Mehersingh Sethi v. Khurshed Nadirshaw Satarawalla

Chagla, C.J:—

The question of jurisdiction of this Court to entertain the suit filed by the respondent arises in this appeal.

It appears that the father of the plaintiff leased to the defendant certain property situated in Mahableshwar within the jurisdiction of the Civil Court at Wai. The lease was for five years; and the rent reserved under the lease was Rs. 10,000 for the first year, and Rs. 12,000 for each subsequent years. The lease was for the purpose of enabling the defendant to run a hotel in the name of Ripon-Connaught Hotel; and by this lease the lessee gave a charge on the assets and income of the two hotels carried on by the lessee in respect of any instalment of rent remaining unpaid for one month after the due date thereof. It may be stated that the rent reserved was made payable by certain instalments fixed under the lease. The case for the plaintiff was that the defendant paid the rent reserved for the first year, viz. Rs. 10,000, but for the year 1949 he only paid Rs. 5,000, and did not pay any rent subsequently. He therefore filed this suit for recovering the arrears of rent due to him, and also for enforcing the charge which he had under the lease.

A preliminary issue was raised before Mr. Justice Desai before whom the suit came up for hearing, that this court had no jurisdiction to try the suit; and the learned Judge held that the Court has jurisdiction; thereupon the defendant appealed; and the appeal has come before us for disposal.

What is urged by the defendant is that the Special Court set up under s. 28 of the Bombay Rents and Hotel and Lodging House Rates Control Act is the only Court upon which exclusive jurisdiction has been conferred to try the suit, and therefore the High Court has no jurisdiction to entertain or try the suit.

What is urged against this contention is that this is not a suit for recovery of rent, but this is a suit for enforcement of a charge, and a suit for enforcement of a charge is not exclusively triable by the Court at Wai within those jurisdiction the premises are situate. It is also contended that the charge is a charge on immoveable property as the assets of the two hatels comprise tenancy rights and therefore the suit can only be filed where the immoveable property on which the charge is sought is situate.

Under s. 28 of the B.R.H and L.H.R Control Act special courts have been set up, and the jurisdiction conferred upon these courts is to try any suit or proceeding between a landlord and tenant relating to the recovery of rent or possession of premises to which any of the provisions of Part II of the Act apply, and to decide any application made under the Act and to deal with any claim or question arising out of the Act or any of its provisions, and subject to the provision of sub-s. (2) no other Court shall have jurisdiction to entertain any such suit, proceeding, or application made, or to deal with such claim or question. So the section is really in two parts; not only it confers jurisdiction upon special courts, but it also ousts the jurisdiction of every civil court to try suits which are cognizable by the special courts, or to try questions which can only be tried by special courts set up under the Act. It would be noticed that the jurisdiction of special courts is not merely to try suits for the recovery of rent or possession, but the jurisdiction is wider, because the jurisdiction is to try suits relating to the recovery of rent or possession of premises.

In the first place we have to determine what is the real nature of this suit. The plaint sets out the terms of the lease and the obligation of the defendant to pay rent; and in paragraph 9 thereof there is an averment that ‘there is now due by the defendant to the estate of the owner (the lessor having died, and the present plaintiff is his son) the sum of Rs. 40,000 as and by way of rent and Rs. 3,229-7-0 for taxes’. The draftsman has also used the expression ‘royalty’, but it is conceded by Mr. M.V Desai on behalf of the plaintiff that the suit is by a landlord against his tenant, that the lease creates the relationship of landlord and tenant, and that what is due by the defendant to the plaintiff is rent, and not royalty. It is clear therefore that the suit is primarily to enforce liability of the defendant in respect of rent due under the lease; and in prayers (c) and (d) of the plaint the plaintiff wants a decree for Rs. 3,229-7-0 which is the amount due in respect of taxes, and a decree for Rs. 40,000 which is the amount due for arrears of rent; and in prayer (e) of the plaint the plaintiff deals with his charge and prays that the right, title and interest of the defendant in the hotel belonging to him be sold in default of payment of the sum of Rs. 40,000 which he has claimed under the lease. Reading therefore the plaint as a whole there can be no doubt that the suit is substantially and primarily for recovery of arrears of rent due by the defendant. The plaintiff undoubtedly also wants the assistance of the Court to recover that rent by the mode mentioned by him in prayer (e) of the plaint; and the mode of recovery which he has decided upon is the mode fixed between the parties under the lease, viz. by enforcement of the charge given by the defendant to him.

It is difficult to understand how this suit can be characterized as any other than a suit for recovery of rent. It is unnecessary in our opinion to characterize teh suit in order to attract the wider jurisdiction of the special court, viz., a suit relating to recovery of rent. Mr. Desai says that the suit is primarily to enforce the charge, and as the Rent Act does not confer jurisdiction upon special courts to pass decrees in respect of charges, the special court would have no jurisdiction to try the suit. Now, even when a suit is filed to enforce a mortgage, primarily and essentially it is a suit to recover a debt, and in that suit to recover a debt the plaintiff seeks the assistance of the court to enforce the security which has been given by the defendant for payment of that debt. The learned Judge has taken the view that once the arrears become due and payable by the defendant they constituted a debt, and therefore the suit is to recover a debt, and not to recover rent. When a tenant is in arrears of rent in one sense it is true that he owes a debt to the landlord, but the nature of the debt is rent due for use and occupation of the premises let out to him, and what s. 28 of the Rent Act does is to confer jurisdiction upon the special courts to try all suits in respect of debts which are debts arising out of arrears of rent. Therefore it would not be sufficient for the plaintiff to contend that this is a suit to recover a debt; but he must go further and satisfy us that the debt which he is claiming does not arise by reason of the relationship between the plaintiff and the defendant of landlord and tenant, and that the nature of the debt is not arrears of rent due by the defendant of the plaintiff.

It is then urged that s. 16 of the Civil Procedure Code prevents the Civil Judge's Court at Wai from having jurisdiction to try this suit. It is urged that the property in respect of which the charge is sought is situate in Bombay, and therefore the Civil Judge's Court at Wai would have no jurisdiction to try the suit. Section 28 of the Rent Restriction Act confers jurisdiction upon the special Courts set up by that section notwithstanding anything contained in any law; and notwithstanding that by reason of the amount of the claim or for any other reason the suit or proceeding would not but for the provision be within its jurisdiction, the special Court would still have jurisdiction to try suits and proceedings mentioned in that section.

Therefore the only question that has to be determined is, is the suit of the nature contemplated by section 28. If the suit is of that nature, then the rules with regard to the jurisdiction laid down in the Civil Procedure Code have no application. It is not permissible to ask the further question as to whether the special court set up under s. 28 has the necessary pecuniary jurisdiction or even the necessary territorial jurisdiction. It must not be forgotten that courts set up under s. 28 are special courts with exclusive jurisdiction with regard to a particular subject matter and their jurisdiction arises, not by reason of any pecuniary or territorial consideration, but their jurisdiction arises by reason of the subject matter being of the nature mentioned in s. 28 Therefore in order to determine the jurisdiction of the special court, the only thing that has to be looked at is the subject matter of the suit; and if the subject matter of the suit is that which is described in s. 28, then the special court has jurisdiction, and no further question as to its pecuniary or territorial jurisdiction can arise.

It is then urged that the question as to whether the plaintiff is entitled to a charge is not a question that arises under the Rent Act, nor is it a question with regard to which jurisdiction has been conferred upon the special Court. In our opinion section 28 confers jurisdiction upon the special court not only to decide the question referred to in that section, but also all matters which are incidental or ancillary to the determination of those questions.

The main question, as already pointed out in the suit is, whether any rent is due by the defendant, and what is the quantum of the rent. Having decided that question, it would only be then that the Court will have to consider, as incidental or ancillary to the decree to be passed for rent, as to whether a charge should be given to the plaintiff, and whether, in default of the defendant satisfying the decree, the charge should be enforced.

There is direct authority for the proposition that the special court set up under s. 28 of the Act has jurisdiction not only to decide question referred to in that section, but also matters incidental and ancillary to those questions. In Importers and Manufacturers Ltd. v. Pheroze Framroze Taraporewala,(4) there was an interesting case which went up before the Supreme Court. In that case the plaintiffs had filed the suit for possession and compensation against their tenant and the second defendant who claimed to be a sub-tenant. The plaintiffs did not recognise the sub-tenancy and contended that the second defendant was a trespasser, and they were entitled to compensation from the second defendant for use and occupation of the premises. This Court held that the plaintiffs cannot only agitate the question as between themselves and the tenant in the Small Cause Court which was the special court constituted under s. 28 of the Rent Act, but they can also agitate the question between themselves and the second defendant. The second defendant appealed to the Supreme Court, and the Supreme Court held that as far as the question of compensation was concerned, it was incidental and ancillary to the claim for possession and therefore the Small Cause Court had jurisdiction to try that suit; and even with regard to the question of possession as between the plaintiffs and the second defendant, the Supreme Court held that all rights between the parties should be finally determined in the suit, and therefore the Court had jurisdiction to determine the question of possession even between the plaintiffs and the second defendant upon whom the plaintiffs looked upon as a trespasser.

The position is identical here. If a claim for compensation is incidental and ancillary to a claim for possession, the claim for a charge in respect of a decree for arrears of rent is also incidental and ancillary to that decree. If the Court has jurisdiction to pass a decree for rent, the Court must have equally jurisdiction to determine the mode in which the plaintiff can recover the decretal amount. A claim for a charge is nothing more than a claim to have the decree, if obtained, satisfied in a particular manner.

In any view of the case it is difficult to understand how this Court can possibly decide the questions which arise in this suit. The defendant has contended that the standard rent of the premises is not Rs. 12,000, but much less. He has contended that he has made part payments which have not been acknowledged by the plaintiff. Therefore the main question which this Court will be called upon to determine in this suit is, what is the standard rent and what is the quantum of rent which the defendant is liable to pay to the plaintiff. Under s. 28 the jurisdiction of this Court is expressly ousted with regard to the determination of these questions; and therefore if we were to hold that the Court has jurisdiction to try the suit, we would really be holding that this Court has jurisdiction to try questions which the Legislature has set up a special court to determine.

Mr. Desai relied upon two decisions of this Court; one is the decision of Mr. Justice Tendolkar reported in Bai Urmilabai v. Jehangir B. Pastakia(5) and the other is the decision of the appellate Court reported in Goverdhanlal Bansilal…Plaintiff- v. Ramrichpal Dalsukhrai…Defendant-.(6) where we were considering the effect upon the jurisdiction of this Court of s. 12 of the City Civil Court Act; and what was held in those two cases was that suits on mortgages in respect of land situated outside the ordinary jurisdiction which were cognizable by this Court before the City Civil Court Act was enacted continued to be cognizable by this Court, because under the Bombay City Civil Court Act jurisdiction has not been conferred upon the City Civil Court to try suits of that nature. Now when one looks at the Bombay City Civil Court Act and the scheme of the Bombay Rents H.R and L.H.R.C Act the position becomes amply clear. Under s. 3 of the City Civil Court Act power is given to the State Government to issue a notification conferring jurisdiction upon the court to try, receive and dispose of all suits and other proceedings of a civil nature the value of the subject matter of which does not exceed the amount mentioned therein; and this notification may be isued notwithstanding anything contained in any law; and under s. 12 of the Act, notwithstanding anything contained in any law, the High Court shall not have jurisdiction to try suits and proceedings cognizable by the City Civil Court.

The first distinction which is obvious is that s. 3 does not set up a special court with exclusive jurisdiction; it sets up a civil court with a particular pecuniary jurisdiction; and the position of the City Civil Court is like that of the other civil courts in the State and all rules as to jurisdiction contained in the Civil Procedure Code apply to the City Civil Court. Therefore in both these decisions what we held was that s. 16 of the Civil Procedure Code applied to the City Civil Court; and if the property was not situate within the jurisdiction of the City Civil Court, the City Civil Court could not entertain a suit to enforce a mortgage merely because the pecuniary limit was not exceeded in the mortgage suit. Further s. 12 provides that the High Court has no jurisdiction to try only those suits which are cognizable by the City Civil Court. Therefore the Bombay City Civil Court Act takes away a part of the jurisdiction which the High Court had and confers it upon this new Court; but to the extent that the jurisdiction is not conferred upon the City Civil Court, the jurisdiction of the High Court continues unimpaired. Section 12 does not contain any prohibition against the High Court trying any particular or specific kind of suit or deciding or determining any particular question. As far as the test to be applied in order to determine the jurisdiction of the High Court when one considers the Bombay City Civil Court Act, is, is a particular suit cognizable by the City Civil Court; if it is not then the jurisdiction of the High Court contnues. But the test to be applied when considering the Bombay Rents H.R and L.H.R.C Act is entirely different. The question there is: what is the nature of the suit; what are the questions to be determined; and if the nature of the suit is that of a suit relating to the recovery of rent or possession by landlord and tenant, or it relates to any question that arises under the Act, then under s. 28 there is an express prohibition against Courts other than the named Court trying the suit or determining that question. Therefore applying that test to the matter before us what we have to ask ourselves is, does this suit involve any question which can solely be determined by the special court? In our opinion the only answer to that question can be, that it undoubtedly does. As already pointed out the principal question is the question of determination of rent; that question arises between a landlord and tenant, and the suit is expressly filed to recover rent after it is determined by the Court. This Court has no jurisdiction either to determine the rent or to give relief to the landlord in respect of the rent; and the relief which the landlord seeks is not the wider relief relating to the recovery of rent but the recovery of rent itself due from the tenant who has failed to pay rent. Therefore, in our opinion, with respect to the learned Judge who tried the suit, the Court has no jurisdiction to try the suit; and therefore the appeal must be allowed and the suit will be dismissed.

There are one or two observations which we would like to make. We were told by Mr. Desai that his client applied to the Civil Judge, Junior Division, Wai, for fixation of standard rent, and this was by an application No. 55 of 1950. Now we are in 1954; and we are told that application has not yet been disposed of. To delay applications made for fixation of standard rent under the Rent Restriction Act is to defeat the very purpose of the Act. The Act was put on the statute book—as as far as the tenants are concerned in order to give them speedy relief. That is why the Legislature set up special courts and conferred exclusive jurisdiction upon those Courts. If a simple application like an application for fixation of standard rent may be kept pending for about four years, it seems to us that it was futile for the Legislature to set up special courts and to confer upon them special jurisdiction to dispose of cases arising under the Act. Ordinay Civil Court would have disposed of this matter much earlier.

We therefore direct that in the event of the plaintiff filing a suit for recovery of rent and possession in the Wai Court, which is the Court having jurisdiction, that Court will dispose of the suit with utmost expedition. We have every sympathy for the plaintiff who has been kept out of his rent and has been kept out of his premises, and who has come to this Court and has been told by this Court that it has no jurisdiction to deal with his matter and to give him the necessary relief.

As questions of jurisdiction are always difficult questions to decide and as the question whether a suit to enforce a charge will be cognizable by this Court or not has arisen for the first time in this appeal, we cannot blame the plaintiff for having come to this Court in the belief that as this Court had jurisdiction in the past it would have jurisdiction even after the passing of the Rent Restriction Act. One learned Judge of this Court has taken the view that this Court has jurisdiction.

In the circumstances we think that the fairest order to make with regard to costs will be that there will be no order as to costs throughout. The order of Mr. Justice Desai directing the defendant to pay the costs of the issue is set aside.

Liberty to the appellant's attorneys to withdraw the sum of Rs. 500 deposited in court.

Attorneys for appellant: Crawford Bayley & Co.

Attorney for respondent: Aibara & Co.

Appeal allowed.

P.M.P