The primary liability for water charges rests with the actual occupier, not the landlord, emphasizing the distinction between water charges and water taxes.

JUDGMENT

Sandeep V. Marne J. - By order dated 13 December 2022, this Court has already observed that the Petition required admission. Hence Rule. Rule made returnable forthwith. With the consent of the learned counsel appearing for parties, Petition is taken up for hearing and disposal.

A. The Challenge

2. Petitioners have filed this Petition challenging Judgment and Order dated 12 July 2021 passed by Appellate Bench of Small Causes Court at Mumbai in Revision Application No. 237 of 2015 thereby confirming the Order dated 15 July 2015 passed by Small Causes Court in application at Exhibit 42 filed by the Original Plaintiffs under provisions of Order XV-A of Code of Civil Procedure, 1908 directing the Petitioners-Defendants to deposit Rs.5,85,80,203/- towards arrears of water charges.

B. Facts

3. By Indenture dated 23 December 1938, Ardeshir Dadabhoi Baria and Bai Monie Ardeshir Baria (Barias) granted lease of land and building admeasuring approximately 13,000 sq. yards for a tenure of 999 years to Tarachand Navalchand Jhaveri and Ratanchand Navalchand Jhaveri (Jhaveris). It is the case of Jhaveris that Clause 8 of the Lease Deed conferred upon them right to create sub-lease in respect of portion of the demised premises for a term not exceeding one year without seeking prior consent of the lessors. Jhaveris contend that in accordance with the said covenant in para 8 of the Lease Deed, a monthly tenancy (which according to the Jhaveris does not exceed tenure of one year) was created in favour of New Era Textiles Mills Pvt. Ltd in the year 1968. On 18 October 1963 New Era Textiles Mills Pvt. Ltd. was ordered to be wound up and prior to the winding up Order, New Era Textiles Pvt. Ltd. had sold its assets and other rights to its sister concern - New Era Fabrics Ltd. (NEFL). According to the Jhaveris, this transaction was without their consent and therefore possession and occupation of the demised premises by NEFL was illegal. Jhaveris therefore filed Suit No. 236 of 1968 for eviction of NEFL from suit premises. In 1977, NEFL filed a declaration suit bearing RAD Suit No. 4081 of 1977 before the Small Causes Court against Jhaveris. Consent terms were executed between Jhaveris and NEFL in Suit No. 236 of 1968, under which NEFL was recognized as monthly tenant of Jhaveris. According to Jhaveris, NEFL agreed to pay all rates, taxes, easements, duties and impositions in respect of the suit premises and agreed to indemnify Jhaveris in respect all cost, charges, expenses, loss or damages suffered by Jhaveris by reason of their non-payment. Similar consent terms were filed in RAD Suit No. 4081 of 1977 filed by NEFL.

4. Prior to the year 1980, NEFL directly applied for and secured four independent water connections in its own name from Municipal Corporation for Greater Mumbai (MCGM) for operation of its factory in the suit premises. NEFL used to consume and pay charges for water consumed through those four water connections directly secured from MCGM. In January 1981, disputes arose between NEFL and MCGM in respect of the quantum of water supplied and in respect of payment of water charges. NEFL therefore filed Suit No. 3626 of 1986 in this Court challenging the Demand Notices and the Disconnection Orders passed by the MCGM. Various orders were passed by this Court from time to time in Suit No. 3626 of 1986 in respect of water charges and property tax claims of MCGM.

5. On 21 January 2000, Tenancy Agreement was executed by NEFL in favour of M/s. Johnson Dye Works Pvt. Ltd. (JD) for a period of 30 years in respect of premises admeasuring 65,000 sq. fts. forming part of the suit premises. Petitioners contend that NEFL and JD are controlled by Agarwal family members and that both the companies are part of same promoters/majority stake holders. A Leave and License Agreement was executed by NEFL on 27 August 2005 in favour of Home Care Retail Marts Pvt. Ltd. in respect of premises admeasuring 51,000 sq. ft. for 33 months under which the licensor (NEFL)