AI Drafter 
TaxTMI 
TaxTMI 
2013 (8) TMI 1045
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....upon the valuation. The Division Bench held that the expression "licensee" used in Section 41(1) of the PSCC Act has the same meaning as in Section 5 (4A) of the Bombay Rents, Hotels and Lodging House Rates (Control) Act, 1947 (in short "the Rent Act"). Further it was held that the expression "licensee" as used in Section 5(4A) does not cover a gratuitous licensee. The Division Bench in that case rejected the ejectment application holding that the Small Causes Court at Bombay lacked jurisdiction. 4. In Bhagirathi Lingawade and others v. Laxmi Silk Mills, in an unreported judgment of the Bombay High Court dated 03.09.1993, another Division Bench of the Bombay High Court expressed the view that Section 5(4A) and Section 13(1) of the Rent Act, 1947 are not at all relevant in interpreting the scope and ambit of Section 41 of the PSCC Act, under which suit was filed. 5. The Full Bench of the Bombay High Court, which is the Judgment under appeal, reported in 2007 (5) Maharashtra Law Journal 341, answered the question in the affirmative overruling the Ramesh Dwarikadas Mehra case (supra), the legality of which is the question, that falls for our consideration. FACTUAL MATRIX 6....
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....on "licensee" as used in sub-section (4A) of section 5 of the Rent Act and/or whether the expression "licensee" used in section 41(1) of PSCC Act is a term of wider import so as to mean and include a "gratuitous licensee" also? (ii) Whether a suit by a "licensor" against a "gratuitous licensee" is tenable before the Presidency Small Cause Court under section 41 of PSCC Act? Both the above mentioned questions, as already indicated, were answered by the Full Bench in the affirmative, the correctness of otherwise of those findings is the issue that falls for our consideration. Arguments 10. Shri Soli J. Sorabjee, learned senior counsel appearing for the appellants, submitted that the Full Bench was in error in overturning a well-reasoned judgment of the Division Bench of the High Court in Ramesh Dwarkadas Mehra's case and contended that the licence created by the plaintiffs in favour of the defendants was admittedly gratuitous and hence a suit for eviction of such a licensee is not maintainable in a Small Causes Court. Further, it was pointed out that the intention of the Legislature was that the "licence" contemplated in Section 41 of PSCC Act must take its colour f....
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....tion of the Small Causes Court to eviction proceedings and proceedings for the recovery of rent/licence fee, not to evict a gratuitous licensee. Shri Sorabjee also submitted that the expression "licence" contemplated in Section 41 of PSCC Act does not include a gratuitous licensee, which is also in consonance with the principle of Nocitur a sociis, which provides that words must take colour from words with which they are associated. In support of this contention, reliance was placed on the judgment of this Court in Ahmedabad Pvt. Primary Teachers Assn.'s case. 13. Shri Sorabjee also submitted that the respondents have proceeded on a wholly incorrect premise that the Rent Act 1947 only protects the licensees who were in possession on 01.02.1973. It was pointed out that by virtue of 1973 Amendment to the Rent Act 1947, protection was given to all "licensees" defined in Section 5(4A). It was also submitted that certain licensees were given the status of deemed tenants under Section 15A and that only those licensees who had subsisting license on 01.02.1973 were given the status of deemed tenants. Learned senior counsel pointed out that if all the licensees were deemed tenants, there....
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....d that the Maharashtra Act of 1976 made necessary changes in Chapter VII of PSCC Act which contained Sections 41 to 49 and by virtue of the amendment, the pecuniary restriction on the jurisdiction of the Small Causes Court placed by Section 18 has been removed to speed up the proceedings for eviction and to avoid multiplicity of proceedings. The Legislature also intended that all cases of licensees and tenants should be tried only by the Small Causes Court under Section 41(1) of PSCC Act. 16. Before considering the rival contentions raised by the counsel on either side and the reasoning of the Full Bench, it is necessary to examine the historical settings of the various legislations. LEGISLATIVE HISTORY PSCC Act: 17. The PSCC Act came into force on 01.07.1882. In that year, the Transfer of Property Act as well as the Easements Act was also enacted. Under the PSCC Act, Small Causes Courts were established in Calcutta, Madras, Ahmedabad and Bombay and the PSCC Act was enacted to consolidate and amend the law relating to Courts of Small Causes established in the Presidency Towns. Small Causes Court was conferred with the jurisdiction to try all suits of a civil nature wher....
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....r possession irrespective of value of the subject-matter. Suits between landlord and tenant pending on the original side of the High Court were transferred to the Presidency Small Cause Courts, Mumbai and were to be tried under the provisions of the Rent Act. Even landlords were prohibited from recovering any amount in excess of standard rent which was pegged down at the level of rent in September, 1940 or on the date of first letting. Even the landlord's right of evicting tenant was also severely curtailed and the landlords could recover possession only on proof of grounds of eviction enumerated under the Rent Act, therefore, they started letting out their premises under an agreement of leave and license. Proceedings for recovery of possession against the licensee though started filing suits under Section 41 of the Small Cause Courts Act, the defendants in those cases starting denying that there were licensees but tenants and that the agreement of leave and licence was sham and bogus and hence not binding. Even the findings rendered by the Small Cause Court in exercise of its jurisdiction under Section 41 on the question of tenancy was not final and the aggrieved party had a r....
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....notorious that the Bombay Rents, Hotel and lodging House Rates Control Act, 1947, is being avoided by the expedient of giving premises on leave and license for some months at a time; often renewing from time to time at a higher license fee. Licensees are thus charged excessive license fees' in fact, several times more than the standard rent, and have no security of tenure, since the licensee has no interest in the property like a lessee. It is necessary to make provision to bring licensees within the purview of the aforesaid Act. It is therefore provided by Cl.14 in the Bill that persons in occupation on the 1st day of February 1973 (being a suitable anterior date) under subsisting licenses, shall for the purposes of the act, be treated as statutory tenants and will have all the protection that a statutory tenant has, under the Act. It is further provided in Cl. 8 that in the case of other licenses, the charge shall not be more than a sum equivalent to standard rent and permitted increases, and a reasonable amount for amenities and services. It is also provided that no person shall claim or receive anything more as license fee or charge, than the standard rent and permitted increas....
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.... recovery of possession of any immovable property or of licence fees or charges of rent thereof, to which the provisions of the Bombay Rents, Hotels and Lodging House Rates Control Act, 1947, the Bombay Government Premises (Eviction) Act, 1955, the Bombay Municipal Corporation Act, the Bombay Housing Board Act, 1948 or any other law for the time being in force, applies. 25. The Statement of Objects and Reasons of the 1976 Amendment is also relevant and same is extracted hereunder: " STATEMENT OF OBJECTS AND REASONS At present in Greater Bombay, all suits and proceedings between a landlord and tenant relating to recovery of possession of premises or rent, irrespective of the value of the subject matter lie in the Court of Small Causes, Bombay under Section 28 of the Bombay, Rent, Hotel and Lodging House Rates Control Act, 1947. Under that section, suits and proceedings for the recovery of the license fee between a licensor and licensee as defined in that Act also lie in the Court of Small Causes, irrespective of the value of the subject matter. Under Chapter VII of the Presidency Small Causes Court Act, 1882 an application can be made by a licensor for recovery of posses....
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....licensor" and "licensee" in Section 41(1) of the PSCC Act by the 1976 Amendment and also whether all disputes between licensors and licensees are intended to be tried only by the Small Causes Courts. Before embarking upon such an exercise, we have to deal with the basic principles of interpretation of the expressions which figures in the Statutes under consideration. Golden Rule 27. Golden-rule is that the words of a statute must be prima facie be given their ordinary meaning when the language or phraseology employed by the legislature is precise and plain. This, by itself proclaims the intention of the legislature in unequivocal terms, the same must be given effect to and it is unnecessary to fall upon the legislative history, statement of objects and reasons, frame work of the statute etc. Such an exercise need be carried out, only when the words are unintelligible, ambiguous or vague. 28. It is trite law that if the words of a Statute are themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The above principles have been applied by this Court in several cases, the judgments of which are rep....
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.... a suit between the licensor and licensee, relating to recovery of licence fee, therefore, if a licensee is covered by Section 15A read with Section 5(4A) of the Rent Act 1947, the suit under Section 41(1) would not be maintainable. Section 41(1), therefore, takes in its compass "licensees" who do not fall within the ambit of Section 5(4A) read with Section 5(11) and Section 15A of the Rent Act 1947. 32. Gratuitous licensee, it may be noted, does not fall within Section 5(4A) read with Sections 5(11) and 15A of the Rent Act 1947. The provisions of Section 41(1) also do not specifically exclude a gratuitous licensee or makes any distinction between the licensee with material consideration or without material consideration. Further, it may also be noted that Section 28 of the Rent Act 1947 do not confer jurisdiction on the Small Causes Court to entertain a suit against a gratuitous licensee. Section 28 read with Section 5(4A) would show that a party who claims to be a gratuitous licensee is not entitled to any protection under the Rent Act 1947. PARI MATERIA: 33. Viscount Simonds in A.G. v. HRH Prince Ernest Augustus of Hanover (1957) 1 All ER 49, conceived the above mention....
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....law is cognizable by the Court of Small Causes Bombay as per Section 41(1) of the PSCC Act or whether it is cognizable by City Civil Court, Bombay? This Court while dealing with that question held that the Court of Small Cause have jurisdiction and that in Section 41(1) of the PSCC Act and Section 28 of the Bombay Rent Act, 1947, pari materia words are used, about the nature of the suits in both these provisions, for conferring exclusive jurisdiction on Small Causes Courts. Paragraphs 17 and 18 of that judgment would make it clear that in that case this Court only observed that some expressions in Section 28 of the Rent Act only are pari materia with the expressions employed in Section 41(1) of the Small Cause Court and not stated that the PSCC Act and the Rent Act are pari materia statutes. 36. We may in this respect refer to Section 51 of the Rent Act which provides for the removal of doubt as regards proceedings under Chapter VII of the PSCC Act which states that for removal of doubt, it is declared that unless there is anything repugnant in the subject or context references to suits or proceedings in this Act shall include references to proceedings under Chapter VII of the P....
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....C 436, Viscount Simonds has opined that "a word or phrase in an enactment must always be construed in the light of the surrounding text. "....words and particularly general words, cannot be read in isolation; their colour and their content are derived from their context." Noscitur a sociis is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words are intentionally used by the legislature in order to make the scope of the defined word correspondingly wider. The above principle has been applied in several judgments of this Court like The State of Bombay and Others v. The Hospital Mazdoor Sabha and Others [AIR 1960 SC 610, (1960) 2 SCR 866] Bank of India v. Vijay Transport and Others, [AIR 1988 SC 151, (1988) 1 SCR 961], M/s Rohit Pulp and Paper Mills Ltd. v. Collector of Central Excise, (1990) 3 SCC 447, Samatha v. State of Andhra Pradesh, (1997) 8 SCC 191, M/s Brindavan Bangle Stores & Ors. v. The Assistant Commissioner of Commercial Taxes & Another, (2000) 1 SCC 674 etc. 39. We find the expression "licensee" in Section 41 of the PSCC Act has been used to fully achieve the object and purpose especially of 1976 Amendment Act and legi....
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....all the suits and proceedings between a "licensor" and a "licensee" relating to recovery of possession of any immovable property or relating to recovery of licence fee. Section 5(4A) of the Rent Act defines the term "licensee" so also Section 52 of the Indian Easement Act, 1882. Sub-section (4A) of Section 5 of the Rent Act provides that "licensee" means a 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". The definition of "licensee" under sub-section (4A) of Section 5 is both exhaustive as well as inclusive. But it is relevant to note that the licensee under sub-section (4A) must be a licensee whose licence is supported by material consideration meaning thereby a gratuitous licensee is not covered under the definition of licensee under sub-section (4A) of Section 5 of the Rent Act. 43. Let us now examine the definition of "licence" under Section 52 of the Indian Easement Act which provides that where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would....
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....ate that the word licence is not popularly understood to mean that it should be on payment of licence fee, it can also cover a gratuitous licensee as well. In other words, a licensor can permit a person to enter into another's property without any consideration, it can be gratuitous as well. 47. We have already indicated the expression "licence" as reflected in the definition of licensee under sub-section (4A) of Section 5 of the Rent Act and Section 52 of the Indian Easement Act are not pari materia. Under sub-section (4A) of Section 5, there cannot be a licence unsupported by the material consideration whereas under Section 52 of the Indian Easement Act payment of licence fee is not an essential requirement for subsistence of licence. We may indicate that the legislature in its wisdom has not defined the word "licensee" in the PSCC Act. The purpose is evidently to make it more wide so as to cover gratuitous licensee as well with an object to avoid multiplicity of proceedings in different courts causing unnecessary delay, waste of money and time etc. The object is to see that all suits and proceedings between a landlord and a tenant or a licensor and a licensee for recovery of ....
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....s is a key to unlock the mind of legislature in relation to substantive provisions of statutes and it is also well settled that a statute is best interpreted when we know why it was enacted. This Court in Bhaiji v. Sub Divisional Officer, Thandla and Ors. (2003) 1 SCC 692 stated that the weight of the judicial authority leans in favour of the view that the statement of objects and reasons cannot be utilized for the purpose of restricting and controlling statute and excluding from its operation such transactions which it plainly covers. Applying the above-mentioned principle, we cannot restrict the meaning and expression licensee occurring in Section 41(1) of the PSCC Act to mean the licensee with monetary consideration as defined under Section 5(4A) of the Rent Act. ONE UMBERALLA POLICY 50. We are of the considered view that the High Court has correctly noticed that the clubbing of the expression "licensor and licensee" with "landlord and tenant" in Section 41(1) of the PSCC Act and clubbing of causes relating to recovery of licence fee is only with a view to bring all suits between the "landlord and tenant" and the "licensor and licensee" under one umberalla to avoid unneces....