NATRAJ STUDIOS PRIVATE LIMITED Vs. NAVRANG STUDIOS

JUDGEMENT

(1.) The appellant Natraj Studios (P) Ltd., and the first respondent Navrang Studios, a firm entered into an agreement on March 28, 1970, by which the latter granted the former "leave and licence" for the use of their two studios and other premises described in list I annexed to the agreement and situated at 194, Kurla Road Andheri Bombay, and the machineries, equipments, property setting materials etc. mentioned in list No:2 annexed to the agreement. Though the agreement was initially for a period of 11 months it was extented from time to time. By an agreement dated November 5.1972, the original agreement was extended for a period of eleven months from January 1, 1973. The 'leave and licence' agreement was thus in force on February 1, 1973, with effect from which date S.15A was inserted in the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, by an amendment (Maharashtra Act 17 of (1973) The effect of Section 15A was that any person who was in occupation of any premises on February 1, 1973 as a licensee was deemed to have become, on that date, for the purposes of the Act, a tenant of the landlord in respect of the premises or part thereof in his occupation. On April 28, 1979, the first respondent purported to terminate the "leave and licence" agreement and called upon the appellant to hand over possession of the Studios to the first respondent. Immediately, on May 8, 1979, the appellant filed Declaratory Suit No. 2326 of 1979 in the Court of Small Causes, Bombay, praying, for a declaration, that the plaintiff-appellant was a monthly tenant of the two studios and all other structures and open land covered by the agreement and for fixation of standard rent and other reliefs. A written statement was filed by the first respondent contesting the suit. Pending disposal of the suit an interim order was made provisionally fixing the rent as Rupees 11500/- per month. On August 4, 1979 the appellant filed an application under Section 33 of the Arbitration Act in the Bombay High Court for a declaration that the arbitration clause in the 'leave and licence' agreement was invalid inoperative etc. The application was dismissed by the High Court on November 12, 1979, by a learned single Judge on the ground that he had no jurisdiction to determine the alleged rights if any of the appellant as a tenant. On January 21, 1980, the first respondent filed an application under S. 8 of the Arbitration Act praying that the second respondent might be appointed as the sole arbitrator to decide the disputes and differences between the parties under the 'leave and licence' agreement dated March 28, 1970. On February 29, 1980, the High Court allowed the application of the first respondent and appointed the second respondent as the sole arbitrator. A day earlier that is, on February 28, 1980, an appeal filed by the appellant against the judgement and order dated November 12, 1979 of the learned single Judge was dismissed by a Division Bench of the High Court on the ground that it was not maintainable under Section 39 of the Arbitration Act. The present two Civil Appeals have been filed by the appellant against the orders of the High Court dated November 12, 1979, and February 29, 1980.

(2.) Shri Soli Sorabji and Shri Talat Ansari learned counsel for the appellant submitted that the essence of the disputed between the parties was the right to the possession of the two Studios; that after the 1973 Amendment to the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the status of the appellant was at least that of a 'deemed tenant', that under the scheme , of the Bombay, Rents, Hotel and Lodging House Rates Control Act, 1947 the dispute between the parties could only be resolved by the 'Court of Small Causes and that every other Court's jurisdiction including that of an arbitrator was excluded, Shri Mridul, learned counsel for the first respondent, argued that the subject matter of the 'leave and licence' agreement was not 'premises' within the meaning of that expression as defined in the Bombay Act but the business as such and, therefore, the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act were not attracted at all.

(3.) For a clear appreciation of the rival submissions, the relevant provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, may first be set out.