The main legal point established in the judgment is that a suit for the recovery of a security deposit falls within the jurisdiction of the court, and unsubstantiated defenses may lead to the court rejecting them and granting relief to the Plaintiff.

The Plaintiff has filed this suit for recovery of security deposit, interest and for the cost of the suit. It is not in dispute that the Plaintiff had given interest free security deposit to the Defendants which was refundable upon the Plaintiff handing over the vacant possession of the premises given on leave and licence to the Plaintiff by the Defendants.

2. During the period between 9th September, 1995 and 9th February, 1998, the Plaintiff deposited a sum of Rs.1,83,000/- as security deposit for the use of the premises on leave and licence basis with the Defendants. The Defendants by their letter dated 31st March, 1998 addressed to the Plaintiff had acknowledged the same. It is the case of the Plaintiff that the Plaintiff vacated the premises and handed over the same to the Defendants on 12th October, 1999. It is the case of the Plaintiff that out of the said sum of Rs.1,83,000/- deposited by the Plaintiff as security deposit with the Defendants, an amount of Rs.30,000/- towards the licence fee in the month of August 1999, September 1999 and October 1999 has been deducted and adjusted against the said deposit of Rs.1,83,000/- and the same has been acknowledged and confirmed in the ledger account of the Plaintiff in the books of the Defendants.

3. It is the case of the Plaintiff that from time to time the Plaintiff has also made separate payment to the Defendants in respect of the electricity charges and the same has been acknowledged by the Defendants from time to time in various statements as well as in the correspondence.

4. It is the case of the Plaintiff that on or about 15th May, 2000, the Defendants refunded only a sum of Rs.25,000/- as against Rs.1,53,000/- after deducting the sum of Rs.30,000/- towards licence fee for the month of August 1999, September 1999 and October 1999 and refused to pay the balance amount. The Plaintiff accordingly by his advocates’ letter dated 8th May, 2003 called upon the Defendants to refund the said amount. The Defendants by their advocates’ letter dated 10th May, 2003 denied the claim and contended that the Plaintiff had failed to pay the licence fee, electricity charges alleged to be due to the Defendants and instead of paying dues to the Defendants, the Plaintiff has chosen to instruct his advocate to raise a demand. According to the Plaintiff since the Defendants did not pay the balance amount, the Plaintiff filed this suit on 13th May, 2003 for recovery of Rs.1,28,000/- with cost. Writ of Summons was served upon the Defendants. There was delay in filing Vakalatnama by the Defendants. The Defendants thereafter took out Chamber Summons seeking condonation of delay in filing Vakalatnama. The said Chamber Summons was allowed by this Court. The Plaintiff thereafter took out Summons for Judgment.

5. The Defendants have filed affidavit in reply and have raised various pleas opposing Summons for Judgment. In para 17 of the affidavit in reply, the Defendants have raised plea of jurisdiction in respect of the suit filed by the Plaintiff in view of provisions of Section 41 of the Presidency Small Courts Act. Considering this plea raised in the affidavit in reply R.Y.Ganoo, J passed an Order dated 30th September, 2010. It was the case of the Plaintiff that since the Plaintiff has already handed over the possession of the flat under the leave and licence agreement to the Defendants and the suit was filed for the recovery of security deposit, suit would not fall within the provisions of Section 41 of the Act. The Plaintiff relied upon the Judgment of this Court in the case of RMC Readymix (I) Pvt. Ltd. vs. Kanayo Khubchand Motwani (2006 (4) Bom.C.R.437). Shri R.Y.Ganoo, J., however did not agree with the view taken by this Court in the said Judgment in the case of RMC Readymix (I) Pvt. Ltd. (supra) and directed the Registrar (Judicial) to place the papers before the Hon’ble the Chief Justice for appropriate directions and raised following points to be decided by the Larger Bench:

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