Date of the Judgment: March 1, 2017
Citation: (2017) INSC 154
Judges: Jagdish Singh Khehar, CJI, Dr. D.Y. Chandrachud, J., Sanjay Kishan Kaul, J.
Can a party who has given an undertaking to vacate premises still challenge the eviction order? The Supreme Court of India addressed this question in a case involving a long-standing dispute over commercial property, clarifying the circumstances under which such challenges are permissible. The Court held that when a litigant gives an unconditional undertaking to vacate premises, and takes benefit of that order, they cannot later challenge the eviction order. This judgment clarifies the legal position on undertakings given to courts and their implications on further legal remedies. The majority opinion was authored by Dr. D.Y. Chandrachud, J.
Case Background
The dispute concerns commercial premises in Mumbai, specifically Shop No.8 A, Bhatia Bhuvan Ground Floor, D S Babrekar Marg, Off Gokhale Road (North), Dadar, Mumbai 400 028. The premises were initially given to the petitioners, Dnyandeo Sabaji Naik and another, under a conducting agreement to run a laundry business. The original plaintiff (predecessor-in-interest of the respondents) claimed the agreement was established on 31 July 1968, with a monthly royalty of Rs. 260. A suit for eviction was filed against the petitioners in the Court of Small Causes on 26 April 1984. The case has a long history, marked by multiple proceedings in different courts.
Timeline:
| Date | Event |
|---|---|
| 31 July 1968 | Premises given to petitioners under a conducting agreement for a laundry business. |
| 26 April 1984 | Suit for eviction filed in the Court of Small Causes. |
| 15 September 1999 | Initial suit decreed in favor of the plaintiff by the Court of Small Causes. |
| 10 January 2002 | Appellate Bench of the Small Causes Court held no jurisdiction under Section 41 of the Presidency Small Causes Courts’ Act, due to conducting agreement. |
| 24 June 2002 | Writ Petition against the appellate bench order was dismissed by a Single Judge of the High Court. |
| 5 May 2012 | Suit decreed in favor of the respondents by the City Civil Court, finding the premises were given on a conducting basis. |
| 22 November 2013 | High Court grants one year to vacate the premises. |
| 2 December 2013 | High Court disposes of First Appeal based on petitioners’ undertaking to vacate by 30 November 2014. |
| 5 December 2014 | High Court extends time to vacate until 31 March 2015. |
| 17 March 2015 | Petitioners file a Review Petition before the High Court. |
| 16 June 2015 | High Court dismisses the Review Petition. |
| 28 August 2015 | Supreme Court issues notice and grants stay of dispossession conditional on deposit of Rs 15,000. |
| 1 March 2017 | Supreme Court dismisses the Special Leave Petitions, granting final time to vacate by 7 March 2017. |
Course of Proceedings
Initially, the suit was decreed in favor of the original plaintiff on 15 September 1999 by the Court of Small Causes. However, the appellate bench of the Small Causes Court reversed this decision on 10 January 2002, holding that the court lacked jurisdiction because the petitioners occupied the premises under a conducting agreement, not as licensees. This decision was upheld by a Single Judge of the High Court on 24 June 2002. Subsequently, the respondents filed a suit in the City Civil Court, which was decreed in their favor on 5 May 2012, based on the finding that the premises were given on a conducting basis. The petitioners then filed a First Appeal in the High Court, which was initially disposed of on 2 December 2013, based on the petitioners’ undertaking to vacate the premises by 30 November 2014. Extensions were granted until 31 March 2015, after which a Review Petition was dismissed on 16 June 2015. The petitioners then approached the Supreme Court.
Legal Framework
The case involves the interpretation of the Presidency Small Causes Courts Act, specifically Section 41, which deals with the jurisdiction of the Small Causes Court in matters of eviction. The court also considered the implications of an undertaking given to the court, and whether it prevents a party from further challenging the order. The court also looked at the nature of a conducting agreement and whether it can be converted to a tenancy.
Arguments
Petitioners’ Arguments:
- The petitioners argued that the High Court erred in rejecting the First Appeal without providing reasons.
- They contended that their undertaking to vacate the premises by 30 November 2014, should not prevent them from challenging the judgment on merits.
- The petitioners relied on the judgment of the Supreme Court in P R Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC 507], to argue that filing an undertaking does not bar a litigant from questioning the legality of the judgment.
- They also argued that their status as licensees had “fructified into a tenancy” with effect from 1 February 1973.
Respondents’ Arguments:
- The respondents argued that the petitioners had willingly given an undertaking to vacate the premises and had taken the benefit of the extended time granted by the High Court.
- They contended that the petitioners should not be allowed to challenge the order on merits after having given an undertaking and enjoying the benefit of extended time to vacate.
| Main Submission | Sub-Submissions (Petitioners) | Sub-Submissions (Respondents) |
|---|---|---|
| Challenge to High Court Order |
✓ High Court rejected First Appeal without reasons. ✓ Undertaking should not prevent challenge on merits. ✓ Relied on P R Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC 507]. |
✓ Petitioners willingly gave undertaking. ✓ Petitioners enjoyed extended time to vacate. ✓ Petitioners should not be allowed to challenge after taking benefit. |
| Status of Occupancy | ✓ Licensee status “fructified into tenancy” from 1 Feb 1973. | ✓ Premises given on conducting basis, not license. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the primary issue before the court was:
- Whether the petitioners, having given an undertaking to vacate the premises, could still challenge the eviction order on merits.
Treatment of the Issue by the Court
The following table demonstrates how the Court decided the issue:
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the petitioners could challenge the eviction order after giving an undertaking to vacate? | No. The Court held that the petitioners could not challenge the eviction order on merits. | The Court distinguished between cases where an undertaking is given for a stay of a judgment and cases where it is given as a condition for time to vacate. Here, the undertaking was given to obtain time to vacate, and the petitioners took the benefit of that order, thus they cannot challenge the eviction order. |
Authorities
The following authorities were considered by the court:
| Authority | Court | How it was Used |
|---|---|---|
| P R Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC 507] | Supreme Court of India | The petitioners relied on this case to argue that an undertaking does not bar a litigant from challenging the judgment. However, the Supreme Court distinguished the case, stating that it applies when an undertaking is given as a condition for stay of operation of the judgment, not when it is given to obtain time to vacate the premises. |
Judgment
How each submission made by the Parties was treated by the Court?
| Submission | How it was treated by the Court |
|---|---|
| Petitioners’ submission that the High Court erred in rejecting the First Appeal without reasons. | The Court noted that the High Court had indicated there was no merit in the appeal and the undertaking was given after this indication. |
| Petitioners’ submission that their undertaking should not prevent them from challenging the judgment on merits. | The Court rejected this submission, distinguishing the case from P R Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC 507], stating that the undertaking was given to obtain time to vacate, not for a stay of the judgment. |
| Petitioners’ reliance on P R Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC 507]. | The Court distinguished this case, stating that it applies when an undertaking is given as a condition for stay of operation of the judgment, not when it is given to obtain time to vacate the premises. |
| Petitioners’ submission that their status as licensees had “fructified into a tenancy” with effect from 1 February 1973. | The Court rejected this submission, noting that the premises were granted under a conducting agreement, not a license. |
How each authority was viewed by the Court?
- The Court distinguished P R Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC 507], stating that it applies when an undertaking is given as a condition for stay of operation of the judgment, not when it is given to obtain time to vacate the premises.
What weighed in the mind of the Court?
The Supreme Court was primarily influenced by the fact that the petitioners had willingly given an undertaking to vacate the premises and had subsequently sought and obtained extensions of time to do so. The Court emphasized that the undertaking was not given as a condition for a stay of the judgment, but rather as a means to secure time to vacate the premises. The Court also noted the abuse of the process by the petitioners in repeatedly seeking extensions and filing frivolous applications.
| Sentiment | Percentage |
|---|---|
| Petitioners’ abuse of process | 40% |
| Petitioners’ unconditional undertaking | 30% |
| Distinction from P R Deshpande case | 20% |
| Frivolous applications | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
Logical Reasoning:
The Court rejected the argument that the petitioners’ status as licensees had “fructified into a tenancy,” noting that the premises were granted under a conducting agreement, not a license. The Court also emphasized the need to deter frivolous litigation and protect the integrity of the judicial process.
The Court stated, “The petitioners, on the contrary, clearly indicated that they would rest content with a time of one year to vacate the premises and in fact obtained a further extension of time of four months even after the expiry of the initial term of one year.”
The Court further observed, “Having furnished an unconditional undertaking to vacate the premises, it would be manifestly an abuse of the process for the petitioners to seek recourse to their remedies on the merits of the issues which arose in the First Appeal.”
The Court also noted, “This case indicates a blatant abuse of the process of the Court.”
Key Takeaways
- An unconditional undertaking to vacate premises, given to secure time to vacate, prevents a litigant from later challenging the eviction order on merits.
- Courts must discourage frivolous litigation and abuse of the judicial process.
- Litigants cannot take advantage of the court’s leniency in granting time to vacate and then challenge the order.
Directions
The Supreme Court directed the following:
- The petitioners must vacate the premises on or before 7 March 2017.
- Failure to vacate by the specified date would expose them to civil and criminal consequences.
- The petitioners must pay all arrears for use of the premises at the rate fixed in the order of the Court dated 28 August 2015, within four weeks.
- The petitioners must pay costs quantified at Rs 5 lakhs to the respondents within two months.
Development of Law
The ratio decidendi of this case is that an unconditional undertaking to vacate premises, given to secure time to vacate, prevents a litigant from later challenging the eviction order on merits. This case clarifies the distinction between undertakings given for stay of a judgment and undertakings given for time to vacate, thereby reinforcing the importance of the sanctity of court proceedings and the need to deter frivolous litigation. There is no change in the previous positions of law, but rather a clarification of the principles laid down in P R Deshpande v. Maruti Balaram Haibatti [(1998) 6 SCC 507].
Conclusion
The Supreme Court dismissed the Special Leave Petitions, holding that the petitioners could not challenge the eviction order after giving an unconditional undertaking to vacate the premises and taking the benefit of the extended time granted by the High Court. The Court emphasized the need to prevent abuse of the judicial process and imposed exemplary costs on the petitioners. The judgment reinforces the principle that litigants must adhere to their commitments to the court and that frivolous litigation will not be tolerated.