Skip to content


Indian Hotel Co. Ltd. Vs. T. Stevenson - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtMumbai High Court
Decided On
Case NumberChamber Summons No. As of 1981 in Suit No. 170 of 1965
Judge
Reported inAIR1982Bom160
ActsBombay Rents, Hotel and Lodging House Rates Control Act, (1947) - Sections 5 (4A) and (8)
AppellantIndian Hotel Co. Ltd.
RespondentT. Stevenson
Appellant AdvocateI.M. Chagla,;G.A. Thallar,;N.G. Thakkar,;J.R. Gagrat and;V.B. Agrwala, Advs.
Respondent AdvocateR.S. Cooper,;S.D. Nanavati and;S.R. Mishra, Advs.
Excerpt:
a) the case dealt with the meaning of the words 'a room or other accommodation in a hotel or lodging house' in reference to section 5(8)(b) of the bombay rents, hotel and lodging house rates control act, 1947 - it was held that the area occupied by a hairdressing saloon would be considered as a room or accommodation in a hotel - since, the hotel would not be considered as a premises, therefore, the said act would not be applicable in such situation ;b) it was adjudged that a shop-owner in a hotel would not be considered as a protected 'licensee' within the meaning of section 5(4a) of the bombay rents, hotel and lodging house rates control act, 1947;c) the case questioned whether a licensee of a shop in a hotel could be relieved of undertaking given to court for handing over the possession.....order1. the present chamber summons is taken out by the defendant for a relief from an undertaking given to this court contained in the consent terms which disposed of the suit.2. on 28th mar., 1941, the plaintiff who owns the taj mahal hotel in bombay, entered into lease and hire agreement in writing, registered, with jacques m. stevenson in respect of a premises admeasuring about 2,375 sq. it. the plaintiff was running a hair dressing saloon in the said premises and jacques sievenson was to do the same business, the lease was renewed twice, once on 22nd feb., 1943, and again on 5th march 1946, the defendant joined jacques m. stevenson as a partner on 15th mar., 1944, and then took an assignment of the right, title and interest of jacques m. stevenson on 19th sep., 1947, there were.....
Judgment:
ORDER

1. The present chamber summons is taken out by the defendant for a relief from an undertaking given to this Court contained in the consent terms which disposed of the suit.

2. On 28th Mar., 1941, the plaintiff who owns the Taj Mahal Hotel in Bombay, entered into lease and hire agreement in writing, registered, with Jacques M. Stevenson in respect of a premises admeasuring about 2,375 sq. It. The plaintiff was running a hair dressing saloon in the said premises and Jacques Sievenson was to do the same business, The lease was renewed twice, once on 22nd Feb., 1943, and again on 5th March 1946, The defendant joined Jacques M. Stevenson as a partner on 15th Mar., 1944, and then took an assignment of the right, title and interest of Jacques M. Stevenson on 19th Sep., 1947, There were further registered renewals of lease on 17th Mar., 1949, 1st April, 1952 and 12th Feb., 1955, A portion of the said premises was surrendered on 4th July, 1952, with a consequent reduction in the rent. On 9th June, 1958, an agreement was signed between the plaintiff and the defendant with some changes in the terms from those in the previous agreements. According to the defendant. This agreement was surreptitiously and fraudulently got signed by the plaintiff from the defendant on a representation that the terms and conditions were the same as in previous agreements. In Sept., 1958, the defendant got the agreement scrutinized and discovered these changes. From about this time the disputes started between the plaintiff and the defendant 1982 Bom./41 IV G-19 resulting in this suit being filed by the plaintiff against the defendant for possession in which the defendant filed her written statement. Ultimately, the suit reached hearing on 19th Apr., 1969, before Nain J. Consent Terms were arrived at between the plaintiff and the defendant and a decree was obtained in terms thereof. The relevant terms thereof are as follows:

'1. Ordered that the defendant do vacate the suit premises within one month of the plaintiffs intimating to the defendant to occupy the area admeasuring about 1,100 sq. It, on the southern side of the Taj Mahal Hotel Building shown bounded in red on the plan annexed hereto'.

'2. At the time the defendant vacated the suit premises, she shall hand over to the plaintiffs all the articles and things mentioned in the leave and license agreement dated 26th Feb., 1964.'

'3. Agreed that the plaintiffs will paint the walls and the ceiling of the area shown in the plan hereto annexed and provide flooring windows therein. The plaintiffs will also provide therein electric points and water connections as required by the defendant'.

'4. Agreed that the defendant do pay to the plaintiff Rs. 2,850/- per month as compensation for the use and occupation of the said area shown in the plan hereto annexed inclusive of air-conditioning charges. The air-conditioning will be provided by the plaintiff for 10 hours daily only during the defendant's working hours'.

'5. The defendant shall occupy the said area shown in the plan hereto annexed as a mere licensee of the plaintiff and on the terms and conditions contained in the agreement dated 26th Feb., 1964, except as modified herein. The license shall be personal to the defendant alone'.

'6. The license period shall be for 6 years in the first instance beginning from 15th Apr., 1969, with an option to the defendant to renew the said license for a further period of 6 years on the same terms and conditions except as to renewal and provided that the defendant observes and performs all the terms and conditions of the leave and license agreement'.

'7. The defendant undertakes to the Hon'ble Court that she shall hand over to the plaintiffs quiet and peaceful possession of the said area shown in the plan hereto annexed on the expiration of the period of the said license or the sooner determination thereof under the sooner determination thereof under the said agreement of the leave and license.'

'8.Pursuant to the said consent terms, the defendant vacated the portion originally in her possession and took possession of the new premises admeasuring about 1100 sq. Ft. On the southern side of the hotel building.

4. The Bombay Rents Hotel & Lodging. House Rates (Control) Act, 1947, was amended by the Amending Act SVII of 1973, by which certain rights were conferred on the licensees which till then were not available to them provided the licensees were in possession of the premises under a subsisting agreement on 1st Feb. 1973. After the commencement of the Amending Act, according to the plaintiff, the defendant by her advocates letter dated 1st April, 1975, exercised here option to renew the license but the defendant denies any exercise of option by her and denies authority of the advocate to execs such an option and alleges a collusion between the plaintiff and the advocate, Mr. Changla has stated that for the purpose of this application he does not prove the authority of the advocate. He earlier acted for the defendant and says that he will only rely on the affidavits filed.

5. Based on the amendment of the Rent Act, the defendant contends that she has become a protected licensee and that it being the policy of the Legislature to protect licensees, the Court should relieve her from the undertaking which she has given. Mr.Cooper for the defendant has contended that the portion occupied by the defendant which is admittedly an enclosed portion, and therefore, can be called a room is premises within the meaning of the Bombay Rent Act, and that consequently the Rent Act and the protection given thereby in 1973 is available to the defendant, a licensee thereof. The contention on behalf of the plaintiff on the ground that the saloon is not premises within the meaning of the Bombay Rent Act as it will be 'room or other accommodation in a hotel or lodging house' as such specifically excluded from the definition of premises. It is contended in the alternative that the defendant is not a licensee within the meaning of sub-section (4A) of S. 5 of the said Act so not the amendment. It is further contended that in any event, in the facts and circumstances of this case, the defendant is not entitled to and should not be relieved from the undertaking solemnly given.

6.Mr. Cooper took me through the scheme of the Rent Act in support of his contention. Section 5(2) defines hotel or lodging house o mean 'a building or part of a building where lodging with or without board or other services by way of business is provided for a monetary consideration'. Section 5(8) defines presses and goes on to say but does not include a room or other accommodation in the hotel or lodging of the Act show that the Act is enacted relating to, inter alia, control or rates of hotels and lodging houses and of evictions and also to control the charges for licence of premises etc. Mr. Cooper then referred to Part II of the Act to show business premises and contended that include a part of hotel building given for a shop. This contention of Mr. Cooper is not disputable. Looking to the pronto deal as such with a relationship deals only with the premises let out for residential and business purposes. The relationship between the hotel or lodging house lodger which is normally not that landlord and tenant, is normally dealt with by part III as pointed our provides for fixation by the Controller of fair rate to be charged for boarding, lodging house. The controller may also daily and monthly lodgers as also the number of lodgers to be accommodated in each room or specified accommodation. Section 37 prohibits recovery by a hotel of charges in excess of the fair rate. Section 38 prohibits ejectment if fair rate is not paid. According to me it is clear that the provision of the Rent Act divide themselves into two main parts, one relating to the premises let out for residential or business purposes and the other regulating the relation ship between the hotel owners and lodgers. The contention of Mr.Cooper is that the intention of the Legislature in excluding the room or other accommodation from the definition of the premises was to exclude from the operation of par II, only such portions and relationships as were to be controlled under part III and not other. I am unable to accept this contention of Mr.Cooper.

7. It is rarely, if at all, that a hotel or a lodging house lets out a room or accommodation to a lodger. Basically the relationship between the hotel and its lodger is that of the licensor and licensee. The definition in the act was there even before the amendment giving protection to licensees. If the intention of the Legislature, therefore, was to exclude only those rooms or accommodations which are given out to the lodger as licensee, it was not necessary for the Legislature to exclude the room or accommodation as it has done from the definition of 'premises'. It is contended by Mr. Chagla that when any land or building is given out on lease for running a hotel the protection of rent act is available to the hotel owner as it will be a lease of premises within the meaning of S. 5(8) and this is not disputed on behalf of the defendant. The question is when the hotel owner in his turn gives a room to a lodger what would be the relationship and what would be the in his moderation in a hotel were not excluded from 'premises'. In such a case linger not being a tenant is not protected. In my view the exclusion of room or other accommodation from the premises was accommodation which were being given out by the hotels to the lodgers in normal way inasmuch as such exclusion was not necessary there being not relationship of landlord and tenant which alone was sought to be protected under part II. In most of the cases a lodger could not have taken a contention that he is a tenant. In any case, the provisions of part III which specifically apply as between a hotel and a lodger would be sufficient to destroy and such contention. Therefore, the words room or other accommodation must include something else than the portions being position. I must considers to what was intended to be excluded by those words.

8. I felt happy when on behalf of the plaintiff it was pointed out to me that the Supreme Court has already spoken on the subject while interpreting a cognate statue applicable in Delhi in Associated Hotels Ltd. V.r.n Kapoor, : [1960]1SCR368 . The happiness that I felt was short lived and was brought to an

end when Mr.Cooper contended with considerable force that there are three varying judgments given by the

by the Bench consisting of three Judges and that though the appellant succeeded on the majority views that is no common ratio deducible from these judgments and what binds me is the ratio and not the conclusion on the facts of the case. Though I was hard put to do so I believe I have been able to discern the ratio of the majority decision but after considerable effort and struggle. In this I was also helped by the decision of this Court in Narendra Bachubhai Dave v. Jethalal S. Dave (1975) 78 BLR 196 wherein it is said 'the ratio of the Supreme Court case is that the rooms Supreme Court case is that the rooms sublet must be room in a hotel not only in physical sense but in the sense that it is directly r indirectly used by the hotel'. Though the ratio as culled out in the said judgment of this Court is binding upon me I think it is necessary to analyze the judgments in the Supreme court once again to do justice to the forceful contention of Mr. Cooper regarding absence of any ratio end the difficulty I faced in discovering the ratio.

9. In that matter before the Supreme Court, the appellant was the proprietor of a hotel called Imperial Hotel housed in a building on Queens Road New Delhi. One R. N, Kapoor was the proprietor of a business carried on under the name of Madam Janes. Under an agreement with the appellant, the came to occupy certain space in the ladies and gents cloak room of the Imperial Hotel,

*It seems that citation and names of parties do not correspond.............Ed.

paying initially at the rate of Rs. 800/- and subsequently Rs. 700/- per month. The business being carried on was that of a barber shop and lodger in the hotel as also outsiders were entitled to visit the said shop i.e. the shop was not meant exclusively for the residents of the hotel. The question was whether the relationship was governed by the Rent Control Act applicable in Delhi which excluded from the meaning of the words premises, a room in dharamshala hotel or lodging house. However, the word hotel was not defined in the said Act. The first question that arose was whether the relationship was that of landlord and tenant or licenser and licensee and it was held that the agreement really amounted to a lease and no a license as is apparent from the discussion in the judgment of Subba Rao. J., with which S. K. Das, J., concurred in his separate judgment. As regards the next questions to availability of the protection of the Rent Act, after comparing the proviso of the Act applicable in Delhi and the absence of definition of hotel and lodging house in the Act under his consideration, it is held by S. K. Das, J:-

'(5) Passing now from definitions which are apt not to be uniform, the question is whether the partitioned spaces in the two cloak rooms let out to the respondent were rooms in that hotel. In a physical sense they were undoubtedly rooms in that hotel. I am prepared, however, to say that a strictly literal construction may not be justified and the word 'room' in the compost expression 'room' in a hotel. Must take colour from the context of or the collocation of words in which it has been used; in other words, its meaning should be determined noscitur a socials. The reason why I think so may be explained by an illustration. Suppose there is a big room inside a hotel: in a physical sense it is a room in a hotel, but let us suppose that it is let out, to take an extreme example, as a timber godown. Will it still be a room in a hotel, though in a physical sense it is a room of the building which is used as a hotel? I think it would be doing violence to the context if the expression 'room' in a hotel is interpreted in a strictly literal sense. On the view which I take a room to a hotel must part fulfill two conditions; (1) it must be part of a hole in the physical sense and (2) its user must be connected with the general purpose of the hotel of which it is a part. In the case under our consideration the spaces were let out for carrying on the business o a hair dresser. Such a business I consider to be one of the amenities which a modern hotel provides., the circumstances that people not resident in the hotel might also be served by the hair dresser does not for the residents in the hotel to have a hair dressing saloon within the hotel facilities to its residents; some hotels also non-residents can play billiards on ties by letting out rooms in the hotel for that purpose. All these ammoniating and barber's shop within the hotel thus according to S.K. Das, J., to he a room in the hotel, two factors are a queried to be considered, viz; physical connection with the hotel and the purpose for which it was used.

10. On reading the judgment of Sarkar, J., it did appear on first reading that as contended by Mr.Cooper he takes a view which is different from the comes to the same conclusion that the room in question was a room in a hotel and so not 'premises' and the Rent Act the Difference Between the two judge merges. After discussing and stating censer and not a tenant, searcher J., proceeds to consider to what extent the Act and for that purpose the mean agrees with what khosla, J., held in the intimately connected with the hotel as says AIR 1959 SC 1266;- 'I do not appreciate why any room in an hotel is not intimately connected with it, by which apparently is meant, the business of the hotel. The business of the hotel is carried on in the whole building and therefore, in every part of it. It would be difficult to say that one part of the building is more intimately connected with the hotel business than another. Nor do I see any reason why a the Act should exempt from its protection a part which is intimately connected as it is said, and which I confess I do not understand, and not a part not so intimately connected. I also do not understand what is meant by saying that a part of an hotel supplies essential amenities. The idea of a essentiality of an amenity is so vague as to be unworkable. This test would introduce great uncertainty in the working of the Act Nor do I see any reason why the Act which could not have been intended. Nor do I see any reason why the Act a room which is an protection in a room which is an essential amity of the hotel and not other rooms in it.' He then disapproves the part of the judgment of Kohl, J., where Khoslas, hotel may be within the definition, it must be let out for the purpose of the hotel sarkar, J., says AIR 1959 SC 1959. 'By this it is apparently meant that the room must be let our to supply board or give other services to the guests to do which are the purposes of a hotel, Again I find no justification for the view, there is nothing in the definition about the purposes of the letting out, nor an I aware that hotel proprietors are in the habit of letting out portions of the hotel premises to others for supplying hotel premises to others for supplying hotels. It may be that a hotel proprietor grants licenses t contractors to use parts of his premises to provide board and services to the guests in the hotel. This however is a different matter and with such licenses we are not concerned. Again, a proprietor of a different kind of business who lets out a the purposes of his business does not get an exemption from the operation of the Act. I am unable to see why the proprietor of a hotel business should have special consideration. The act not doubt exempts a room in a hotel but it says nothing about the purposes for which the room must be out to get the exemption. Further, not only a room a in a hotel is exempted by the definition but at the same time also a room in a dharamsala. If a room in a hotel within the Act is a room let out for the purposes of the hotel so must therefore be a room in a dharmsala./ it would however be difficult to see how a room in a dharmasala can be let out for the purposes of the dharamasala for food or give any services, properly so called'. He thereafter observes AIR 1959 S.c. 1267; 'Having given the mater may best consideration. I have not been able to find any reason why the words used in the definition should not have there plain meaning given to them. I there fore come to the conclusion that a room in a hotel within the definition is any room in a building in the whole of which the business of hotel is run. So understood, the definition would include the spaces in the cloak rooms of the Imperial Hotel with which we are concerned. These spaces are, in my view, rooms in a hotel and excluded from the operation of the Act, The Rent Controller had not power to fix any standard rent in respect of them'.

11. The view of Sarkar, J., appears to me to be that one must first apply the 2nd test laid down by S.K. Das,j.,about the purpose for which the entire building or portions thereof is used only a part thereof is being used for running a hotel and thereafter any room in be is to be excluded from the premises in my view there is not must difference learned judges of the supreme court and the application of the tests laid down in both the judgments will ultimately give the same result when applied for determining whether a particular room is a room in a hotel. The ratio of the tow judgments is that one must ascertain whether the portion in question is part of the same building or definable portion thereof which is used for the purpose of the hotel or the or indirectly. Whichever of the tow judgments are applied in the present case the conclusion must be that the room occupied by the defendant is a room or accommodation in a hotel.

12.If I have had to choose between the ratio of three judgments on the basis that there is not common ratio, it would have preferred to follow the judgment of S.K. Das, J. I am therefore of the opinion that the area occupied by the hairdressing saloon of the defendant is a room or an accommodation in a hotel and therefrom not premises within the meaning of the Rent Act and hence

rent Act does not apply thereto consequently even if the protection given to a licensee would have relationship between the plaintiff and the defendant, it is not available as that area is not premises to which the rent act applies.

13. Mr. Chagla has further contended that assuming that it is such premises as is covered by the definition in the rent act the defendant does not get the protection as a licensee because she contained in section 5(4-A) of the said act he relies on the following portion of the definitions: 'Licensee, in respect of any premises or part thereof means........ but does not include..... a person having any accommodation in a hotel, lodging house, hotel guest house, club, nursing home, hospital sanatorium, dharmashala, home for widows, orphans or like premises marriage or public hall or like entertainment or like institutions... or a person having accommodation in any premises or part thereof for conducting a canteen, creche, dispensary or other services as amenities by any undertaking or institution. According to Mr. Chagla either one or the other part of the said portion will cover the relationship between the plaintiff and the defendant and there fore she will not get the protection of the Rent Act. The words a person having any accommodation' applies to the accommodation not only in a hotel but also in such other institutions as hospitals marriage or public halls, or places o amusement or entertain met or like institution. The clear intention is not to confine the exception in respect of a person who is a lodger or an accommodation occupied by a lodger. The words 'person'and 'accommodation' have a wide meaning and any person who has been given any accommodation in the types of establishment mentioned is excluded from the definition of 'licensee'.There is no reason to give a narrower meaning to these words. They would, thereafter, include any type of accommodation given to any person provided the accommodation has some connection with or nexus to such establishments. It is now so well-known as can be taken judicial notice of that many hotels give out shops as licensees to various parties for running banks, travel agencies, boutiques, shoe shops drug stores, hair dressing saloon, book shop, etc. The intention of giving accommodation for these purposes is mainly that the clientele of the hotel gets the benefit thereof and can meet its requirements in the very premises of the hotel rather than so got the clienteles of the hotel may not be sufficing to enable the shop owners to run them profitably, and therefore, they are also allowed to cater to the outside market but this does not take away or in any way affect the basic idea and intention of attracting clients and of making the stay more comfortable for the clients who are lodgers. If this is the intention the hotels must necessarily have some control over these shop owners. It is quite possible, looking to the business methods, that in a desire to steal a march over competitors, a hotel owner or a group of hotel owners may himself or itself acquire shops are situated that will suffer. It in respect of top grade luxury hotel words get around that you cannot get a proper hair cut or hairdressing or that it has a useless book shop or that there are several shops which sell sub-standard goods of are cheating, it will affect the whole hotel. It is possible, that keeping this in mind the initial exemption in a hotel or lodging house from it being a premises and exclusion is made while giving protection to the licensees. On that interpretation that I have given to the definition of 'premises' there was no necessity of excluding a person occupying any accommodation in a hotel while defining licensee, the same having been excluded from the definition of premises'. However, this appears to have been done by why of abundant caution. The contention of Mr. Chagla that even it the portion occupied by the 1973 amendment to the Rent Act has to be accepted.

14. Mr. Cooper then contended on the assumption that the defendant is entitled to the protection of the Rent Act, that the defendant should be elided from the undertaking. Mr. Cooper has very fairly stated that he does not want to contend in the present proceedings that if the defendant has acquired the protection of the Rent Act she ceased to be bound by the undertaking on acquiring such protection but has argued the entire matter on the basis the even if she is seek relief from the undertaking. In the view that I have taken, it is not necessary to decide this question but since this question was debated fully before me I am expressing my opinion.

15. Mr. Cooper contends as follows. At the time when the undertaking was given, under the law it was the legal obligation of the defendant as a licensee to deliver back possession on the license coming to an end by efflux of time or otherwise and correspondingly there was a legal right in the plaintiff to take possession: however as the subject matter in respect of which undertaking was given was not part of the subject matter of the suit and consequently in view of legal position then obtainable under O. 23, R. 3, a decree for possession of the licensed premises could not have been passed, while arriving at the agreement for giving license with option of renewal, the undertaking was given so as to obviate the plaintiff being driven to filing of a fresh suit for possession. According to Mr. Cooper, the undertaking was only a method of ensuring by reassure of courts sanction that the defendant carried out her obligations. He contends that the entire basis viz., the legal right to obtain possession of the shop has vanished as a result of Legislative enactment and the defendant is now entitled to retain the premises by reason of the protection afforded by the amendment to a licensee. Mr. Cooper says that this granting of protection to licensees being a legislative policy is public policy and the court must fall in line and relieve the defendant from the undertaking. In support of his contention that such public policy should prevail and court should act in accordance therewith, he relied on Natraj studios (P) Ltd. V. Navrang studios AIR 1981 SC 537. In that case there was an agreement to refer to arbitration the disputes as may arise between the parties. The Bombay Rent Act applied to the relationship between the parties. The question arose as to whether the matter is referable to arbitration or that because of special jurisdiction conferred on the small causes court, the arbitration agreement cannot effective, while considering this position, it is observed as follows :

'17. The Bombay Rent Act is a welfare legislation aimed at the definite social objective of protection of tenants against harassment by landlords in various ways. It is a matter public policy. The scheme of the Act shows that the conferment of exclusive jurisdiction on certain courts is pursuant to the social objective at which the legislation aims. Public policy requires that contracts to the contrary which nullify the rights conferred on tenants by the Act cannot be permitted. Therefore, public policy requires that parties can not also be permitted to contract out of certain kind of disputes to be settled by special courts constituted by the Act. It follows that arbitration agreements between parties whose rights are regulated by the Bombay Rent Act cannot be recognized by a court of Law.'

16 It is to be noticed that the aid of the public policy, obviously meaning thereby the legislative policy, was taken to interpret the intention of the Legislature in conferring special jurisdiction. Here the question that has arisen is very different. In the present case the conflict, if any, is between the protection afforded by the Legislature and the undertaking given by the defendant. The Legislature has not given protection to the licensees notwithstanding any decree or order of the court. The intention of the Legislature is clearly not to give protection against the decree or order of the court. Even though protection of licensees may be a matter of public policy it will on the other hand be dangerous and contrary to public policy to allow a person who has solemnly given an undertaking to court to commit a breach thereof or grant exemption therefrom to enable him to avail of the protection under the Act. The policy of Legislature cannot be taken to be to allow a person to commit such breach unless it was so specifically indicated by the normal words such as 'notwithstanding any decree or order of the court' which are to be found in other provisions of the Rent Act. For example such words were used while introducing in S. 15, the amendment granting protection to a sub-tenant , in the year 1959. Accordingly , I do not see any substance in the contention of Mr.cooper that public policy requires granting of exemption from the undertaking. I find support for my view undertaking. I find support for my view from the judgment of this court in Narendra v.Jethalal : (1978)80BOMLR196 , wherein similar question arose. In that case there was an operative decree for possession with the undertaking that it was not to be executed till a particular time and a corresponding undertaking to hand over possession on the due date. It was contended therein as in the present case that by virtue of the consent decree the defendant therein was a licensee and the defendant being in possession on 1st Feb.1973, under a subsisting agreement of license, had acquired protection under the Rent Act. This contention was negative as in that case it was clear that the defendant was not a licensee even under general law. However, it is not possible to say so in the present case and it is agreed on both the sides that the defendant is a licensee within its meaning under general law; the only dispute being whether she is a licensee within the meaning of Rent Act and protected by the provisions of the Rent Act and which question is decided in the negative for reasons already mentioned. After holding that the defendant was not a licensee, the learned Judge proceeded to consider the other contentions also since all the contentions were fully argued before the court, and therefore, though the remaining portion of the judgment can be said to be obiter will be of very high persuasive value. I need not refer to the various contentions or the facts of that case but it will be sufficient to quote certain portions of the judgment, which relevant portions are as follows :

'In the present case, as we shall presently show, there are no words used in S. 15A of the Bombay Rent Act which in express terms override the effect of any decree for possession passed in favour of a party. Moreover, in that case the rights under the decree were proprietary rights which vested in the state with retrospective effect. The decree, therefore , was executable , in any event, only at the instance of the State and the right of the appellant to be continued in possession of the land as malik makbuza had been recognized by the state itself. The observation in the judgment that the decree had become inexecutable, on which strong reliance has been placed by Mr.Methta, must be considered in the light of these facts. In the case before us, apart from there being no words in S. 15A of the Bombay Rent Act which express an intention to override any decree, there is no provision which takes away the right of the decree-holder or vests it in the state or any other authority as in the case before the supreme court. In these circumstances, it appears to us that the ratio in that decision has no application to the case before us. On the other hand, we find that in Ramdas v. Monica : AIR1974Bom245 , it has been held by a full Bench of this court that the provisions of the Bombay Rent Act do not apply to appeals pending on the date on which the provisions of parts II and III if the Act were applied to the premises which were the subject-matter of the proceedings. In that case, the view previously taken, that S. 12 of the Bombay Rent Act is prospective and not retrospective, has been clearly approved . It appears to us that in the light of this decision, there is substance in the sub-mission of Mr.Sorabjee that the appellants are not entitled to claim protection of the provisions of sec. 12(1) of the Bombay Rent Act. The provisions of S. 15A are prospective as from Feb. 1.1973 . On the plain terms of S. 15A of the Bombay Rent Act, there is nothing to show that it was intended to override to show that it was intended to override any decree for possession which might have been passed prior to its coming into force'.

'In view of these decisions, it appears to us that although certain consequences which may result from a contract might also result from consent decree, nevertheless a consent decree passed by a court on the basis of compromise between the parties cannot be equated with a contract, but must be regarded as something more than a contract. In our opinion, the mere use of the word 'contract' in the non obstinate clause in S. 15A of the Bombay Rent Act is not enough to override a consent decree which provides for possession being handed over'.

17. No doubt the words used are in the context of that decree which provide for an executable decree for possession but in my view it will make no difference whether the decree proved for possession or that the right of the plaintiff was sought to be protected by an undertaking. The ultimate object of both the provisions will be to ensure that the plaintiff gets his possession though intervention of a court in case of default. In case of a decree for possession, by execution and in case of an undertaking by forcing a person to give possession under a threat of contempt proceedings, which may result in his imprisonment or imposition of fine. It is not necessary for me to decide whether in case of a breach of an undertaking to give possession as in the present case, a court on a proper application can make an order for possession also, apart from punishing the person for contempt.

18. Mr. Chagla relied on the judgment of Lentin, J.dated 21st Dec.1973, in company Application No.120 of 1973, in company petition No.170 of 1967 R.N. Bhagat v. Official Liquidator. In that case, on or about 2nd April 1970 Bhagat had given an undertaking to court in consideration of permission granted to him by the official liquidator to continue to use and occupy the company flat at Kanta Nivas. The undertaking, inter alia, was that in the event of certain contingencies arising, on the official Liquidator calling upon him to hand over the flat, he and his family members will forthwith remove themselves from the said flat and hand over peaceful possession to the official liquidator without claiming any right or interest therein. Thereafter, the landlords (respondents Nos.2 to 5 before Lentin, J.) took out a chamber summons against the official liquidator for order and direction against the official liquidator to deliver to them the possession of the said flat. The applicant was not made a party to nor was he given notice of he judge's summons taken out by the landlord. The said Bhagat sought to appear at the hearing of the said Judge's summons but was not allowed to appear. The judge's summons taken out by the landlord was made absolute and the official liquidator was directed to get possession from Bhagat and hand over possession to the landlord, Bhagat sought to oppose handing over possession, inter alia, on the ground that he had acquired protection under S. 15A of the Rent Act since Feb.1973 and that the appellant was relieved of or was discharged from his undertaking by reason thereof. Contentions made on behalf of Bhagat were negatived and certain observations made were relied on by Mr.chagla. These observations were :

'Does it now behave the applicant to come forth and ask that he be discharged from his undertaking or that the same be modified when on the faith thereof he obtained from the court, which otherwise he would not have the indulgence and concession to occupy the suit premises? In my opinion, the answer is in the negative. To answer otherwise would be to shake the very foundation of the confidence reposed by the public at large in the solemnity of assurances given to the court, If the court were to find itself helpless in such circumstances, the value of such solemn assurances given by a party to the court, on the faith whereof he obtains a concession, indulgence, or relief from the court would be nil, and would result in subversion of judicial authority to the detriment of public interest'.

'It must be remembered that even prior to S. 15A coming to the statute book, it was open to the applicant if he had not given the undertaking to have claimed a sub-tenancy as he was in exclaimed a sub-tenancy as he was in exclusive possession of the flat since 1955. It was in order to ensure that he would not make any such claim, that not only was he required to execute the undertaking to that effect on 2nd April 1970, but in addition to make assurance doubly sure, Kantawala, J., as he then was took a further personal undertaking from him to vacate as and when called upon to do by the court. In view of these undertakings, the applicant could not have successfully set up a claim to tenancy even if section 15A of the Rent Act had not been enacted. In my opinion, the position is in no way different, and has in no way changed, merely by reasons of the enactment of S. 15A. Assuming that under S. 15A he is deemed to be a tenant, the undertakings given by him mean, as they necessarily must, that he will not stake a claim to tenancy but that as a gentleman and in pursuance of the undertaking given by him he would vacate as and when called upon by the court. In other words, even if under S. 15A of the Rent Act, the applicant is deemed to be a tenant, it is for him to say that in spite thereof, he will carry out the solemn assurance given by him to the court, and not claim any interest in he property which though in law he might be entitled to do. In re West Devon Great consol mine, reported in (1888) 38 Ch D 51, it was held that an undertaking not to appeal is binding even though the right to appeal existed . On the same ratio, even assuming that the applicant is deemed to be a tenant under S. 15A, in view of the personal undertaking given by him to Kantawala, J. As he then was, not to claim any interest in the flat save and except by way of permissive use, he cannot now avail himself of the title, if any endowed upon him by S. 15A of the Rent Act. Greater the reason why the undertakings must be carried out and must be enforced is because the undertakings given by the applicant were not the result of any agreement or compromise between him and any party to the proceedings but were solemn assurances given in order, to obtain a relief, indulgence and concession from the court to continue to occupy the flat. There is no question of the applicant and the court having arrived at a contract. There can be no contract between a party and the court'.

'In my opinion, it does not behave the applicant to contend that he is protected from eviction merely because a status, if any, of a tenant has been conferred upon him by S. 15A of the Rent Act'.

19. In reply Mr. Cooper pointed out some portions of the judgment and contended that an undertaking given to the court to get a concession from the court stands on a different footing from an undertaking given to court to get concession from a party to the litigation, and therefore, when the defendant in the present case has acquired a right to continue in possession of the property subsequent to giving of an undertaking the defendant who did not obtain any concession from the court but gave the undertaking only as a part of the settlement, should be relieved from the undertaking. The portions relied on by Mr.Cooper read as follows :

'As far as the present summons is concerned, what must be ascertained is, whether by giving his undertaking to the court, the applicant obtain an indulgence or concession from the court but for which undertaking he would not have obtained. The answer is obviously in the affirmative. An undertaking given by a party to the court on the faith whereof he obtains an indulgence or concession from the court which other wise he would not have obtained, must necessarily stand on a higher footing than an undertaking given to the court for a concession or indulgence received by that party from the opposite party. An undertaking to the court constitutes more than a solemn promise, assurance and guarantee given by a person to the court in order to obtain a relief or concession from the court and hence such an undertaking is and must necessarily be more sacrosanct than a mere order of the court, passed with or without the consent of the other party. While a consent order taken by parties may merely be a bargain arrived at between them with the imprimatur of the court, such an imprimatur does not and cannot make the court itself a party to the bargain embodied in such consent order. However, in the case of an undertaking given by a person to the court on the faith whereof the court gives that person relief, indulgence or concession which the court would not have done but for the solemnity of his assurances, it is not only in the public interest and public policy, but also for the more effective administration of justice that the court should hold that person to his obligation solemnity given by the undertaking and on the faith of which the court has acted. To allow the applicant to reprobate his solemn oblivion to carry out his undertaking after approbation the indulgence, concession and relief given to him by the court on the faith of his undertaking, would be an impediment to the smooth administration of justice and an encouragement of breach of faith towards the court by others like-minded'.

'The undertaking given in person by the applicant to Kantawala, J., as he then was and the undertakings executed by him on 2nd April 1970 stand on a higher footing than had he given similar undertakings to the court to obtain from the opposite party which in this case there was none.'

'None of these decisions can be of assistance to the applicant. The facts and circumstances in those cases have not the slightest semblance or bearing to those in the matter before me. There is no decree in the matter before me. There is no opposite party in the matter before me. Before me is a simple undertaking given by the applicant, to the court on the faith and bona fides whereof an indulgence was given to the applicant by the court to occupy the premises. To my mind, such an undertaking would not attract the provisions of S. 15A of the Bombay Rent Act or fall within the ratio of the decisions relied on by Mr.Shah'.

'Mr. Shah finally contended that this was a fit case where the applicant should be relived from his undertakings on the following grounds. Firstly, the background and the context in which the earlier undertaking was given was designed merely for preventing the applicant from committing default in the payment of monthly compensation. Secondly, that the object of enforcing the undertaking today was to aid, implement, perpetrate and approve of an illegal compromise or to sanction an illegality. Mr.Shah elaborated that if the landlords were to file a suit against the applicant for recovery of possession such compromise could never be enforced nor could the applicant be evicted for reason other than those contemplated by the Bombay Rent Act. According to Mr.Shah, through the medium of the Official Liquidator and/or the court, the landlords are attempting to bypass by provisions of the amended Act and the court should not give assistance to such landlords by taking advantage of its dominant position qua the applicant'.

'Coming to the first ground urged by Mr. Shah, the same can be repelled briefly by stating that the background and the context of the undertaking originally given by the applicant, namely that he would pay the monthly compensation without making any default, can possibly have no relevance to the undertakings executed by him on 2nd April 1970 and a personal undertaking given by him to Kantawala, J., as he then was.

Regarding the second ground urged by Mr.Shah it is difficult to see how the question of any compromise, legal or illegal, arises. It can never be said that by accepting the undertakings of the applicant, there was a 'compromise' between the applicant and the court. The contention that the court would be sanctioning an illegality must be urged to be rejected. Success or failure by the landlords in eviction proceedings against the applicant in the court of small causes can in no way militate from the undertaking given by the applicant, not by way of any compromise but in order to obtain relief and concession from the court but for which undertaking such relief or concession would never have been given to him. There is no question of the landlords attempting to bypass S. 15A. The applicant having given his undertakings must stand by them and must hand over possession to the official Liquidator which the latter was directed to take from the applicant by Nain J. By his order dated 6th July, 1973.'

20. The question before Nain J. Was the effect of the undertaking given to the court to get a concession from the court to get a concession from the court and while considering certain cases cited several observations are made which create an impression that there is some difference between the there is some difference between the two types of undertakings mentioned above. However, on a close reading of the judgment this subtle distinction is not supported. The observations made in the said judgment which tend to draw distinction between the undertaking given to the court to obtain concession from the court and the undertaking given to the court whilst settling the disputes between two parties were made only with a view to emphasize the fact that the undertaking was not given pursuant to any contract as there can be no contract between any party and the court, and the learned Judge did not intend to say that the undertaking given to the court in implementation of a settlement between the parties are on a different footing. In any event, the question before the learned Judge was not whether the undertaking given to court to obtain concession from the court stands on different and higher footing than one given as a part of a compromise between the parties. None of the parties were in any way concerned with effect of the latter type of undertaking and obviously no arguments were advanced for or against such a distinction. The judgment then is not an authority for the proposition that the two types of undertakings stand on a different footing. If such a proposition is to be accepted several questions will immediately arise. What is the distinction? In what way one has higher sanctity than the other? To what extent is the sanctity higher? Does a breach of one type of undertaking lead to higher punishment than the other? Is the relief from one to be granted for grounds more stringent than the other? In my view acceptance of such a contention would lead to invidious distinction between the different undertakings given to the court and to unnecessary legal gymnastics. Undertakings given to the court for whatever reason must always remain an undertaking to the court and the purpose for which it is given cannot make any difference to its ultimate effect. The principle to be borne in mind in considering the effect of an undertaking is to be found in the very passages in the judgment recited above and which is to the effect that if a person is to be deemed to be discharged or is to be discharged from an undertaking because of such subsequent events as in that case, which are similar to those in the present case , the very foundations of the confidence reposed by the public at large in solemnity of assurances given to the court will be shaken and would result in subversion of the judicial authority to the detriment of public interest. The observation in the said judgment to the effect that it was in order to ensure that Bhagat would not make any claim in future as he may otherwise be free to make that he was required to execute an underrating as also was required to give further personal undertaking to vacate and that the position had not in any way changed merely by reason of the enactment of S. 15A even assuming that Bhagat could be deemed to be a tenant under S. 15A, are according to me, equally applicable in case of an undertaking given to the court whilst settling a matter and arriving at consent-terms between the parties.

21. This being the position I am of the view that it lies ill in the mouth of any party to say 'though I have given a solemn undertaking which I had given for obtaining concession from the opponent and thought I have now enjoyed the full benefit of the concession, please relieve me of the same because though it is within my power to comply with the undertaking the Legislature has now sought to give me further benefit'. The benefit given by the Legislature is a right conferred on the party but it does not take away the power of the party to comply with the undertaking and this by itself cannot be a ground for holding that the party is not bound by the undertaking or for relieving the party from the undertaking.

22. In the present case, in the suit in which the undertaking was given there were disputed claims and couture-claims between the plaintiff and the defendant without going into the merits of the case, the parties decided to obtain concession from each other and an undertaking to court was the basis for such concession. It is possible that the plaintiff would have succeeded in the suit and the defendant would have had to vacate forthwith. It is possible that the plaintiff would have lost the suit and the defendant would have would have lost continued in possession as a protected tenant and the plaintiff would have been driven to eviction proceedings if necessary grounds then existed. In this position, the defendant obtained concession from the plaintiff as a result of which she became entitled to continue in possession for a period of 6 years as a licensee in the alternative premises with an option to continue for a further period of six years and the plaintiff ensured to stifle (and if Mr. Cooper's contention was to be accepted, unsuccessfully attempted to ensure) the the plaintiff will get possession at the end of 12 years maximum. With a view to see that the plaintiff gave such a concession and to ensure that the plaintiff struck to and honoured his concession the result of which was that the defendant was able to continue in the portion originally given alternatively, a mandatory provision in the decree was made and in return with a view to ensure that the defendant vacated the accommodation in her possession the plaintiff required her to give an undertaking to court and undertaking was given by her to the court, Having obtained and fully enjoyed this concession in such a manner and now when it is not possible to restore the benefit obtained by her the defendant has come to the court for relief from her undertaking. It can hardly lie in the mouth of the defendant to say that it is just and equitable that she should be relieved of her undertaking. The plaintiff on relieving the defendant from her undertaking would be that both parties should be relegated to the same position as it was obtainable at the time it was given and which is impossible to do today. In the circumstances, it is not just or equitable to relieve the defendant from her undertaking.

23. Apart from the ground of public policy no other grounds are urged for granting such a relief and this I have negatived. However ,I must point out certain disturbing aspect of this application and which makes it thoroughly unjustified and dishonest for the defendant to apply for the relief in the manner she has done. In the affidavit-in-support of the chamber summons for relief from undertaking it is stated in paragraph 3 thereof as follows :-

'3 Upon the defendant making the aforesaid statements and giving the aforesaid undertaking the plaintiffs accepted the defendant as a licensee of the suit premises referred in the consent decree in the above matter and defendant became entitled to remain in possession of the suit premises as a licensee of the plaintiffs on the terms and conditions contained in the agreement dated 26th February 1964 except as modified by the said consent decree and the said license was for first instance for six years beginning from 15th August 1969 with an option to the defendant to renew the said licence for a period of further six years on the same terms and conditions provided that the defendant observes and performs all the terms and provided in the consent terms and consent decree the defendant was to remain in the possession of the suit premises till 14th April 1981 as the licensee of the plaintiffs on the payment of the monthly compensation as provided therein .Accordingly, the defendant continued to pay such licence fee regularly every month as a compensation for the use and occupation of the area described in the plan annexed to the said consent decree.'

It is clear therefore that according to the defendant she was to remain in possession of the suit premises till 14th Apr.1981. The consent-terms are clear that she was to remain in possession till that date only if she exercised her option, and therefore, this statement clearly implies that she has exercised her option. It is again stated in para 6 towards the end to the effect that the defendant is entitled to remain and to continue in possession notwithstanding the defendant is entitled to remain and to continue in possession notwithstanding the undertaking even after 24th Apr. 1981 (which is admitted to be a mistake for 14th Apr. 1981). It is difficult to see how this date could have been mentioned if the defendant had not exercised the option as she is now suggesting. The plaintiff letter from one Mr. Razvi, advocate, acting, on behalf of the defendant, by which the option was first mentioned in the affidavit of 19th Feb. 1981. The letter was specifically referred to and annexed to the further affidavit dated 3rd April, 22nd Feb. 1981 has denied the exercise of option completely as follows.

'I deny that I have enjoyed the benefit of the said consent decree and had exercised the option mentioned in the consent decree and has taken out this chamber summons only when the time to vacate the premises mentioned in plan Ex. 'B' to the consent decree is about to reach as alleged. I say that neither I nor my advocates M/s. Pathare neither I nor my advocates M/s.. pathare & co. To my knowledge have exercised the option.'

At the hearing the defendant has throughout her counsel specifically denied the authority of Mr. Rizvi to write such a letter. To me this denial appears to be false and dishonest. It she had no knowledge about the option having been knowledge about the option having been exercised she could not have mentioned the date of 14th Apr. 1981 as the date when licence will expire. She has not contended any where that there was implied exercise of option. Apart from the above two indications Mr. Cooper appearing for the defendant had on 6th Feb., 1981, applied to me that I should hear this matter urgently on the ground that the licence was to come to an end on 14th Apr, 1981 and that if the defendant continued in occupation thereafter, it may amount to a breach of the undertaking. The denial by the defendant of the excretes of option appears to be a false denial. If it is assumed that there is no exercise of option at all as contended by the defendant the position of defendant becomes worse. In that case the defendant on her own admonition is guilty of gross breach of the undertaking as she was bound to hand over possession on he expiration of 6 years as the option was not exercised. She has come to court over five years after committing breach. It will be rightly unjust and inequitable to grant any relief to the defendant who is guilty of either making false denial with a view to obtain relief or is in gross contempt for a number of years.

24. I must point out that if any relief from undertaking is granted to a person who has behaved in this fashion will be a wrong exercise of power to grant relief from undertaking and the only result will be of complete loss of conference of the public in undertakings given to the court and in judicial decrees and orders generally. To the general litigant what is important is not the niceties of law and distinctions between decree and order on one hand and undertaking court on the other or the distinctions between executable and non-executable decrees but what is important is that once the dispute is finally put an end to by way of consent terms which are accepted by the parties as binding, the recapped by the parties must follow. It is the duty of the court to see that as far as it can help such result as contemplated by parties follows and the confidence of litigant in court of Law is not shaken.

25. In the result I dismiss the chamber summons with costs, looking to the time the matter has taken, I quantify the cost at Rs.1,500/-

26. Order accordingly,


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //