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Mazda theatres Limited Vs. Gordhandas Tribhuvandas Mangaldas - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberO.C.J. Appeal No. 50/X of 1954 and Suit No. 146 of 1954
Judge
Reported in(1954)56BOMLR1080
AppellantMazda theatres Limited
RespondentGordhandas Tribhuvandas Mangaldas
DispositionAppeal allowed
Excerpt:
.....the rights of the parties were. - - one would have thought that rule 241 was precisely intended to cover a case like this where a lessor and a lessee are disputing their mutual rights and the question of those rights can be determined effectively and finally by the court construing the relevant provision of the lease and deciding what the rights of the parties are. we should like to point out that the learned judge has not exercised the discretion conferred upon him under rule 242. if he had exercised the discretion, the matter might have been different and we would have been very loath to interfere with that discretion. it appears clearly from the record that it was only the counsel for the plaintiffs who had to struggle with the view taken by the learned judge that the..........declaration of their rights or the declaration of the rights of the defendant. the view that the learned judge seems to have taken is that this rule does not apply when on a broad construction of a contract the question to be decided is whether there is or there is no liability on one party or the other under the contract. now, with very great respect to the learned judge, he seems to have overlooked the fact that, if you declare a right under an instrument in favour of a party, it necessarily follows that there is a corresponding liability upon someone else. if in this case the lessees have the right not to pay the entertainment duty on the complimentary tickets to be given to the defendant, obviously there is a liability upon the defendant to pay the entertainment duty. conversely,.....
Judgment:

M.C. Chagla, C.J.

1. This is an appeal against a judgment of Mr. Justice Coyajee by which he held that he had no jurisdiction to maintain an originating summons by reason of the provisions of Rule 241 of the High Court Rules.

2. The plaintiffs, who took out the originating summons, are the lessees and what they wanted was the proper construction of Clause 2(r) of the indenture of lease dated November 21, 1927, and they took out the summons against the lessor, who is the defendant. The parties were agreed on having this clause construed by means of an originating summons and the plaintiffs had agreed to pay the costs of the summons. The question that arose for construction was whether the defendant was entitled to use the complimentary pass issued to him by the lessees free from the liability to pay entertainment duty. Under Clause 2(r) the lessees had undertaken the obligation to give a complimentary pass to the lessor and reserve one box of six seats for the use of the lessor and his family and friends in every show on every day. Now, this obligation was a fairly light obligation till the Government decided to levy entertainment duty even on complimentary tickets. When the Entertainment Tax Act was amended and when the lessees became liable to pay entertainment tax on the complimentary tickets which they had to give to the lessor, the obligation became a very heavy one and therefore the lessees wanted it to be determined by the Court whether the entertainment duty had to be paid by the lessor or by the lessees. This is the question they wanted to be decided by the Court on an originating summons.

3. Now, the rule in question is Rule 241 and that provides :-

Any person claiming to be interested under a deed, will, or written instrument, may apply in Chambers by originating summons for the determination of any question of construction arising under the instrument, and for a declaration of the rights of the person interested.

The only two conditions which are required are that there must be a written instrument and what should be required to be done by the Court is the declaration of the rights of the person interested under the written instrument. In this case, there is a lease : undoubtedly it is a written instrument, and what the plaintiffs seek is the declaration of their rights or the declaration of the rights of the defendant. The view that the learned Judge seems to have taken is that this rule does not apply when on a broad construction of a contract the question to be decided is whether there is or there is no liability on one party or the other under the contract. Now, with very great respect to the learned Judge, he seems to have overlooked the fact that, if you declare a right under an instrument in favour of a party, it necessarily follows that there is a corresponding liability upon someone else. If in this case the lessees have the right not to pay the entertainment duty on the complimentary tickets to be given to the defendant, obviously there is a liability upon the defendant to pay the entertainment duty. Conversely, if there is a right in the defendant to have the complimentary tickets without paying the entertainment duty, then there is an obligation or liability upon the plaintiffs to pay the entertainment duty. Therefore, it is not correct to say that what the plaintiffs wanted to determine was a declaration of liability. The learned Judge also seems to have been under the impression that contractual rights cannot be determined under Rule 241. That again, with respect, is a misapprehension. Rule 241 must be very broadly and liberally interpreted. The right contemplated by that rule is any right, and the whole object of that rule is to make a procedure available to parties which is both cheap and expeditious for determination of disputes as to construction of a written instrument, which dispute could be settled by the Court interpreting the instrument and determining what the rights of the parties are. One would have thought that Rule 241 was precisely intended to cover a case like this where a lessor and a lessee are disputing their mutual rights and the question of those rights can be determined effectively and finally by the Court construing the relevant provision of the lease and deciding what the rights of the parties are. It is perhaps not necessary to point out that our rule is based on the English Rule 1 of Order LIVA, and the view consistently taken by the English Courts is that the word 'instrument' used in the rule was meant to receive a wide construction and applied to any written document under which any right or liability, whether legal or equitable, existed; and there are innumerable cases in the books where a lease has been construed and the rights of the lessor and the lessee determined. We should like to point out that the learned Judge has not exercised the discretion conferred upon him under Rule 242. If he had exercised the discretion, the matter might have been different and we would have been very loath to interfere with that discretion. The view taken by the learned Judge is that he had no jurisdiction to entertain this originating summons under Rule 241. With respect, we think that the view is erroneous and therefore we must set aside the order passed by the learned Judge.

4. The result is, the appeal will be allowed and the order of dismissal passed by the learned Judge is set aside. The originating summons is sent back for trial on merits.

5. With regard to the costs of this appeal, Mr. Laud has argued that the plaintiffs agreed to pay the costs of this proceeding and that this appeal is part of the proceeding and the appeal has been rendered necessary because of the view taken by the learned Judge. Now, it is clear that the proceedings contemplated by the parties were the originating summons and not an appeal arising from the originating summons. As the parties had agreed to abide by the decision of the Court, an appeal could never have been contemplated by the parties. It is because the learned Judge took the view that the originating summons was not maintainable that this appeal has become necessary. It appears clearly from the record that it was only the counsel for the plaintiffs who had to struggle with the view taken by the learned Judge that the originating summons was not maintainable. Counsel for the defendant seems to have played more the part of a satisfied spectator than anything else. If both the parties had agreed to have this matter tried by an originating summons, it was equally the duty of the counsel for the defendant to have pointed out to the learned Judge that under Rule 241 he had jurisdiction to try this originating summons. Under the circumstances, we think the fairest order to make will be that there will be no order as to costs of the appeal.


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