AI Drafter 
TaxTMI 
TaxTMI 
1981 (1) TMI 279
X X X X Extracts X X X X
X X X X Extracts X X X X
....reement was initially for a period of 11 months it was extended from time to time. By an agreement dated November 5, 1972, the original agreement was extended for a period of eleven months from January 1, 1973. The 'leave and licence' agreement was thus in force on February 1, 1973, with effect from which date S. 15A was inserted in the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, by an amendment (Maharashtra Act 17 of 1973). The effect of S. 15A was that any person who was in occupation of any premises on February 1, 1973 as a licencee was deemed to have become, on that date, for the purposes of the Act, a tenant of the landlord, in respect of the premises or part thereof in his occupation. On April 28, 1979, the first respondent purported to terminate the 'leave and licence' agreement and called upon the appellant to hand over possession of the Studios to the first respondent. Immediately, on May 8, 1979, the appellant filed Declaratory Suit No. 2326 of 1979 in the Court of Small Causes, Bombay, praying for a declaration that the plaintiff-appellant was a monthly tenant of the two studios and all other structures and open land covered by the agre....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as defined in the Bombay Act but the business as such and, therefore, the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act were not attracted at all. For a clear appreciation of the rival submissions, the relevant provisions of the Bombay Rent, Hotel & Lodging House Rates Control Act, 1947, may first be set out. Section 5(4A) defines a licensee as follows: "(4A) 'licensee', in respect of any premises or any part thereof, means the person who is in occupation of the premises or such part, as the case may be, under a subsisting agreement for licence given for a licence fee or charge; and includes any person in such occupation of any premises or part thereof in a building vesting in or leased to a cooperative housing society registered or deemed to be registered under the Maharashtra Co-operative Societies Act, 1960; but does not include a paying guest, a member of a family residing together, a person in the service or employment of the licensor, or a person conducting a running business belonging to the licensor, or a person having any accommodation in a hotel, lodging house, hostel, guest house, club, nursing home, hospital sanatorium, dharmas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is Act by Section 15A. (c) xxx xxx xxx We may add here that the definition of landlord in S.5(3) was suitably amended in 1973 so as to include 'in respect of a licensee deemed to be a tenant by S.15A' 'the licensor who has given such licence'. Sec. 6(1) provides: "(1) In areas specified in Schedule I, this part shall apply to premises let or given on licence for residence, education, business, trade or storage." Sec. 15A which deems certain licensees in occupation of premises on 1.2.1973 as tenants says: "15A. (1) Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any contract, where any person is on the 1st day of February, 1973 in occupation of any premises, or any part thereof which is not less than a room, as a licensee he shall on that date be deemed to have become, for the purposes of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his occupation. (2) The provisions of sub-section (1) shall not affect in any manner the operation of sub-section (1) of section 15 after the date aforesaid." Sec. 28(1) which prescr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clear that even a building so constructed or designed as to be capable of being used for running a certain business only is "premises" within the meaning of Sec. 5(8) and Sec. 5(8A) and does not cease to be premises merely because the building is capable of being used for the particular business only or merely because machinery or equipment must necessarily go alongwith the building if it is to be used for the business. If "premises" did not, by definition include a building given on licence but meant only a building which was let, it could perhaps be argued with great force that the expression premises would not take within its stride a business let as a business, but the situation is changed by the inclusion of any building given on licence in the definition of "premises", and by the deeming of a licensee as a tenant under S. 15A of the Act. A licensee is not really a tenant but is a person deemed to be a tenant because of Sec. 15A of the Act. A building in which a person is licensed to run a business is "premises" within the meaning of S. 5 (8) and 5 (8A), to which Part II of the Act is made applicable by S. 6(1) notwithstanding the fact that the building is not let as such. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... including any fittings, affixed to such building or part of the building for the more beneficial enjoyment thereof. This Court held that where the lease was composite and had a plurality of purposes, the decisive test was the dominant purpose of the demise. Applying the test it was found that the real subject of the lease was the cinema apparatus and fittings including, 'subsidiarily and incidentally', the building. It will be seen that in both the cases there was no question of a licence, nor any question of a licensee being deemed to be a tenant. The question concerned a lease and the question was whether what was demised was a business or a building as such. If what was intended to be demised was a business, the Act would not apply. If what was intended to be demised was a building the Act would apply. The test of dominant intention was applied and it was found in each of the cases that the lease was of a business and not of accommodation'. The question in the present case is entirely different and is one of construction of the provisions of the Bombay Rent, Hotel & Lodging House Rates (Control) Act, 1947, which deem a licensee to be a tenant and, by definition, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....motion pictures only. Property tax and other taxes were to be borne and paid by the licensors while the licensees were required to pay for the consumption of electricity and water. During the subsistence of the licences the licensees were not to part with the possession of the studios and other premises, machineries and equipments. The Studios and other premises, machineries and equipments were to be used by the licensees in a prudent manner. The agreement further stipulated that no tenancy rights were to be understood as having been created by the licensors in favour of the licensees. The interest created was that of licensees only. The licensees were to carry on their business of motion picture films' production in the licensed premises under the name and style of Natraj Studios (P) Ltd. The agreement is thus seen to be a composite agreement which gave 'leave and licence' (1) to use the studios and other premises for producing films and (2) to use the machinery and equipment for the same purpose. The licensors parted with possession of the Studios and the machinery in favour of the licensees. Notwithstanding the fact that the agreement was a composite one and the two ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to contract out of the legislative mandate which requires certain kind of disputes to be settled by special courts constituted by the Act. It follows that arbitration agreements between parties whose rights are regulated by the Bombay Rent Act cannot be recognised by a Court of law. Thus exclusive jurisdiction is given to the Court of Small Causes and jurisdiction is denied to other Courts (1) to entertain and try any suit or proceeding between a landlord and a tenant relating to recovery of rent or possession of any premises, (2) to try any suit or proceeding between a licensor and a licensee relating to the recovery of licence fee or charge, (3) to decide any application made under the Act and, (4) to deal with any claim or question arising out of the Act or any of its provisions. Exclusive jurisdiction to entertain and try certain suits, to decide certain applications or to deal with certain claims or questions does not necessarily mean exclusive jurisdiction to decide jurisdictional facts also. Jurisdictional facts have necessarily to be decided by the Court where the jurisdictional question falls to be decided, and the question may fall for decision before the Court of exc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he defendants denied the claim of the plaintiffs. It was said: "On a proper interpretation of the provisions of S.28 of the suit contemplated in that section is not only a suit between a landlord and a tenant in which that relationship is admitted but also a suit in which it is claimed that the relationship of a landlord and a tenant within the meaning of the Act subsists between the parties. The Courts which have jurisdiction to entertain and try such a suit are the Courts specified in S.28 and no other". In Raizada Topandas & Anr. v. M/s. Gorakhram Gokalchand the plaintiff instituted a suit in the City Civil Court, Bombay, against the defendant for a declaration that the plaintiff was in lawful possession of a shop and for an injunction restraining the defendants from entering the shop. The plaintiff alleged that the defendant was licensee for a definite term of years and that the period of licence stipulated under the agreement had expired (The suit was instituted before S.15A was introduced into the Act by the 1973 amendment). The defendant's plea was that there was a relationship of landlord and tenant between the parties and that the Court of Small Causes alon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p between the parties was of a landlord and a tenant. The Court, however, found as a fact that there was no relationship of landlord and tenant between the parties. In Deccan Merchants Cooperative Bank Ltd. v. M/s. Dalichand Jugraj Jain & Ors., the conflict was between the jurisdiction of the Registrar of Cooperative Societies under the Maharashtra Cooperative Societies Act and the jurisdiction of the Court of Small Causes under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The Court held that whether or not the Registrar of Co-operative Societies was a 'Court' whose jurisdiction was ousted under S.28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the jurisdiction of the Registrar was surely ousted on broader considerations of public policy. The Court pointed out that the Rent Act had a specific social objective in view and for the achievement of that objective it was necessary that the Court set up under the Rent Act alone should deal with a dispute between a landlord and a tenant and that in accordance with the provisions of the Rent Act. Necessarily, the jurisdiction of the Registrar was ousted. The Court said (at pp. 901, 9....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by a perusal of the plaint which was filed in the High Court as to whether such a suit was capable of being entertained by the High Court. Once it was a suit which could be entertained by the High Court, there was no question of its not being entertained by it. It would only be when the defendant filed a written statement and claimed the protection of the Rent Act that the question would arise to be determined by the High Court whether the relationship between the plaintiff and the defendant in the particular case before it was that as between landlord and tenant. If it came to the conclusion that it was not so, it would continue to have the jurisdiction to try the suit and would be able to try the suit on the merits to its logical conclusion. If, on the other hand, the High Court came to the conclusion that the relationship between the plaintiff and the defendant was as between landlord and tenant it would cease to have jurisdiction on that determination and the suit would be liable to be transferred to the Small Causes Court which, under s. 28 of Bombay Act LVII of 1947, would be the only Court to have jurisdiction to try the suits as between landlords and tenants falling within....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence to Arbitration. On the other hand it was submitted by the learned counsel for the respondent that S. 40 of the Arbitration Act prevented the Small Cause Court from exercising any jurisdiction over arbitration proceedings. It was also urged that the questions at issue in the Court of Small Causes and before the arbitrator were not identical. The suit was properly instituted in the Court of Small Causes and if the respondent wanted to rely upon the arbitration clause an application under s. 34 of the Arbitration Act should have been made to the Court of Small Causes before the written statement was filed. That was not done. It was said that the Court of Small Causes would have no jurisdiction to stay the proceedings under s. 34 of the Act as it was precluded from exercising any jurisdiction over arbitration proceedings under s.40. There is no substance in this argument. S. 40 of the Arbitration Act declares that a Small Cause Court shall have no jurisdiction over any arbitration proceeding or over any application arising thereout. We do not see how it can be said that the Court of Small Causes is exercising jurisdiction over any arbitration proceedings merely because the a....