Mr. Ashok Vadilal Shah and Smt. Smita Ashok Vadilal Shah vs Shri Jayantilal Mandlal Kothari

R.M. Lodha, J.—By means of this revision application, the petitioner seeks to challenge the two orders passed by the Competent Authority on 22.7.97. On that day, the Competent Authority first rejected the application made by the present petitioner for leave to defend the application for eviction and the condonation of delay and then by a separate order passed an order of eviction u/s 13A(2) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.

The brief facts necessary for disposal of this revision application may be thus narrated. The respondent No. 1 herein (to be referred as original applicant for the sake of convenience) made an application for eviction against one Mr. Bhikalal Sundarji Vakaria (for the sake of convenience to be referred as original respondent No. 1 hereinafter) and the present petitioners Ashok Vadilal Shah and Smt. Smita Ashok Vadilal Shah (hereinafter to be referred as original respondent No. 2) before the Competent Authority Konkan Division, Bombay. The original applicant inter alia averred that he is builder promoter who constructed a building on the plot of land of Plot No. D-1 and Plot No. 15 at the corner of Cross Road No. 3 of Mamlatdarwadi Main Road, Malad (West), Mumbai, known as Kothari Apartment and under the agreement dated 19.11.1975, he agreed to grant a licence to the original respondent No, 1 to remain in use and occupation of Flat No. 5 on the second floor in the building Kothari Apartment on payment of full consideration as a lumpsum one time licence fee as described in Part II, 111 and IV of Schedule annexed to the agreement dated 19.11.1975 and the said licence was capable of being revoked automatically in breach of any of the terms and conditions of the said agreement and any default thereof. The original respondent No. 1 upon signing the agreement dated 19.11.1975 requested the original applicant to treat the deposit of Rs. 95.609/- made by him as lumpsum licence fee and further requested the original applicant that the balance amount of Rs. 1751/- would be paid after some time. It is the case of the original applicant that original respondent No. 1 was liable to pay to him a sum of Rs. 250/- for making deposit for shares to be subscribed for formation of co-operative housing society and Rs. I/- as admission fee and/or otherwise also Rs. 1751/ already prescribed in para 4 of the agreement dated 19.11.1975 before or after the occupation. The original applicant was to form a co-operative housing society only after all the fourteen occupants join in the formation of the said society and paid the shares money. According to the original applicant, it was agreed that if the original respondent No. 1 failed to pay any amount, he would not be taken as member in the society and he would be responsible for all actions for his default and failure to comply with the provisions of Clause 22 of the agreement dated 19.11.1975 shall bring to an end the said agreement and the money paid to the original applicant shall stand forfeited. It is the case of the original applicant that the original respondent No. 1 committed breach of the agreement dated T 9.11.1975 and accordingly, the agreement was revoked on 31.3.1978 and the amount paid by the first respondent was forfeited. The original applicant averred that after the agreement came to an end on 1.4.1978 the original respondent No. 1 orally assured the original applicant that he would pay a sum of Rs. 1751/ - but he did not do so. The first respondent violated Clause 10-B of the agreement and left the premises in the month of April, 1990 by transferring his right in favour of the original respondent No. 2. In para 14 of the application; the original applicant pleaded that the original respondent No. 1 has already assigned his right, title, interest and benefit of agreement dated 19.11.1975 in favour of the assignee way back in the month of April, 1990 and if the original respondent No. 1 wanted revival of the original agreement he was bound to pay the balance amount due to the original applicant which was agreed to be paid by original respondent No. 2 to the original applicant and also an amount of Rs. 20.000/- being repair charges of the building. The letter of no objection signed by the original applicant in favour of respondent No. 1 was in good faith on compliance of aforesaid conditions which was never complied with and therefore, the said document has no legal support. The original applicant has stated in the application that original respondent No. 1 also did not pay any amount to the original applicant despite having agreed to do so vide their letter dated 14.5.1992 and the original respondent No. 2 has further violated Clause 24 of the agreement and demolished the lay out and construction of the portion of the premises in question and made structural changes. It was thus alleged that both the original respondent Nos. 1 and 2 have committed breaches and made defaults and violated the terms of the agreement dated 19.11.1975 and therefore, prayed that both the respondents, original respondent Nos. 1 and 2 be ordered and decreed to hand over quiet, vacant and peaceful possession of the suit premises viz. Flat No. 5 on the second floor and further direction to the respondent Nos. 1 and 2 to pay mesne profits at the rate of Rs. 250/- per month or such other sum as may be ordered by the Competent Authority.

The original respondent No. 1 seems to have not chosen to appear despite service of summons of proceedings. The original respondent No. 2 were served with the summons on 8.6.96. An application for leave to defend with condonation of delay was made on 30th August, 1996. The Competent Authority by his order dated 22.7.97 dismissed the application made by the original respondent No. 2 for leave to defend with condonation of delay and on that very date, by a separate order passed an order of eviction necessitating filing of the present revision application by the original respondent No. 2.

Mr. Thorat, learned senior counsel appearing for the petitioners raised two-fold contentions in support of revision application. His first contention is that, on the face of the averments made in the application made by the original applicant, Section 13A(2) was not attracted and the Competent Authority had no jurisdiction. The submission of the learned senior counsel is based on the facts that, according to the averments made in the application for eviction u/s 13A(2), the date of the licence agreement 19.11.1975. In the application in unequivocal terms it has been stated that the said agreement for licence due to breaches and defaults by the original respondent No. 1 came to an end on 31.3.1978. According to Mr. Thorat, the provisions of Section 13A(2) came into force vide Maharashtra Amending Act No. 18 of 1987 with effect from 1.10.1987 and the said provision is not retrospective and cannot be invoked to the licence which stood terminated or revoked prior to 1.10.1987. In support of this contention Mr. Thorat, learned senior counsel appearing for the petitioners relied upon the judgment of this Court in Dinkar Keshav Deshmukh Vs. Vasantdada Sugar Institute, . The second contention of the learned senior counsel for the petitioners is that the original respondent No. 2 (petitioners herein) are not party to the so-called licence agreement dated 19.11.1975, Even if it be assumed that it was open to the original applicant to make an application u/s 13A(2) though the licence expired prior to 1.10.1987, the Competent Authority under Sub-section 3 of Section 13A(2) has no jurisdiction to entertain any claim of whatever nature against the person who is not a licensee according to the agreement of licence.

On the other hand, Mr. Pandya, learned Counsel appearing for the original applicant (respondent No. 1 herein) supported the order of eviction passed by the Competent Authority. He submitted that once the application for leave to defend made by the petitioners herein (original respondent No. (1) was rejected by the Competent Authority, the Competent Authority did not commit any error In passing the order of eviction on the application made by the original applicant u/s 13A(2) of Bombay Rent Control Act.

It is true that the application for leave to defend was not made by the present petitioners (original respondent No. 2) before the Competent Authority within time. Mr. Thorat, learned senior counsel appearing for the petitioners did not dispute that summons of the proceedings was served upon the petitioner on 8.6.96 and that application for leave to defend with condonation of delay was made on 30th August, 1996 and therefore, the application for leave to defend was barred by 52 days. In the absence of any sufficient cause shown by the petitioners in making application for leave to defend belatedly, the Competent Authority cannot be said to have erred in rejecting the application for leave to defend. This aspect was not challenged by Mr. Thorat. I, therefore, have to hold that the Competent Authority did not commit any error in rejecting the application made by the petitioners for condonation of delay and refusing to grant leave to the petitioners to defend. However, that is not end of the matter. The contention of the learned senior counsel for the petitioners that Section 13A(2) on the face of the averments made in the application by the original applicant could not have been invoked needs to be examined. It would be seen that the original applicant in the application has in unequivocal terms averred at various places that the agreement dated 19.11.1975, which is the agreement of licence, according to the original applicant, came to an end on 31.3.1978 due to breaches and defaults by the original respondent No. 1. Thus, according to the averment made in the application, the agreement of licence had come to an end on 31.3.1978. The question that arises is whether the provisions of Section 13A(2) which came to be enacted with effect from 1.10.1987 could be invoked to the licences which had expired or been terminated and were not subsisting on 1.10.1987 when provisions of Section 13A(2) came into effect.

The relevant portion of the Bombay Rent Control Act reads thus:

In areas to which this Part is extended under Sub-section (3) of Section 2, it shall apply to premises let (or given on licence) for which of the purposes referred to (in Sub-section (1) or notified under Sub-section (1A) or let for such standard rent as the (State) Government may, by notification in the Official Gazette, specify.

Section 13A(2) which came into force with effect from 1.10.1987 on the commencement of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 reads thus:

13A(2). Landlord entitled to recover possession of premises given on licence on expiry of licence. (1) Notwithstanding anything contained in this Act, a licensee in possession or occupation of premises given to him on licence for residence shall deliver possession of such premises to the landlord on expiry of the period of licence; and on the failure of the licensee to so deliver the possession of the licensed premises, a landlord shall be entitled to recover possession of such premises from a licensee, on the expiry of the period of licence by making an application to the Competent Authority; and the Competent Authority, on being satisfied that the period of licence has expired, shall pass an order for eviction of a licensee.

(2) Any licensee who does not deliver possession of the premises to the landlord on expiry of the period of licence and continues to be in possession of the licensed premises till he is dispossessed by the Competent Authority shall be liable to pay damages at double the rate of the licence fee or charges of the premises fixed under the agreement of licence.

(3) The Competent Authority shall not entertain any claim of whatever nature from any other person who is not a licensee according to the agreement of licence.

Explanation. - For the purposes of this section -

(a) the expression "landlord" does not include a tenant or a sub-tenant who has given premises on licence ;

(b) an agreement of licence in writing shall be conclusive evidence of the fact stated therein.

The fair reading of Section 13A(2) leaves no manner of doubt that the said provision which came into force with effect from 1.10.1987 cannot be applied to the licences which had already expired or stood terminated prior to 1.10.1987. The said Section 13A(2) cannot be given retrospective effect to apply to licences which accrued prior to 1.10.1987 and stood revoked or terminated or came to an end prior to 1.10.1987. The licences which were not subsisting on 1.10.1987 cannot be governed by the provision of Section 13A(2) which is effective from 1.10.1987. In Dinkar Keshav Deshmukh (supra), the learned Single Judge of this Court has taken the view that provisions of Section 13A(2) are prospective in operation and not applicable to the cases where licence stood terminated prior to 1.10.1987. I concur with the view taken by the learned Single Judge in Dinkar Keshav Deshmukh (supra). Para 7 of the said report reads thus:

Mr. Pitre the learned Counsel appearing on behalf of the licensee on the other hand contended that Misc. Application No. 20 of 1992 was instituted as a counterblast because the licensee had filed a Declaratory Suit seeking protection of the Bombay Rent Act prior to the present Misc. Application No. 20 of 1992. Mr. Pitre further contended that Maharashtra Amending Act 18of 1987 is not retrospective. Mr. Pitre placed heavy reliance on the Judgment of the learned Single Judge of this Court in the case of Ravindranath H. Hiremath (Lt. Col.) v. Prashani kumar Buttani 1994 Mh. L.J. 1731. Mr. Pitre further contended that Part IIA contemplates summary procedure for trial of the Applications before the Competent Authority. Mr. Pitre contended that in fact, u/s 31E Special procedure for disposal of Applications is laid down under which the Licensee is required to obtain permission and leave of the Competent Authority before filing the Written Statement to defend the action (See Section 31E(4)). Mr. Pitre further contended that u/s 13A(2), a Licensee who does not deliver possession of the premises to the landlord on the expiry of the period of licence and who continues to be in possession till he is dispossessed shall be liable to pay damages at double the rate of the licence fee. Similarly, Mr. Pitre drew my attention to Section 13A(2) Sub-clause (3) which states that the Competent Authority shall not entertain any claim of whatever nature from any other person who is not a licensee according to the Agreement of Licence. Mr. Pitre drew my attention to Explanation (b) under which it is laid down that the Agreement of Leave and Licence in writing shall be conclusive evidence of the fact stated therein, Mr. Pitre, therefore, contended that the entire Scheme introduced by Maharashtra Amending Act 18 of 1987 constitutes a separate Code by itself. Mr. Pitre further contended that in view of the Judgment of the learned Single Judge in Ravindra nath''s case (supra), it is clear that if the licence has expired prior to October 1, 1987 or in respect of which any proceedings are pending in the Court then Section 13A(2) is not applicable (See para 10 of the said Judgment). 1 find merit in the contention advanced by Mr. Pitre the learned Counsel appearing on behalf of the licensee. Section 13A(2) applies to a Licensor-landlord who is the owner of the Flat. Section 13A(2) is restricted to premises given on licence for residence only. The said section does not apply to premises given on licence for non-residential purposes. At this stage, it may be mentioned that there is a dispute between the parties as to whether the premises are given for residential purposes or not. But that question is not necessary for deciding the present dispute in this petition. The contentions to attract Section 13A(2) are as under:-

(i) The Licensor should be the owner of the Flat.

(ii) The premises must have been given on licence.

(iii) Period of licence should have expired.

(iv) The Licensed Agreement may be in writing or oral.

Section 13A(2) Starts with a non obstante clause. For the purposes of deciding the present controversy, to my mind, the most important aspect of this case is that the jurisdictional fact which gives power to the Competent Authority to decide the matter is that the licence should have expired. In the present case, the licence stood expired in 1980 i.e. much prior to October 1, 1987. In paragraph 5 of the Application No. 20 of 1992 the Licensor-Petitioner has conceded that the cause of action arose initially in 1980 when the licence expired. This aspect is also important because the terms and conditions embodied in the Agreement are made conclusive. In other words, when the Amending Act came into force the license had come to an end even on the basis of the tenor of the said Agreement. It is true that in paragraph 5 of the Application, it is contended that further cause of action arose on October 15, 1991 when notice was given by the Licensor to the Licensee to vacate the premises. But that, to my mind, is only a plea taken up in order to bring the present dispute u/s 13A(2). Applying the ratio of the Judgment of the learned Single Judge in Ravindranath''s case, it is clear that Maharashtra Amending Act 18 of 1987 cannot be read retrospective to cases where a licence was created prior to October 1, 1987 and the said licence stood terminated prior to October 1, 1987 or in respect of which proceedings are pending in the Court. To such cases Section 13A(2) will not apply (See paragraph 10 of the said Judgment). Even giving harmonious construction to the provisions of Sections 13A(2), 31E, 31H, 31I, it is clear that Maharashtra Amending Act 18 of 1987 cannot apply to licences which stood terminated by efflux of time prior to October 1, 1987. It needs to be clarified that if the licence expired after October 1, 1987 as in the case of Ravindranath H. Hiremath (supra) then Section 13A(2) stands attracted. Further, in the present case, I am not inclined to accept the contention advanced on behalf of the Petitioner that in view of Section 31H(2) the landlord can seek to recover possession by withdrawing the Suit against the tenant with the leave of the Court and thereafter proceed against the tenant under Part IIA of the Act. A bare reading of Section 31H indicates that it does not apply to Proceedings u/s 13A(2) but it applies only to provisions of Section 13A(1). Lastly, it may be mentioned that if the contention of the Petitioner is accepted it would lead to anomaly. Large number of Declaratory Suits are filed in the Small Causes Court prior to October 1, 1987. Similarly, suits are also filed for possession prior to October 1, 1987 under Presidency Small Causes Court Act in which dispute between Licensor and Licensee arises. If the argument of the learned Counsel for the petitioner is accepted, it would mean that all those suits will stand abated or in those suits the Licensor will withdraw the suits with the permission and thereafter once again apply to the Competent Authority, this was never intended by the Amending Act 18 of 1987. Further, It may be mentioned that even in Dalal''s Rent Act (FifthEdition) at page 662, the learned Author after construing various provisions referred to above has observed that in respect of licences which have expired prior to October 1, 1987 and prior suit or proceedings are pending then the same are not intended to be transferred to the Competent Authority.

Since according to the original applicant, the agreement for licence came to an end on 13.3.78 viz, it was not subsisting and/or existing on 1.10.1987, provisions of Section 13A(2) could not have been attracted and when provisions of Section 13A(2) could not be attracted, the application for eviction made by the original applicant u/s 13A(2) was not maintainable and could not have been allowed on its face. The Competent Authority, thus, committed serious error of law and jurisdiction in passing an order of eviction on the application u/s 13A(2) made by original applicant when the said provisions could not have been invoked by original applicant.

The second contention raised by the learned senior counsel for the petitioner also has merit and deserves to be accepted. It would be seen that the present petitioners who are original respondent No. 2 are admittedly not the parties to the agreement of licence dated 19.11.1975. In the entire application for eviction, the original applicant has not averred that the original respondent No. 2 is a licensee under the said agreement dated 19.11.75. The agreement dated 19.11.1975 is between original applicant and original respondent No. 1. So far as respondent No. 2 is concerned, it appears that original respondent No. 1 transferred his rights or interest in the suit flat to original respondent No. 2. Since the original respondent No. 2 viz. petitioners herein are not licensees, u/s 13A(2)(3), the Competent Authority had no jurisdiction to entertain any claim of whatever nature against original respondent No. 2 who are not licensees according to the agreement of licence. Sub-section 3 of Section 13A(2) provides in an unequivocal terms that the Competent Authority shall not entertain any claim against the person who is not a licensee, according to the agreement of licence. Accordingly, the order passed against the present petitioners (original respondent No. 2) by the Competent Authority is palpably without jurisdiction and has to be set aside.

In view of the a foregoing discussion, revision application is allowed. The order of eviction dated 22.7.97 passed by the Competent Authority Konkan Division, Mumbai against the present petitioners is quashed and set aside. No costs.