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)
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Mr. Subodh Dharmadhikari, Senior Counsel assisted by Mr.
Chinmay Dharmadhikari, counsel for applicants.
Mr. Masood Shareef, counsel for respondent Nos. 1 to 4.
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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 rkn 3 cra52.2024.odt 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 rkn 4 cra52.2024.odt 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 rkn 6 cra52.2024.odt 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 rkn 7 cra52.2024.odt 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 rkn 8 cra52.2024.odt 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) rkn 9 cra52.2024.odt 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. rkn 10 cra52.2024.odt
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 rkn 11 cra52.2024.odt 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 rkn 12 cra52.2024.odt 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 rkn 13 cra52.2024.odt 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, rkn 14 cra52.2024.odt 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, rkn 15 cra52.2024.odt 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 rkn 16 cra52.2024.odt 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;- rkn 17 cra52.2024.odt 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 rkn 18 cra52.2024.odt 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 rkn 19 cra52.2024.odt 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 rkn 20 cra52.2024.odt 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 rkn 21 cra52.2024.odt 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 rkn 22 cra52.2024.odt 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, rkn 23 cra52.2024.odt 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, rkn 24 cra52.2024.odt 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. rkn 25 cra52.2024.odt
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 rkn 26 cra52.2024.odt 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 rkn 27 cra52.2024.odt 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 rkn 28 cra52.2024.odt 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, rkn 29 cra52.2024.odt 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. rkn 30 cra52.2024.odt
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 rkn 31 cra52.2024.odt 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 rkn 32 cra52.2024.odt 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. rkn 33 cra52.2024.odt
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.
rkn 34 cra52.2024.odt
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 rkn 35 cra52.2024.odt 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 rkn 37 cra52.2024.odt 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 rkn 38 cra52.2024.odt 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 rkn 39 cra52.2024.odt 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, rkn 40 cra52.2024.odt 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 rkn 41 cra52.2024.odt 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 rkn 42 cra52.2024.odt 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.] rkn Signed by: Mr. R.K. NANDURKAR Designation: PA To Honourable Judge Date: 18/03/2025 18:06:14