2)
Mh.L.J. 25];
f] Jasraj Lalji Oswal Vs Raziya Mehboob Patel and
another [2020 (5) Mh.L.J. 681] .
23. The plaintiffs have filed a suit for eviction, possession,
arrears of occupation charges, mesne profit, damages, and
perpetual injunction under Section 26 of the Provincial Small
Causes Court Act read with Section 106 of the Transfer of the
Property Act, and the plaintiffs have made the following prayers:
a) Declare that the occupation of the defendants over the
suit property after the expiry of the lease on
23/02/2023 is illegal and that the plaintiffs, being
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landlords, are entitled for eviction of the defendants
from the suit property and delivery of vacant
possession of the suit property.
b] Pass a decree for eviction of the defendants from the
suit property by directing the defendants to remove
themselves and vacate the suit property and deliver to
the plaintiffs the vacant possession of the suit property
described in the schedule mentioned in para No. 1 of
the plaint.
c] Pass a decree for a perpetual mandatory injunction,
commanding the defendants to remove themselves
from the suit property and to deliver to the plaintiff
the vacant possession of the suit property.
d] Issue a perpetual injunction restraining the defendants
from dealing with the suit property and from creating
any charge, mortgage and or third party interest in
the suit property in any manner whatsoever.
e] Pass a decree in a sum of Rs. 7,81,662/- for illegal
occupation of defendants w.e.f. 24/02/2023 upto the
date of filing of the present suit @ Rs. 1,11,666/- per
day.
f] Issue direction to the defendants for payment of the
occupation charges @ Rs. 33,50,000/- per month to
the plaintiffs from the date of suit till delivery of
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actual physical and vacant possession of the suit
property.
g] Hold an inquiry into the future mesne profits from the
date of institution of the suit till recovery of
possession to be determined by means of a separate
inquiry as contemplated by Order XX Rule 12(1)(c) of
the Civil Procedure Code.
h] Full cost of the suit with any other relief or reliefs to
which the plaintiff may be entitled in the facts and
circumstances of the case.
i] Pass any other order or orders as this Hon'ble Court
deems fit.
24. The plaintiffs have filed the suit for a declaration that
the occupation of the defendants over the suit property after the
expiry of the lease on 23/02/2023 is illegal and that the plaintiffs,
being landlords, are entitled for eviction of the defendants from
the suit property and delivery of vacant possession of the suit
property. The other reliefs claimed by the plaintiffs is for the
eviction, occupation charges, and mesne profit.
25. It is well settled that the remedy under Order VII Rule
11 of the Code is an independent and special remedy, wherein the
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Court is empowered to summarily dismiss a suit as a threshold
without proceeding to record evidence and conducting the trial.
On the basis of the evidence adduced, if it is satisfied that the
action should be terminated on any of the grounds contained in
this provision. The underlying object of the Order-VII Rule 11-D of
the Code is that the Court would not permit the plaintiff to
unnecessarily protract the proceedings if the suit is barred by any
law. In such a case, the Court has to see whether there is a sham
litigation, and if it is found that it is sham litigation, it would be
necessary to put an end to it without vesting the judicial time. It is
also well settled that if, on a meaningful reading of the plaint, it is
found that the suit is manifestly vexatious and meritless and does
not disclose a clear right to suit by exercising the power under
Order VII Rule 11 of the Code, the plaint can be rejected.
26. The Chapter-IV-A(i) of the Bombay Rent Act deals
with the recovery of possession of certain immovable property and
certain license fees and rents. Section 26 of the Act of 1887 deals
with the suits or proceedings between a licensor and licensee or a
landlord and tenants for recovery of possession of immovable
property and license fees or rent, except those to which under Acts
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apply to lie in a Court of Small Causes. Section 26 is reproduced
for reference:
Section-26
26. Suits or proceedings between licensors and licensees
or landlords and tenants for recovery of possession of
immovable property and licence fees or rent, except
those to which other Acts apply, to lie in Court of Small
Causes.-- (1) Notwithstanding anything contained
elsewhere in this Act, but subject to the provisions of
sub-section (2), the Court of Small Causes shall have
jurisdiction to entertain and try all suits and proceedings
between a licensor and licensee, or a landlord and
tenant, relating to the recovery of possession of any
immovable property situated in the area within the local
limits of the jurisdiction of the Court of Small Causes, or
relating to the recovery of the licence fee or charges or
rent therefor, irrespective of the value of the subject-
matter of such suits or proceedings.
(2) Nothing contained in sub-section (1) shall apply to
suits or proceedings for the recovery of possession of any
immovable property or of licence fee or charges or rent
thereof, to which the provisions of the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947, the
Bombay Government Premises (Eviction) Act, 1955, the
Bombay Provincial Municipal Corporations Act, 1949, or
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the Maharashtra Housing and Area Development Act,
1976, or any other law for the time being in force, apply.
Section 26-A deals with the appeal, which states that
an appeal shall lie from a decree or order made by the Court of
Small Causes exercising jurisdiction under Section 26 to the
District Court. Whereas Section 25 deals with the revision of
decrees and orders of Courts of Small Causes. The High Court, for
the purpose of satisfying itself that a decree or order made in any
case decided by the Court of Small Causes was according to law,
may call for the case and pass such order with respect thereto as it
thinks fit.
27. It is vehemently submitted by learned counsel for the
applicants that the plaintiffs have filed a suit for declaration,
which is not within the purview of Section 26 of the Act of 1887,
and therefore, the suit is not maintainable and thus barred by the
law.
28. In the light of the above submission, if the averments
in the plaint is seen, it reveals that plaintiffs have claimed their
ownership over the suit property land bearing Khasara No. 131/1,
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C.T.S. No. 372, Sheet No. 341/30, ad-meausring 1583.67 Sq. Mtrs.
It is an admitted fact that the suit property was originally owned
by the late Shri Shankarrao Mulik. The original landlord
Shri Shankarrao Mulik has sold the retainable share of 1583.61
Sq. Mtrs in Mulik Layout to Shri Ajit Bhaiyyasaheb Mulik i.e. the
Plaintiff No.1 and Predecessor of plaintiff Nos. 2 and 3 namely
Shri Devendra Mulik jointly by way of sale-deed dated
26/05/1988. This fact is substantiated by the registered sale-deed
dated 26/05/1988. Thus, after the execution of the sale deed, the
plaintiff No. 1 and predecessor of the plaintiff Nos. 2 to 4 became
the absolute owners of the suit property, and they are enjoying the
same. Shri Devendra Bhaiyyasaheb Mulik, i.e. father of the
plaintiff Nos. 2 to 4, passed away on 05/11/2004, and his share in
the suit property devolved upon the plaintiff Nos. 2 to 4, being his
legal heirs.
29. After becoming the owner of the said land, Shri Ajit
Bhaiyyasaheb Mulik, plaintiff No. 1, and the ancestor of Plaintiff
Nos. 2 to 4, Shri Devendra Bhayyasaheb Mulik, had executed a
lease deed on 24/02/1993 in favour of the M/s Mulik Hotels Pvt.
Ltd., duly incorporated under the Companies Act. The landowner,
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Shri Ajit Mulik and Devendra Mulik, leased out the aforesaid land
admeasuring 1583.61 Sq. Mtrs out of Khasara No. 131/1 bearing
City Survey No. 372 for a period of 30 years commencing from
24/02/1993 and ending on 23/02/2023. As per the lease-deed,
the monthly rent payable by the lessee with respect to the said
land was Rs. 500/-, and an amount of Rs. 5,00,000/- was paid by
the said Company towards a lease deposit for use of the said land
for the full period of the lease. The lease deed executed by the said
owners in favor of the said Company was for a period of 30 years
and was valid upto 23/02/2023. The terms of the said lease
provide that the taxes in respect of the lease premises were
payable by the lessor during the subsistence of the said lease, and
an increase in the taxes due to the user of the premises was to be
paid by the lessee. The lease deed further provides that, in the
event of the lessee contravenes any of the conditions of the lease,
the lessor shall be entitled to terminate the lease by giving three
months notice. The lease also provides that the lessee shall be free
to mortgage its leasehold rights in the lease premises as a security
for repayment of loans, which was proposed to be obtained from
public financial institutions like MSFC, SICOM, TFCI, etc.
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30. It further provides that the lessee shall, within 90
days from the creation of the mortgage, inform the lessors about
the creation or execution of the mortgage in favour of the public
financial institutions. Perusal of the said lease, the owner thereof
had placed Mulik Hotels Pvt. Ltd. in possession of the said land.
The said lessee thereafter erected the building and structure
thereon to establish a hotel over the said land and was running the
said hotel under the name and style as "Hotel Mansingh.". The
averments in the plaint further show that the said lease specifically
provides that the lease was for the period of 30 years from the
date of the lease deed, during which the lessee was entitled to use
and enjoy the leased premises for the purpose of setting up the
hotel. There was no clause or condition for renewal or extension of
lease inasmuch as the lease was for the fixed period. No right for
renewal or extension of lease was created in favour of the lessee,
as only a limited right to use the leased premises for setting up a
hotel was granted.
31. It is further pleaded that by the said lease, no title or
interest is created in favour of the lessee of the said land, as the
said land remains with the owner, Shri Ajit Mulk and Devendra
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Mulik. The pleading further shows that the said company, M/s
Mulik Hotel Pvt. Ltd., obtained a term loan of Rs. 25,00,000/-and
an additional term loan of Rs. 35,00,000/- by executing a loan
agreement dated 23/02/1993 and 25/04/1995 with SICOM Ltd.
The lessee also availed a term loan of Rs. 85,00,000/- from the
Maharashtra State Finance Corporation, popularly known as
MSFC. The said company has executed the deed of hypothecation
dated 23/07/1994 and 25/4/1995 in favour of the MSFC and
SICOM limited. A charge was created on the movable assets of the
company, including all its furniture, equipment, and other movable
assets. The said company, under the agreement dated 23/07/1994,
delivered and deposited with the MSFC the document to create an
equitable mortgage to secure the loan amount advanced by SICOM
and MSFC to the said company. The equitable mortgage was
created by the said company in favour of the aforesaid financial
institutions, only with respect to leasehold rights in the said land.
The lessee defaulted in making the repayment of the term loan to
both the public financial institutions, and therefore, the
aforementioned financial institutions took over the possession of
the land, building, and its furniture and equipment on
29/05/1999. As the mortgage was limited to the leasehold rights
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for the limited period of lease, which under any eventualities was
to expire on 23/02/2023. The further pleadings show that the
financial corporation advertised to transfer the mortgage premises,
including the furniture and equipment, by inviting offers for the
purpose of the same. The defendants responded to the said
advertisement and had given an offer to acquire the said mortgage
premises together with furniture and equipment, which was
accepted by the said financial institutions. Accordingly, by way of a
deed of assignment of leasehold rights, the leasehold rights of the
Mulik Hotel Pvt. Ltd. with respect to the said land, together with
other secured property, came to be assigned in favour of the
defendant No. 1 for consideration of Rs. 1,45,21,000/-. The said
deed of assignment of leasehold rights was duly executed and
registered before the Sub-Registrar, Nagpur. In terms of the said
deed of assignment of leasehold rights, the defendants were
entitled to use the said land/property for the residue unexpired
period of lease.
32. As the 30 year period was ending on 23/02/2023,
and the lease of the suit property stood terminated, the plaintiffs
issued a notice to the defendants and asked to vacate the land. The
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said notice was replied by the defendant. The notice was issued
under Section 106 of the Transfer of Property Act, 1882. As the
defendants have not handed over the possession, the cause of
action arose for the plaintiffs to file the suit, and therefore, the suit
is filed for a declaration that the occupation of the defendants over
the suit property after expiry of the lease on 23/02/2023 is illegal
and that the plaintiffs, being landlords, are entitled for eviction of
the defendants from the suit property.
33. In support of the said pleading, the plaintiffs placed
on record the sale deed dated 26/05/1998, executed between
Shankarrao Hanumantrao Mulik, Ajit Bhaiyyasaheb Mulik, and
Devendra Bhaiyyasaheb Mulik; the lease deed dated 24/02/1993
between Devendra Bhaiyyasaheb Mulik, Ajit Bhaiyyasaheb Mulik,
and M/s Mulik Hotel Pvt. Ltd; and the deed of assignment
between SICOM Ltd. and Amarjit Resorts Pvt. Ltd. Thus, on
perusal of the pleading of the plaintiffs, it reveals that the entire
pleading revolves around the lease deed. The proceedings initiated
by the plaintiffs pertain to the leasehold rights, with the cause of
action arising from the expiration of the lease period. The plaintiffs
contend that Defendant No. 1, who acquired the leasehold rights,
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is no longer entitled to retain possession of the said leasehold
property. Consequently, the plaintiffs have called upon Defendant
No. 1 to hand over possession of the leasehold property to them.
In this regard, the plaintiffs seek a declaration that the defendants'
continued occupation of the suit property after the expiration of
the lease period is unlawful, along with a claim for possession of
the suit property.
34. Learned counsel for the applicants/defendants placed
reliance in the case of Smita Rajeev Sah and another (referred
supra) and submitted that suit for declaration of title cannot be
decided by the Court of Small Cause. On going through the facts of
the cited case, it reveals that by filing the suit, the share in the
property was claimed, and therefore, the Hon'ble Apex Court held
that a suit for declaration of title cannot be entertained in a Small
Causes Court.
35. In the case of Ramji Gupta and another Vs Gopi
Krishan Agrawal (dead) and others [(2013) 9 SCC 438] , wherein
also the issue as to the title was involved and therefore, the
Hon'ble Apex Court held that in the jurisdiction of the Small
Causes Court, there is a bar to adjudicate upon the issue of title.
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36. In the case of Nirmal Jeet Singh Hoon Vs Irtiza
Hussain and others [(2010) 14 SCC 564], the Hon'ble Apex Court
also held that the Small Causes Court cannot adjudicate upon the
issue of title.
37. In the case of Laxmipat Singhania vs. Larsen and
Toubro Ltd., [AIR 1951 Bom 205], wherein this Court, by
considering the provisions of the agreement to lease, observed that
it would be convenient to see what the legal position is in India
regarding the rights of the lessor and the lessee in cases in which a
lease of a plot of land is obtained and the lessee puts up a
structure thereon, and observed that the law of England is that
anything affixed to the earth belongs to the lessor, and it is not
open to the lessee to take it away or to remove it at any rate in
cases where it cannot be removed without causing serious damage
to the structure. But under the provision of the Transfer of
Property Act, the Law in India is quite different; and under Section
108(h) of that Act, in the absence of a contract to the contrary, a
lessee may, even after the determination of the lease, remove all
things which he has attached to the earth, which of course include
structures or buildings put up by him. The effect of this provision
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is that the lessee is the owner of the building put up by him,
although it is put up on the land belonging to the lessor. There
may thus be two distinct ownerships, one of the land and the other
of the structure. That such a position is possible was recognized by
their Lordships of the Privy Council in Narayan Das vs Jatindra
Nath, [AIR (14) 1927 P.C. 135]. In that case a plot of land, upon
which there was a house erected by a lessee of the plot, had been
sold for payment of arrears of revenue; and before the removal of
the house, the whole property was acquired under the Land
Acquisition Act, 1894, and the question that arose was whether the
auction purchaser or the person who put up the house was entitled
to compensation in respect of the structures. The learned
subordinate judge who tried the suit held that the house passed
with the land to the auction purchaser by virtue of the revenue
sale. On appeal, the learned judges of the High Court held that the
ownership of the building did not pass to the plaintiff on the
auction sale, but those who had put up the structure remained
owners thereof. Their Lordships of the Privy Council held that
what was transferred to the auction purchaser was land only and
not the house. Their Lordships pointed out that in India there was
no absolute rule of law that whatever was affixed or built on the
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soil was because a part of it was subject to the same rights of
property as the soil itself. This decision, to my mind, is clear
authority for the proposition that a building can be owned by one
man and the land by another in India, and that in a case where a
lessee puts up a building on a vacant plot of land taken on lease by
him, although the lessor may be the owner of the land, the
building belongs to the lessee and not to the lessor.
38. On the basis of the submissions made by the learned
Senior Counsel of the applicants, it is claimed that the irrevocable
leasehold rights, the subject land created in favour of M/s. Mulik
Hotel Pvt. Ltd., which came to be assigned in favour of the
applicant No. 1 and the lessee, namely the present applicants,
undisputedly the owner of the structure of the hotel.
39. The application is filed by the applicant under Order
VII Rule 11 of the Code by the applicants, on the ground that the
prayer clause (c) and (d) in the plaint is perused, it would reveal
that the plaintiffs have prayed for a decree of perpetual mandatory
injunction, which the Small Causes Court cannot pass, and
therefore, the Small Causes Court is barred from taking cognizance
of a suit which seeks to obtain an injunction.
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40. It is an undisputed fact that the leasehold rights were
created in favour of M/s Mulik Hotels Pvt. Ltd., as the Company
had obtained financial assistance from SICOM and MSFC but
subsequently defaulted. Consequently, SICOM and MSFC took
possession of the constructed building. Thus, it is an undisputed
fact that, as per the deed of assignment of leasehold rights,
executed by SICOM in favour of the defendants, the defendants
have rightly used the building premises and the remaining period
of the lease deed dated 24/02/1993, thereby step into the shoes of
the lessee. The applicants have filed an application before the
Small Causes Court, asserting that the suit is barred from being
entertained by the Small Causes Court.
41. In the case of Srihari Hanumandas Totala vs Hemant
Vithal Kamat and others [AIR 2021 SC 3802], the Hon'ble Apex
Court laid down the guidelines for deciding an application under
Order-VI Rule 11(d) of the Code. It is laid down that while
deciding an application under Order VII Rule 11 of the Code, a few
lines or passages from the plaint should not be read in isolation,
and pleadings ought to be read as a whole to ascertain their true
import.
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42. Thus, the applicability, as laid by the Hon'ble Apex
Court, is that where a plaint as a whole did not disclose a cause of
action, Order-VII Rule 11(a) of the Code is applicable, and it starts
the continuation of the suit. If the conditions mentioned under
Order VII Rule 11 of the Code are fulfilled, the entire plaint has to
be rejected.
43. It is settled that only on the basis of the averments
made in the plaint could it be ascertained as to whether the cause
of action is made out or not. It is equally true that for finding out
the same, the entire pleadings in the plaint will have to be read
and that too at its face value, and defence taken by the defendants
cannot be looked into. It could thus be seen that the Court has to
find out as to whether, in the background of the facts, the reliefs as
claimed in the plaint can be granted to the plaintiffs. It has been
consistently held that if the Courts find that none of the reliefs
sought in the plaint can be granted to the plaintiffs under the law,
the question then arises as to whether such a suit is to be allowed
to continue or go for trial. The power conferred on the Court to
terminate a civil action is a drastic one, and the conditions
enumerated under Order VII Rule 11 of the Code are required to
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be strictly adhered to. However, under Order VII Rule 11 of the
Code, a duty is cast upon the Court to determine whether the
plaint discloses a cause of action by scrutinizing the averments in
the plaint and read in conjunction with the documents relied
upon, or whether the suit is barred by any law.
44. The underlying object of Order VII Rule 11 of the
Code is that when a plaint does not disclose a cause of action, the
Court would not permit the plaintiff to unnecessarily protract the
proceedings. It has been held that in such a case, it will be
necessary to put an end to the litigation so that further judicial
time is not wasted.
45. The remedy under Order VII Rule 11 of the Code is an
independent and special remedy, wherein the Court is empowered
to summarily dismiss a suit at the threshold, without proceeding to
record evidence and conducting a trial, if it is satisfied that action
should be terminated on any of the grounds contained therein.
Therefore, a duty is cast on the Court to determine whether the
plaint discloses a cause of action by scrutinizing the averments in
the plaint, read with documents relied on, and whether the suit is
barred by law.
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46. A cause of action, thus, means every fact, which if is
traversed, would be necessary for the plaintiffs to prove in order to
support his right. It is a bundle of facts taken with the law
applicable to them which gives the plaintiffs a right to relief
against the defendants. It must include some act done by the
defendants since, in the absence of such an act, no cause of action
can possibly accrue. It is not limited to the actual infringement of
the right sued on but includes all the material facts on which it is
founded.
47. The words "right to sue" ordinarily refer to the right
to seek relief by means of legal proceedings. The right to sue
accrues only when the cause of action arises. In a suit for
declaration, the starting point of limitation is when the right to sue
accrues.
48. By applying these principles, if the entire pleading
and averments in the plaint are considered, it entirely revolves
around the lease deed. From the averments of the plaint, nowhere
does the dispute as to the title appear to be raised, and the suit is
also not for declaration of title. In fact, from the averments of the
plaint, it is nowhere revealed that the Small Causes Court has to
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adjudicate upon the issue of title. It is the defence of the applicants
that they acquire the interest in the structure, in view of the rights
created in their favour by way of lease.
49. In view of Section 108 (h) of the Transfer of Property
Act, 1882, it is the defendant who claimed that they owns
ownership of the building, as it did not pass to the plaintiffs in the
auction sale. The defence of the defendants is not to be seen at this
stage. Recently, in the case of Central Bank of India and another Vs
Smt. Prabha Jain and others [Manu/SC/95-2025], the Hon'ble
Apex Court held that the plaint with multiple reliefs cannot be
rejected just because some reliefs are barred.
50. The Hon'ble Apex Court, by referring its earlier
judgment Dwarka Prasad Agarwal (D) by Lrs. and another vs
Ramesh Chandra Agarwal and Others [(2003) 6 SCC 220], and
observed that the bar of jurisdiction of the Civil Court is not to be
readily inferred. Such a provision requires strict interpretation. It
was further held that this Court would lean in favour construction,
which would uphold retention of the Civil Court jurisdiction.
51. Under Section 33 of the Maharashtra Rent Control
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Act, suits between landlord and tenant (in respect of lessor and
lessee or licensor and licensee) relating to recovery of possession
would fall within the jurisdiction of the Court of Small Causes
Mumbai. Similarly, Section 41 of the Act of 1887 also considers the
suits relating to the recovery of possession of property for which
the Court of Small Causes alone would have jurisdiction to be
instituted in that Court. Ordinarily, a suit for recovery of
possession would be filed by the landlord/lessor/ licensor against
the tenant / lessee / licensee or vice-versa. Therefore, the suits for
recovery of possession. The suits relating to recovery of possession
may be filed either by the landlord or by the tenant for getting the
possession or for protecting the possession. It has been held by this
Court in the case of Mansukhlal Dhanraj Jain and Ors. Etc vs
Eknath Vithal Ogale Etc [(1995) 3 BOM CR 240], that the phrase
'relating to recovery of possession' is comprehensive in nature and
takes in its sweep all suits and proceedings, which are concerned
with the recovery of possession of property. It, therefore, holds that
a suit for an injunction restraining the defendants from defecting
forcible recovery of possession filed by the licensee would be
covered under the said phrase. This judgment takes into account,
under Section 41(1) of the Act of 1887, whether the suit can be
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tried only by the Court of Small Causes.
52. The Hon'ble Apex Court in the case of Babulal
Bhuramal And Another vs Nandram Shivram And Others [AIR
1958 SC 677], in which the suit for declaration of tenancy and the
declaration of sub-tenancy was held to be a suit for protection
from eviction by tenant and hence was held liable to be filed under
Section 28 of the Bombay Rents Act, 1944 (at present Section 33
of Maharashtra Rent Control Act). The Hon'ble Apex Court in
para-15 of the judgment held that when the licensees claimed to
protect their possession by invoking the help of the Court by parity
of reasoning, they would be in substance seeking protection of the
Rent Act and hence their suit would fall within the Rent Act and
consequently be within the jurisdiction of the Court of Small
Causes.
53. In the case of ING Vysya Bank Ltd. Vs. Modern India
Ltd. [2000 (2) All MR 357], this Court considered an application
in Section 9 of the Arbitration and Conciliation Act, 1996, for
granting relief to a licensee against the licensor from terminating
his license and taking over possession. In that case also, the
licensee claimed to be in possession of the licensed premises,
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which was later renewable, and consequently the right of
extension/renewal of the license was claimed under the
agreement. The respondents claimed that the application was
essentially for specific performance of the agreement, which relief
could not be granted by the Court of Small Causes at Bombay
under Section 19(h) of the Act.
54. This Court considered the substance and essence of
the suit, which is required to see, and observed that in a suit
relating to recovery of possession, some of the reliefs may be
structured around a claim for specific performance. If the theme
and the foundation relate to recovery of possession, such a relief
could not be seen in isolation. Consequently, the Civil Court's
jurisdiction would have to be considered upon seeing the
substance of the suit. The Court further observed that the basis to
protect the possession against the dispossession in a pre-existing
relationship was important to consider, and if that relationship was
between the licensor and licensee (as also landlord and tenant or
lessor and lessee), then the substance of the claim would be to
protect the possession against recovery, which would be a suit
relating to possession. Hence, it is observed in para 17 of the
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judgment that only a suit for specific performance simplicitor
would not be covered. But if the suit was not for specific
performance but essentially for continuation of the existing
leasehold right, it would be covered by the aforesaid legislation.
The Court noted that one of the reliefs was the
execution of a fresh leave and license agreement upon the
declaration sought and not a bare relief of specific performance.
Consequently, it held that the Civil Court would be barred from
trying such a suit.
55. The substance of this suit is that the lease of the suit
property stands expired after 30 years, as it was valid upto
23/02/2023. Thus, the contract between the parties under the
deed of lease came to an end on 23/02/2023, and there is no
renewal of the lease as per the contract between the parties under
the deed of lease. There is also no clause of a renewal of lease, and
therefore, the plaintiffs claimed the declaration against the
defendants that the occupation of the defendants over the suit
property after the expiry of the lease on 23/02/2023 is illegal and
the plaintiffs, being landlords, are entitled for eviction of the
defendants from the suit property and the delivery of vacant
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possession of the suit property. The suit, therefore, ultimately seeks
to protect the plaintiff's right in the suit premises, as the validity of
the lease came to an end after 30 years on 23/02/2023.
56. After considering the facts, the entire pleading, and
the documents filed on record, it reveals that consequently the suit
relates to the recovery of possession of the lessor from the lessee,
and therefore, the suit would lie before the Small Causes Court.
Thus, the position of law is settled if the relationship between the
parties is as lessor and lessee, which is an admitted position.
57. In light of the above discussion, as the suit pertains to
the recovery of possession from the lessee by the lessor, the Small
Causes Court has jurisdiction. Hence, the revision, under Section
25 of the Provincial Small Cause Courts Act, 1887, lacks merit and
is liable to be dismissed. Accordingly, I proceed to pass the
following order.
a] The Civil Revision Application is dismissed.
[URMILA JOSHI-PHALKE, J.]
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Signed by: Mr. R.K. NANDURKAR
Designation: PA To Honourable Judge
Date: 18/03/2025 18:06:14
