1. Dispute over recovery of printing press business, machinery, and premises after conducting agreement expired by efflux of time. (Para 1 , 2 , 3 , 4 )
Back
Next 
2024 Supreme(Online)(Bom) 10704
HIGH COURT OF BOMBAY
HON'BLE SHRI JUSTICE M. M. SATHAYE
YESHWANT CHANDRAKANT PATIL – Appellant
Versus
MUKUND NATHUJI SHELKE – Respondent
FA/811/1986
Advocates:
For the Appellants/Petitioners: Ajay Panicker
For the Respondents: Balkrishna Joshi, Virendra Pethe
For the Appellants/Petitioners: Ajay Panicker
For the Respondents: Balkrishna Joshi, Virendra Pethe
A person conducting a running business of a licensor is excluded from the definition of 'licensee' under the Bombay Rent Act and cannot claim deemed tenancy. Factual subsequent developments, such as slum declarations, require trial-level evidence and cannot be decided for the first time in an appeal.
Headnote:(A) Bombay Rent, Hotel and Lodging House Rates Control Act, 1947 - Sections 15A and 5(4A) - Deemed tenancy - Definition of "licensee" under Section 5(4A) specifically excludes a person conducting a running business belonging to the licensor - Consequently, such a person does not acquire protected status or become a deemed tenant on 1st February 1973 under Section 15A - A conducting agreement, by its nature, does not create tenancy rights if the party is merely conducting a running business (Paras 24-26).
(B) Maharashtra Slum Areas (Improvement, Clearance And Redevelopment) Act, 1971 - Section 22 - Slum declaration - Objections regarding the bar of proceedings under Section 22 due to the declaration of an area as a slum are mixed questions of fact and law - Such issues, when raised for the first time as subsequent events, cannot be adjudicated in a First Appeal based on affidavits and xerox copies, as they require a full-fledged trial with evidence and cross-examination (Paras 34-39).
(C) Indian Evidence Act, 1872 - Sections 91 and 92 - When a written agreement is admitted, oral evidence cannot be used to contradict its terms or the specific lists of articles mentioned therein (Paras 17, 31).
Facts of the case:
The plaintiff filed a suit for the recovery of a printing business, its machinery, articles, and the premises it occupied, alleging that a three-year conducting agreement had expired by efflux of time. The defendant resisted the suit, claiming to be a protected licensee or deemed tenant under the Rent Act and asserting ownership of the machinery. During the prolonged pendency of the appeal, several subsequent events occurred: the property was declared a slum, the defendant claimed to have become a direct tenant of the owner, and parts of the premises were demolished due to road widening.
Findings of Court:
(I) The Civil Court has jurisdiction over the prayers for the return of the business, recovery of machinery, and royalty, as the defendant did not qualify as a protected licensee. (II) The plaintiff is entitled to the recovery of the business, machinery, and royalty, as ownership was established through delivery challans and the list of articles in the admitted conducting agreement. (III) The recovery of possession of the premises cannot be conclusively decided in the appeal due to the need for evidence regarding the slum declaration and direct tenancy.
Issues: The main issues were whether the Civil Court had jurisdiction despite the defendant's claim of deemed tenancy; whether the plaintiff was entitled to recover the business and machinery; and whether subsequent events regarding slum status and direct tenancy affected the prayer for possession of premises.
Ratio Decidendi: A person inducted to conduct a running business is legally excluded from the definition of a "licensee" under the Rent Act, thereby forfeiting the right to be deemed a tenant. Ownership of business machinery can be proven via delivery challans and non-denial of a listed inventory in an admitted contract. However, substantive changes in the status of the property (such as slum declaration) and the legal relationship between parties (such as direct tenancy) require the leading of evidence and cannot be decided in an appellate court without a remand to the trial court.
Result: Appeal partly allowed. The suit is decreed for the return of the business, machinery, and payment of royalty and mesne profits. The claim for recovery of possession of the suit premises is remanded to the Trial Court for fresh consideration in light of subsequent events.
Legal Category Hierarchy
- property law
-
practice and procedure
- jurisdiction
- evidence
- appeal
- interim orders
-
statutory interpretation
- bombay rents, hotel and lodging house rates control act, 1947
- maharashtra slum areas (improvement, clearance and redevelopment) act, 1971
- indian contract act, 1872
-
indian evidence act, 1872
- sections 91 and 92 (Para 17)
Table of Contents
2. Plaintiff claims return of business and possession; Defendant asserts protected licensee or deemed tenant status under Bombay Rent Act. (Para 5 , 6 , 16 , 17 , 18 , 19 , 20 )
3. Defendant excluded from definition of 'licensee' under Section 5(4A) Rent Act as person conducting licensor's running business, so no protection. (Para 24 , 25 , 26 , 27 , 28 )
4. A person conducting a running business of the licensor is excluded from the definition of 'licensee' under Section 5(4A) of the Bombay Rent Act. (Para 26 , 28 )
5. Appeal partly allowed: decree for return of business, machinery, and royalty; suit remanded for trial on possession considering subsequent events. (Para 41 )
6. Does a person conducting a running business of the licensor qualify as a protected licensee under Section 15A of the Bombay Rent Act?
No. Such a person is expressly excluded from the definition of 'licensee' in Section 5(4A) and therefore cannot claim deemed tenancy protection under Section 15A. (Para 24 , 25 , 26 , 28 )
7. Can a civil court entertain a suit for recovery of business, machinery, and royalty when the defendant claims tenancy rights under the Bombay Rent Act?
Yes, for such claims. The civil court has jurisdiction to decide the prayer for recovery of suit business, its machinery, articles, and royalty amount. (Para 22 , 23 , 28 )
8. Does Section 22 of the Maharashtra Slum Areas Act bar a suit for recovery of business, machinery, and royalty?
No. Section 22 bars proceedings for recovery of arrears of rent, compensation, or possession of slum premises, but does not bar recovery of business, machinery, and royalty. (Para 9 , 28 )
9. Can a party's failure to specifically deny a list of machinery in an admittedly executed agreement preclude them from claiming ownership of that machinery?
Yes. Non-denial of a specific list of machinery in an admitted agreement prevents the party from disputing ownership and from leading evidence to the contrary. (Para 31 )
10. Can subsequent events like slum declaration and direct tenancy with the landlord be decided for the first time in a first appeal without a trial?
No. Such factual issues require pleadings and evidence tested through trial, and cannot be conclusively decided for the first time in appeal. (Para 34 , 35 , 36 , 37 , 38 , 39 )
JUDGMENT :
1. This Appeal is filed challenging the judgment and decree dated 7 March 1986 passed by the Judge, City Civil Court, Bombay in S. C. Suit No. 6153 of 1980. The Appeal is filed by the Plaintiff. By the said Judgment and Decree, the suit filed by the Appellant/Plaintiff is dismissed. For the sake of convenience the Appellant is hereinafter referred to as the Plaintiff and the Respondent is hereinafter referred to as the Defendant in their original capacity in the suit.
2. The Plaintiff filed the said suit claiming to be the owner of the business of a printing press, which he has been carrying in the name and style of “Yeshwant Printing Press” in the suit premises (“the suit business” for short). The description of the suit premises given in the Plaint is only the description of the plot on which the suit building is standing. It is stated to be plot No. 8, Sai Niwas Plot, Netaji Baug, Agra Road, Opposite A.P.I. Company, Bhandup, Bombay - 400078. The Plaintiff claims to be the owner of the machinery, furniture, fixtures and other connected things with the said printing press. He claims to have all relevant licenses required for carrying on the suit business. He claims that due to his ill health, he was medically advised to take rest and the Defendant was known to him as he had earlier conducted and managed the Plaintiff's printing press business. The Plaintiff further claims that the Defendant requested the Plaintiff to allow him to conduct and manage the suit business for a certain period. It is claimed that after due negotiations, the Plaintiff gave the suit business to the Defendant for conducting under the Conducting Agreement dated 1 October 1977. It is worth mentioning at this stage that the suit premises involved are in fact described in this Conducting Agreement, being premises admeasuring about 20 feet by 10 feet construction on the suit plot as mentioned in the plaint. It is further contended that the term of the said Conducting Agreement was of 3 years, which expired on 30 September 1980. It is contended that by efflux of time the said Conducting Agreement came to an end and therefore, 10 days prior to the term-end, the Plaintiff sent a letter-cum-notice dated 20 September 1980 to the Defendant requesting to hand over the suit business back to the Plaintiff. It is contended that the said letter-cum-notice was not complied with and hostile stand was taken. Thereafter despite repeated requests and personally meeting with Defendant, he acted rudely and refused to hand over the suit business and possession of the suit premises. It is contended that on 24 October 1980, Plaintiff found that many of the articles and parts of machinery of the suit business were not in the suit premises and when the Plaintiff confronted the Defendant, the Plaintiff was driven out by the Defendant.
3. It is contended that the Defendant damaged the articles and paraphernalia of the business badly and the Plaintiff came to know that the Defendant was actually doing business under the name and style of “Kumud Printers” in the suit premises and had spread rumors in the market that the Defendant has purchased the suit business from the Plaintiff. It is contended that on 25 October 1980, when the Plaintiff tried to meet the Defendant in the suit premises, the Defendant threatened him with conversion of suit premises into restaurant and hotel or passing it to some 3rd party. It is contended that therefore, the suit is filed, since the Defendant's occupation is merely of trespasser after efflux of time provided in the Conducting Agreement.
4. The Plaintiff prayed for recovery of charge and management of the suit business and delivery of the possession of the suit premises along with all the machinery, articles fixtures etc. The Plaintiff further prayed for payment of royalty and mesne profit. The Plaintiff further prayed for appointment of the Court Receiver and for injunction, restraining the Respondent from conducting the suit business.
5.
