SYNDICATE BANK Vs. EAST INDIA HOTELS LTD

JUDGEMENT

(1.) THIS appeal arises out of the judgment and order dated 24-2-1995 wherein the preliminary issue of jurisdiction raised by the appellant defendant has been rejected by the learned single judge by holding that section 41 of the presidency small cause courts act, 1882 is not applicable to the suit no. 4000 of 1990 filed by the respondent plaintiff against the appellant defendant and that the suit is maintainable in this court.

(2.) FOR the sake of convenience the appellant is hereinafter referred to as the defendant and the respondent is hereinafter referred to as the plaintiff.

(3.) THE facts set out in the suit no. 4000 of 1990 are that by an indenture of lease dated 12th August , 1971 the plaintiff took on lease from the government of maharashtra a plot of land situated at nariman point, mumbai 400 021 for a period of 99 years on terms and conditions as more particularly set out therein. On the said plot of land, the plaintiff was to construct a 5 star deluxe hotel called "the oberoi towers" (hereinafter referred to as the hotel ). To facilitate construction of the hotel, an agreement was arrived at between the parties hereto on 27-12-1974 wherein the defendant agreed to advance a loan of Rs. 30 lakhs to the plaintiff with interest @ 12. 5% per annum. As per the said agreement dated 27-12-1974 the plaintiff was to permit the defendant to use and occupy 15,000 sq. ft. On the mezzanine to the ground floor of the hotel (hereinafter referred to as the said area) for a period of 12 years commencing from 27-12-1974. The said agreement contained a clause that at the end of the period of 12 years the plaintiff shall, on an application made by the defendant in writing, renew the licence for another period of 12 years if the plaintiff so deems fit on the terms and conditions to be mutually agreed upon. Accordingly, the loan of Rs. 30 lakhs was advanced by the defendant to the plaintiff and the defendant was put in possession of the said area. It is not in dispute that the said loan amount of Rs. 30 lakhs has been repaid by the plaintiff to the defendant with interest within the period stipulated under the aforesaid agreement.