DEVADHAR J.P., J.: - This appeal arises out of the judgment and order dated 24-2-1995 wherein the preliminary issue of jurisdiction raised by the appellant defendant has been rejected by the learned Single Judge by holding that section 41 of the Presidency Small Cause Courts Act, 1882 is not applicable to the Suit No. 4000 of 1990 filed by the respondent plaintiff against the appellant defendant and that the suit is maintainable in this Court.

2. For the sake of convenience the appellant is hereinafter referred to as the defendant and the respondent is hereinafter referred to as the plaintiff.

3. The facts set out in the Suit No. 4000 of 1990 are that by an indenture of lease dated 12th August, 1971 the plaintiff took on lease from the Government of Maharashtra a plot of land situated at Nariman Point, Mumbai 400 021 for a period of 99 years on terms and conditions as more particularly set out therein. On the said plot of land, the plaintiff was to construct a 5 Star Deluxe Hotel called "The Oberoi Towers" (hereinafter referred to as the hotel). To facilitate construction of the hotel, an agreement was arrived at between the parties hereto on 27-12-1974 wherein the defendant agreed to advance a loan of Rs. 30 lakhs to the plaintiff with interest @ 12.5% per annum. As per the said agreement dated 27-12-1974 the plaintiff was to permit the defendant to use and occupy 15,000 sq.ft. on the mezzanine to the ground floor of the hotel (hereinafter referred to as the said area) for a period of 12 years commencing from 27-12-1974. The said agreement contained a clause that at the end of the period of 12 years the plaintiff shall, on an application made by the defendant in writing, renew the licence for another period of 12 years if the plaintiff so deems fit on the terms and conditions to be mutually agreed upon. Accordingly, the loan of Rs. 30 lakhs was advanced by the defendant to the plaintiff and the defendant was put in possession of the said area. It is not in dispute that the said loan amount of Rs. 30 lakhs has been repaid by the plaintiff to the defendant with interest within the period stipulated under the aforesaid agreement.

4. It is stated in the plaint that just before the expiry of 12 years, the plaintiff by a letter dated 18/19th April, 1986 called upon the defendant to vacate the said area on the expiry of 12 years as the plaintiff intended to have the said area for its own purpose. The defendant, however by a letter dated 8-7-1986 sought renewal of the licence for a further period of 12 years as provided under the agreement dated 27-12-1974, but the same was rejected by the plaintiff. Thereafter, several meetings were held between the parties and during the course of one such meeting the representatives of the defendant pleaded for permission to use atleast 1/3rd of the said area, but the same was also rejected by the plaintiff. It is stated in the plaint that the defendant represented from time to time that arrangements are being made to move out of the said area to the defendant's own premises at maker towers, Nariman Point, Mumbai. However, by its letter dated 22-7-1989 the defendant informed the plaintiff that the Board of Directors of the defendant have decided not to vacate the said area. It is the case of the plaintiff that ultimately when the fire broke out on the first floor of the Oberoi Hotel on 12-4-1990, the defendant vacated the said area. Later on by a letter dated 26-5-1990 the defendant claimed back the possession of the said area but the plaintiff contended that the defendant having ceased to occupy the said area was not entitled to claim back possession of the said area from the plaintiff.

5. The defendant thereafter filed a Suit bearing No. 2735 of 1990 in this Court against the plaintiff under section 6 of the Specific Relief Act, 1963 alleging forcible dispossession and sought restoration of possession of the said area. In the said suit both the parties agreed that only for the purposes