Broach Sadan Premises Chsl Through Honble Secretary vs. The Board Of Trustees Of The Port Of Mumbai And Ors.

Held

The Court held that the dispute over rent, particularly the higher rates introduced from October 1, 2012, should not lead to the eviction of the Applicant-Society, especially since other lessees of BPT who challenged the new rates were paying under a compromise formula. The Court noted BPT's past willingness to consider the Society as a direct lessee. The ratio is that disputes over rent, especially when a compromise formula exists and the tenant has occupied the premises for a long period, should not automatically result in eviction. The Court set aside the Appellate Bench's judgment and decree, modifying the Trial Court's decree. The Applicant-Society was directed to pay Rs. 1,14,44,776.15/- within four weeks, representing lease rent and interest until July 31, 2024. They must also continue paying rent as per the compromise formula from October 1, 2024. The Society's proposal to be treated as a direct lessee will be considered by the Board of Trustees after payment. The Society can challenge the new rates, and their liability for the difference will depend on the outcome of those proceedings. This arrangement is specific to the peculiar facts of this case and not a precedent.

Facts

The Bombay Port Trust (BPT) offered a 99-year lease for a plot of land in 1962, confirmed in 1963. Possession was handed over in 1964, and the lessee, Mr. Narayandas Jadhavji, constructed a building by 1974, selling units to various purchasers. These purchasers formed the Applicant-Society, registered in 1975 and occupying the units since. In 1984, BPT served a notice seeking possession, alleging unauthorized sale of units. BPT filed a suit in 1985 against Jadhavji and the Applicant-Society. The Small Causes Court found the lease termination valid but refused eviction, citing BPT's conduct. An appeal by BPT led the Appellate Bench to decree eviction and mesne profits. The Applicant-Society filed this Civil Revision Application against the Appellate Bench's order.

Key Issues

1. Whether the Plaintiff-BPT, as an instrumentality of the State, acted unfairly or arbitrarily in seeking eviction, considering the Apex Court's judgments in M/s Dwarkadas Marfatia and Sons vs. Board of Trustees of the Port of Mumbai & Anr. and Jamshed Hormusji Wadia vs. Board of Trustees, Port of Mumbai and another? The Applicant-Society argued that BPT, being a state instrumentality, must act fairly and cannot arbitrarily seek eviction, relying on the cited Apex Court judgments. The Respondent-BPT contended that the Dwarkadas Marfatia judgment is factually distinguishable and that Jadhavji breached lease conditions by assigning units without consent. 2. Whether the Small Causes Court had jurisdiction to try the suit filed by BPT, given the commencement of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971? The Applicant-Society argued that the suit, filed after the PP Act came into effect, was not maintainable before the Small Causes Court. The Respondent-BPT did not record specific arguments on this point. 3. Whether the Appellate Court should have considered the compromise offer made by BPT in 1997? The Applicant-Society argued that the Appellate Court should have allowed them to complete payments under the compromise offer, which they had partially accepted. The Respondent-BPT argued that since the compromise was not fully acted upon and was made on a without prejudice basis, it could not be relied upon.