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2006 DIGILAW 751 (BOM)

JAYANT L. SHAH v. NARANJI LALJI KHONA

2006-05-02

S.U.KAMDAR

body2006
ORAL JUDGMENT :- The present suit is filed for a decree of on that the defendant has no right, title or interest to carryon the of Messrs. Narshi Hansraj or any other business in the suit premises Shop No. 7-B, Navratan Villa, 279A, Lakhamshi Napu Road, Matunga, 400019 and that he is a trespasser in respect thereof. By prayer clauses (d) a decree for possession couched in the form of mandatory as well as prohibitory injunction has been sought. Prayer clause (e) seeks a decree for a sum ,900/- towards the arrears of royalty for a period from 1-11-1978 to 2-12the rate of Rs. 750/- per month. By prayer clause (f) damages in the form of compe- nsation or future mesne profits at the rate of Rs. 25/- per day has been There are various other interim reliefs in the present suit. 2 Some of the material facts, briefly enumerated are as under : " The original plaintiff Lakchand Dhanji Shah was an executor appointed e.a Will dated 19-3-1977 of one Narshi Hansraj Khona alias Sha Narshi who expired in Bombay on 12-10-1978. The said original plaintiff who executor has also expired and his legal heir has been brought on record. 4. It is the case of the plaintiff that prior to 3-11-1967 the said original plaintiff Lakmichand Dhanji Shah, the defendant Naranji Lalji Khona and one kji Lalji Lalka were carrying on business in partership. in the name and of Messrs. Narshi Hansraj. The said partnership firm was dealing in grains and grocery items. The said partnership firm was dissolved with effect from 367 and all the assets and liabilities of the said firm were taken over by the deceased Narshi Hansraj Khona and thus he became entitled to the said business. A deed of dissolution was executed between the parties on 15-11-1967. 5. It is the case of the plaintiff that since the deceased Narshi Hansraj a was not in a position to carryon the business he entered into a conducting agreement with the defendant for a period of three years from 3-11-1967 to 2-11on the terms and conditions mutually agreed upon between the said seed Narshi Hansraj Khona and the defendant herein. The said terms and conditions of the conducting agreement were reduced in writing and the said was executed between the parties in or about November, 1967. The said terms and conditions of the conducting agreement were reduced in writing and the said was executed between the parties in or about November, 1967. It is the case of the plaintiff that under the terms and conditions of the said conducting agreement is inerter alia provided that the said agreement will be for a period of three years. from 3-11-1967 to 2-11-1970. Under clause 3 of the said agreement it has recorded that the conductor i.e. the defendant herein has been given session of running business, the stock-in-trade, furniture, fixtures and other articles and things relating to the said business a list whereof is annexed to the agreement. The annexure to the said agreement shows the stock-in-trade of sum of Rs. 15,754.34 of the various items as set out therein. It also contains ails of the furniture’s and fixtures of the said shop premises. Under clause 7 of said the said agreement it was provided that the said agreement is entered into purpose of running the business on the basis of royalty amount due and under the agreement and the conductor shall have the user of the said under leave and licence and no sub-tenancy rights are created in favour conductor or are intended to be created in favour of the conductor. It further mentioned that the mere right to use the said premises for the purpose running the said business is allowed under the said leave and licence. various other terms and conditions of the said agreement. It is the ca plaintiff that under the terms and conditions of the said agreement the and the shop premises were handed over to the defendant and the agreed to pay monthly royalty charges of Rs. 750/- for conducting business. 6. It has been the further case of the plaintiff that after the expired said agreement a fresh agreement has been entered into on 17-2-1971 the said deceased Narshi Hansraj Khona and the defendant herein on terms and conditions. It was provided thereunder that the said agreement executed for a further period office years from 17-2-1971 to 16-2-1976. agreement is also brought on record in evidence. It was provided thereunder that the said agreement executed for a further period office years from 17-2-1971 to 16-2-1976. agreement is also brought on record in evidence. It is the case of the plaintiff the said agreement came to an end by efflux of time on 16-2-1976 ho defendant did not hand over possession of the said shop and continued the business and continued to make payment of the royalty amount of to the said deceased. The deceased paid rent in respect of the said premi landlord. It is the case of the plaintiff that after the death of Narshi Khona the defendant approached the landlord for getting the transferred in his name and the landlord refused to do so and, therefore receipt has continued to be in the name of the deceased. The defendant direct payment to the landlord to create false evidence to usurp the pre accordingly it was necessary to file the present suit. It is the case of plainff that on 17-3-1979 a notice was issued by the advocates of the" 1 d the defendant calling upon the defendant to hand over the possession premises but the defendant refused to do so by reply of his advocates I 4-4-1979 and made false contention claiming right, title and interest i property. The letter of the defendants advocate was duly replied by plaintiffs advocate through their letter dated 5-11-1979 which w replied by the defendants advocate by letter dated 27-11-1979. In view fact that the defendant was not inclined to vacate the premises and hand over the same to the plaintiff herein along with the running business, the plaintiff the present suit. The said Narshi Hansraj Khona died on 12-10-197 behind his last Will and testament dated 19-3-1977 and appointment plaintiff as the executor of the said Will. The said original plaintiff al and his son who is the beneficiary of the said estate of the deceased Hansraj Khona and also of the executor and trustee in place of t plaintiff has come on record and seeks to continue the present suit. 7. The present suit is accordingly filed for declaration that the has no right, title and interest and claim possession of the said property relief that the defendant should remove himself from the suit pre defendant has filed written statement on 16-4-1980. 7. The present suit is accordingly filed for declaration that the has no right, title and interest and claim possession of the said property relief that the defendant should remove himself from the suit pre defendant has filed written statement on 16-4-1980. It has been contented therein that defendant is in fact a protected licensee under the provisions of the Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter to as Bombay Rent Act) particularly in view of the amendment the licensee as on 1-2-1973. In that view of the matter it has been that the dispute between the licensor and the licensee or landlord and is not maintainable in this Court but under section 41 of the Presidency small causes Courts Act or under section 28 of the Bombay Rent Control Act, It has been thus submitted that the Small Causes Court has exclusive jurisdiction and this Court has no jurisdiction to entertain and try the present suit is liable to be dismissed. It has been submitted that the original tenant is claiming right in the property on the basis of tenancy in his favour through the will it is settled law that no tenancy can be bequeathed by a Will and, also the plaintiff has no right, title or interest to maintain the present suit has been further submitted that the defendant is a nephew of the original ff and thus a member of the family of the defendant under section 5(l1)(c) therefore, the defendant is a tenant and is entitled to the said property. In any event, it has been submitted that the defendant is a protected licensee because the agreements are in fact leave and licence agreements protecting the defendant 1-2-1973 as a tenant. Apart from the aforesaid submissions, on merits, it been submitted that both the agreements of conducting which have been red into and the terms and conditions thereof indicate that in fact there was a transfer of tenancy in favour of the plaintiff herein. The defendant has put forth a that he is a nephew of the said deceased. The defendant further submits that deceased having no son and having only one daughter defendant was brought up as a son by the deceased Narshi Khona since four years age. Even his age was performed by the said deceased. The defendant has put forth a that he is a nephew of the said deceased. The defendant further submits that deceased having no son and having only one daughter defendant was brought up as a son by the deceased Narshi Khona since four years age. Even his age was performed by the said deceased. In that circumstances, the original eased in fact handed over the possession of the said business to the defendant he was taken as a partner in the said business right from 1948 and he continued to be the partner till 1967 and it is only the original plaintiff was stile and was not running the business with the defendant that the said firm was solved and the right title and interest was taken over by deceased Narshi khona and in turn he allowed the defendant to take over the said business and , the same. It was submitted that because at that time it was not possible to sub the premises it was agreed that the leave and licence will be created in the form of a conducting agreement so as to avoid any trouble from the landlord. It as submitted that the said agreement is accordingly arrived at with a view to circumvent the provisions of the Rent Act then existing. It has been further bmitted that a sum of Rs. 750/- per month was paid as a rent because under the id agreement the defendant was using the said premises, It has been denied that ere is any conducting agreement and/or that the conducting agreement came to end by efflux of time. It has been submitted that the said agreement is in fact , tally in favour of the defendant and, therefore, the defendant rightly refused to Vacate the premises. 8. On the aforesaid pleadings between the parties, the following issues were framed. 1.Whether this Court has jurisdiction to entertain and try the suit? 2.Whether the plaintiff can claim tenancy rights in respect of the premises on the basis of Will of Narshi Hansraj? 3.Whether the defendants prove that he was carrying on busine the suit premises on leave and license granted to him by deceased Narshi Hansraj at the time of his death and is protected under provisions of Bombay Rent Act? 2.Whether the plaintiff can claim tenancy rights in respect of the premises on the basis of Will of Narshi Hansraj? 3.Whether the defendants prove that he was carrying on busine the suit premises on leave and license granted to him by deceased Narshi Hansraj at the time of his death and is protected under provisions of Bombay Rent Act? 4.Whether the plaintiff proves that the defendant was given pre for conducting the business of Narshi Hansraj and he cannot claim any right whatsoever after the death of Narshi Hansraj and entitled for the protection under provisions of Bombay Rent Act. 5.Whether conducting agreements dated 15th November, 1967 17th February, 1971 are sham and were not to be acted upon were executed with a view to circumvent the provisions of Bo Rent Act? 6.Whether the defendant is protected tenant or licensee of the premises? 7.Whether the plaintiff proves that defendant is a trespasser in res of the suit premises. 8.What reliefs? 9. Both the parties have led oral evidence which is on record. Parties also tendered their respective documents which are also taken on record. perusal of the evidence the case has been reiterated. The evidence has been I of the plaintiff which has come on record. Subsequently he has tendered various documents. Similarly, the defendant has also led the oral evidence of Nar Lalji Khona who is the defendant herein. As far as the oral evidence is concerned by and large it is on the same line as the contentions of the parties for claim leave and licence agreement in respect of the suit flat. However, the crucial is documentary evidence in the present case. Insofar as the documentary evidence concerned both the agreements are produced by the plaintiff. First agree contains the annexure as mentioned in the said agreement whereas the see agreement does not contain any annexure though clause 3 of the said agree refers to the annexure in respect of stock-in-trade and other furniture’s fixtures. Then the correspondence is produced by and between the parties. defendant has on the other hand also produced large number of documents. defendant has produced his books of accounts firstly to indicate that in fact the called claim of handing over stock of Rs. Then the correspondence is produced by and between the parties. defendant has on the other hand also produced large number of documents. defendant has produced his books of accounts firstly to indicate that in fact the called claim of handing over stock of Rs. 15,754/- mentioned in the annexure the first agreement was in fact not a handing over of the stock tow conducting the business but the same was purchased by the defendants and books of accounts were produced to show that the said amount was paid. accounts are also produced to show that Rs. 750/- was in fact paid per mo towards the rent and was debited accordingly in the books of accounts. The s payment of Rs. 750/- per month has been made in part payment of the supply the material of shop and part paid in cash to the said deceased Narshi Kho Thereafter the defendant has produced the death certificate of the wife of original defendant as also produced the rent receipts to show that in fact Mani Narshi Khona was the tenant. The defendant has also produced a Shops Establishment Certificate and licence of the relevant period which stands in name of the defendant. A licence under the B.M.C. Act is also produced which is e name of the defendant in respect of the suit premises. The defendant has also produced sales tax returns and the sales tax invoices indicating that the was independently carrying on the business and his business has been n in his own name and not in the name of the deceased Narshi Khona. so produced official translations of various entries of ledger indicating said payment to the deceased herein. 10. On the aforesaid evidence the matter was heard by me. The learned: for the plaintiff has submitted in his written submission that the suit is for declaration that the defendant has no right, title or interest therein. It has been d by the plaintiff that on the plain reading of the terms and conditions of agreements it is clear that it is actually a conducting agreement and not a licence agreement. It has been d by the plaintiff that on the plain reading of the terms and conditions of agreements it is clear that it is actually a conducting agreement and not a licence agreement. It has been submitted that thus it is clear that the Narshi Khona has not created any leave and licence or a monthly in respect of the defendant herein and in view thereof it has been d that the said premises is required to be returned along with the running by the defendant to the plaintiff herein. Insofar as the plaintiff is ed he is named to be the beneficiary of the Will of the deceased Narshi . It is his case that his father was appointed as executor in respect of the ill and the Will being probated and probate issued by this Court on 23-10he is entitled to maintain the present suit and claim possession of the said premises. It is his case that under the said Will he is the beneficiary. Under clause the Will he has stated that the entire estate has been conferred on him in of the fact that he is the daughters son of the deceased. The said clause 3 as under:- "3. I further direct that my said executor shall after the death of my wife and in case my wife predeceases me shall pay the estate left, if any then remaining in trust to my daughters son namely Jayant Laxmichand Dhanji or his heirs executors administrators for his use and benefit I absolutely for him." has further submitted that under the agreement both under clause 3 and under se 7 it has been expressly provided that the said agreement is entered into for the purpose of running the business on the basis of royalty and thus he summits that there is no question of any leave and licence agreement being red into. He further submits that under the first agreement the annexure was made to the said conducting agreement indicating that at the time of handing over the business the stock-in-trade as well as various furnitures and fixtures are handed over to the defendant. It has been thus submitted that the aforesaid indicates that there was a mere conducting agreement and not leave and nee agreement in favour of the defendant herein. It has been thus submitted that the aforesaid indicates that there was a mere conducting agreement and not leave and nee agreement in favour of the defendant herein. He has further submitted the terms and conditions of the second conducting agreement are also identical to the first conducting agreement, though it is true that annexure is not annexed to the said original agreement though the same is referred to in clause 3 thereof . In his submission the same should not make any difference because the id annexure which formed part of the first agreement should be read as part of second agreement also because it is identical in every respect. Insofar as the documents produced by the defendant are concerned, particularly books of . account it has been submitted that insofar as the evidence produced b defendant is concerned, there is no merit in the case of the leave and licence tenancy even though the defendant is holding a licence as well as the sales tax assessment are in respect of the business run by the defendant in his own and not in the name of Narshi Khona but still according to the plaintiff present suit must be decreed as the terms and conditions of the conduct agreement are proved by him and thus the said suit is liable to be decreed favour of the plaintiff. 11. On the other hand, the learned counsel appearing for the defendant contended that this Court has no jurisdiction to entertain and try the presence ", It has been contended that in fact exclusive jurisdiction is vested in the Causes Court by virtue of provisions of section 41 of the Presidency Causes Courts Act if the defendant is held to be a licensee or if the defendant held to be the protected then under section 28 of the Bombay Rent Act as in at that point of time the suit should have been filed in the Small Causes Co not in this Court. Insofar as the above contention is concerned, the learned counsel for the defendant has submitted that by oral evidence as well documentary evidence the defendant has been able to establish that the terms conditions of the conducting agreement though so mentions are in fact n conducting agreement between the parties. Insofar as the above contention is concerned, the learned counsel for the defendant has submitted that by oral evidence as well documentary evidence the defendant has been able to establish that the terms conditions of the conducting agreement though so mentions are in fact n conducting agreement between the parties. He has submitted that the conditional the part of the deceased Narshi Khona itself indicates that it was not a conditional agreement as sought to be made out. Firstly he has drawn my attention annexure to the first agreement which indicates that certain goods have handed over as stock-in-trade to the defendant by the deceased Narshi when in fact he has paid for the said goods. He has also produced the necessary books of accounts to establish the entries of the relevant years indication payment thereof. He has further submitted that therefore, advisee second agreement no stock-in-trade was prepared at the time of execution of the second. agreement therefore the second agreement has no annexure thereto. He has further sub that the second agreement indicates that the same was executed for five ye there was no stock-in-trade. Even at the expiry of the first agreement no has been taken and that shows that in fact the agreement is not for conduction business. It has been submitted that if it is conducting agreement then I. expected of the proprietor or the plaintiff to take stock of the Goods which lying and seek account of the goods which are purchased band sold defendant pursuant to the conducting agreement. However, no such case established by the plaintiff which indicates that in fact the agreement the styled as conducting agreement but in fact it was a leave and licence agreement so as to circumvent the provisions of the Bombay Rent Act because deceased Nurshi Khona himself was a tenant and he was not interested in his tenancy being jeopardized by the landlord by sub-letting the same which was prohibited the provisions of the Bombay Rent Act. It has been further submitted that basis of the evidence of the plaintiff, the defendant and the daughter deceased namely, Champaben Laxmichand Shah it is clear that in fact there conducting business agreement but it was a leave and licence agreement learned counsel for the defendant has also submitted that it is now settled I the tenancy cannot be bequeathed by the deceased Narshi Khona in favour of the plainfiff herein as has been held in the judgment of the Division Bench of this Court in the case of Dr Anant Tribak Sabnis Vs Vasant Pratap Pandit , the Apex Court in the case of Bhavarlal Labhchand Shah vs. Kanaiyalal Intawala, reported in (1986) 1 SCC 571 and the judgment of the Court in the case of lasant Pratap Pandit vs. Dr. Anant Trimbak ported in 1994 MhLJ. page 1450. The learned counsel relying upon said judgments submitted that tenancy cannot be bequeathed at all by Narshi and the so called claim of the plaintiff on the basis of the bequeath pandancy is without any merit. Admittedly the plaintiff was never in n of the suit property and, therefore, he cannot claim tenancy under 5(ll)(c) though he may be one of the family member of the said he defendant the present ed in the Sabnis esidency judgment submitted that tananacy cannot be bequeath of the tenancy is without any merit. Admittedly the plaintiff claim tenancy under section 5(11)© though he may be one of the family member of the said deceased. 12. I have heard the learned counsel for both the parties. Various issues are by the Court and my findings in respect thereof are as under :- 13. Insofar as the present case is concerned, though it is an admitted , that though two conducting agreements are entered into by the deceased. Khona and the defendant on the circumstances and the material and e produced on record it is established by the defendant that the said ting agreements are in fact not conducting agreements but the agreements and licences which have been executed by the deceased Narshi Khona. from the aforesaid position I am taking into consideration the various conducting agreements which has been produced by the defendant in the present Case. The ting agreements which are also on record indicate that clause 2 provides ding over of the stock-in-trade. from the aforesaid position I am taking into consideration the various conducting agreements which has been produced by the defendant in the present Case. The ting agreements which are also on record indicate that clause 2 provides ding over of the stock-in-trade. However, the defendant has been able to said that in fact it was not handing over of the stock-in-trade but in fact the ,goods were purchased and he has produced the books of accounts to show payment in respect of each and every goods which has been purchased by him the deceased Narshi Khona. He has also produced the books of accounts he has been paying the compensation of Rs. 750/- fixed and not on the basis business profit which was earned from the said business. The fixed amount, by the defendant is not in dispute though it is styled as royalty and not as, compensation or rent. However, the most crucial document which has been produced by the defendant is that the defendant never conducted for and on If of the deceased Narshi Khona. He was conducting business in his own t and he has obtained all necessary licences independently including the bay Shops and Establishments Licence, the BMC licence and various other liences as required. He has also assessed himself to the sales tax in his own e. He has filed the assessment record and the orders passed by the Sales Tax authorities independently in his name which are on record. Furthermore, the ks of accounts indicate that the profit earned by the said business has been ropriated by the defendant exclusively to himself. It also indicates that even en some grocery items are delivered to the deceased Narshi Khona, in fact the aunt has been adjusted against the payment of the royalty at the rate of Rs. 10/-. All the aforesaid circumstances, coupled with the oral evidence of the said fend ant indicate that in fact the defendant was not conducting business on the of the deceased Narshi Khona but he was running the conducting business in his Own independent right independently and not at the instance or on the plaintiff. Clause 7 of the agreement is also very crucial. Clause agreement consists of two parts. It states that though the business is conducting basis but when it comes to the premises the leave an agreement has been executed. Clause 7 of the agreement is also very crucial. Clause agreement consists of two parts. It states that though the business is conducting basis but when it comes to the premises the leave an agreement has been executed. There is no dispute that the defendants possession of the said premises exclusively and the deceased Narshi K not in a joint possession. It is nobodys case also in respect thereof. defendant was actually running the business in his own right independent exclusively and was not dependent Upon the plaintiff herein. Thus, in fact the totally of the circumstances and totality of the circumstances and the oral evidence led between the established that the conducting agreement was in fact nothing but licence agreement. It is now settled law that in case of the leave agreement or a conducting agreement what is required to be seen by the true and correct intention of the parties at the time of execution agreements. It is not in dispute that original Narshi Khona was a tenant of the said property. It is also not in dispute that at the relevant time was prohibited under the Rent Act. Thus in my opinion the aforesaished coupled with admitted facts an irresistible conclusion is that in fact the conducting agreement was nothing but a leave and licence agreement the defendant and it was not a conducting agreement insofar as the concerned. Clause 7 insofar as the second part of the said a concerned, reads as under :_ "It is agreed that for the purpose of running the business on royalty under this Agreement and incidental thereto the Condudtor have the user of the said premises under leave and licence oft (Emphasis supplied) In my opinion, thus on an interpretation of the agreement re material circumstances and evidence produced on record it is establish defendant that the agreement was entered into for a leave and lice hold that it was a leave and licence agreement then in that event this have no jurisdiction for two reasons. Firstly because the agree me licensor and licensee is required to be filed before the Small Cause Bombay under section 41 of the Presidency Small Causes Court Act. . the present case, the leave and licence agreement was prior to 1-2-197 the date of 1-2-1973 there was a valid and subsisting leave . agreement. Firstly because the agree me licensor and licensee is required to be filed before the Small Cause Bombay under section 41 of the Presidency Small Causes Court Act. . the present case, the leave and licence agreement was prior to 1-2-197 the date of 1-2-1973 there was a valid and subsisting leave . agreement. There is no dispute that leave and licence agreement expo 1976 by efflux of time. It is also on record that the defendant was possession of the shop premises. Once these criteria are complied my opinion, as on 1-2-1973 the defendant as a licensee became licensee by virtue of the amendment to the Bombay Rent Act by was 15A and thus he is deemed tenant and he is entitled to protection of Rent Act as existing then. If that is so, then under the provisions of s the Bombay Rent Act, this Court has no jurisdiction to entertain present suit. Even a suit between licensor and licensee falls under the Presidency Small Causes Court Act and there under also suit for possession exclusively vests in the Small Causes Court. Thus, in view therefor answer issue No.1 in favour of the defendant and against the plaintiff. 14. Insofar as issue No.3 is concerned, I have already discussed and held defendant is a protected licensee and thus entitled to protection of the I also, therefore, answer issue No.3 in favour of the defendant and plaintiff. My answer to issue No.3 is in the affirmative. Once answer of 3 is answered in favour of the defendant as a corollary answer to 4 must be against the plaintiff and in favour of the defendant. Insofar ,5 is concerned, I again answer the same in favour of the defendant and plaintiff. 15. Issue No.6 and issue No. 1 are overlapping and, therefore, my answer o. 6 is in affirmative and in favour of the defendant and against the Insofar as issue No.7 is concerned, my answer to the same is in the . Once it is held that the defendant is a bona fide licensee, the answer to he has to be in favour of the defendant and against the plaintiff. .; I am of the view that in light of the fact that in the present case this no jurisdiction to entertain the present suit, I am not inclined to go into s so far as issue No.2 is concerned. .; I am of the view that in light of the fact that in the present case this no jurisdiction to entertain the present suit, I am not inclined to go into s so far as issue No.2 is concerned. Secondly, as far as issue No.2 is, it is not relevant and related to the plaintiff and the defendant in the (case because the issue No. 2 pertains to the claim of the plaintiff as a ice-versa his landlord. Now this issue would also arise between the landlord and the plaintiff because deceased Narshi Khona was a tenant sought him the plaintiff is claiming tenancy right. In that light of the matter, the view that this is not the issue which should be answered in this proceedings and the same can be determined in a suit between the original of the premises and any person who is claiming tenancy thereof. Insofar defendant is concerned, the defendant is admittedly claiming right; thought Narshi Khona who is the grandfather of the plaintiff and therefore, this issue is concerned, even if they are protected licensee still issue as framed is not required to be determined in the present case and accordingly I decline to answer the same . 18. In the aforesaid light of the matter, I am of the view that the present suit fail since this Court has no jurisdiction to entertain and try the suit the plaintiff and the defendant herein. In that light of the matter, dismiss the suit. However, there shall be no order as to costs. Suit dismissed.