Vasudev Gopalkrishna Tamwekar vs The Board Of Liquidators Happyhome

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 578 of 1961

Decision Date: 10 May, 1963

Coram: Bhuvneshwar P. Sinha, J.C. Shah, N. Rajagopala Ayyangar

In this case, the Supreme Court examined an appeal that was filed on a certificate issued by the High Court of Judicature at Bombay. The appeal challenged a judgment and order of a Division Bench of that Court dated 12 March 1959, which had set aside the earlier decision of the judge of the Bombay Civil Court rendered in Chamber Summons in Arbitration case No A.B.N./C.H.O‑2310/88 of 1954‑55. The appellant was represented by counsel, while the respondent was defended by another team of counsel.

The High Court had addressed, for the first time, the contention that the agreement between the parties effected a present demesne of the land in favour of the appellant. This argument, which had not been raised before the Trial Court, was examined by the High Court. In the lower Court, the appellant’s counsel had relied upon section 27‑A of the Specific Relief Act and asserted that the defendant could defend his possession even though no lease had been executed and registered as required by law. The High Court also considered the argument that the appellant had become a ‘tenant’ of the land under the Society because the agreement referred to him as a ‘tenant’. The Court concluded that such reference was merely a description or misdescription of the appellant and could not, as a matter of law, create a landlord‑tenant relationship. The Court noted that the agreement had been discussed in detail to demonstrate the weakness of the argument based on the appellant’s label as ‘tenant’. It was not contested that the appellant had failed to pay any instalment in respect of the transaction that was to be in his favour, and consequently he did not qualify for a lease of Plot No 10 allotted under the Society’s building scheme. Because of his default, the Society was left with no alternative but to terminate the agreement and require the appellant to surrender vacant possession of the property. Although the agreement described him as a ‘tenant’, the Court explained that this term merely signified a ‘proposed tenant’ and was used for convenience of expression. The appellant would have become a tenant only if he had satisfied all dues to the Society and executed a sub‑lease that was duly executed and registered.

In this matter the Court observed that the appellant had not complied with the terms of the agreement that had been described in detail earlier. Because of that failure, the provisions of the Act intended to realise the Society’s dues had to be invoked. Accordingly, the arbitral award was deemed a perfectly valid award and the appellant’s plea that he was a tenant governed by the Rent Control Act (Bombay Act 57 of 1947) was found to have no justification. Nevertheless, the appellant argued that regardless of how the relationship created by the document might be characterised, section 28 of the Bombay Act 57 of 1947 removed the jurisdiction of the Committee of arbitrators appointed under the Bombay Cooperative Societies Act 7 of 1925 to determine whether the appellant was a tenant of the Society’s premises. The appellant relied upon the Supreme Court’s decision in Babulal Bhuramal v. Nandram Shivram (1) to support this contention. The Court then examined the material portion of section 28, which provides that, notwithstanding anything contained in any law and irrespective of the amount of the claim or any other reason, the Court of Small Causes, Bombay, in Greater Bombay shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which the provisions of that Part apply, and shall also decide any application made under the Act and any claim or question arising out of the Act or its provisions; subject to the provisions of sub‑section (2), no other court shall have jurisdiction to entertain such suits, proceedings, applications, or to deal with such claims or questions.

The appellant further contended that, because the Society had purportedly claimed before the arbitrators that the appellant was a tenant and had sought possession on that ground, the arbitrators lacked the authority to grant any relief for possession. The Court found no warrant for that submission. The pleadings presented to the arbitrators are not part of the record, and on a reasonable reading of the award no inference can be drawn that the Society asserted a tenancy relationship. Instead, before the Committee of arbitrators the Society alleged that the appellant had persistently defaulted in repayment of the loan due to it and consequently sought a declaration that the appellant had ceased to be a member of the Society, together with an order for delivery of vacant possession of the premises. It therefore appeared that no landlord‑tenant relationship had ever existed between the Society and the appellant, and the appellant’s claim of tenancy could not affect the jurisdiction of the arbitrators.

In this matter the Society asserted that it had never maintained a landlord‑tenant relationship with the appellant, and consequently the appellant’s claim that he occupied the disputed premises as a tenant could not alter the jurisdiction of the committee of arbitrators. Because the existence of a tenancy was not pleaded, the Court found no advantage in examining whether the provisions of section 28 of the Bombay Act 57 of 1947 would prevail over the provisions of the Bombay Co‑operative Societies Act 7 of 1925, a point that had been raised by counsel. The alternative argument presented was that, even if the Society sought an order for possession on a basis other than a tenancy, the appellant’s assertion of tenancy and the consequent framing of the dispute as a landlord‑tenant issue would, in the view of that argument, render the Court of Small Causes, Bombay the sole forum competent to determine the question. Section 298 of the Bombay Act 57 of 1947 expressly removes the jurisdiction of all courts other than the Court of Small Causes to try any suit, proceeding or application that arises between a landlord and a tenant and to consider any claims or questions specified in that section. Even assuming that an arbitrator appointed under the Bombay Co‑operative Societies Act could be regarded as a court, the present Court considered it unnecessary to rule on the exclusion of such jurisdiction because, for that exclusion to arise, the proceeding before the arbitrator must involve a dispute between a landlord and a tenant concerning the recovery of rent or the possession of premises to which Part II of the Act applies. The exclusive jurisdiction of the Court of Small Causes therefore arises only when the party invoking it alleges that the opposite party is a tenant or a landlord and the dispute falls within the matters referred to in section 28. Where the party invoking the jurisdiction does not expressly set up a claim that the other is a tenant or landlord, the defendant cannot displace the ordinary court’s jurisdiction merely by alleging such a relationship, and on that ground the ordinary court retains the authority to try the suit, proceeding or application. No judgment of this Court in Babulal Bhuramal’a Case (1) supports the proposition that merely pleading tenancy concerning the disputed premises would divest ordinary courts of jurisdiction to adjudicate a suit, proceeding or application. The factual backdrop of the appeal decided in Babulal’s case (1) may be summarised as follows: a landlord instituted an ejectment suit in the Court of Small Causes against a tenant after terminating the tenancy and, in that suit, impleaded two additional persons whom the landlord alleged had no right to occupy the premises.

The Court found that the two individuals who had been claimed to be sub‑tenants were not lawful sub‑tenants and therefore had no right to remain in the premises. Accordingly, the Court issued a decree for ejectment against all three defendants. Following that decree, the three defendants instituted proceedings in the Bombay City Court seeking a declaration that the first defendant was a tenant of the landlord and that the other two defendants were lawful sub‑tenants entitled to the protection afforded by Bombay Act 57 of 1947. The Bombay City Court initially ruled that it possessed jurisdiction to hear the suit, but it ultimately dismissed the suit on its merits. The High Court of Bombay subsequently affirmed the decree, holding that the City Court lacked jurisdiction to entertain the suit, although the High Court did not express any view on the merits of the case. The Court affirmed the High Court’s determination regarding jurisdiction. The matter before the Court required consideration of the true effect of section 28 of Bombay Act 57 of 1947 in view of the allegations made by the plaintiffs that they were tenants and the landlord’s denial of the existence of any tenancy. The Court observed, quoting from page 681 of the earlier judgment, that the suit did not cease to be a suit between landlord and tenant merely because the defendants denied the plaintiffs’ claim. The Court explained that whether the plaintiffs were tenants is a question arising under the Act or its provisions and must be decided by the court hearing the suit. Upon a proper interpretation of section 28, a suit contemplated in that section includes not only cases where the landlord‑tenant relationship is admitted but also cases where the relationship is asserted by one party. The Court held that these observations do not support the argument that the ordinary courts lose jurisdiction to try a suit for recovery of possession of premises covered by Part XI of the Act simply because a party raises a dispute over the existence of a landlord‑tenant relationship. Consequently, the appeal was dismissed with costs.