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The Metal Box Of India Ltd. v. M.V Appaiah And Others
Opinion Summary (Venkatesh, J.)
Factual and Procedural Background
A company (the Petitioner/tenant) took a lease of premises in Longford Town, Bangalore, from respondents 1 and 2 in 1968 by a registered lease deed dated 19 August 1968. The lease term was ten years commencing 11 July 1968. The landlords stated the lease expired on 10 July 1978 and, claiming they required the premises for their own bona fide use and occupation, filed an application under Clause (h) of sub-section (1) of Section 21 of the Karnataka Rent Control Act, 1961 in November 1978 in the Court of the Civil Judge, Civil Station, Bangalore (subsequently H.R.C. No. 833 of 1978 before the VI Small Causes Judge).
The tenant resisted the landlords' claim, pleading (among other things) that the registered lease reserved a right to exercise an option to renew, that it had exercised that option, and that the landlords' application was therefore not maintainable. Some evidence was recorded in the rent-control proceeding. In January 1981 the tenant filed I.A. II under Section 151 CPC read with Rule 35 of the Karnataka Rent Control Rules, 1961 asking for a stay of the proceeding; shortly before that it had instituted an original suit O.S. No. 1028 of 1981 in the I Additional Civil Court, Bangalore, seeking a declaration and injunction that it was entitled to continue possession as tenant until 11 July 1988 (claiming it had validly exercised the renewal option). The court below dismissed I.A. II; the tenant (petitioner before this Court) challenged that dismissal by way of revision.
Legal Issues Presented
- Whether the lease in question is a contractual lease (i.e., whether the tenant validly exercised an option to renew such that the tenancy continued contractually beyond 10 July 1978).
- If the lease is contractual, whether the court constituted under the Karnataka Rent Control Act is competent to proceed with the landlords' application under Clause (h) of sub-section (1) of Section 21 of the Act (given the tenant's contention that the landlords had no right of re-entry and therefore no ground under Section 21(1)(h)).
Arguments of the Parties
Petitioner's (Tenant's) Arguments
- The lease was contractual in nature and reserved an option to renew which the tenant had exercised, entitling it to remain until 11 July 1988 on the same terms.
- Because landlords had not reserved any right of re-entry during the extended contractual term, they could not invoke Clause (h) of sub-section (1) of Section 21 of the Karnataka Rent Control Act to evict the tenant.
- The court constituted under the Act is a court of limited jurisdiction following a summary procedure; therefore, complicated questions such as construction and interpretation of the lease and whether it is contractual are beyond its scope and should be decided by the original suit in the civil court. For these reasons the tenant sought a stay of the rent-control proceeding by I.A. II and asked the rent-control court to await the decision in the original suit (O.S. No. 1028 of 1981).
Respondents' (Landlords') Arguments
- The court below (the rent-control court) was competent to decide the questions raised and, accordingly, had rightly rejected I.A. II seeking a stay.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Govindaswamy R. v. Pannalal C.S. (ILR 1978 KAR 813) | To illustrate that the Karnataka Rent Control Act is a self-contained enactment governing leases of applicable buildings and that possession can be recovered only on grounds enumerated in sub-section (1) of Section 21 by the procedure provided in the Act. | The court relied on this authority to explain the limited and specialised nature of the jurisdiction conferred by the Act and to frame the legal context within which the competency question arises. |
| Unspecified "classic case" quoted in H.W.R. Wade's Administrative Law (4th Ed.) | Principle that when a jurisdictional question is disputed before a tribunal, the tribunal must decide it for the purpose of proceeding; that such a decision is provisional and open to later judicial review (e.g., by mandamus or prohibition) if wrong. | The court used the quoted passage to support the proposition that the rent-control court must decide, as a preliminary and collateral question, whether it has jurisdiction to proceed (i.e., must determine the contractual nature of the lease and related competency issues before going into the merits). |
| Observations attributed to Lord Goddard C.J. (case not named) | That an inferior tribunal may inquire into facts necessary for jurisdiction but cannot confer jurisdiction upon itself by a wrong decision; such jurisdictional fact decisions are collateral and subject to review by higher courts (e.g., by certiorari). | The court relied on these observations (as quoted in Wade) to reinforce the duty of the tribunal to decide jurisdictional questions preliminarily, while acknowledging that such decisions are reviewable. |
Court's Reasoning and Analysis
The Court framed the narrow issue in this revision as whether the rent-control court was competent to decide the disputed questions (the contractual nature of the lease and the consequent competency to proceed under Section 21(1)(h)). The Bench declined to decide the substantive questions of whether the lease was contractual or whether the landlords were precluded from seeking eviction; those were to be decided in the appropriate forum(s) where they were being urged.
The Court emphasised the established administrative-law principle (adopted from H.W.R. Wade and supporting authorities) that when jurisdictional facts are disputed before a tribunal it must decide them preliminarily rather than declining to act. The Court reasoned that:
- The rent-control court is a court of limited and statutory jurisdiction under a self-contained enactment (the Karnataka Rent Control Act), as illustrated by the decision in Govindaswamy R. v. Pannalal C.S.
- Nevertheless, when the existence of jurisdiction depends on particular facts (here, whether a contractual lease existed and whether landlords retained any right of re-entry), the tribunal must enquire into and decide those jurisdictional facts before proceeding to the main merits; its decision on those collateral facts is provisional and open to later challenge.
- In the present case the court below overruled the tenant's objections and proceeded, but in doing so it made observations on the merits of contentions raised in I.A. II rather than limiting itself to a preliminary determination of the jurisdictional questions.
- Because the lower court traversed into merits while deciding competency, the impugned order required interference: the revision was necessary not to determine the substantive lease issues, but to ensure the rent-control court proceeds properly by first deciding the jurisdictional questions preliminarily and then continuing the enquiry in light of those answers.
Consequently, the Court set aside the impugned order and directed the lower court to hear the two specified points preliminarily and, after answering them, to proceed with the enquiry in the case afresh.
Holding and Implications
Holding: The revision petition is allowed; the impugned order of the court below is set aside. The lower court is directed to hear preliminarily the two questions identified (whether the lease is contractual and, if so, whether the rent-control court is competent to proceed under Section 21(1)(h)) and, after answering them, to proceed with the enquiry in the case. Parties are directed to bear their own costs.
Implications:
- Direct effect on the parties: The impugned dismissal of I.A. II is set aside and the matter is remitted to the rent-control court to determine preliminarily the jurisdictional facts before continuing the eviction proceeding; the tenant's substantive claims as to the contractual renewal and the landlords' entitlement to invoke Section 21(1)(h) remain undecided and must be determined in the forum(s) where they are being prosecuted.
- No broader precedent is stated to be created by this decision beyond applying the established principle that tribunals must decide disputed jurisdictional facts preliminarily; the Court did not decide the substantive lease questions themselves.
Costs: Each party to bear its own costs.
Venkatesh, J.:—
The Petitioner, a Company registered under the Companies Act, took on lease from respondents 1 and 2 a premises situated in Longford Town, Bangalore City, in the year 1968 and continues to be in possession of the same. The lease is evidenced by a registered lease deed dated 19th August 1968, the term of the lease being 10 years commencing from the 11th July, 1968. The premises is said to have been allotted to the share of the 3rd respondent, son of respondents 1 and 2, at a partition in their family.
2. Stating that the contractual lease entered into between them and the petitioner had come to an end by 10th July 1978 by efflux of time and that they wanted possession of the premises for their own bona fide use and occupation, the respondents filed an application under Clause (h) of sub-section (1) of Section 21 of the Karnataka Rent Control Act, 1961 (the Act) against the petitioner in the Court of the Civil Judge, Civil Station, Bangalore, in the month of November, 1978. The proceeding thus commenced is, on transfer, pending in H.R.C No. 833 of 1978 on the file of the VI Small Causes Judge, Civil Station, Bangalore. The claim of the landlords for possession of the premises is being resisted by the tenant. Apart from stating that the claim of the landlords was neither bona fide nor reasonable, the tenant, in the statement of objections it has filed to the application, pleads that under the registered lease-dead (referred to above) it had reserved the right to exercise its option for renewal of the tenancy; that, in fact, it had exercised that option; and that, in the circumstances, the application was liable to be dismissed in limine, being not maintainable.
3. In the month of January, 1981, by which time some evidence had also been recorded, the tenant filed an application, I.A II, in the court below under Section 151 CPC. read with Rule 35 of the Karnataka Rent Control Rules, 1961, requesting the court to stay further proceedings in the case. It may be noted that a few days earlier to the filing of this I.A, the tenant had filed an original suit, O.S No. 1028 of 1981, in the I Additional Civil Court, Bangalore, against the landlords claiming a declaration that it was entitled to continue in possession of the premises as a tenant until the 11th day of July, 1988, and for a permanent injunction restraining them from dispossessing it during that period. The tenants plea in the said original suit has been that the right reserved to it under the lease-deed (referred to above) to renew the lease for a further period of ten years had been exercised by it and that it, the tenant, was entitled to continue on the same terms and conditions as a lessee of the premises in question until 11th July 1988; that though the landlords had no right to evict it from the premises during that period they had initiated a proceeding in the court constituted under the Act for its eviction; and that, in the circumstances, it was seeking the relief of declaration and injunction at the hands of that court.
4. Reiterating the aforesaid averments made in the plaint and further stating that the proceeding in the court was of a summary nature, that its jurisdiction was very much limited, and that the question whether it had exercised its option of renewal and whether the lease in question was a contractual one etc., were questions of a complicated nature and thus were beyond the scope of the enquiry in that court of limited jurisdiction, it, the tenant filed I.A II and sought for stay of the proceeding. I.A II was resisted by the landlord. By its impugned order the court below has dismissed I.A II.
5. Challenging that order it is contended by the learned Counsel for the petitioner that, as avered by his client in the original suit referred to above and in I.A II filed in the proceeding in question, the lease between his client and the landlords was contractual in nature; that the landlords, not having reserved any right of re-entry into the premises during the currency of that lease, had no right to seek his client's eviction under Clause (h) of sub-section (1) of Section 21 the Act; that the court, constituted as it is under the Act, was a court of limited jurisdiction following a summary procedure and, as such, any enquiry by it into complicated questions involving the construction or interpretation of the lease deed in question and as to whether the lease was contractual or not, and the like, were all beyond its scope of enquiry; and that, therefore, it should have stopped its proceeding awaiting the findings in the original suit referred to above.
6. On the other hand, learned counsel for the landlords contended that the court below was competent to go into these questions and that therefore had rightly rejected I.A II.
7. Whether the lease in question is a contractual one, and, if so, are the landlords precluded from seeking eviction of the tenant under Section 21(1)(h) of the Act, the landlords not having reserved any right of re-entry during the extended period of the said contractual lease need not be gone into in this revision. These questions are required to be decided at the appropriate forums wherein they are being urged. The only question that arises for our consideration in this revision at this stage is whether the court below is not comptent to go into these questions.
8. It is true that the court, as constituted under the Act, is a court of limited jurisdiction. Its powers are circumscribed by the provisions of the Act. The Act, as observed by a Division Bench of this Court in Govindaswamy R. v. Pannalal C.S . ILR 1978 KAR 813., itself is a self-contained enactment governing leases in respect of buildings to which the Act applies. In the case of such buildings or premises the landlords can recover possession only on one or more of he grounds enumerated in sub-section (1) of Section 21 and by filing an application as provided therein in the court (constituted under the Act).
9. Apart from other points or questions that might have arisen in the court below in the proceeding in question, in view of the rival pleadings of the parties, the two points that arise are:
(i) Whether the lease in question is a contractual one as contended by the tenant; and
(ii) if so, is the court not competent to proceed with the application of the landlords for the reasons urged by the tenant.
10. Since the aforesaid questions go to the very root of the matter touching the competency and jurisdiction of the court, to proceed with the claim on merits it will have to first decide these questions. In this connection the following observations of the learned Author H.W.R Wade in his ‘Administrative Law’ (4th Edition) at page 240 may be noted:
“POWER TO DETERMINE JURISDICTIONAL QUESTIONS.
Where a jurisdictional question is disputed before a tribunal, the tribunal must necessarily decide it. If it refuses to do so, it is wrongfully declining jurisdiction and the court will order it to act properly. Otherwise the tribunal or other authority would be able to wield an absolutely despotic power, which the legislature never intended that it should exercise. It follows that the question is within the tribunal's own jurisdiction, but with this difference, that the tribunal's decision about it cannot be conclusive. This also was explained in the classic case:
‘Suppose a judge with jurisdiction limited to a particular hundred, and the matter is brought before him as having arisen within it, but the party charged contends that it arose in another hundred, this is clearly a collateral matter independent of the merits; on its being presented, the Judge must not immediately forbear to proceed, but must enquire into its truth or falsehood, and for the time decide it, and either proceed or not with the principal subject-matter according as he finds on that point; but this decision must be open to question, and if he has improperly either for borne or proceeded on the main matter in consequence of an error, on this the Court of Queen's Bench will issue its mandamus or prohibition to correct his mistake.”
Similarly Lord Goddard C.J, explained that
“if a certain state of facts has to exist before an inferior tribunal have jurisdiction, they can inquire into the facts in order to decide whether or not they have jurisdiction, but cannot give themselves jurisdiction by a wrong decision upon them; and this court may by means of proceedings for certiorari, inquire into the correctness of the decision. The decision as to these facts is regarded as collateral because though the existence of jurisdiction depends on it, it is not the main question which the tribunal have to decide.
A collateral question is thus to be contrasted with ‘the main question’, or ‘the actual matter committed to its decision’, upon which the tribunal's own decision is conclusive.
All this doctrine applies just as much to ordinary administrative action as it does to the decisions of courts and tribunals”.
11. The learned Counsel for the petitioner argued that in the circumstances of the case and in view of the pendency of the original suit wherein these very questions will come up for trial before that court having original jurisdiction, the court below should have stopped its proceeding awaiting the decision in the original suit. I am unable to agree with this view.
12. As ovserved by the learned Author H.W.R Wade when questions like these touching the jurisdiction of the Court or tribunal are raised in a proceeding pending before it that court or tribunal must necessarily decide those questions before proceeding with the merits of the claim. If the court or tribunal refuses to decide those questions it would be wrongfully declining the jurisdiction vested in it. In the instant case no doubt the court below has over-ruled the objections raised by the tenant to proceed with the matter, but in doing so makes certain observations on the merits of the contentions raised in I.A II. Therefore, that order is required to be set aside with appropriate directions to it to proceed with the matter afresh.
13. For the reasons mentioned above this revision petition is allowed. The Impugned order of the court below is set aside. The court below is directed, to hear the two points or questions raised above (in para-9) preliminarily, and, after answering them, in the light of those answers to proceed with the enquiry in the case.
14. Parties are directed to bear their own costs.
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