SUSHILA KASHINATH DHONDE Vs. HARILAL GOVINDJI BHOGANI

JUDGEMENT

(1.) This appeal, by special leave, by defendants 5 to 7, is directed against the order dated December 2, 1968 of the Bombay High Court in Special Civil Application No. 2545 of 1968 filed by the appellants under Article 227. The circumstances leading up to the filing by the appellants of the Special Civil Application in the High Court may be briefly mentioned.

(2.) Respondent No. 1, as plaintiff instituted Rent Act Suit No. 784/6206 of 1963 in the Court of Small Causes at Bombay against Jayantilal Dayalal and Co., respondent No. 2 herein and its three partners, respondents 3 to 5 who were defendants 1 to 4. The appellants herein were impleaded as defendants 5 to 7. According to the plaintiff, respondents 2 to 5 were the owners of an open plot of land known as Jalaram Nagar, situate in Greater Bombay and were doing business of construction. The said defendants represented to the plaintiff that they were putting up a building in the said property according to the plans and specifications submitted to the Bombay Municipality. The plaintiff applied to the defendants to let to him, on the basis of a monthly tenancy, a portion of the building to be constructed as soon as the building was ready for occupation. Defendants 1 to 4 agreed to do so on the plaintiff advancing a sum of Rs. 12,500/- as loan towards construction and on their executing a deed of charge, in accordance with the provisions of the Bombay Rents, Hotel and Lodging House Rates Control. Act, 1947 (Bombay Act No. LVII of 1947) (hereinafter called the Act) . The plaintiff agreed to those conditions and accordingly advanced a sum of Rs. 12,500/- to defendants 1 to 4 on August 12, 1959 and the said defendants executed a deed of charge in favour of the plaintiff on the said date, which deed of charge was also registered with the Sub-Registrar of Bombay on the same day. Defendants 1 to 4 started construction of the building in question and though it was completed they failed to let out the said premises to the plaintiff in spite of the provisions to that effect in the deed of charge of August12, 1959. On the other hand, the said defendants let out the same to some third parties, contrary to and in breach of the provisions contained in the deed of charge. According to Section 18 of the Act, defendants 1 to 4 were bound and liable to complete the construction of the building within a period of 2 years from the date of the agreement and were also bound to let out the said premises to the plaintiff within the said period. As defendants 1 to 4 had failed to carry out the obligation cast on them by the Act, the plaintiff had become entitled to the return of the sum of Rs. 12,500/- with interest at 4% per annum from August 12, 1959 till the date of payment. The deed of charge complies with all the requirements of Section 18 of the Act and under the said Act, the loan for construction of Rs. 12,500/- together with interest due is a charge on the entire building as well as on the entire interest of the said defendants in the land on which the building has been put up. The appellants, who are defendants 5 to 7 in the suit had purchased the property from defendants 1 to 4 and as the amount repayable to the plaintiff with interest is a charge on the property, those defendants are also bound and liable to pay the amount together with interest. As the dispute between the parties arose out of the provisions of the Act, the Court of Small Causes where the suit has been instituted has jurisdiction to try and entertain the suit. On these averments the plaintiff prayed for a declaration that the sum of Rs. 12,500/- given by him as construction loan shall be a charge on the land as well as the buildings put up thereon and that the plaintiff is entitled to recover from the defendants the amounts mentioned in the plaint together with further interest and that in default the property be sold under the direction of the Court and that liberty be given to obtain a personal decree against the defendants in case the full amount is not recovered by sale of properties. The plaintiff also asked for certain other consequential reliefs by way of injunction and appointment of receiver.

(3.) Respondents 2 and 3 did not file any written statement, but respondents 4 and 5 contended that the Court of Small Causes has no jurisdiction to try the suit in view of the pecuniary value given in the plaint. They had also denied the receipt of the sum of Rs. 12,500/- They further pleaded that the deed of charge referred to by the plaintiff had been executed only by respondent. No. 3 in collusion with the plaintiff and that it is a sham and colourable document. They further contended that the plaintiff was not entitled to any reliefs by way of charge or for recovery of the amounts.