JAGAT NARAYAN, C.J.—This is special appeal against an order of the learned Company Judge refusing to grant leave under sec. 446 of the Companies Act to continue a pending suit.

2. The appellants M/s Maratha Mandir Ltd., a company registered under the Indian Companies Act, having their office at Bombay are the owners of a property situated at Bombay, part of which was given on lease to M/s. Golcha Properties (P) Ltd. under an agreement dated 31-10 55. Thereafter disputes arose between the parties and in 1958 Messrs Golcha Properties (P) Ltd. filed a suit in the High Court of Bombay in which a consent decree was passed on 25th February 1959 The terms of the compromise are contained in consent decree Ex. B. Under this consent decree the appellants agreed to grant a lease of the premises specified therein for a term of 20 years commencing from 16th October 1958 on a monthly rent of Rs.5,500 payable in advance on or before the 10th day of each month- All the terms of the lease are contained in the consent decree. We reproduce clause 26 of the consent decree as there is a dispute between the parties about the interpretation of this clause :

"The lease shall contain the usual provision for forfeiture and reentry. In the event of difference of opinion between the parties as regards the clause it will also be determined by arbitration hereinafter provided."

Ms. Golcha Properties (P) Ltd. hereinafter referred to as "the Company" made defaults in payment of rent and municipal taxes which were payable by it. Ultima-tely on 11-4-66 the appellants instituted a suit against the Company for recovery of arrears of rent and for eviction under the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 hereinafter referred to as the Bombay Rent Control Act") in the court of the Small Cause Court, at Bombay which has exclusive jurisdiction to try such suits. They claimed a sum of Rs. 55,000/- as arrears of rent from 16th February 1965 to 15th December 1965 and a sum of Rs. 55,252.94 as arrears of taxes. The Company filed a written statement on 17-8 66, which is Ex. 2. Para 3 of the written statement runs as follows.

"With further reference to paragraphs 1 to 9 of the plaint, the defendants say that the plaintiffs have failed and neglected to carry out their obligations under the said High Court decree and in spite of repeated demands have failed and neglected to execute the 20 years lease in favour of the defendants. The defendants submit that in view of the defaults and until the plaintiffs obey the said High Court decree and execute the said 20 years lease the plaintiffs are not entitled to maintain this suit or to seek to enforce against the defendants any right in respect of the said premises. On the other hand, the defendants have at all times material to this suit (being already in possession) have continued in possession of the said premises in part performance of the said consent terms and the said High Court decree and have also done acts in furtherance thereof and have performed and/or are willing to perform the defendants part of the obligations thereunder. On this ground also the defendants submit that the plaintiffs are not entitled to maintain this suit."

In para 5 it was stated—

"The defendants say that they have spent about Rs. 20,00,000/- in the construction of the building and structures constituting the said premises and notwithstanding the defendants strict legal rights in the matter, the defendants have paid the rent at the rate of Rs. 5,500/- per month and have also paid the amounts of Municipal taxes on the basis of the apportionment made by the plaintiffs."

In para 7 it was stated —

"......The defendants say that the true facts are that the monthly rent of Rs. 5,500/- is highly excessive and exorbitant and the municipal taxes in respect of the said premises may also thereby get inflated. The defendants having spent about rupees 20,00.000/- as aforesaid for the construction of the premises and having regard

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