Karnataka High Court
Khandelwal Brothers Co. Ltd. vs G.S. Nisar Ahmed on 2 June, 2004
Equivalent citations: ILR2004KAR2864, 2004(5)KARLJ120, 2004 AIR - KANT. H. C. R. 2577, 2004 AIHC 3687 (2004) 5 KANT LJ 120, (2004) 5 KANT LJ 120
Author: K. Sreedhar Rao
Bench: K. Sreedhar Rao
JUDGMENT K. Sreedhar Rao, J.
1. The legislative action is one of the techniques in the democratic polity to solve the social problems in a legal manner to avoid social frictions and to prevent unlawful methods to vindicate one's right. The Karnataka Small Cause Courts Act, 1964 is one such legislation in the direction. The dispute resolution procedural law in civil jurisprudence broadly categorises different jurisdictions like matrimonial, probate, insolvency, and Civil Court jurisdiction, etc. In the category of the Civil Court jurisdiction there is further classification of Civil Court and Small Cause Court, The wholesome object of creating Small Cause Court is to provide expeditious trial and disposal of certain type of cases in the shortest possible time. The instant case provides a queer situation of a provision in the Small Cause Courts Act working against and subverting the object of Small Cause jurisdiction.
2. In this case the appellant is the tenant of a non-residential premises on the monthly rental of Rs. 800/-. The tenancy is a monthly tenancy. The plaintiff respondent issued legal notice under Section 106 of Transfer of Property Act (hereinafter called as T.P. Act) terminated the tenancy and filed the suit for recovery of possession and mesne profits, The defendant disputed the validity of the termination notice and resisted the suit.
3. The Trial Court has found that the notice of termination issued under Ex.P.1 is valid in law. The receipt of notice is convincingly proved by the fact of reply given by the tenant under Ex.P.3. The finding of the Trial Court in this behalf is sound and proper.
4. The Division Bench of this Court in SHIVAMURTHY MALLAYYA SWAMI v. MAHADEV UMARANE , 1989 (1) Kar.L.J. 83 has held that even in the absence of a plea regarding jurisdiction in the written statement before the Trial Court or in first appeal, it would not validate the decree when the Court had no jurisdiction in view of the provisions of the Karnataka Small Cause Courts Act. Therefore it is argued that decree of a Civil Court is a nullity.
5. The Counsel for the appellant relied on the ruling of this Court in RAMESH P. SETH v. M.S. KRISHNA MURTHY AND ANR., ILR 2000 KAR 665 to contend that after the termination of the tenancy, the occupation of the tenant does not be that of a trespasser and would be a statutory tenant within the definition of a tenant under Karnataka Rent Control Act of 1961. Therefore the question of grant of damages or mesne profits would not arise and that the landlord would be entitled to recover only the agreed monthly rents even after the termination of the tenancy and nothing more. Hence an artificial prayer for mesne profits would not exclude the jurisdiction of the small cause Court.
6. This Court in BANGALORE POINTING & PUBLISHING CO. LTD. v. SOUKAR T. PREMNATH , has held that in the case of tenancy not covered by the Rent Act, 1999 after termination of tenancy under T.P. Act, the lessor has to file a suit for possession and such a suit for possession is not covered by Article 4 of Schedule-I r/w Section 8 of the Karnataka Small Cause Courts Act. The decision also makes distinction between suit for ejectment and suit for possession.
7. The following substantial questions arise for consideration.
(1) Whether in law after the termination of tenancy under the Transfer of Property Act would the tenant continues to be a statutory tenant.
(2) Whether the suit for possession and mesne profits is excluded from the cognizance of the Small Cause Courts Act?
8. Re. Point No. 1: The Division Bench of this Court in B.S. GIRIDHAR v. P.V. SHETTY, ILR 84 KAR 1115 has held that despite the termination of tenancy under Section 106 of the T.P. Act the tenant would continue to be a statutory tenant within the definition of the Rent Control Act 1961 notwithstanding the fact that eviction of such tenant need not be governed by Section 21 of the Act but for the purpose of his legal status he would be a statutory tenant. The landlord cannot recover damages or mesne profits but can recover only the agreed rents till the date of delivery of possession even in a suit for possession instituted under T.P. Act.
9. There is a drastic change in the legal definition of a statutory tenant in the Karnataka Rent Act 1999. The relevant provisions are extracted here under:
Section 3(n) "Tenant" means any person by whom or on whose account or behalf the rent of any premises, is or but for a special contract would be, payable, and includes.-
(i) a sub-tenant;
(ii) any person continuing in possession after the termination of his tenancy, but does not include any person to whom a licence as defined in Section 52 of the Indian Easements Act, 1882 (Central Act 5 of 1882) has been granted.
The provisions of Sub-section (1) of Section 2 declare that the provisions of Chapter I to III and Chapters V to VIII of the Act shall apply to the areas mentioned in the First Schedule. Therefore Chapters I to III applies to the premises which are situate in Bangalore. Sub-section (3) declares that nothing contained in the Act shall apply to the premises to which the Rent Act 1999 is not made applicable. The suit premises is a commercial premises and the area of the premises is more than 14 sq mts. Therefore, the Rent Act of 1999 would not be applicable to the premises in question. So much so the definition "tenant" under the Rent Act also would not be applicable to the premises in question. The position was different under the Rent Control Act of 1961. The provisions of Rent Act, 1999 are made applicable to the pending cases and with effect from the date of Rent Act of 1999 coming into force, the Rent Control Act of 1961 is repealed. In that view of the matter, the legal fiction of a statutory tenant cannot be invoked in respect of a tenant not covered by Rent Act 1999 and such tenants would be governed only by the provisions of Section 106 and 111 of the Transfer of Property Act. The decision of this Court in ILR 2004 page 98 takes notice of this distinct legal position and holds that the ratio in Ramesh P. Seth's case would not be applicable to tenancies not covered by Rent Act 1999.
10. The provisions of Section 8 and Articles 4 and 10 of the Schedule of the Small Cause Courts Act read thus:
"8. Cognisance of suits by Courts of Small Causes.-
(1) A Court of Small Causes shall not take cognizance of the suits specified in the Schedule as suits excepted from the cognizance of a Court of Small Causes.
(2) Subject to the exceptions specified in the Schedule and to the provisions of any law for the time being in force, all suits of a civil nature of which the value does not exceed twenty-five thousand rupees shall be cognizable by a Court of Small Causes.
Provided that the State Government, in consultation with the High Court, may by notification, direct that all suits of which the value does not exceed three thousand rupees shall be cognizable by a Court of Small Causes mentioned in the notification.
SCHEDULE Article (4) a suit for the possession of immovable property or for the recovery of an interest in such property but not including a suit for ejectment where-
(a) the property has been let under a lease or permitted to be occupied, by a written instrument or orally and
(b) the Court of Small Causes would be competent to take cognizance of a suit for the rent of the property, and
(c) the only substantial issue arising for the decision is as to whether the lease has been determined by efflux of the time limited thereby or has been determined by a notice in accordance with the law for the time being in force in respect of such lease, or the permission to occupy has been withdrawn;
Article (10) a suit for the determination or enforcement of any other right to or interest in immovable property;
11. In the first place I find that the legislative approach adopted is more a confusing exercise. What could have been said in a plain and understandable language has been put in a riddled form with unnecessary too many negative requisites. That Article 4 lays down that in a suit for ejectment, in the case of oral or written lease or licence of an immovable property, the Small Cause Court will have jurisdiction (1) if the annual rental value of the property shall be within the pecuniary jurisdictional limits cognizable by the Small Cause Courts which means the total annual rent of the premises should be less than Rs. 25,000/- and (2) The only substantial issue that should be, whether the lease has been determined by efflux of time limited thereby or has been determined by notice in accordance with law for the time being in force in respect of such lease or the permission to occupy has been withdrawn.
12. The gist of Clause (c) of Article 4 in other words mean that in case of lease the only issue that arise should be that lease has to be determined by efflux of time or by termination notice and in case of licence the permission to occupy has been withdrawn. The exclusionary provisions of Article 4 would not apply if the issues other than the one mentioned in Clause (c) arise.
13. Article 10 declares that a suit for the determination or enforcement of any other right or interest in immovable property is outside the scope of the jurisdiction of the Small Cause Court. The words appearing in Article 4 "a suit for the possession of immovable property or for the recovery of an interest in such property and the provisions of Article 10 are similar without any difference or distinction.
14. This Court in GURUVAIAH P.M. v. KRISHNAVENAMMA, 1983(1)Kar.LJ. 66 has held that a suit to recover interest accrued on a mortgage debt is nothing but a suit to recover an interest in the immovable property and as such outside the purview of Small Cause Court in view of Article 4 and 10 of the Act and a suit is maintainable before Civil Court.
15. The contractual tenancy comes to an end after valid termination under Section 106 of T.P. Act. The continued occupation of the tenant would be an unauthorised occupation. The remedy for the landlord is to seek damages or mesne profits from the date of termination till possession. The cause of action to sue for possession with damages or mesne profits is one and indivisible. The issue relating to damages or mesne profits would be an additional issue not covered by Clause (c) of Article 4. Therefore the Small Cause Court cannot entertain a suit for possession with damages or mesne profit but can entertain a suit only in case of ejectment as envisaged under Article 4.
16. The general principle is that the jurisdiction of the Court shall be determined by the averments in the plaint. Under the Small Cause Courts Act the Article 4 makes a departure from the principle and the jurisdiction of the Court is made dependent upon the contentions raised in the written statement and at the will of the defendant. In the written statement if the defendant were to deny the relationship of landlord and tenant, denies the title or take any other plea which gives rise to issues other than the one mentioned in Clause (c) of Article 4 the Small Cause Court has to return the plaint for presentation before the Civil Court for adjudication. Therefore it implies that till the written statement is filed the jurisdiction of the Small Cause Court remains uncertain. In the present legal settings the defendant from the date of appearance has 90 days time to file written statement, till then unreasonably the plaintiff has to keep waiting to make sure his forum.
17. The special classification of a category of landlords envisaged in Article 4 does not appear to be intelligible and currently not warranted by factual exigency. The Small Cause Court under the provisions of the Act can only deal with the cases of money claims relating to unsecured loans not more than Rs. 25000/- and suit for ejectment as envisaged under Article 4. All other suits of civil nature are virtually outside the scope and jurisdiction of the Small Cause Court. The jurisdiction of the Small Cause Court to deal with the immovable property only for relief of ejectment under Article 4 is the only exceptional situation, perhaps made with a view to favour a section of landlords whose, rental value of the premises is marginal. But the working of the provisions of the Act causes more harm than a favour to that category of landlords who came under the jurisdiction of the Small Cause Court since they have to spend uncertain moments regarding forum until the filing of the written statement.
18. In retrospect we find that the policy of Small Courts with the summary jurisdiction has failed to achieve its object and purpose. The time consumed for disposing cases by the Small Cause Court and the Civil Court makes no difference. That most of the provisions like Sections 11 to 15 are not put in use and does not have practical utility. Section 23 provides for abolition of Small Cause Courts after consultation with the High Court. It is high time that the idea of small cause jurisdiction should be done away with. In most of the cases invariably the jurisdictional issue becomes a moot point and that alone contributes for prolonged and multiplicity of litigation on technical grounds. The legislative authorities should take social audit of the working efficiency of every legislation from time to time and make necessary legislative surgery, which in a great way contributes for expeditious disposal and avoids unnecessary appeals and revisions. The abolition of Small Cause Courts may not pose serious practical difficulties. The City Civil Courts Act could be suitably amended redefining the jurisdiction of the City Civil Courts with reference to subject matter and its valuation vis-a-vis the jurisdiction of the Civil Judge, Senior Division; presently managing the Small Cause Courts.
19. Coming back to the facts, I find that for the reasons and discussions made above, a suit for possession with mesne profits or damages in the case of a lease or licence, would be outside the scope and jurisdiction of the Small Cause Court. In the instant case the plaintiff has sought for possession and mesne profits, therefore it cannot be said that the Civil Court had no jurisdiction in the matter.
20. The Counsel for the appellant submitted that on humanitarian consideration for the party to make alternative arrangements a reasonable time to be granted, I find that grant of one year's is just and reasonable.
The appeal is dismissed. The appellant is granted a year's time to vacate premises.
The Registry is directed to send the copy of the judgment to the Law Secretary to impress the Government about redundancy of the Small Cause Courts Act.