Bombay HC: Licensor-Licensee Relationship Alone Cannot Oust Civil Court Jurisdiction in Section 6 Dispossession Suit
A City Civil Court order returning a restaurateur's plaint to the Small Causes Court is set aside; the dominant nature of a Section 6 possessory suit governs jurisdiction, not the underlying licence relationship.
Justice Farhan P. Dubash, sitting singly at the Bombay High Court, has set aside an order of the City Civil Court at Mumbai that returned the plaint of Ambrosia Restaurants Pvt. Ltd. for presentation before the Court of Small Causes. The City Civil Court had held, by its order of 31 August 2024, that Section 41 of the Presidency Small Causes Courts Act, 1882 vested exclusive jurisdiction in the Small Causes Court because the parties stood in a licensor-licensee relationship. Justice Dubash rejected that reasoning. The court held that the dominant character of the suit — a summary possessory action under Section 6 of the Specific Relief Act, 1963 filed within six months of alleged forcible dispossession — determines the forum, not the pre-existing contractual relationship between the parties. The cross objections filed by the respondents, which sought outright rejection of the plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, were also dismissed.
The Dispute Before the Court
Ambrosia Restaurants Pvt. Ltd., the appellant, had been placed in possession of approximately 6,700 sq. ft. of built-up area on the third floor of Udyog Bhavan, 250-D, Worli, Mumbai, pursuant to two registered Leave and License Agreements dated 7 October 2017 executed by respondents Sunita Dileep Nevatia and Dileep Nevatia, who owned the East Wing and West Wing of those premises respectively.
The respondents issued a No Objection Certificate on or about 29 March 2018 to allow the appellant to commence and operate a restaurant from the suit premises. The appellant then obtained financial assistance from Union Bank of India and undertook renovation and interior works. On 23 October 2018, the appellant alleges, it was forcibly dispossessed from the suit premises by the respondents otherwise than in due course of law.
Aggrieved, the appellant filed a suit on 7 January 2019 — within six months of the alleged dispossession — under Section 6 of the Specific Relief Act, 1963, seeking restoration of possession. This Court granted ad-interim protection on 15 November 2019 restraining the respondents from inducting any third party into the suit premises, and that protection was continued through subsequent orders.
Following enhancement of the pecuniary jurisdiction of the City Civil Court, the suit stood transferred to that court. The respondents then moved an application invoking Section 41 of the Presidency Small Causes Courts Act, 1882, seeking return or rejection of the plaint on the ground that the City Civil Court lacked jurisdiction. By the impugned order of 31 August 2024, the City Civil Court accepted that contention and directed return of the plaint under Order VII Rule 10 of the Code for presentation before the Court of Small Causes at Mumbai.
The Competing Jurisdictional Arguments
Mr. Rajiv Narula, appearing for the appellant, argued that the suit was not an ordinary licensor-licensee dispute but a summary possessory action. The Leave and License Agreements were relied upon only to explain how the appellant came into possession, not to enforce any contractual right. The foundation of the suit was the alleged unlawful dispossession and the six-month window prescribed under Section 6 of the Specific Relief Act. He relied on this Court's decisions in Faijulbee Hajeel and Ors. v. Yadali Amir Shaikh Ansari and Eknath Vithal Ogale v. Mansukhlal Dhanraj Jain, and on the Supreme Court's decision in Mansukhlal Dhanraj Jain v. Eknath Vithal Ogale, AIR 1995 SC 1102, all of which, he submitted, recognised that a Section 6 suit lies before the civil court regardless of the parties' status.
Respondent No. 2, Dileep Nevatia, appearing in person, countered that the plaint itself proceeded on the admitted basis of a licensor-licensee relationship and that the substantive reliefs claimed — handing over possession, appointment of a Court Receiver, and appointment of the appellant as agent to carry on business — related directly to possession of licensed premises. He submitted that Section 41 of the Presidency Small Causes Courts Act uses the broader expression “relating to recovery of possession” rather than “for recovery of possession,” and that the appellant could not circumvent that statutory mandate by labelling the suit a Section 6 action.
Mr. Nevatia also pressed the cross objections, arguing that having found the suit barred by jurisdiction, the Trial Court ought to have rejected the plaint under Order VII Rule 11(d) — not returned it under Order VII Rule 10 — because the defect was not merely territorial or pecuniary but went to the class of court. He relied on the Supreme Court's decisions in Bharvagi Construction v. Kothakapu Muthyam Reddy, AIR 2017 SC 4428, and Kamla v. K.T. Eshwara Sa, AIR 2008 SC 3174.
Additionally, Mr. Nevatia contended that the continuation of the ad-interim order for over five years had effectively prevented the respondents — described as senior citizens for whom rental income from the premises was their principal source of livelihood — from letting or licensing the premises. He quantified the alleged loss at approximately Rs. 6.72 crores together with further interest, and pressed a separate Interim Application seeking restitution under Section 144 of the Code.
How the Court Reasoned
Justice Dubash began by setting out both provisions in full. Section 41 of the Presidency Small Causes Courts Act, 1882 confers exclusive jurisdiction on the Court of Small Causes at Mumbai over suits between licensors and licensees relating to recovery of possession of immovable property within Greater Mumbai. Section 6 of the Specific Relief Act, 1963 provides a summary remedy for a person dispossessed without consent otherwise than in due course of law, requiring only proof of prior possession and dispossession within six months, with questions of title expressly excluded.
The court found that the plaint, read as a whole, disclosed a suit satisfying the essential requirements of Section 6. The appellant asserted possession under the Leave and License Agreements, alleged forcible dispossession on 23 October 2018, and filed suit on 7 January 2019, within the six-month window. The court held that the correctness of those averments was a matter for trial, and that at the stage of deciding a jurisdictional objection, the court was required to proceed on the averments in the plaint.
Justice Dubash accepted the ratio of Faijulbee Hajeel that a suit under Section 6 based on prior possession and unlawful dispossession continues to lie before the civil court even where the parties stand in a licensor-licensee or landlord-tenant relationship. He also drew on Eknath Vithal Ogale, which distinguished a Section 6 possessory suit from a suit for bare injunction and held that the existence of a licensor-licensee relationship is not determinative when the plaintiff does not claim possession in the capacity of a licensee.
On the Supreme Court's decision in Mansukhlal Dhanraj Jain — relied upon by both sides — the court noted that the judgment itself explained the nature of a Section 6 suit:
The court then identified the precise error in the impugned order. The Trial Court had proceeded principally on the fact that the parties stood in a licensor-licensee relationship and had treated that fact as sufficient to attract Section 41, without examining whether the relief claimed flowed from contractual rights or from the independent statutory remedy under Section 6. The Trial Court also failed to consider the judgments placed before it by the appellant. Once the plaint disclosed prior possession, alleged dispossession on 23 October 2018, and institution of suit on 7 January 2019 within six months, the plaint was required to be examined within the limited scope of Section 6, not dismissed as falling under Section 41 merely on account of the pre-existing relationship.
On the respondents' reliance on Mahadev P. Kambekar v. Shree Krishna Woollen Mills Pvt. Ltd., AIR 2019 SC 913 — for the proposition that even after determination of a licence, possession disputes remain within the Small Causes Court — Justice Dubash held the principle inapplicable. The present suit was not founded on termination of the licence but on allegation of dispossession otherwise than in due course of law, filed within six months of that event.
Similarly, Bixin Office Parks v. Kailasa Urja was distinguished: that case concerned ouster of jurisdiction by agreement, whereas the present issue was simply whether the suit, as framed, was a Section 6 suit or a Section 41 proceeding. The court observed that framing a Section 6 suit does not amount to circumventing Section 41; the two operate on distinct foundations.
On the presence of ancillary reliefs — injunction, damages, and appointment of a Court Receiver — Justice Dubash held that the dominant nature of the suit is what governs. The principal relief was founded on alleged dispossession and restoration of possession under Section 6. Ancillary reliefs would not, at this stage, justify return or rejection of the plaint when the basic ingredients of Section 6 were pleaded.
Cross Objections and the Return-versus-Rejection Debate
The respondents pressed their cross objections on the ground that the Trial Court, having found the suit barred by jurisdiction, should have rejected the plaint under Order VII Rule 11(d) rather than returning it under Order VII Rule 10. They argued that the bar was not merely territorial or pecuniary but went to the class of court, making return inappropriate.
Justice Dubash held that this debate was rendered academic by the finding on jurisdiction. Once the court concluded that the City Civil Court did possess jurisdiction to entertain the suit as framed, and that the suit was not barred by Section 41, the question of rejection under Order VII Rule 11(d) did not arise. A plaint can be rejected under that rule only where the suit is barred by law on the statements in the plaint itself. No such bar was made out here, and the cross objections accordingly failed.
On the restitution claim for Rs. 6.72 crores allegedly lost by the respondents during the continuation of the ad-interim order, the court observed that the principle of restitution under Section 144 of the Code could not determine the question of whether the plaint was liable to be returned or rejected. The claim for compensation, if otherwise maintainable, would have to be considered independently and in accordance with law.
Order
Justice Dubash allowed the Appeal from Order No. 695 of 2024 and passed the following directions:
The impugned order dated 31 August 2024 passed by the City Civil Court at Mumbai in Notice of Motion No. 2399 of 2024 in S.C. Suit No. 1320 of 2024 is set aside. The Notice of Motion filed by the respondents seeking return or rejection of the plaint stands rejected.
S.C. Suit No. 1320 of 2024 is restored to the file of the City Civil Court at Mumbai, to be proceeded with in accordance with law from the stage at which it stood immediately prior to the impugned order.
The cross objections filed by the respondents under Order VII Rule 11(d) stand dismissed.
The court clarified that it had not examined the merits of the rival claims on possession or dispossession. The Trial Court shall decide the suit on its own merits, uninfluenced by observations in either the impugned order or the present order, save for the findings on jurisdiction. All contentions of the parties on the merits are kept open.
Pending interim applications in the appeal stand disposed of. There is no order as to costs.
After pronouncement, Ms. Nidhi Loya, counsel for the appellant, sought continuation of the ad-interim protection earlier granted by the court. Justice Dubash directed that the ad-interim protection granted by order dated 28 April 2025 in Interim Application No. 3853 of 2025 — restraining creation of further third-party rights in the suit premises — shall continue for six weeks from 14 July 2026, that is, until 25 August 2026. The parties are directed to appear before the Trial Court on 11 August 2026 and place a copy of this order on record.