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PETITIONER: BHATIA CO-OPERATIVE HOUSINGSOCIETY LTD.

       Vs.

RESPONDENT: D. C. PATEL.

DATE OF JUDGMENT: 05/11/1952

BENCH: DAS, SUDHI RANJAN BENCH: DAS, SUDHI RANJAN MAHAJAN, MEHR CHAND BOSE, VIVIAN BHAGWATI, NATWARLAL H.

CITATION:  1953 AIR   16            1953 SCR  185  CITATOR INFO :  RF         1957 SC 344  (20)  F          1958 SC 789  (8)  RF         1963 SC 468  (9)  D          1966 SC1024  (7)  RF         1978 SC1217  (34)  D          1988 SC1313  (8)  D          1988 SC1531  (125)  F          1991 SC 844  (14)

ACT: Bombay Rents, Hotel and Lodging House BatesControlAct  (LVII of  1947) s. 4 (1)-Suit by lessee of premises  belonging  to Government   or   local   authority   against    sub-lessee- Applicability  of  Act-Jurisdictioin  of  City  Civil  Court Construction  of  lease--Ownership  of building  put  up  by lessee-Jurisdiction  of  Courts--Inherent  power  to  decide question of jurisdiction.

HEADNOTE: Section 4 of the Bombay Rents, Hotel and Lodging House Rates Control  Act,  1947, which provides that the Act  shall  not apply  to  premises belonging to the Government or  a  local authority  applies not only to suits between the  Government or  a local authority as a landlord against the lessee,  but also  to  suits  by a lessee of the Government  or  a  local authority against his sublessee.  The indemnity conferred is in  respect  of premises belonging to the  Government  or  a local authority. A  building site was auctioned to a person by the  City  Im- provement  Trust of Bombay with a condition that the  bidder Was to put up a building of a certain description at a  cost of not less than Rs. 50,000 and after the Completion of  the building, the site and the building were to be leased to the bidder for a period of 999 years at a fixed yearly rent. Held,    a construction of the lease-deed that the  building put  up by the bidder belonged to the Trust and not  to  the bidder  and a suit by the lessee against his sub-lessee  was not governed by the-Bombay Rents, Hotels and.  Lodging House Rates Control Act, 1947, as the premises belonged to a local authority within the meaning of s. 4 (1) of the Act, and the

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suit could accordingly be instituted in the City Civil Court of Bombay. A  civil  Court  has inherent  jurisdiction  to  decide  the question  of  its own jurisdiction and to entertain  a  suit although as a result of the inquiry it may turn out that  it has no jurisdiction.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 18 of  1952. Appeal from the Judgment and Order dated December 12,  1949, of  the High Court of Judicature at Bombay (Weston and  Shah JJ.)  in First Appeal No. 456 of 1949, arising out of  Judg- ment and Decree dated January 24, 1949, of the 186 Bombay City Civil Court in Civil Suit No. 106 of 1948.  M.C. Setalvad, Attorney-General for India, (S.B.Jatharwith him) for the appellant.  N. P. Engineer (E.  H. Bhaba with him) for the respondent.  1952.  November 5. The Judgment of the Court was delivered by DAS  J.-This  is an appeal filed with the special  leave  of this Court.  It is directed against the judgment and  decree passed    December 2, 1949, by a Division Bench (Weston  and Shah  JJ.) of the Bombay High Court reversing,   the  ground of  absence  of jurisdiction, the judgment  and  decree  for possession  passed    January 24, 1949, by the  Bombay  City Civil  Court  and  directing the return of  the  plaint  for presentation to the proper Court. There  is  no  dispute  as to the  facts  material  for  the purposes  of  this appeal.    or about April 15,  1908,  the Board of Trustees for the Improvement of the City of  Bombay put  up  to auction plots Nos. 16, 17 and 18 of  new  survey Nos.  8234,  8235  and 8244 situate    the  Princess  Street Estate of the Board containing an area of 2235 square  yards for being let   certain conditions.  One Sitaram Luxman  was the highest bidder and was declared the tenant at an  annual rent  per square yard to be calculated at the rate  of  41/2 per  cent  of  Rs.  29 per square yard  and  he  signed  the memorandum  of agreement incorporating the  conditions  upon which  the  auction was held and by which he  agreed  to  be bound.  He deposited the moneys in terms of clause 3 of  the conditions, and upon such payment entered into possession of the  plots.  By clause 7 Sitaram Luxman agreed,  within  the time  specified therein, to build and complete at a cost  of not  less than Rs. 50,000 a building consisting of 5  floors with  suitable offices, drains etc. according to  plans  and specifications  to  be  made by an  approved  architect  and approvedby the Board By clause 17                            187 he agreed, so soon as the main building should be roofed in, to  insure  in the joint names of the Board and  of  himself and, until the granting of the lease thereinafter  provided, keep  insured  the buildings and works   the plots  for  the full  value  thereof.  Clause 18 of the  conditions  was  as follows:- "18.   The lease.  Immediately after the  completion  within the  time limited by condition 7 of the said  buildings  and works to the satisfaction of the Trust Engineer testified by his  certificate the Trustees will if the contract  has  not previously  been  determined  grant to  the  tenant  or  his approved  nominee who shall accept the same a lease  of  the said  plot with buildings thereon for the term of 999  years

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from  the date of the auction at the yearly rent  calculated in accordance with the accepted bidding for the plot." Clause 25 gave power to the Board, if the buildings were not completely finished within the stipulated time and   certain other  contingencies,  to forfeit the deposit and  to  enter upon  and retain possession of the plots and  all  buildings and works then standing thereon. Pursuant  to this agreement the said Sitaram Luxman  erected those  plots a building which has since come to be known  as the New Sitaram Building.    the completion of the building, by  an Indenture -of lease made   April 19,  1916,  between, the  Trustees for the Improvement of the City of Bombay  and one Rustomji Dhunjibhoy Sethna the receiver of the estate of Sitaram  Luxman appointed by the High Court in Suit No.  720 of 1913, the Trustees, pursuant to the said agreement and in consideration  of the monies which had been expended in  the erection of the buildings and of the rent and the  covenants thereinafter reserved and contained, demised unto the lessee all  that  piece  of land situate    their  Princess  Street estate  together with the buildings erected thereon to  hold the same for 999 years from April 15, 1908, paying  therefor up  to January, 15, 1909, the rent of Re.  I and during  the remainder of 188 the  term  the yearly rent of Rs. 2,916 by  equal  quarterly payments.   By the said Indenture the lessee  covenanted  to pay all rates and taxes, not to use or to permit to be used, without the lessor’s consent, the portion of land not  built upon except as open space, not to pull down, add to or alter the  buildings without such consent, to keep in  repair  all drains  sewers etc., to repair, pave, cleanse and paint  and amend  all the buildings, walls etc., to permit the  lessors and  their employees to enter upon the premises  to  inspect the  conditions  thereof    48 hours’  notice,  to  use  the demised premises for residential purposes or as offices  and schools only and not as a public house or liquor shop or for any  business  or  trade, throughout the term  to  keep  the buildings  insured  against fire in the joint names  of  the lessor and the lessee and to rebuild or reinstate and repair the  building if destroyed or damaged by fire or  otherwise. There was a proviso for re-entry for nonpayment of rent  for 30 days or for breach of any of the lessee’s covenants. In  1925  all  the  properties  of  the  Trustees  for   the Improvement  of  the  City of Bombay vested  in  the  Bombay Municipality under and by virtue of Bombay Act XVI of  1925. By  a deed of assignment made   April 26, 1948, Shri  Bhatia Co-operative  Housing Society Limited, a society  registered under  the Bombay Co-operative Societies Act, VII  of  1921, the  appellant before us, acquired the lessee’s interest  in the demised premises.  June  29,  1948,  the  appellant  served  a  notice    the respondent before us who was a monthly tenant in  occupation of  Block  No.  B/2   the ground floor of  the  New  Sitaram Building  at  a  monthly rental of Rs. 52-5-9  to  quit  and vacate  the same   July 31, 1948.  By his  advocate’s  reply the  respondent maintained that he had been paying the  rent regularly and otherwise performing the terms of his  tenancy and  claimed the protection of the Bombay Rents,  Hotel  and Lodging House Rates Control Act, 1947 (Act LVII of 1947);                            189 The  respondent  not  having vacated  the  block  under  his occupation   the expiry of the notice to quit, the appellant filed summary Suit No. 106 of 1948 against the respondent in the City Civil Court at Bombay for vacant possession of  the said  Block  No.  B/2   the ground floor  of  the  said  New

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Sitaram  Buildings  and mesne profits from August  1,  1948, until  delivery of possession.  After stating  the  material facts,  the appellant submitted that the Bombay Act LVII  of 1947 did not apply to the demised premises.  The  respondent filed  his written statement maintaining that under  section 28 of the Bombay Act the CityCivil Court had no jurisdiction to entertain the suit.  He averred that he had performed and observed all the conditions of his tenancy and was ready and willing  to  do so, that the New Sitaram Building  had  been constructed at the expense of the appellant’s predecessor in title  and that the premises belonged to the  appellant  and not  to  the Government or a local authority  and  that  the respondent was entitled to the protection of the Bombay  Act LVII  of  1947.   Leaving out the issue as  to  whether  the appellant  was  entitled to any compensation, there  were  4 issues raising in effect two points, namely, (1) whether the Court  had jurisdiction and (2) whether the Bombay Act  LVII of 1947 applied to the premises in suit. The learned City Civil Court Judge in a well-considered  and careful  judgment  answered  the issues  in  favour  of  the appellant and decreed the suit.  The respondent appealed  to the High Court.  The High Court reversed the decision of the trial Judge and holding that the Bombay Act LVII of 1947 did apply  to the premises and consequently that the City  Civil Court,  by  virtue  of  section  28  of  that  Act,  had  no jurisdiction  to  entertain  the  suit,  directed  that  the plaint, be returned to the appellant for being filed in  the proper Court.  The High Court having declined to grant leave to  the  appellant to appeal to this  Court,  the  appellant applied for and obtained special leave 190 of  this Court to prefer this appeal and filed  this  appeal pursuant to such leave. Learned  counsel  for  the respondent took  a  preli  minary objection,  founded    the provisions of section 28  of  the Bombay Act, that the City Civil Court had no jurisdiction to entertain the suit, for that section clearly states that  in Greater  Bombay the Court of Small Causes alone  shall  have jurisdiction  to  entertain  and  try  any  suit  between  a landlord  and a tenant relating to the recovery of  rent  or possession of any premises to which any of the provisions of that  Part of the Act applied and to decide any  application made  under the Act and to deal with any claim  or  question arising  out  of  the Act and no  other  Court  should  have jurisdiction to entertain any suit or proceeding or to  deal with  such claim or question.  If, as contended for  by  the appellant,  the  Act does not apply to  the  premises,  then section  28 which is an integral part of the Act  and  takes away  the  jurisdiction of all Courts other than  the  Small Causes  Court in Greater Bombay cannot obviously be  invoked by  the respondent.  The crucial point, therefore, in  order to  determine the question of the jurisdiction of  the  City Civil Court to entertain the suit, is to ascertain  whether, in  view  of section 4 of the Act, the Act  applies  to  the premises  at all.  If it does, the City Civil Court  has  no jurisdiction   but  if  it  does  not,  then  it  has   such jurisdiction.   The question at once arises as to who is  to decide this point in controversy.  It is well settled that a Civil Court has inherent power to decide the question of its own  jurisdiction, although, as a result of its enquiry,  it may  turn  out that it has no jurisdiction  over  the  suit. Accordingly we think, in agreement with the High Court, that this preliminary objection is not well founded in  principle or   authority and should be rejected.        The  main controversy between the parties is  as  to

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whether  the  Act  applies to  the  demised  premises.   The solution   of   that  controversy  depends   upon   a   true construction  of  section 4 (1) of the Bombay  Act  LVII  of 1947, Which runs as follows:- 191 "4.  (1) This Act shall not apply to any promises  belonging to  the Government or a local authority or apply as  against the  Government  to any tenancy or other  like  relationship created  by  a  grant from the$  Government  in  respect  of premises,taken    lease or requisitioned by the  Government; but  it  shall  apply  in respect of  premises  let  to  the Government or a local authority." It  is  clear that the above sub-section  has  three  parts, namely- (1)  This  Act shall not apply to premises belonging to  the Government or a local authority, (2)  This  Act shall not apply as against the Government  to any tenancy or other like relationship created by grant from the  Government  in  respect of premises  taken    lease  or requisitioned by the Government, (3)  This Act shall apply in respect of premises lot out  to the Government or a local authority. The contention of the appellant Society is that the  demised premises belonged to the Trustees for the improvement of the City  of  Bombay and now belong to the  Bombay  Municipality both  of which bodies are local authorities and,  therefore, the  Act  does not apply to the demised  premises.   Learned counsel  for the respondent, however, urges that the  object of  the Act, as recited in the preamble, is inter  alia,  to control rent.  It follows, therefore, that the object of the legislation  was  that the provisions of the  Act  would  be applicable only as between the landlord and tenant.  Section 4  (1) provides for an exemption from or exception  to  that general  object.   The purpose of the; first  two  parts  of section  4  (1) is to exempt two cases  of  relationship  of landlord  and tenant from the operation of the Act,  namely, (1)  where  the  Government or a local  authority  lets  out premises belonging  to it, and (2) where the Government lets out premises taken on lease or requisitioned by it.  It will be  observed  that the second part of section  4  (1)  quite clearly  exempts  "any tenancy or other  like  relationship" created by the Government but the first part makes no 192 reference  to Any tenancy or other like relationship at  all but  exempts the premises belonging to the Government  or  a local authority.  If the intention of the first -#part  were as formulated in item (1), then the first part of section  4 (1), like the second part, would have run thus:- This  Act  shall  not apply to any tenancy  or  other  like- relationship  created  by Government or local  authority  in respect of premises belonging to it. The  Legislature was familiar with this form of  expression, for it adopted it in the second part and yet it did not  use that  form  in  the first.  The  conclusion  is,  therefore, irresistible that the Legislature did not by the first  part intend to exempt the relationship of landlord and tenant but intended to confer   the premises belonging to Government an immunity from the operation of the Act. Learned  counsel for the respondent next contends  that  the immunity given by the first part should be held   to      be available only to the Government or a local  authority    to which the premises belong.  If that were     the   intention then the Legislature would have used    phraseology  similar to  what  it did in the second part, namely, it  would  have expressly   made  the  Act  inapplicable  "as  against   the

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Government  or a local authority".  This it did not  do  and the only inference that can be drawn from this  circumstance is that this departure was made deliberately with a view  to exempt the premises itself. It  is  said  that if the first part of the  section  is  so construed  as to exempt the premises from the  operation  of the  Act,  not  only as between the Government  or  a  local authority    the  one hand and its lessee   the  other,  but also  as  between that lessee and his  subtenant,  then  the whole purpose of the Act will be frustrated, for it is  well known that most of the lands in Greater Bombay belong to the Government  or  one or other local authority,  e.g.,  Bombay Port Trust and Bombay Municipality and the greater number of tenants will not be able to avail themselves of the  benefit and protection of the Act.  In the first place, the                            193 preamble to the Act clearly shows that the object of the Act was to consolidate the law relating to the control of  rents and  repairs  of certain premises and not of  all  premises. The Legislature may well have thought that an immunity given to premises belonging to the Government or a local authority will  facilitate  the  speedy development of  its  lands  by inducing   lessees  to  take  up  building  leases     terms advantageous  to  the  Government  or  a  local   authority. Further,  as  pointed  out  by  Romer  L.  J.  in  Clark  v. Downes(1),  which case was approved by Lord Goddard C.J.  in Rudler v. Franks(1) such immunity will increase the value of the  right  of reversion belonging to the  Government  or  a local  authority.  The fact that the Government or  a  local authority  may be trusted to act fairly and  reasonably  may have  induced the Legislature all the more readily  to  give such  immunity to premises belonging to the Government or  a local authority but it cannot be overlooked that the primary object of giving this immunity was to protect the  interests of  the  Government or a local authority.   This  protection requires  that the immunity should be held to attach to  the premises  itself and the benefit of it should  be  available not only to the Government or a local authority but also  to the  lessee deriving title from it.  If the benefit  of  the immunity  was  given  only  to the  Government  or  a  local authority  and  not to its lessee as  suggested  by  learned counsel  for  the  respondent and the  Act  applied  to  the premises  as  against the lessee, then it must  follow  that under  section 15 of the Act it will not be lawful  for  the lessee  to sublet the premises or any part of it.   If  such were  the  consequences, nobody will take a  building  lease from  the Government or a local authority -and the  immunity given  to the Government or a local authority will, for  all practical purposes and in so far at any rate as the building leases  are concerned, be wholly illusory and worthless  and the  underlying purpose for bestowing such immunity will  be rendered wholly ineffective.  In our opinion, therefore, the consideration of the (I) [1931] 145 L.T. 20. (2) [1947] 1 K.B. 530. 194 protection  of the interests of the sub-tenants in  premises belonging  to  the Government or a  local  authority  cannot override the plain meaning of the preamble or the first part of  section  4  (1)  and  frustrate  the  real  purpose   of protecting and furthering the interests of the Government or a local authority by conf erring   its property an  immunity from the operation of the Act. Finally,  learned counsel for the respondent urges that  the words "belonging to" have not been used in a technical sense

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and  should be read in their popular sense.  It  is  pointed out  that it was the lessee who erected the building at  his own  cost, he is to hold it for 999 years, he has the  right of  subletting the building in whole or in part    rent  and terms  to be fixed by him, of ejecting sub-tenants,  and  of assigning the lease.  Therefore, it may fairly be said  that the  premises or, at any rate, the building belongs  to  the lessee  and the rights reserved by the lease to  the  lessor are  only  by way of security for the  preservation  of  the building which,   the expiry or sooner determination of  the lease, will vest in the lessor.  This line -of reasoning has found  favour  with  the  High Court  which  has  held  that although  in  form  the  building  belongs  to  the   Bombay Municipality  who  are  the successors in  interest  of  the lessors, in substance the building belongs to the appellant, the   assignee  of  the  lessee,  and  not  to  the   Bombay Municipality.   We are unable to accept this reasoning,  for we see no reason to hold, in the circumstances of this case, that  the substance does not follow the form. By the  opera- tive  part of the lease the demise is not only of  the  land but  also of the building standing thereon.  This demise  is ’certainly an act of ownership exercised by the lessor  over the land as well as the buildings. Under section 105 of  the Transfer  of  Property Act a lease is a transfer only  of  a right  to  enjoy  the demised, premises,  but  there  is  no transfer of ownership or interest in the demised promises to the  lessee  such as there is in a sale (section  54)  or  a mortgage (section 58). In the present case, the lessee cannot,   his 195 own covenant, use the buildings in any way he likes.  He has to  use  the  game  only  as  offices  or  schools  or   for residential  purposes  and  cannot,  without  the   lessor’s consent,  use them for purposes of any trade  or,  business. He  cannot pull down the buildings or make any additions  or alterations  without the lessor’s consent.  He cannot  build upon the open space.  He must, if the premises are destroyed by  fire  or otherwise, reinstate it.  The  lessor  has  the right  to  enter upon and inspect the premises at  any  time giving  48  hours’  notice.   All  these  covenants  clearly indicate that the lessor ha$ the dominant voice and the real ownership.   What are called attributes of ownership of  the lessee are only the rights of enjoyment which are common  to all  lessees under well drawn leases, but the ownership,  in the  land and in the building is in the lessor. It  is  true that the lessee erected the building a this own cost but  he did  so  for  the lessor and   the  lessor’s  land    agreed terms.   The  fact  that the  lessee  incurred  expenses  in putting  up the building is precisely the consideration  for the  lessor granting him a lease for 999 years not  only  of the building but of the land as well at what may, for all we know,  be  a  cheap  rent which  the  lessor  may  not  have otherwise  agreed  to  do.  By the  agreement  the  building became the property of the lessor and the lessor demised the land  and the building which, in the circumstances,  in  law and  in  fact belonged to the lessor.  The law  of  fixtures under  section  108 of the Transfer of Property Act  may  be different  from the English law, but section 108 is  subject to any agreement that the parties may choose to make.  Here, by  the agreement the building became part of the  land  and the  property  of  the lessor and the lessee  took  a  lease that footing.  The lessee or a person claiming title through him  cannot now be heard to say that the building  does  not belong  to the lessor.  Forfeiture does not, for  the  first time,  give title to the lessor.    forfeiture he  re-enters

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upon  what has all along been his own property.   Said  Lord Macnaghten in Heritable Reversionary Company v. Mullar(1):-- (I) (1892] A.C. 598 at  021, 196 "The  words ’Property’ and ’belonging to’ are not  technical words in the law of Scotland.  They are to be understood,  I think,  in  their ordinary signification.  They  are  infact convertible terms; you can hardly explain the one except  by using the other.  A man’s property is that which is his own, that which belongs to him.  What belongs to him is his  pro- perty." In  our  opinion the interest of the lessor in  the  demised premises  cannot  possibly  be -described  as  a  contingent interest  which  will become vested   the expiry  or  sooner determination  of the lease, for then the lessor  could  not have  demised the premises including the building as he  did or  before the determination, of the lease exercise any  act of ownership or any control over it as he obviously has  the right  to  do under the covenants referred  to  above.   The truth  is that the lessor, after the building  was  erected, became  the  owner  of it and all the  time  thereafter  the demised premises which include the building have belonged to him subject to the right of enjoyment of the lessee in terms of  the  lease.   If it were to be held  that  the  building belonged to the lessee by reason of his having put it up  at his  own cost and by reason of the attributes  of  ownership relied    by  learned  counsel, then as  between  the  local authority (the lessor) and the lessee also the building must for  the  same reason founded   what,have  been  called  the attributes of ownership be held to belong to the lessee  and the  Act will apply.  Surely that could not possibly be  the case,  for  it  would mean that the Government  or  a  local authority will always be bound by the Act in respect of  the building put up by the lessee under building leases  granted by it in respect of land belonging to it.  In that case  the immunity  given to the Government or a local authority  will be wholly illusory and worthless.  In’ our view in the  case before us the demised premises including the building belong to  a local authority and are outside the operation  of  the Act.   This  Act being out of the way, the  appellants  were well within their                            197 rights to file the suit in ejectment in the City Civil Court and that Court had jurisdiction to entertain the suit and to pass the decree that it did. I  The result, therefore, is that we allow this appeal,  set aside the judgment and decree of the High Court and  restore the  decree  passed by the City Civil Court.  The  appellant will be entitled to costs throughout in all Courts.                      Appeal allowed. Agent  for  the  appellant: P. G. Gokhale.   Agent  for  the respondent: S. P. Varma.