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Bai Meherbai Sorabji Master v. Pherozshaw Sorabji Gazdar
Structured Summary of the Opinion (Marten, C.J.; Blackwell, J.)
Factual and Procedural Background
The dispute arose between landlord (plaintiff) and tenant (defendant). On 25 September 1925 the plaintiff gave a notice to quit effective 1 January 1926, which was not complied with. The plaintiff filed a suit in the High Court on 6 January 1926 claiming: (a) ejectment; (b) rent from 1 April 1925 to 31 December 1925 and compensation thereafter at Rs. 500 per month; and (c) Rs. 30 as rent for the garage for 1 September 1925 to 31 December 1925 and compensation thereafter at Rs. 50 per month. The first-floor tenancy and the garage tenancy were treated as separate tenancies. Calculations in the pleadings produced totals of Rs. 1,542 (claim (b)) and Rs. 175 (claim (c)) up to 29 January 1926.
The High Court writ was served on 19 January 1926. The defendant vacated both premises on 29 January 1926 and, between 19 and 29 January, paid Rs. 400 which was appropriated partly to the garage rent and partly as compensation for January occupation of the first floor. The High Court proceedings were initially heard as a short cause with adjournments; the defendant's written statement raised points about the proper standard rent and alleged overpayments.
Independently, in December 1925 the defendant had filed a Small Cause Court suit seeking Rs. 1,800 as alleged excess rent. That Small Cause Court action produced interlocutory orders (award of Rs. 170 reduced to Rs. 55 on 9 February) and then proceeded to an appeal to the Full Court of the Small Cause Court; those proceedings were pending when the High Court first heard the matter in March 1926.
On 12 March 1926 Mr. Justice Fawcett delivered a detailed judgment in the High Court holding that the High Court suit was not res judicata by reason of the Small Cause Court proceedings, treating the Small Cause Court as not competent to try an ejectment suit. He found the standard rent for the purpose of the High Court suit (by agreement) to be Rs. 138 and decreed Rs. 828 for April–September 1925, reserving the claim for October–December 1925 and costs. The matter was adjourned because of the ongoing Small Cause Court proceedings.
On 13 July 1926 the Full Court of the Small Cause Court allowed the plaintiff's appeal and dismissed the defendant's suit there. The High Court resumed on 26 July 1926, and Mr. Justice Fawcett delivered a further judgment awarding Rs. 414 for October–December 1925 less previous payments, resulting in an additional decree of Rs. 14; the learned judge addressed costs under sections 22 and 41 of the Presidency Small Courts Act, 1882 and declined to make an order as to costs on the ground that the suit fell under the first paragraph of section 22.
The present appeal concerns only the question of costs arising from those rulings. The High Court's final order is the subject of the appeal reported in this opinion.
Legal Issues Presented
- Whether the High Court suit was res judicata by virtue of the Small Cause Court proceedings (i.e., whether the Small Cause Court decision precluded the High Court suit).
- Whether the High Court suit as brought (for ejectment combined with rent/compensation) was cognizable by the Small Cause Court within the meaning of section 22 of the Presidency Small Cause Courts Act, 1882 (and thus whether section 22 applied to costs).
- Whether, if the suit could or should have been split after the defendant vacated the premises, the relevant date for determining jurisdiction/character of the suit is the date of institution or a later date.
- Whether the learned High Court judge erred in exercising his discretion as to costs by concluding that the plaintiff should have brought separate proceedings in the Small Cause Court and by ordering that no costs be awarded to the plaintiff.
- What amount the plaintiff was entitled to recover from the defendant (as this related to the costs reasoning under the Small Cause Courts Act provisions).
Arguments of the Parties
Appellant (Plaintiff) — points appearing in the opinion
- The plaintiff proceeded in the High Court seeking ejectment and rents/compensation and (by implication) relied on the plaintiff's right to bring that suit in the High Court (section 21 of the Presidency Small Cause Courts Act is referred to in the Court's analysis).
- The plaintiff obtained a decree for standard rent for a specified period and for a small balance after accounting for payments; the plaintiff contended that the High Court was the appropriate forum and that costs should follow the usual rule.
Respondent (Defendant) — points appearing in the opinion
- The defendant's written statement contended that the claimed standard rent figures were incorrect (the standard rent was not Rs. 144 as claimed by the plaintiff) and that historically the defendant had paid rent exceeding the standard rent, entitling him to a refund or set-off.
- The defendant had separately initiated a Small Cause Court suit to recover alleged excess rent; the defendant relied on the existence and pendency (and initial orders) of that Small Cause Court proceeding in arguing res judicata or that the High Court suit was not maintainable to the extent alleged.
- It was argued (on the record) that after the defendant vacated the premises the High Court suit effectively became a different suit (simply for rent) that could have been cognizable by the Small Cause Court, and therefore costs should be disallowed on the ground that separate Small Cause Court proceedings should have been brought.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Krishnasami Chetti v. The Natal Emigration Board | Holds that an application under Chapter VII (summary proceedings begun by summons) is not a "suit" within the meaning of section 22 of the Presidency Small Cause Courts Act; an ejectment suit is not cognizable by the Small Cause Court. | Used to support the conclusion that section 22 does not apply to the present suit because proceedings under Chapter VII are not "suits" for the purpose of that section, and ejectment lies outside the Small Cause Court's jurisdiction. |
| Tyeb Beg Mahomed v. Allibhai (Sir Lawrence Jenkins) | States that proceedings under Chapter VII are not a suit, nor is an adjudication in those proceedings a decree (i.e., Chapter VII proceedings are distinct from suits). | Relied on to reinforce that summary proceedings under Chapter VII cannot be equated with suits under section 22; supports the legal distinction between summary (summons-initiated) proceedings and suits. |
| Laxmibai v. Radhabai (Scott, C.J.) | Addressed the circumstances in which appellate courts may review the lower court's exercise of discretion as to costs — i.e., reviewable where questions of principle are involved. | Quoted as authority for the proposition that an appellate court may review a costs decision that rests on an error of law or principle (thus enabling interference with the learned Judge's costs order). |
| Ranchordas Vithaldas v. Bai Kasi | Lay down the principle that appellate courts should interfere with the exercise of discretion by lower courts on costs where there has been misapprehension of facts, violation of established principle, or no real exercise of discretion. | Invoked by Blackwell, J. to show that interference was appropriate because the learned Judge had misapprehended material facts and law in making his costs order. |
Court's Reasoning and Analysis
The Court's analysis unfolds in several steps focusing chiefly on the nature of the proceedings (suit vs. summary proceedings), the applicable statutory provisions, the proper date for testing jurisdiction, and the exercise of discretion on costs.
1. Nature of Chapter VII proceedings versus "suit" under section 22:
- The Chief Justice (Marten, C.J.) emphasized that Chapter VII summary proceedings are commenced by a summons and are not "suits" within the meaning of section 22 of the Presidency Small Cause Courts Act. He relied on prior authorities (Krishnasami Chetti; Tyeb Beg Mahomed) to show the statutory distinction.
- Because an ejectment suit is outside the jurisdiction of the Small Cause Court, section 22 (which applies only to suits cognizable by that Court) does not apply to the present High Court suit as it was instituted on 6 January 1926.
2. Date of test for character/jurisdiction of the suit:
- The Court rejected the argument that the suit should be re-characterized after the defendant vacated the premises on 29 January 1926 so as to make it thereafter a suit cognizable by the Small Cause Court. The Court held that the relevant date for testing whether a suit is cognizable by the Small Cause Court is the date of institution (here, 6 January 1926), not any subsequent date.
- The Chief Justice explained that accepting the defendant's splitting argument would produce an injustice: the plaintiff would have been prima facie entitled to costs up to the date possession was given, but could thereafter be deprived of costs by recharacterization.
3. Exercise of discretion on costs and appealability:
- The Court considered and rejected the alternative justification that the learned Judge's order on costs was an unreviewable exercise of discretion because it involved matters of judicial discretion. The Chief Justice held that the learned Judge's order was founded on reviewable questions of principle and was therefore open to appellate review (citing Laxmibai v. Radhabai).
- The Court examined the practical consequences of forcing the plaintiff to have elected for multiple Small Cause Court proceedings (three separate proceedings would have been necessary: ejectment for first floor, ejectment for garage, and a separate suit for rent), and observed that (i) section 41 procedure is permissive (not mandatory), (ii) the multiplicity of proceedings would be an inappropriate remedy in the circumstances, and (iii) Small Cause Court proceedings are not necessarily cheaper or quicker than High Court proceedings in all cases. These pragmatic and principle-based considerations supported the appellate intervention.
4. Specific factual/legal misapprehensions (Blackwell, J.):
- Blackwell, J. emphasized a factual misapprehension by the learned Judge: sums of Rs. 150 (garage rent) and Rs. 250 (compensation for January) were paid after suit and effectively recovered in the High Court action; although the decrees formally appeared as Rs. 828 and Rs. 14, in substance the plaintiff recovered Rs. 1,242 in the suit. That factual assessment affected whether section 21 (permitting suits exceeding Rs. 1,000 to be instituted in the High Court) was applicable.
- Blackwell, J. also considered a legal misapprehension: the suit began as an ejectment suit and did not cease to be one by reason of the defendant giving possession after suit. An ejectment suit is not cognizable by the Small Cause Court, and proceedings under section 41 are permissive only. Thus the learned Judge was wrong to treat the suit as one founded on contract of tenancy to bring it within section 22 for costs purposes.
5. Conclusion of analysis:
- Both judges concluded that the learned High Court judge erred in law and in factual assessment in concluding that section 22 applied and in disallowing costs. The appellate court found that the plaintiff was entitled to bring the combined suit in the High Court and that the costs order was unsustainable.
Holding and Implications
Holding:
APPEAL ALLOWED. The appellate court discharged the learned Judge's order insofar as it related to costs and ordered that the defendant pay the costs of the suit throughout, including the costs of the appeal.
Direct consequences and implications:
- The specific order of the High Court judge (Mr. Justice Fawcett) refusing to award costs to the plaintiff was set aside; the defendant was ordered to pay costs in the High Court and for the appeal.
- The court ruled that section 22 of the Presidency Small Cause Courts Act does not apply to a suit that was not cognizable by the Small Cause Court at the date of institution; proceedings under Chapter VII (section 41 etc.) are summary proceedings initiated by summons and are not "suits" for the purpose of section 22.
- The court held that the date for testing whether a matter is cognizable by the Small Cause Court is the date of institution of the suit, not a later date when the circumstances of the case may have changed.
- No statement in the opinion purports to establish a new binding precedent beyond the application of existing statutory interpretation and precedent; the decision applies the cited authorities and principles to the facts before the Court and reverses the costs order on those bases.
Miscellaneous (as recorded in the opinion)
Attorneys for appellants: Messrs Mehta, Lalji & Co.
Attorneys for respondent: Messrs Payne & Co.
Appeal allowed.
This summary is based exclusively on the content of the provided opinion and does not add information not contained in that text.
Marten, C.J:—
This appeal is one only as to costs. But it raises questions of some importance as between suits in the High Court and suits in the Small Cause Court.
The plaintiff and defendant were landlord and tenant. On September 25, 1925, the plaintiff gave a notice to quit by January 1, 1926. That notice was not complied with. Accordingly, on January 6, 1926, this suit was filed in the High Court claiming (a) ejectment; (b) rent from April 1, 1925, to December 31, 1925, and compensation thereafter at Rs. 500 per month; and (c) Rs. 30 as rent for the garage from September 1, 1925, to December 31, 1925, and compensation thereafter at Rs. 50 a month. The letting of the main building, viz., the first floor thereof, and the letting of the garage were separate tenancies. The total under (b) would be Rs. 1,542, and under (c) Rs. 175 calculated up to January 29, 1926.
On January 19, the writ in the High Court suit was served. On January 29, the defendant vacated both premises. Between January 19 and 29, he paid in all Rs. 400 which was appropriated in satisfaction of claim (c) as regards the rent for the garage, and as to the balance for compensation for the month of January in respect of the first floor under claim (b).
The suit came on for hearing as a Short Cause on February 2. It was adjourned for four weeks. Then, on March 2, the defendant was ordered to put in his written statement. It was adjourned again, and then it came on for hearing on March 9. Substantially, the written statement contended, first, that the standard rent was not Rs. 144 as claimed by the plaintiff, and, secondly, that in the past the defendant had paid rent at the agreed amount under the tenancy, which amount exceeded the standard rent, and, therefore, the plaintiff had been overpaid.
I should now explain that in December 1925 the defendant had filed a Small Cause Court suit to recover Rs. 1,800 in respect of this alleged excess over the standard rent. That suit came before the Chief Judge on January 29, 1926, when he held that the defendant was only entitled to recover Rs. 170. On February 9, the Judge reduced that amount to Rs. 55 on the ground of a slip in the previous order. There was an appeal to the Full Court of the Small Cause Court and a cross-appeal. Both those then were pending when the High Court suit came on for hearing on March 9 before Mr. Justice Fawcett.
It appears that on that date issues were raised: (1) whether the suit was res judicata having regard to the suit in the Small Cause Court; (2) whether, if so, the present suit was maintainable; and (3) what amount the plaintiff was entitled to recover from the defendant. On March 12, Mr. Justice Fawcett gave a detailed judgment holding that the suit was not res Judicata. He said:—
“The first issue that was raised is: Whether this suit is res judicata having regard to the Small Cause Court suit. In my opinion the answer is clearly in the negative on this ground that the Small Cause Court is not a competent Court to try the present suit within the meaning of section 11 of the Civil Procedure Code. The present suit is one for ejectment which is outside the jurisdiction of the Small Cause Court.”
Then the learned Judge went into the question as to what was the standard rent, and it was taken by agreement between the parties for the purpose of the present suit that the standard rent was Rs. 138. That was Rs. 115 plus twenty per cent, for two years making up the Rs. 138. Then the learned Judge dealt with what he described as the main question, viz., whether the defendant was entitled to set off this alleged excess of rent paid by him; and, after dealing with the law on the point and various authorities, he decided eventually against the defendant. He concluded:—
“The result is that the plaintiff's must have a decree for the standard rent at the rate of Rs. 138 per month due for the months of April to September 1925, i.e, for Rs. 828. The claim in regard to the rents for the succeeding three months of October, November and December 1925 will be decided, as already mentioned, later on. The suit is adjourned for three months. The question of costs is reserved.”
That adjournment arose because of the Small Cause Court suit. Eventually, on July 13, the appeal of the present plaintiff was allowed by the Full Court of the Small Cause Court, and the present defendant's suit in that Court was dismissed. Thereupon this High Court suit came on again for hearing before Mr. Justice Fawcett on July 26, 1926, when he delivered the judgment now under appeal. In the first place he came to the conclusion in respect of the outstanding rents for October, November and December that as the defendant's claim for a refund had been rejected by the Small Cause Court, the present plaintiff was entitled to Rs. 414. But inasmuch as there had already been a payment of Rs. 400 made by the defendant, he was only entitled to a further decree for the balance, viz., Rs. 14. Now that Rs. 400 was paid in September 1925 on account, and must not be confused with the Rs. 400 which was paid in January 1926. There is no dispute up to that point.
Now comes the question of costs. The learned Judge dealt with sections 22 and 41 of the Presidency Small Courts Act, 1882, and he ended up saying:—
“The case accordingly is one that, in my opinion, falls under the first paragraph of section 22, as this is a suit founded on a contract of tenancy, and the plaintiff has obtained a decree for only Rs. 828. I do not consider that it is a case, which I should certify as fit to be, brought in the High Court. Therefore, I pass no order as to costs.”
As I read that judgment, the learned Judge considered that section 22 of the Act applied here. That was on the assumption that the suit could have been brought in the Small Cause Court, for section 22 only applies to a suit cognizable by the Small Cause Court. On the other hand, when one comes to look at Chapter VII, sections 41 to 49, it is clear that the summary proceedings there are not a suit. They are begun by a summons, and there are various references in the sections, e.g, sections 46, 47 and 49, referring to a suit, and which, in my opinion, clearly show that the Legislature was distinguishing there between summary proceedings brought by a summons and what is described in this Act as a suit.
This view is one which was adopted in Krishnasami Chetti v. The Natal Emigration Board, where Sir Arthur Collins and Mr. Justice Shephard held that a suit for ejectment was not a suit cognizable by the Small Cause Court, and therefore section 22 did not apply. Their Lordships say (p. 218):—“An application under Chapter VII is not a suit within the meaning of section 22.” They, accordingly, reversed the judgment of Mr. Justice Wilkinson to the contrary effect. Similarly, in Tyeb Beg Mahomed v. Allibhai, Sir Lawrence Jenkins says (p. 49):—“It is quite true that it [i.e, section 108 of the Civil Procedure Code] has not a direct application, because proceedings under Chapter VII are not a suit, nor is an adjudication in the proceedings a decree.” And indeed Mr. Justice Fawcett had himself held on February 9 that the present suit for ejectment was outside the jurisdiction of the Small Cause Court.
In my judgment, then, this present suit, as brought on January 6, was not a suit cognizable by the Small Cause Court within the meaning of section 22, and, accordingly, that section does not apply.
It is, however, argued that we should in some way split up this suit and say that, although the plaintiff was entitled to bring his suit for ejectment on January 6, yet when the defendant vacated the premises on January 29, that thereafter the suit became as it were a new suit merely for rent, and, accordingly, it could then be brought apart from section 41, and that after that date you had a suit cognizable by the Small Cause Court. To my mind that argument is entirely erroneous. The date to test a suit is the date when it is brought, and not some subsequent date in its history. One example alone may show the injustice of that argument if it was to prevail. Admittedly here (for it cannot be contended to the contrary) the plaintiff was entitled to bring her suit for ejectment. Consequently, up to the date when the defendant delivered possession, the plaintiff was prima facie entitled to the costs of her suit. But if the argument of the defendant was to prevail, the defendant would escape scot free from all costs in that respect.
I now pass to the second branch of the argument on which it was contended that learned Judge's order could be supported. That was on the alternative ground that quite apart from section 22 the learned judge came to the conclusion in the exercise of his discretion that separate suits should have been brought in the Small Cause Court instead of one in the High Court, and that consequently the plaintiff should be disallowed all costs. It was, accordingly, argued that no appeal would lie from the exercise of that discretion. But in my opinion the judgment is founded on reasons which this appellate Court is entitled to review as involving questions of principle. In this respect I would refer to the judgment of Sir Basil Scott in Laxmibai v. Radhabai.
Now, in the first place, it has to be conceded here that, if the plaintiff had proceeded in the Small Cause Court to obtain all the reliefs she wanted, she would have had to bring three separate suits, viz., (1) for ejectment in respect of the first floor, (2) for ejectment in respect of the garage, and (3) for rent in respect of the first floor and the garage. This is because the limitation of value under section 41, viz., where the annual value at a rack-rent does not exceed Rs. 2,000, would have been exceeded if the plaintiff had joined in one ejectment suit the first floor premises as well as the garage. Moreover, a separate suit for rent was in any event necessary because it would appear that claims for rent cannot be added to summary proceedings under Chapter VII.
To my mind the very fact that the defendant would thus be exposed to three suits instead of one would prima facie show that this would be the wrong remedy to adopt, more especially when you get the third snit relating to the rent of the properties involved in both the first two suits. Secondly, it is an error to suppose that necessarily a suit in the Small Cause Court is cheaper than one in the High Court. It depends partly on the value. But, having regard to the high and increasing Court fees levied in suits in the Small Cause Court, it can be shown from the High Court records that in certain classes of suits where they are undefended, a High Court suit is cheaper than one in the Small Cause Court. Similarly as regards matters of expedition short causes in the High Court come on at least as quickly as those in the Small Cause Court. Further, if a suit is eventually defended, then there may be considerable delay in the Small Cause Court, because that Court may be unable to hear the case de die in diem, as is the practice in the High Court. Therefore, all these matters must be taken into consideration before one considers that necessarily in any particular case, any saving of money or time would be effected by taking proceedings in the Small Cause Court.
But I base my judgment on this that at the most the procedure given by section 41 is permissive; that the plaintiff here was entitled to bring this suit in the High Court (see section 21): and that in my opinion it was an error of principle for the learned Judge under these circumstances to hold that the plaintiff undoubtedly should have brought three separate suits in the Small Cause Court, and that she was so wrong in coming to the High Court that she should be given no costs at all—not even of the suits which she might have brought, according to the learned Judge, in the Small Cause Court and in which she would wholly or partially have succeeded. Even if the order had been that she should recover no more costs in the High Court than she would have obtained in the Small Cause Court, that would have been an order I should have better understood. But here the plaintiff was, I think, entitled to complain of the order which the learned Judge made as being based on an erroneous view of section 22, and on an erroneous view as to the proper principles applicable to the awarding of costs in the present case apart from section 22.
I would, accordingly, allow the appeal, and discharge the order of the learned Judge so far as it relates to costs, and order that instead the defendant do pay the costs of the suit throughout, including the costs of this appeal.
Blackwell, J.:—I am of the same opinion. In Ranchordas Vithaldas v. Bai Kasi, it was laid down by a Bench of this Court that the principle to be deduced from the decisions therein referred to is that (p. 682) “appeal Courts should interfere with the exercise of discretion by the lower Courts as to costs when there has been any misapprehension of facts, or violation of any established principle, or where there has been no real exercise of discretion at all.” That case is referred to in the judgment of Scott, C.J in Laxmibai v. Radhabai.
I think the learned Judge was under a misapprehension of fact in this case. It appears to me that he overlooked the fact that after this suit had been brought a sum of Rs. 150 was paid by the defendant to the plaintiff to cover the rent of the garage from September 1, 1925, to the end of January 1926, and Rs. 250 by way of compensation for the occupation of the first floor during January. That sum having been paid after suit was, in substance, recovered in the action, and although the learned Judge passed a decree in the first instance for Rs. 828 and in the second instance for Rs. 14, making in all Rs. 842, in effect Rs. 1,242 were recovered by the plaintiff in this suit from the defendant. In my judgment, therefore, in so far as the learned Judge based his decision relating to costs on section 22 of the Presidency Small Cause Courts Act, he was under a misapprehension, because, although the decrees passed were for Rs. 828 and Rs. 14, the amount in effect recovered in the suit was Rs. 1,242, and it is provided by section 21 of the Presidency Small Cause Courts Act that “all suits whereof the amount or value of the subject-matter exceeds one thousand rupees may be instituted in the High Court at the election of the plaintiff as if this Act had not been passed”.
Further, I think that the learned Judge was under a misapprehension of law. He had, in the course of his first judgment, as has been pointed out by the learned Chief Justice, held that the suit was a suit in ejectment. In my opinion it did not cease to be a suit in ejectment because after the suit possession of the premises was given by the defendant. I think, therefore, that the learned Judge was wrong in holding that the suit was a suit founded on a contract of tenancy, and that therefore section 22 applied. In my judgment the suit, begun as a suit in ejectment, combined with a claim for rent and for compensation, did not, because possession of the premises was given after suit, cease to be a suit in ejectment, but remained such up to the termination of the suit.
Moreover, a suit in ejectment is not cognizable by the Small Cause Court. Only a summons under section 41 is cognizable by the Small Cause Court. But proceedings by way of summons under section 41 are permissive only. When a plaintiff has got to decide whether he should bring three different proceedings in the Small Cause Court, as he would have been obliged to do if he had adopted that method of proceeding, viz., a summons in ejectment for the first floor, a summons in ejectment for the garage (inasmuch as the rack-rent of the two taken together would have exceeded the limit provided for by section 41, namely, Rs. 2,000) and a suit to recover the rent for the first floor and for the garage, it seems to me that he would be thoroughly justified in deciding to combine all those proceedings in one suit in the High Court. In so far, therefore, as the learned Judge based his judgment upon general questions of discretion, with great deference to him, I think that he was wrong, and that he overlooked the fact that proceedings under section 41 are permissive, and not compulsory.
I, therefore, respectfully agree with the learned Chief Justice that the learned Judge was wrong in the decision he came to in regard to costs. I agree that this appeal should be allowed with costs here and below.
Attorneys for appellants: Messrs Mehta, Lalji & Co.
Attorneys for respondent: Messrs Payne & Co.
Appeal allowed.
J.S.K
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