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JURISDICTION OF SMALL CAUSE COURTS IN EVICTING GRATUITOUS LICENSEE = i) Whether the expression “Licensee” used in section 41(1) in Chapter VII of PSCC Act, not having been defined therein, would derive its meaning from the expression “licensee” as used in sub- section (4A) of section 5 of the Rent Act and/or whether the expression “licensee” used in section 41(1) of PSCC Act is a term of wider import so as to mean and include a “gratuitous licensee” also? ii) Whether a suit by a “licensor” against a “gratuitous licensee” is tenable before the Presidency Small Cause Court under section 41 of PSCC Act? = whether a suit filed by a licensor against a gratuitous licensee under Section 41(1) of the Presidency Small Causes Courts Act, 1882 (for short “the PSCC Act”), as amended by the Maharashtra Act No.XIX of 1976 (for short “1976 Amendment Act”) is maintainable before a Small Causes Court, Mumbai. 3. The Division Bench of the Bombay High Court in Ramesh Dwarikadas Mehra v. Indirawati Dwarika Das Mehra (AIR 2001 Bombay 470) held that a suit by a licensor against a gratuitous licensee is not tenable before the Presidency Small Causes Court under Section 41 (1) of the PSCC Act, and it should be filed before the City Civil Court or the High Court depending upon the valuation. The Division Bench held that the expression “licensee” used in Section 41(1) of the PSCC Act has the same meaning as in Section 5 (4A) of the Bombay Rents, Hotels and Lodging House Rates (Control) Act, 1947 (in short “the Rent Act”). Further it was held that the expression “licensee” as used in Section 5(4A) does not cover a gratuitous licensee. The Division Bench in that case rejected the ejectment application holding that the Small Causes Court at Bombay lacked jurisdiction. We are of the view that in such a situation the court also should give a liberal construction and attempt should be to achieve the purpose and object of the legislature and not to frustrate it. In such circumstances, we are of the considered opinion that the expression licensee employed in Section 41 is used in general sense of term as defined in Section 52 of the Indian Easement Act. 52. We have elaborately discussed the various legal principles and indicated that the expression ‘licensee’ in Section 41(1) of the PSCC Act would take a gratuitous licensee as well. The reason for such an interpretation has been elaborately discussed in the earlier part of the judgment. Looking from all angles in our view the expression ‘licensee’ used in the PSCC Act does not derive its meaning from the expression ‘licensee’ as used in Sub-section (4A) of Section 5 of the Rent Act and that the expression “licensee” used in Section 41(1) is a term of wider import intended to bring in a gratuitous licensee as well. 53. We are, therefore, in complete agreement with the reasoning of the Full Bench of the High Court. In such circumstances, the appeals lack merits and are, therefore, dismissed. There is no order as to costs.

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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 6726-6727 OF 2013
(Arising out of SLP (Civil) NO.20763-764 OF 2007)

 

Prabhudas Damodar Kotecha & Ors. …. Appellants

v.

Manhabala Jeram Damodar & Anr. …Respondents

 

J U D G M E N T
K. S. Radhakrishnan, J

 

Leave granted.

 
2. We are, in these appeals, concerned with the question whether a suit
filed by a licensor against a gratuitous licensee under Section 41(1) of
the Presidency Small Causes Courts Act, 1882 (for short “the PSCC Act”), as
amended by the Maharashtra Act No.XIX of 1976 (for short “1976 Amendment
Act”) is maintainable before a Small Causes Court, Mumbai. .

 
3. The Division Bench of the Bombay High Court in Ramesh Dwarikadas
Mehra v. Indirawati Dwarika Das Mehra (AIR 2001 Bombay 470) held that a
suit by a licensor against a gratuitous licensee is not tenable before the
Presidency Small Causes Court under Section 41 (1) of the PSCC Act, and it
should be filed before the City Civil Court or the High Court depending
upon the valuation. The Division Bench held that the expression “licensee”
used in Section 41(1) of the PSCC Act has the same meaning as in Section 5
(4A) of the Bombay Rents, Hotels and Lodging House Rates (Control) Act,
1947 (in short “the Rent Act”). Further it was held that the expression
“licensee” as used in Section 5(4A) does not cover a gratuitous licensee.
The Division Bench in that case rejected the ejectment application holding
that the Small Causes Court at Bombay lacked jurisdiction.

 
4. In Bhagirathi Lingawade and others v. Laxmi Silk Mills, in an
unreported judgment of the Bombay High Court dated 03.09.1993, another
Division Bench of the Bombay High Court expressed the view that Section
5(4A) and Section 13(1) of the Rent Act, 1947 are not at all relevant in
interpreting the scope and ambit of Section 41 of the PSCC Act, under which
suit was filed.

 
5. The Full Bench of the Bombay High Court, which is the Judgment under
appeal, reported in 2007 (5) Maharashtra Law Journal 341, answered the
question in the affirmative overruling the Ramesh Dwarikadas Mehra case
(supra), the legality of which is the question, that falls for our
consideration.

 

FACTUAL MATRIX

 

6. Respondent Nos.1 and 2 along with other plaintiffs (who are now
deceased) filed a suit L.E. and C. No.430/582 of 1978 under Section 41 of
the PSCC Act before the Small Causes Court, Bombay against the appellants
(original defendants) for recovery and vacant possession of one bed room in
Flat No.16, Ram Mahal, Churchgate, Mumbai and also for other consequential
reliefs. Plaintiffs submitted that the defendants were in use and in
occupation of the above premises as their guest-house and so far as hall
and kitchen are concerned, family members of the plaintiff and defendants
were using it as common amenities. The plaintiffs also claim that they are
in occupation of another bed-room in the suit flat and no monetary
consideration was charged by them from the defendants for exclusive use and
occupation of one bed-room and joint use of the hall and kitchen as common
amenities. Permission granted to the defendants to use the premises was
later revoked and since they did not vacate the suit flat and continued to
hold possession wrongfully and illegally, suit was filed for eviction.

 

7. The Small Causes Court decreed the suit on 07.02.1997 and ordered
eviction of the appellants with a specific finding that they are gratuitous
licensee. The appellants preferred an appeal before the Appellate Bench of
Small Causes Court, which was dismissed on 05.04.2003. Against that order
both the appellants and respondents filed writ petitions before the High
Court, Bombay and the respondents’ writ petition was for claiming mesne
profits.

8. The Defendants questioned the jurisdiction of the Small Causes Court,
Mumbai to entertain and try the suit before the learned Single Judge of the
High Court of Bombay, placing reliance on the judgment of the Division
Bench in Ramesh Dwarkadas Mehra’s case (supra) contending that the licence
created by the plaintiffs in favour of the defendants was gratuitous, i.e.
without consideration, hence the suit is not maintainable in that Court.
Learned Single Judge vide his order dated 16.01.2006 referred the matter to
a larger bench. Consequently, a Full Bench was constituted.

9. The Full Bench of the Bombay High Court formulated the following
questions for its consideration:
i) Whether the expression “Licensee” used in section 41(1) in
Chapter VII of PSCC Act, not having been defined therein, would
derive its meaning from the expression “licensee” as used in sub-
section (4A) of section 5 of the Rent Act and/or whether the
expression “licensee” used in section 41(1) of PSCC Act is a
term of wider import so as to mean and include a “gratuitous
licensee” also?
ii) Whether a suit by a “licensor” against a “gratuitous licensee”
is tenable before the Presidency Small Cause Court under section
41 of PSCC Act?

Both the above mentioned questions, as already indicated, were answered by
the Full Bench in the affirmative, the correctness of otherwise of those
findings is the issue that falls for our consideration.
Arguments

10. Shri Soli J. Sorabjee, learned senior counsel appearing for the
appellants, submitted that the Full Bench was in error in overturning a
well-reasoned judgment of the Division Bench of the High Court in Ramesh
Dwarkadas Mehra’s case and contended that the licence created by the
plaintiffs in favour of the defendants was admittedly gratuitous and hence
a suit for eviction of such a licensee is not maintainable in a Small
Causes Court. Further, it was pointed out that the intention of the
Legislature was that the “licence” contemplated in Section 41 of PSCC Act
must take its colour from Section 5(4A) of the Rent Act 1947, which
specifically excludes a gratuitous licensee, hence, such a suit is
maintainable only before a competent civil court. Learned senior counsel
also pointed out that it is an established position of law that, under
Section 9 of the Code of Civil Procedure, 1908, the jurisdiction of a Civil
Court cannot be ousted unless such an ouster is expressed or clearly
implied and such a provision has to be strictly construed. Shri Sorabjee
also submitted that Section 41 of the PSCC Act, as initially enacted, used
the expression “permission” and not “licence”, despite the Easements Act,
1882, which is indicative of the legislative intent that Section 52 of the
Easements Act, not being pari materia, ought not be relied on in
determining the scope and meaning of the term “licensee” in Section 41 of
PSCC Act.

11. Shri Sorabjee also pointed out that, till 1976, the PSCC Act
continued to use the expression “permission” and the 1976 Amendment to the
PSCC Act was inspired only by 1973 Amendment to the Rent Act 1947.
Further, it was also submitted that 1976 Amendment was specifically made to
PSCC Act to harmonize it with the Rent Act 1947. Shri Sorabjee also
submitted that Section 41 of the PSCC Act, by virtue of the 1976 Amendment,
was completely reworded to specifically reflect the language used in
Section 28 of the Rent Act 1947 so as to make it pari materia. In other
words, it was submitted that, after the 1976 Amendment, the Rent Act 1947
and PSCC Act, are cognate and pari materia statutes which form part of the
same system. Learned senior counsel pointed out that the statutes dealing
with the same subject matter or forming part of the same system are pari
materia statutes. Reference was made to the judgments of this Court
reported in Mansukhlal Dhanraj Jain v. Eknath Vithal Ogale (1995) 2 SCC
665, R v. Herrod (1976) 1 All ER 273 (CA) and Ahmedabad Pvt. Primary
Teachers Assn. V. Administrative Officer and Ors. (2004) 1 SCC 755.
12. Shri Sorabjee also submitted that the Statement of Objects and
Reasons of 1976 Amendment proceeds on the premise that the “licence”
contemplated by Section 41 of PSCC Act is a non-gratuitous one which
provides that, under the existing law, the licensor had to go to different
Courts for recovery of possession and licence fee and that the intention of
the Legislature was always to confine the jurisdiction of the Small Causes
Court to eviction proceedings and proceedings for the recovery of
rent/licence fee, not to evict a gratuitous licensee. Shri Sorabjee also
submitted that the expression “licence” contemplated in Section 41 of PSCC
Act does not include a gratuitous licensee, which is also in consonance
with the principle of Nocitur a sociis, which provides that words must take
colour from words with which they are associated. In support of this
contention, reliance was placed on the judgment of this Court in Ahmedabad
Pvt. Primary Teachers Assn.’s case.
13. Shri Sorabjee also submitted that the respondents have proceeded on a
wholly incorrect premise that the Rent Act 1947 only protects the licensees
who were in possession on 01.02.1973. It was pointed out that by virtue of
1973 Amendment to the Rent Act 1947, protection was given to all
“licensees” defined in Section 5(4A). It was also submitted that certain
licensees were given the status of deemed tenants under Section 15A and
that only those licensees who had subsisting license on 01.02.1973 were
given the status of deemed tenants. Learned senior counsel pointed out
that if all the licensees were deemed tenants, there would not have been
any need to insert the word “licence” in various provisions of the Act.
Learned senior counsel also pointed out that these aspects were overlooked
by the judgment in appeal, unsettling the law laid down by the Division
Bench of the High Court in Ramesh Dwarkadas Mehra’s case (supra).
14. Shri Shekhar Naphade, learned senior counsel appearing for the
respondents, submitted that the Full Bench of the Bombay High Court is
right in holding that the expression “licensee” used in Section 41(1) of
PSCC Act does not derive its meaning from the expression “licensee” as
defined in Section 5(4A) of the Rent Act 1947 and that the expression
“licensee” used in Section 41(1) of PSCC Act is a term of wide import so as
to mean and include a gratuitous licensee. Learned senior counsel also
submitted that the argument of the appellants that the Rent Act 1947 is
pari materia with Section 41 of PSCC Act or same system statute, is totally
misconceived. Shri Naphade also submitted that the “licence” contemplated
in Section 41(1) of PSCC Act be considered as licence, as defined in
Section 52 of the Easements Act. Shri Naphade also pointed out that
though Section 41(1) of PSCC Act, as originally enacted, refers to
occupation of premises with permission, such permission means permission as
referred to in Section 52 of the Easements Act which is a contemporaneous
statute, i.e. Easements Act, the Transfer of Property Act and Section 41 of
PSCC Act. In support of that principle, learned senior counsel placed
reliance on the judgment of this Court in National & Grindlays Bank Ltd. v.
The Municipal Corporation of Greater Bombay (1969) 1 SCC 541 and Tata
Engineering and Locomotive Company Ltd. v. The Gram Panchayat, Pimpri
Wachere (1976) 4 SCC 177.

15. Shri Naphade also submitted that the expression “licensor” or
“licensee” or “landlord” and “tenant” used in Section 41 of PSCC Act, as
amended by the Maharashtra Act No. XIX of 1976, relate to “immoveable
property” and Section 52 of the Easements Act which defines a “licence” has
a inseparable connection to immoveable property and property law. Learned
senior counsel pointed out that the expression “licensee” is used as an
antithesis to the concept of tenant and, therefore, the licensee under
Section 41(1) must mean a person having a licence as defined in Section 52
of the Easements Act. Shri Naphade also submitted that the Maharashtra Act
of 1976 made necessary changes in Chapter VII of PSCC Act which contained
Sections 41 to 49 and by virtue of the amendment, the pecuniary restriction
on the jurisdiction of the Small Causes Court placed by Section 18 has been
removed to speed up the proceedings for eviction and to avoid multiplicity
of proceedings. The Legislature also intended that all cases of licensees
and tenants should be tried only by the Small Causes Court under Section
41(1) of PSCC Act.

16. Before considering the rival contentions raised by the counsel on
either side and the reasoning of the Full Bench, it is necessary to examine
the historical settings of the various legislations.

LEGISLATIVE HISTORY

PSCC Act:

17. The PSCC Act came into force on 01.07.1882. In that year, the
Transfer of Property Act as well as the Easements Act was also enacted.
Under the PSCC Act, Small Causes Courts were established in Calcutta,
Madras, Ahmedabad and Bombay and the PSCC Act was enacted to consolidate
and amend the law relating to Courts of Small Causes established in the
Presidency Towns. Small Causes Court was conferred with the jurisdiction
to try all suits of a civil nature where value of the subject matter did
not exceed Rs.10,000/- as per Section 18, subject to exceptions in Section
19 of PSCC Act. Small Causes Courts, at that time, were treated as a Civil
Courts in the hierarchy of the Courts. Chapter VII of PSCC Act, as it
stood prior to the Maharashtra Amendment Act, 1976, contained Sections 41
to 46 conferring limited jurisdiction of recovery of possession of
immoveable property on Small Causes Court giving summary remedy for
recovery of possession of immoveable property of the prescribed value.
Section 41 of PSCC Act then stood as follows:
“41. Summons against persons occupying property without leave.-
When any person has had possession of any immovable property situate
within the local limits of the Small Cause Court’s jurisdiction and of
which the annual value at a rack-rent does not exceed two thousand
rupees, as the tenant, or by permission, or another person, or of some
person through whom such other person claims,
and such tenancy or permission has determined or been withdrawn,
and such tenant or occupier or any person holding under or by
assignment from him (hereinafter called the occupant) refuses to
deliver up such property in compliance with a request made to him in
this behalf by such other person,
such other person (hereinafter called the applicant) may apply
to the Small Cause Court for a summons against the occupant, calling
upon him to show cause, on a day therein appointed, why he should not
be compelled to deliver up the property.

18. Proceedings at that time were initiated by filing an application, not
a suit. Even the Bombay Rent Act, 1939 and Bombay Rent Act, 1944, did not
give exclusive jurisdiction to any Court. Legislative history indicates
that in respect of premises having annual rack rent up to Rs.2,000/-, the
proceedings for recovery of possession between landlord and tenant were to
be filed in Small Causes Court under Chapter VII of the PSCC Act and in
case where the annual rack rent exceeded Rs.2,000/-, the recovery suits
were to be filed in the Original Side of the High Court.
19. Bombay Rent Act 1947 also brought lot of changes to the Rent Act of
1939 and 1944 and Section 28 of the 1947 Act provided that exclusive
jurisdiction was conferred on the Small Cause Court in respect of all the
suits between landlord and tenant relating to recovery of rent or
possession irrespective of value of the subject-matter. Suits between
landlord and tenant pending on the original side of the High Court were
transferred to the Presidency Small Cause Courts, Mumbai and were to be
tried under the provisions of the Rent Act. Even landlords were prohibited
from recovering any amount in excess of standard rent which was pegged down
at the level of rent in September, 1940 or on the date of first letting.
Even the landlord’s right of evicting tenant was also severely curtailed
and the landlords could recover possession only on proof of grounds of
eviction enumerated under the Rent Act, therefore, they started letting out
their premises under an agreement of leave and license. Proceedings for
recovery of possession against the licensee though started filing suits
under Section 41 of the Small Cause Courts Act, the defendants in those
cases starting denying that there were licensees but tenants and that the
agreement of leave and licence was sham and bogus and hence not binding.
Even the findings rendered by the Small Cause Court in exercise of its
jurisdiction under Section 41 on the question of tenancy was not final and
the aggrieved party had a right to file a regular suit for declaration of
the title resulting in multiplicity of the proceedings. Chapter VII of the
PSCC Act was later amended by the Maharashtra Act No. XLI of 1963. The
object of the Amendment in a nutshell is as follows:

“In view of the fact that the provisions of Section 47 of the
Presidency Small Cause Courts Act, 1882 are abused by the parties in
an application under Section 41 and the litigation is protracted on
account of parties in certain cases claiming the right to be tried
under the Bombay Rents, Hotel and Lodging House Rates Control Act,
1947, the Act deletes sections 45 to 47 of the Presidency Small Cause
Courts Act, 1882 and empowers the Small Cause Court to decide as a
preliminary issue the question whether an occupant is entitled to the
protection of the Rent Control Act and to lay down that only one
appeal can be preferred against the order and no further appeal can
lie. New Section 49 provides that recovery of possession shall be a
bar to a suit in any court except on the basis of title to the
immovable property other than as title.”

 
20. Section 42A which provided that if in an application made under
Section 41, the occupant raises a defence that he is a tenant within the
meaning of Bombay Rent Act, 1947 then notwithstanding anything contained in
that Act, the question shall be decided by the Small Cause Court as a
preliminary issue. The question of filing civil suits against licensee
even after the introduction of Section 42A depended upon the value of
subject matter.

Bombay Rent Act

 

21. Bombay Rent Act, 1925 was repealed by the Bombay Rent Protection Act,
1939. Both the Acts did not contain any special or separate definition of
“license” nor did they deal with “licensees”. In the year 1944, Bombay
Rent, Hotel and Lodging House Rates (Control) Act 1944 was enacted followed
by the 1947 Act. Rent Act, 1947 also did not deal with expressions
“license” or “licensee” and their rights and there were widespread attempts
to evade the rigour of the rent control legislation by entering into “leave
and licence” agreements in order to prevent rampant evasion. Bombay Rent
Act was amended in the year 1973 to bring “licensees” within the purview of
the Rent Act, 1947 by adding Section 5(4A) and Section 15A.

22. Statement of Objects and Reasons of Maharashtra Act 19 of 1973 reads
as follows:

“It is now notorious that the Bombay Rents, Hotel and lodging House
Rates Control Act, 1947, is being avoided by the expedient of giving
premises on leave and license for some months at a time; often
renewing from time to time at a higher license fee. Licensees are
thus charged excessive license fees’ in fact, several times more
than the standard rent, and have no security of tenure, since the
licensee has no interest in the property like a lessee. It is
necessary to make provision to bring licensees within the purview of
the aforesaid Act. It is therefore provided by Cl.14 in the Bill
that persons in occupation on the 1st day of February 1973 (being a
suitable anterior date) under subsisting licenses, shall for the
purposes of the act, be treated as statutory tenants and will have
all the protection that a statutory tenant has, under the Act. It
is further provided in Cl. 8 that in the case of other licenses, the
charge shall not be more than a sum equivalent to standard rent and
permitted increases, and a reasonable amount for amenities and
services. It is also provided that no person shall claim or receive
anything more as license fee or charge, than the standard rent and
permitted increases, and if he does receive any such excessive
amounts, they should be recoverable from the licensor.” (Emphasis
supplied)

 

23. Section 15-A introduced in the said Act stated that a person as on
1st February, 1973 in occupation of any premises or any part of which is
not less than a room as licensee under a subsisting agreement of leave and
license, he shall on that day deemed to have become tenant of the landlord
for the purpose of Bombay Rent Act, 1947 in respect of the premises or part
thereof in his occupation. The definition of the expression “tenant” in
Section 5(11) was also amended to include such licensee as shall be deemed
to be the tenant by virtue of Section 15A. The expression “licensee” was
also inserted by Sub-section (4A) in Section 5 which provided that a person
in occupation of the premises or of such part thereof which is not less
than a room, as the case may be, in a subsisting agreement for license
given only for a license fee or charge but excluded from its sweep a
gratuitous licensee.

 
Maharashtra Act XIX of 1976

24. Maharashtra Act XIX of 1976 made drastic changes in Chapter VII of
PSCC Act by which Chapter VII was substituted for the original Chapter VII
(Sections 41 to 49). Under Chapter VII of the 1976 Amendment, the
proceedings for recovery of possession under Section 41 no more remained
summary and they were given status of regular suits. For easy reference,
we may refer to both sub-sections (1) and (2) of Section 41, which reads as
follows:

41. Suits or proceedings between licensors and licensees or
landlords and tenants for recovery of possession of immovable property
and licence fees or rent, except to those to which other Acts apply to
lie in Small Cause Court.-

(1) Notwithstanding anything contained elsewhere in this Act or in
any other law for the time being in force, but subject to the
provisions of sub-section (2), the Court of Small Causes shall have
jurisdiction to entertain and try all suits and proceedings between a
licensor and licensee, or a landlord and tenant relating the recovery
of possession of any immovable property situated in Greater Bombay, or
relating to the recovery of the licence fee or charges or rent
therefor, irrespective of the value of the subject-matter of such
suits or proceedings.

(2) Nothing contained in sub-section (1) shall apply to suits or
proceedings for the recovery of possession of any immovable property
or of licence fees or charges of rent thereof, to which the provisions
of the Bombay Rents, Hotels and Lodging House Rates Control Act, 1947,
the Bombay Government Premises (Eviction) Act, 1955, the Bombay
Municipal Corporation Act, the Bombay Housing Board Act, 1948 or any
other law for the time being in force, applies.

 
25. The Statement of Objects and Reasons of the 1976 Amendment is also
relevant and same is extracted hereunder:

 

“STATEMENT OF OBJECTS AND REASONS

At present in Greater Bombay, all suits and proceedings between a
landlord and tenant relating to recovery of possession of premises or
rent, irrespective of the value of the subject matter lie in the Court
of Small Causes, Bombay under Section 28 of the Bombay, Rent, Hotel
and Lodging House Rates Control Act, 1947. Under that section, suits
and proceedings for the recovery of the license fee between a licensor
and licensee as defined in that Act also lie in the Court of Small
Causes, irrespective of the value of the subject matter. Under
Chapter VII of the Presidency Small Causes Court Act, 1882 an
application can be made by a licensor for recovery of possession of
premises, of which the annual value at a rack rent does not exceed
three thousand rupees. If the rack rent exceeds three thousand
rupees, the licensor has to take proceedings in the City Civil Court
where the rack rent does not exceed twenty five thousand rupees and
for higher rents in the High Court. Similarly, for recovery of
license fees to which the provisions of the Bombay Rent Control Act do
not apply, the licensor has to seek his remedy in the Small Causes
Court, the City Civil Court or the High Court, as the case may be,
according to the value of the subject matter. Under the existing law,
the licensor has to go to different Courts for recovery of possession
of premises and license fees and if the plea of tenancy is raised by
the defendant and succeeds, the matter has again to go to the Small
Causes Court. Similarly, where proceedings on the basis of tenancy
are started in the Small Causes Court and subsequently the plea of
license is taken and succeeds, the plaint is returned and has to be
represented to the City Civil Court or the High Court as the case may
be, depending on the valuation. Thus, there is unnecessary delay,
expense and hardship caused to the suitors by going from one Court to
another to have the issue of jurisdiction decided. Moreover, Chapter
VII of the Presidency Small Causes Courts Act envisages applications
which culminate in orders and are always susceptible of being
challenged by separate suits on title where relationship is admittedly
not between a landlord and tenant.

2. In order to avoid multiplicity of proceedings in different
Courts and consequent waste of public time and money and unnecessary
delay, hardship and expense to the suitors, and to have uniformity of
procedure, it is considered expedient to make the required
supplementary provisions in the Presidency Small Causes Court Act, so
that all suits and proceedings between a landlord and tenant or a
licensor and licensee for recovery of possession of premises or for
recovery of rent or license fee, irrespective of the value of the
subject matter should go to and be disposed of by the Small Causes
Court, either under that Act or the Rent Control Act.

3. The Bill is intended to achieve these objects.”

 

26. We may, on the basis of the above legal and historical settings,
examine the exact intent of the Legislature in inserting the expressions
“licensor” and “licensee” in Section 41(1) of the PSCC Act by the 1976
Amendment and also whether all disputes between licensors and licensees are
intended to be tried only by the Small Causes Courts. Before embarking
upon such an exercise, we have to deal with the basic principles of
interpretation of the expressions which figures in the Statutes under
consideration.
Golden Rule
27. Golden-rule is that the words of a statute must be prima facie be
given their ordinary meaning when the language or phraseology employed by
the legislature is precise and plain. This, by itself proclaims the
intention of the legislature in unequivocal terms, the same must be given
effect to and it is unnecessary to fall upon the legislative history,
statement of objects and reasons, frame work of the statute etc. Such an
exercise need be carried out, only when the words are unintelligible,
ambiguous or vague.

28. It is trite law that if the words of a Statute are themselves precise
and unambiguous, then no more can be necessary than to expound those words
in their natural and ordinary sense. The above principles have been
applied by this Court in several cases, the judgments of which are reported
in Chief Justice of Andhra Pradesh and Others v. L.V.A. Dixitulu and Others
(1979) 2 SCC 34, Kehar Singh and Others v. State (Delhi Admn.) AIR 1988 SC
1883, District Mining Officer and Others v. Tata Iron and Steel Co. and
Another (2001) 7 SCC 358, Gurudevdatta VKSSS Maryadit and Others v. State
of Maharashtra and Others AIR 2001 SC 1980, State of H.P. v. Pawan Kumar
(2005) 4 SCC 350 and State of Rajasthan v. Babu Ram (2007) 6 SCC 55.

29. Section 41(1), as such, came up for consideration before this Court
in Mansukhlal Dhanraj Jain’s case (supra). While interpreting the said
provision, the Court stated that the following conditions must be satisfied
before taking the view that jurisdiction of regular competent civil court
is ousted:
i) It must be a suit or proceeding between the licensee and
licensor; or
ii) between a landlord and a tenant
iii) such suit or proceeding must relate to the recovery of
possession of any property situated in Greater Bombay; or
iv) relating to the recovery of the licence fee or charges or rent
thereof.
30. We are primarily concerned with the condition nos. (i) and (iii) and
if we hold that both the above conditions are satisfied, then Small Causes
Courts will have the jurisdiction to entertain the suit in question,
provided the expression “licensee” means and include “gratuitous licensee”
also. In that context, we have also to examine whether the expression
“licensee” in Section 41(1) of the PSCC Act would mean only “licensee”
within the meaning of sub-section (4A) of Section 5 of the Rent Act 1947.
31. Let us, in this context, make a brief reference to Sub-section (2) of
Section 41 of the PSCC Act, which states, nothing contained in Sub-section
(1) shall apply to suit or proceeding for the recovery of possession of any
immovable property or of licence fee or charges or rent thereof, to which
provisions of Rent Act 1947 apply. A plain reading of this sub-section
shows that the provisions of sub-section shall not apply to suit or
proceeding for recovery of possession of any immovable property or licence
fee to which Rent Act 1947 apply, meaning thereby, if the provisions of Sub-
section (4A) and Sub-section (11) of Section 5 read with Section 15A of the
Rent Act 1947 are attracted, the provisions of Sub-section (1) of Section
41 of the PSCC Act cannot be resorted to to institute a suit between the
licensor and licensee, relating to recovery of licence fee, therefore, if a
licensee is covered by Section 15A read with Section 5(4A) of the Rent Act
1947, the suit under Section 41(1) would not be maintainable. Section
41(1), therefore, takes in its compass “licensees” who do not fall within
the ambit of Section 5(4A) read with Section 5(11) and Section 15A of the
Rent Act 1947.
32. Gratuitous licensee, it may be noted, does not fall within Section
5(4A) read with Sections 5(11) and 15A of the Rent Act 1947. The
provisions of Section 41(1) also do not specifically exclude a gratuitous
licensee or makes any distinction between the licensee with material
consideration or without material consideration. Further, it may also be
noted that Section 28 of the Rent Act 1947 do not confer jurisdiction on
the Small Causes Court to entertain a suit against a gratuitous licensee.
Section 28 read with Section 5(4A) would show that a party who claims to be
a gratuitous licensee is not entitled to any protection under the Rent Act
1947.

PARI MATERIA:

33. Viscount Simonds in A.G. v. HRH Prince Ernest Augustus of Hanover
(1957) 1 All ER 49, conceived the above mentioned principle to be a right
and duty to construe every word of a statute in its context and used the
word “context” in its widest sense, including “other statutes in pari
materia”. Earlier, same was the view taken in R. v. Loxdale (1758) 97 ER
394 stating that when there are different statutes in pari materia, though
made at different times, or even expired and not referring to each other,
they shall be taken and construed together as one system and as explanatory
to each other. This Court in State of Punjab v. Okara Grain Buyers
Syndicate Ltd. Okara AIR 1964 SC 669 held that when two pieces of
legislation are of different scopes, it cannot be said that they are in
pari materia. In Shah & Co., Bombay v. State of Maharashtra AIR 1967 SC
1877, this Court held that the Rent Act 1947 and the Bombay Land
Requisition Act, 1948 were not held to be the acts in pari materia, as they
do not relate to the same person or thing or to same class of persons of
things.

34. “Pari materia” words, it is seen, are used in Section 28 of the
Bombay Rent Act, 1947 and Section 41(1) of PSCC Act referring to the nature
of suits in both the provisions would indicate that those provisions confer
exclusive jurisdiction on Small Causes Court meaning thereby it alone can
entertain suits or proceedings relating to recovery or possession of the
premises. Section 28 of the Bombay Rent Act deals with the suits only
between landlord and tenant and between licensor and licensee relating only
to recovery of licence fee or charge while Section 41 of the PSCC Act
deals with such suits between licensor and licensee also. Where the
premises are not governed by the Rent Act, the provisions of Section 41 of
the PSCC Act would apply, at the same time where the premises are governed
by the provisions of Rent Act, the provisions of Section 28 would be
attracted.

35. When we look at both the provisions, it is clear that the nature of
such suits as envisaged by both the sections is the same. In this
connection, a reference may be made to the judgment of this Court in
Mansukhlal Dhanraj Jain’s case (supra) wherein this court has dealt with a
question whether the suit filed by the plaintiff claiming the right to
possess the suit premises as a licensee, against defendant alleged licensor
who is said to be threatening to disturb the possession of the plaintiff –
licensee without following due process of law is cognizable by the Court of
Small Causes Bombay as per Section 41(1) of the PSCC Act or whether it is
cognizable by City Civil Court, Bombay? This Court while dealing with that
question held that the Court of Small Cause have jurisdiction and that in
Section 41(1) of the PSCC Act and Section 28 of the Bombay Rent Act, 1947,
pari materia words are used, about the nature of the suits in both these
provisions, for conferring exclusive jurisdiction on Small Causes Courts.
Paragraphs 17 and 18 of that judgment would make it clear that in that case
this Court only observed that some expressions in Section 28 of the Rent
Act only are pari materia with the expressions employed in Section 41(1) of
the Small Cause Court and not stated that the PSCC Act and the Rent Act are
pari materia statutes.
36. We may in this respect refer to Section 51 of the Rent Act which
provides for the removal of doubt as regards proceedings under Chapter VII
of the PSCC Act which states that for removal of doubt, it is declared that
unless there is anything repugnant in the subject or context references to
suits or proceedings in this Act shall include references to proceedings
under Chapter VII of the PSCC Act and references to decrees in this Act
shall include references to final orders in such proceedings. The Full
Bench of the Bombay High Court, in our view, is right in holding that
Section 51 of the Rent Act will have to be read with Section 50. The Court
rightly noticed that on the date when the Rent Act came into force, there
were two types of proceedings for recovery of possession pending in two
different courts in the City of Bombay, that is proceedings under Chapter
VII were pending in the Small Causes Court and also suits were pending on
the original side of the High Court. Section 50 provides that suits
pending in any court which also includes the High Court shall be
transferred to and continued before the courts which would have
jurisdiction to try such suits or proceedings under the Rent Act and shall
be continued in such Courts as the case may be and all provisions of the
Rent Act and the Rules made thereunder shall apply to all such suits and
proceedings. In other words, the suits pending in the High Court would be
transferred to the Small Causes Court and would be heard and tried there
and all the provisions of the Rent Act and the Rules made thereunder would
apply to such suits. Section 50 also provided that all proceedings pending
in the Court of Small Cause under Chapter VII shall be continued in that
court and all provisions of the Rent Act and the Rules made thereunder
shall apply to such proceedings. Pending proceedings under Chapter VII
were to be continued as proceedings under the Rent Act and all provisions
and the Rules under the Rent Act were to apply to such proceedings.
37. Section 51 in that context states that references to suits or
proceedings under the Rent Act shall include references to the proceedings
under Chapter VII of the PSCC Act and references to decrees in the Rent Act
shall include references to final order in such proceedings. When we make
a comparative analysis of the abovementioned provisions, it is not possible
to hold that the Rent Act and Chapter VII of the PSCC Act are pari materia
statutes.
Noscitur a sociis Principle

38. The Latin maxim “noscitur a sociis” states this contextual principle,
whereby a word or phrase is not to be construed as if it stood alone but in
the light of its surroundings – Bennion on Statutory Interpretation, Fifth
Edition. A-G Prince Ernest Augustus of Hanover [1957] AC 436, Viscount
Simonds has opined that “a word or phrase in an enactment must always be
construed in the light of the surrounding text. “….words and particularly
general words, cannot be read in isolation; their colour and their content
are derived from their context.” Noscitur a sociis is merely a rule of
construction and it cannot prevail in cases where it is clear that the
wider words are intentionally used by the legislature in order to make the
scope of the defined word correspondingly wider. The above principle has
been applied in several judgments of this Court like The State of Bombay
and Others v. The Hospital Mazdoor Sabha and Others [AIR 1960 SC 610,
(1960) 2 SCR 866] Bank of India v. Vijay Transport and Others, [AIR 1988 SC
151, (1988) 1 SCR 961], M/s Rohit Pulp and Paper Mills Ltd. v. Collector of
Central Excise, (1990) 3 SCC 447, Samatha v. State of Andhra Pradesh,
(1997) 8 SCC 191, M/s Brindavan Bangle Stores & Ors. v. The Assistant
Commissioner of Commercial Taxes & Another, (2000) 1 SCC 674 etc.

39. We find the expression “licensee” in Section 41 of the PSCC Act has
been used to fully achieve the object and purpose especially of 1976
Amendment Act and legislature has used clear and plain language and the
principle noscitur a sociis is inapplicable when intention is clear and
unequivocal. It is only where the intention of the legislature in
associating wider words with words of a narrow significance is doubtful or
otherwise not clear, the rule of Noscitur a Sociis can be applied. When
the intention of the legislature in using the expression ‘licensee’ in
Section 41(1) of the PSCC Act is clear and unambiguous, the principle of
Noscitur a Sociis is not to be applied.
Contemporenea Expositio

40. Contemporenea Expositan is the best and most powerful law and it is a
recognized rule of interpretation. Reference may be made to the judgments
of this Court in National and Grindlays Bank Ltd. v. The Municipal
Corporation of Greater, Bombay (1969) 1 SCC 541 and The Tata Engineering
and Locomotive Company Ltd. v. Gram Panchayat (1976 ) 4 SCC 177.

41. We notice in the instant case that the concept of licence and lease
were dealt with by contemporary statutes – Indian Easement Act, Transfer of
Property Act and Section 41 of the PSCC Act and, as already indicated, all
those statutes were enacted in the year 1882. Therefore, Section 41(1) of
the PSCC Act could not have been contemplated any other meaning of the term
“occupation with permission” but only the permission as contemplated by
Section 52 of the Indian Easements Act. The PSCC Act is a procedural law
and as already indicated, the expression “licensor” and “licensee” or
“landlord” and “tenant” used in Section 41 of the PSCC Act (as amended by
Maharashtra Act No. XIX of 1976) relate to immovable property and Section
52 of the Indian Easements Act which defines a licence has an inseparable
connection to immovable property and property law. Legislature was well
aware of those contemporaneous statutes, that was the reason, why the
expression licence as such has not been defined in the PSCC Act with the
idea that the expression used in a contemporaneous statutes would be
employed so as to interpret Section 41 of the PSCC Act. Above-mentioned
principle, in our view, would apply to the instant case.
Licensor – Licensee

42. The PSCC Act, as already indicated, does not define the expression
“licensor” and “licensee”. Both these expressions find a place in Section
41(1) of the PSCC Act. Section 41(1) confers jurisdiction on Court of
Small Causes to entertain and try all the suits and proceedings between a
“licensor” and a “licensee” relating to recovery of possession of any
immovable property or relating to recovery of licence fee. Section 5(4A)
of the Rent Act defines the term “licensee” so also Section 52 of the
Indian Easement Act, 1882. Sub-section (4A) of Section 5 of the Rent Act
provides that “licensee” means a person who is in occupation of the
premises or such part as the case may be, under a subsisting agreement for
licence given for a “licence fee or charge”. The definition of “licensee”
under sub-section (4A) of Section 5 is both exhaustive as well as
inclusive. But it is relevant to note that the licensee under sub-section
(4A) must be a licensee whose licence is supported by material
consideration meaning thereby a gratuitous licensee is not covered under
the definition of licensee under sub-section (4A) of Section 5 of the Rent
Act.

43. Let us now examine the definition of “licence” under Section 52 of
the Indian Easement Act which provides that where one person grants to
another, or to a definite number of other persons, a right to do, or
continue to do, in or upon the immovable property of the grantor, something
which would, in the absence of such right be unlawful and such right does
not amount to easement or an interest in the property, the right is called
a licence. This Court in State of Punjab v. Brig. Sukhjit Singh (1993) 3
SCC 459 has observed that “payment of licence fee is not an essential
attribute for subsistence of licence. Section 52, therefore, does not
require any consideration, material or non material to be an element, under
the definition of licence nor does it require the right under the licence
must arise by way of contract or as a result of a mutual promise.

44. We have already referred to Section 52 of the Indian Easement Act and
explained as to how the legislature intended that expression to be
understood. The expressions “licensor” and “licensee” are not only used in
various statutes but are also understood and applied in various fact
situations. The meaning of that expression “licence” has come up for
consideration in several judgments. Reference may be made to the judgment
of this Court in C.M. Beena and Anr. v. P.N. Ramachandra Rao (2004) 3 SCC
595, Sohan Lal Naraindas v. Laxmidas Raghunath Gadit (1971) 1 SCC 276,
Union of India (UOI) v. Prem Kumar Jain and Ors. (1976) 3 SCC 743, Chandy
Varghese and Ors. v. K. Abdul Khader and Ors.  (2003 ) 11 SCC 328.

45. The expression “licensee” has also been explained by this Court in
Surendra Kumar Jain v. Royce Pereira (1997) 8 SCC 759. In P.R. Aiyar’s the
Law Lexicon, Second Edition 1997, License has been explained as “A license
in respect to real estate is defined to be an authority to do a particular
act or series of acts on another’s land without possessing any estate
therein”. The word “licensee” has been explained in Black’s Law
Dictionary, Sixth Edition to mean a person who has a privilege to enter
upon land arising from the permission or consent, express, or implied, of
the possessor of land but who goes on the land for his own purpose rather
than for any purpose or interest of the possessor. Stroud’s Judicial
Dictionary of Words and Phrases, Sixth Edition, Vol. 2 provides the meaning
of word “licensee” to mean a licensee is a person who has permission to do
an act which without such permission would be unlawful.

46. We have referred to the meaning of the expressions “licence” and
“licensee” in various situations rather than one that appears in Section 52
of the Indian Easement Act only to indicate that the word licence is not
popularly understood to mean that it should be on payment of licence fee,
it can also cover a gratuitous licensee as well. In other words, a
licensor can permit a person to enter into another’s property without any
consideration, it can be gratuitous as well.
47. We have already indicated the expression “licence” as reflected in
the definition of licensee under sub-section (4A) of Section 5 of the Rent
Act and Section 52 of the Indian Easement Act are not pari materia. Under
sub-section (4A) of Section 5, there cannot be a licence unsupported by the
material consideration whereas under Section 52 of the Indian Easement Act
payment of licence fee is not an essential requirement for subsistence of
licence. We may indicate that the legislature in its wisdom has not
defined the word “licensee” in the PSCC Act. The purpose is evidently to
make it more wide so as to cover gratuitous licensee as well with an object
to avoid multiplicity of proceedings in different courts causing
unnecessary delay, waste of money and time etc. The object is to see that
all suits and proceedings between a landlord and a tenant or a licensor and
a licensee for recovery of possession of premises or for recovery of rent
or licence fee irrespective of the value of the subject matter should go to
and be disposed of by Small Cause Court. The object behind bringing the
licensor and the licencee within the purview of Section 41(1) by the 1976
Amendment was to curb any mischief of unscrupulous elements using dilatory
tactics in prolonging the cases for recovery of possession instituted by
the landlord/licensor and to defeat their right of approaching the Court
for quick relief and to avoid multiplicity of litigation with an issue of
jurisdiction thereby lingering the disputes for years and years.

48. We may in this connection also refer to the judgment of this Court in
Km. Sonia Bhatia v. State of U.P. and Ors. (1981) 2 SCC 585, wherein this
Court was concerned with the ambit of expression “transfer” and
“consideration” occurring in U.P. Imposition of Ceiling on Land Holdings
Act. Both the expressions were not defined in the Act. In such
circumstances, this Court observed that the word “transfer” has been used
by the legislature in general sense of the term as defined in the Transfer
of Property Act. This Court also observed that the word “transfer” being a
term of well known legal significance having well ascertained incidents,
the legislature did not think it necessary to define the term “transfer”
separately. The ratio laid down by the apex court in the above-mentioned
judgment in our view is also applicable when we interpret the provisions of
the PSCC Act because the object of the Act is to suppress the mischief and
advance the remedy.
49. The interpretation of the expressions licensor and licensee which we
find in Section 41(1), in our view, is in tune with the objects and reasons
reflected in the amendment of the PSCC Act by the Maharashtra Act (XIX) of
1976 which we have already extracted in the earlier part of the judgment.
The objects and reasons as such may not be admissible as an aid of
construction to the statute but it can be referred to for the limited
purpose of ascertaining the conditions prevailing at the time of
introduction of the bill and the extent and urgency of the evil which was
sought to be remedied. The legal position has been well settled by the
judgment of this Court in M.K. Ranganathan and Anr. v. Government of Madras
and Ors.  AIR 1955 SC 604. It is trite law that the statement of objects
and reasons is a key to unlock the mind of legislature in relation to
substantive provisions of statutes and it is also well settled that a
statute is best interpreted when we know why it was enacted. This Court in
Bhaiji v. Sub Divisional Officer, Thandla and Ors.  (2003) 1 SCC 692 stated
that the weight of the judicial authority leans in favour of the view that
the statement of objects and reasons cannot be utilized for the purpose of
restricting and controlling statute and excluding from its operation such
transactions which it plainly covers. Applying the above-mentioned
principle, we cannot restrict the meaning and expression licensee occurring
in Section 41(1) of the PSCC Act to mean the licensee with monetary
consideration as defined under Section 5(4A) of the Rent Act.

 
ONE UMBERALLA POLICY

50. We are of the considered view that the High Court has correctly
noticed that the clubbing of the expression “licensor and licensee” with
“landlord and tenant” in Section 41(1) of the PSCC Act and clubbing of
causes relating to recovery of licence fee is only with a view to bring all
suits between the “landlord and tenant” and the “licensor and licensee”
under one umberalla to avoid unnecessary delay, expenses and hardship. The
act of the legislature was to bring all suits between “landlord and tenant”
and “licensor and licensee” whether under the Rent Act or under the PSCC
Act under one roof. We find it difficult to accept the proposition that
the legislature after having conferred exclusive jurisdiction in one Court
in all the suits between licensee and licensor should have carved out any
exception to keep gratuitous licensee alone outside its jurisdiction. The
various amendments made to Rent Act as well the Objects and Reasons of the
Maharashtra Act XIX of 1976 would clearly indicate that the intention of
the legislature was to avoid unnecessary delay, expense and hardship to the
suitor or else they have to move from the one court to the other not only
on the question of jurisdiction but also getting reliefs.

51. We are of the view that in such a situation the court also should
give a liberal construction and attempt should be to achieve the purpose
and object of the legislature and not to frustrate it. In such
circumstances, we are of the considered opinion that the expression
licensee employed in Section 41 is used in general sense of term as defined
in Section 52 of the Indian Easement Act.

52. We have elaborately discussed the various legal principles and
indicated that the expression ‘licensee’ in Section 41(1) of the PSCC Act
would take a gratuitous licensee as well. The reason for such an
interpretation has been elaborately discussed in the earlier part of the
judgment. Looking from all angles in our view the expression ‘licensee’
used in the PSCC Act does not derive its meaning from the expression
‘licensee’ as used in Sub-section (4A) of Section 5 of the Rent Act and
that the expression “licensee” used in Section 41(1) is a term of wider
import intended to bring in a gratuitous licensee as well.
53. We are, therefore, in complete agreement with the reasoning of the
Full Bench of the High Court. In such circumstances, the appeals lack
merits and are, therefore, dismissed. There is no order as to costs.

 

……………………………..J.
(K.S. Radhakrishnan)

 

 
……………………………..J.
(Dipak Misra)
New Delhi,
|August 13 , 2013 | |
| | |

 

 

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