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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M.S. SONAK, J.
Vijay S. Machindar - Petitioner
Versus
Puneet Jitendra Sejpal and Others - Respondents
Writ Petition No. 9729 of 2017
Decided On : 04-09-2017
Section 24 of the Maharashtra Rent Control Act, 1999 provides for the summary disposal of proceedings initiated by a licensor against the licensee for recovery of the licensed premises on the expiry of the license. Section 43 of the Act contemplates leave to be applied for by a respondent to contest the proceedings under Section 24. The competent authority, at the stage of deciding whether leave to contest should be granted, is required to consider whether the affidavit filed by the respondents discloses such facts that would disentitle the landlord from obtaining an order for recovery of possession of the premises on the grounds specified in Section 24. The competent authority is not entitled to adjudicate upon the merits of the defence or decide upon the merits and demerits of the respective cases put forth by the parties.
Fact of the Case:
The petitioner seeks leave to contest an application for eviction under Section 24 of the Maharashtra Rent Control Act, 1999. The petitioner argues that the leave and license agreements were executed as security for loan transactions and have since been repaid. The petitioner also claims that the application for eviction is barred by limitation. The competent authority and the appellate authority declined leave to the petitioner to contest the proceedings under Section 24. The petitioner appeals this decision.
Finding of the Court:
The competent authority and the appellate authority exceeded their jurisdiction by adjudicating upon the merits of the defence raised by the petitioner. At the stage of deciding whether leave to contest should be granted, the competent authority is only required to determine whether the defence raised is arguable and plausible. The competent authority is not entitled to decide upon the merits of the respective cases put forth by the parties. The petitioner has raised defences that may disentitle the respondent from recovering possession of the premises. The bank statements produced by the petitioner indicate repayment of the loan amount. The competent authority should decide the matter on its merits and in accordance with the law.
Ratio Decidendi: The competent authority, at the stage of deciding whether leave to contest should be granted, is not entitled to delve into or adjudicate upon the merits or demerits of the defence or to proceed to decide upon the merits and demerits of the respective cases put forth by the rival parties.
Result: The impugned orders are set aside. Leave to contest the proceedings is granted. The competent authority is directed to dispose of the proceedings on their own merits and in accordance with the law. All contentions of all parties are kept open. The competent authority should endeavor to dispose of the proceedings within the prescribed period. Rule is made absolute to the aforementioned extent. No order as to costs.
1. Not on board. In view of urgency, taken on production board.
2. Heard Mr. Dani, learned Senior Advocate for the petitioner and Mr. Naik, learned Senior Advocate for respondent No. 1.
3. Rule. Rule is made returnable forthwith, with the consent of and at the request of learned counsel for the petitioner and respondent No. 1 who is really the contesting respondent. Mr. Dani states that respondent Nos. 2 and 3 have been duly served. Respondent Nos. 2 and 3 have been imp leaded in this matter because the orders made by them are under challenge.
4. The impugned orders dated 7th June 2016 and 9th August 2017 decline leave to the petitioner to contest the application made by respondent No.1 under Section 24 of the Maharashtra Rent Control Act, 1999 (MRC Act) seeking eviction of the petitioner from the suit premises on the basis that respondent No. 1 is the licensor and the petitioner is licensee in respect of the suit premises and further, the period of license, has already come to an end.
5. Mr. Dani submits that the competent authority, at the stage of deciding whether leave to contest should be granted under Section 43 of the MRC Act, is not entitled to adjudicate upon the merits of the defence raised by the defendant. He submits that the defence raised in this case was that the two leave and license agreements were never intended to be acted upon or were ever acted upon as leave and license agreements, but rather, these agreements were executed as a security for loan transactions under which the petitioners had borrowed a sum of Rs. 2.25 crores from the respondent No. 1, which sum, has been duly repaid by the petitioner through banking transactions. Mr. Dani submits that upon repayment of the loan, there was no question of acting on the basis of the alleged leave and license agreements. Mr. Dani submits that the alleged term of the license, even according to the respondent No. 1 expired on 22nd June 2011 but the application seeking eviction has been instituted after three years. Mr. Dani submits that this is evidence of the circumstance that the leave and license agreements were never intended to be acted upon and in any case the application seeking recovery of possession is barred by law of limitation. Mr. Dani submits that these were the substantial defences raised by the petitioner and the competent authority and the appellate authority have exceeded jurisdiction in declining leave to the petitioner to contest the proceedings under Section 24 of the MRC Act.
6. Mr. Naik, learned Senior Advocate for respondent No. 1, submits that the proceedings under Section 24 of the said Act are required to be disposed of in a summary manner. The only issues relevant in such proceedings are the existence of a written leave and license agreement and whether, the licensee continues in possession of the suit premises, notwithstanding expiry of the period of license set out in the leave and license agreement. Mr. Naik submits that all other issues, that is issues relating to title, nexus with any alleged underlying transactions etc. are totally alien to the scope of proceedings under Section 24 of the said Act read with Special Provisions contained in Chapter VIII of the said Act, which are to be disposed off in a summary manner. Mr. Naik relies upon the decision of this Court in Ami Merchandising Pvt. Ltd. vs. State of Maharashtra and Others, 2014 (3) Mh. L.J. 257, in support of these propositions.
7. Mr. Naik submits that in the present case, the relationship between the parties is governed by registered agreements dated 23rd June 2009 and 20th July 2010, which clearly make out a case of licensor licensee relationship. Mr. Naik submits that there is also no dispute that the period prescribed in the agreements, has since expired. Mr. Naik submits that since there is no serious dispute on these two aspects, which are the only relevant aspects in proceedings of this nature, leave to defend was rightly denied by the two Courts. Since, the i
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