SUSHILA KASHINATH DHONDE & ORS. versus HARILAL GOVINDJI BHOGANI & ORS.

Citation: [1970] 2 S.C.R. 950 · Decided: 17-10-1969 · Supreme Court of India · Bench: J.M. SHELAT · Disposal: Dismissed
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Judgment (excerpt)

950 
SUSHILA KASHINATH DHONDE & ORS. 
v. 
HARILAI. GOVINDJI BHOGANI & ORS. 
October 1 7, 1969 
[J.M. SHELAT, C. A. VAIDIAL!NGAM AND I. 0. DUA, JJ.] 
Bombay Rent• llo!el and Lodgin' Houses Rates Control Act 1947 
(Bom. 57 of 1947), ss. 18(3) and 28(1)-Loan advanced by prospec-
tive tenant for· construction of building-Deed of charge as contemplated 
by's. 18(3) executed between partie~Premtses not Jet out to persun ad. 
vancing money-Suit for money advanced whether one under s. 28 of 
Act-Relationship of landlord and tenant whether necesrory-Meaning of 
lVords "any claim or question arising out of this A ct br any of it.r provi-
sions"-lurtsdiction of Court of S1nall Causes. 
Respondeni no. 1 us plaintiff instituted a suit in the court of Small 
Ciit1'eS at Bombay against respondent no. 2 and its three partners respon-
dents 3 to 5. The appellants herein were also impleaded as defendants. 
!\CCording to the ~:a!nt respondents 2 to .s were con;itru~ a building 
In Greater Bombay with the purpose of letting out portions of It to tenanls. 
Desiring to take a partion of the building on a monthly tenancy respon-
dent no. 1 advanced a sum of Rs. 12,500 as a loan towards tho construc-
tion· of the- building. A deed of charge as c:>ntemplated by s. 18(3) of 
the· Bombay Rents, Hotel and Lodging Home Rates Control Act, 
1947 
was e~~ut~d between the parties and registered with the Sub-Registrar of 
Bombay. · However after the bttllding was comple~ respondents 2 to S 
did not let any portion to respondent no. 1 and, further, they sold the 
building to .the appellants. The appellants having purchased the building 
burdened with the charge for the loan advanced by respondent no. 1 w"e 
also·. according to respondent no. 1, liable to repay the said amount with 
4% interest thereon. The Court df Small Causes decreed the suit; so did 
the first appellate court. The High Court rejected the appellant's pe.ti-
tion under Art. 227 of the Constitution. Appeal in this Court was filed 
by special leave. The contentions of the appellants were (i) that the rela-
tionship between the parties was not one of landlord and tenant and there· 
fore the suit was outside ~he jurisdiction of the court of Sma11 Causes 
under s. 28 of the Act; (ii) that the charge created by the deed executed 
between respondent no. I and respondents 2 ro 5 did not give rise to "any 
claim or question arising out of this Act or any of its provisions" but was 
based on contract. and 'for this reason also the court of Sma11 Causes had 
no juri"Sdiction under s. 28 of the Act to entertain and deal with the pro~ 
ceedings. 
A 
B 
c 
D 
E 
F 
G 
HELD: (i) Having regard to the relevant aspects and the provisions 
of s. 18(3) ands. 28( I) it is not necessary that there should be a relation-
ship of landlord and tenant in res(>C'.'t of all the matters covered by 
s. 28(1) of the Act, so as to give jurisdiction to the Court of Small Causes. 
One type of action contemplated under that section viz., a suit or proceed-
ing for recovery of rent or possession df any premises to which any of the 
H 
provisions of Part II apply may be between a landlord and a tenant; but 
in respect of·the other matters dealt with in that sub-section,:it is not 
nece:isary that the relationship of landlord and tenant shoul<l exist between 
the parties before the court. [958 B-C] 
A 
B 
c 
D 
E 
F 
G 
SUSH!LA V. HA RI LAL 
951 
Shivaling Gangadhar v, Navnitlal Amritlal, I.L.R. ( 1958) Bom. 890, 
Bishan' v. Maharashtra W. & G. Co. (1967) 
B.L.R. 
229 and Bombay 
Grain Dealers v. Lakhmichand, (1967) 71 Bom. L.R. 179, referred to. 
lnzpJrters and Manufacturers Ltd. v. Pheroze Frarnrose Taraporewala, 
[1955] S.C.R. 226, applied and explained. 
(ii) A perusal of the various clauses elf the agreement in the present 
case clearly showed that the loan given by the first respondent to :respon-
dents 2 to 5 was for the purpose of financing the erection of the building 
on the land in question held by the landlards as owners and that the agree-
ment was in writing and had been registered. 
It also included the various 
conditions in s. 18(3). Therefore it was clear that the arrangement by 
way of an adv·.111ce of the construction loan and conditions imposed therein 
and the mannor in which the deed of charge had been executed were in 
accordance with s. 18(3) of the Act and the arran~ement was one per-
missible under that sub-section. [964 D-E] 
Having due regard to the nature of the transaction entered into be~
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