NATRAJ STUDIOS (P) LTD. versus NAVRANG STUDIOS & ANR.

Citation: [1981] 2 S.C.R. 466 · Decided: 07-01-1981 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

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466 
NATRAJ STUDIOS (P) LTD. 
v. 
NAVRANG STUDIOS & ANR. 
January 7, 1981 
(R. S. PATHAK, 0. CmNNAPPA REDDY AND BAHARUL ISLAM;'JJ.] 
Bonzbay Rents, Hotel and Lodging House Rates Control Act 1941-Sectioua 
5 and SA and 28-Scope of-Exclusive jurisdiction to try suits under the Act 
given to Court of S1nall Causes-Parties, if could confer jurisdiction on a ·arbit~ 
r.ator by agreement. 
1hc respondent granted to the appellant "leave and licence" for the use of 
their two studios, machinery, equipment and certain other 
materials: 
With 
effect from February 1, 1973 section 15A was inserted in the Bombay Rents, 
Hotel and Lodging House Rates Control Act, 1947 under which any person 
who was in occupation of any premises on· February 1, 1973 as a licensee shall 
be deemed to have become on that date a tenant of the landlord in respect of 
the premises or part thereof in his occupation. 
The 'leave and licence' agree· 
ment was in force on that date. 
In April, 1979 the respondent purporting to 
terminate 
the 
l~ave 
and 
licence' agreement called upon the appellant to hand over possession of the 
studio3 to the first respondent. Immediately thereafter the appellant filed a suit 
for a declaration that the appella.nt was a monthly tenant of the two studios and 
other structures covered by the agreement. 
In August, 1979 the appellant filed an application under section 33 of the 
Arbitration Act for a declaration that the arbitration clause in the 'leave and 
licence' agreement was invalid and inoperative. The application was dismissed 
by a single Judge on the ground that he had no jurisdiction to determine the 
rights, if any, of the appellant as a tenant. A Division Bench of the liigh 
Court dismissed the appellant's appeal against the order of the single Judge en 
the ground that it was not maintainable under section 39 of the Arbitration 
Act. 
Allowing the first respondent's application under section 8 of the Arbitra-
tion Act the High Court appointed the second respondent as the sole arbitrator. 
Jn appeal against the dismissal of his suit and against the judgment of the 
High Court appointing the second respondent as sole arbitrator it was contended 
on behalf of the appellant that under tne 1947 Act the dispute between 
the 
parties could only be resolved by the Court of Small Causes and that the juris· 
djction of every other Court including that of an arbitrator was excluded. 
On behalf of the first respondent it was contended that the subject matter 
of 'leave and licence' agreement was not 'premises' within the meaning of that 
expression as defined in the 1947 Act but the business as· such and therefore the 
provisions of the Act were not attracted. 
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NATRAJ STUDIOS V. NAVRANG STUDIOS 
467 
Allowing the appeai 
IIELD : A building in which a person is licensed te run a. business is "pre-
mises" within the meaning of sections 5(8) and 5(8A), to which part II of the 
Act is made applicable by section 6(1) notwithstanding the fact that the build· 
ing is not let as such. [474D] 
If the definitions of "premises let or given on licence for business", "pre-
mises" and "licensee" are read together it will be clear that even a building 
so conshucted or designed as to be capable of being used 
for running a 
tcrtain business Only is "premises" within the meaning of section 5(8) 
and 
section 5 (SA) and does not cease to be premises merely because the building is 
capable of being used for the particular business 
only or merely 
because 
machinery or equipment must necessarily go alongwith the building if it is to 
be used for the business. If "premises" did not, by definition, include a build· 
ing given on licence but meant only a building which was let, it could perhaps 
be argued that the expression 'premises' would not take within its 
stride 
a 
business let as a business, but the situation is changed by the inclusion of any 
building given on licence in the definition of "premises" a-nd by the deeming of 
a licensee as a tenant under section 15A of the Act. A licensee is not really 
a tenant but is a person deemed to be a tenant because of section 15A of the 
Act. [474 A-BJ 
Uttamchand v. S. M. Lalwani A.l.R. 1965 S.C. 716 and Dwarka Prasad 
v. Dwarka Das Saraf, [19761 I S.C.R. 277 held inapplicable. 
c 
The 1947 Act applies to a licence to use a building even if the building is 
to be used necessarily and simultaneously along with machinery and 
fixtures 
separat

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