|Case name||Natraj Studios (P) Ltd. v/s Navrang Studios & Others|
|Case number||Civil Appeal Number 1906 and 1907 of 1980|
|Court||Supreme Court of India|
|Bench||Justice O. Chinnappa Reddy, Justice Baharul Islam, Justice R.S. Pathak|
|Author of the judgment||Justice O. Chinnappa Reddy|
|Decided on||January 7, 1981|
|Relevant Act/Sections||Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and Amendment of 1979 – Section 28|
|Author of the case brief||Lavanya Gupta ([email protected])|
Brief Facts and Procedural History:
Natraj Studios (P) Ltd. entered into a leave and license agreement with Navrang Studios for the use of latter’s two studios, machineries, equipment, property, etc. and the agreement was extended from time to time with the last extension being done on January 1, 1973. By virtue of an amendment to the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (“Act”) in 1979, any person who was in occupation of any premises as on February 1, 1973, as a licensee, was deemed to have become a tenant of the landlord in respect of the concerned premises.
On April 28, 1979, Navrang Studios attempted to terminate the aforementioned agreement however, Natraj Studios applied to the Court of Small Causes praying for a declaration of itself as monthly tenant over the properties covered by the agreement in view of the amended Act. Meanwhile, Navrang Studios applied to the Bombay High Court under Section 33 of the Arbitration Act, 1940 praying for a declaration that the arbitration clause in the leave and license agreement was inoperative. The application was dismissed on November 12, 1979, on the ground that the learned single Judge had no jurisdiction to determine rights (if any) of Natraj Studios.
On February 29, 1980 the Bombay High Court allowed Navrang Studio’s application for appointment of a sole arbitrator. The present appeal was filed against the court orders dated November 12, 1979 and February 29, 1980.
Issue before the Court of Law:
1) Whether or not the Court of Small Causes at Bombay had the exclusive jurisdiction to resolve the dispute between the parties despite the existence of the arbitration clause in the agreement?
Ratio of the Court:
Yes, on a bare perusal of the Act it can be seen that Section 28(1) confers an exclusive jurisdiction on the Court of Small Causes to entertain any landlord-tenant or licensor-licensee suits regarding inter alia possession of premises. The Act is a welfare legislation and thus forms a part of the ‘public policy’. Having said so, parties cannot contract out of the statutory requirements, which in the present case relates to adjudication of certain disputes covered by the Act. Thus, in the present case, the jurisdiction of the Court of Small Causes could not be ousted by way of an arbitration clause in the leave and license agreement.
In light of Section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and the nature of the Act being that of a welfare legislation, the Court of Small Causes had exclusive jurisdiction over the present case. In other words, the Arbitrator could not decide upon the question of rights of the parties involved. Thus, eviction and tenancy matters, which are governed by a special legislation, will have the jurisdiction of the authority mentioned in the special legislation only.