M/S Pankaj Hotel And Another vs Bal Mukund And 18 Others on 30 August, 2017

1. Outcome

The High Court of Judicature at Allahabad dismissed both SCC Revisions (No. 171 of 2017 and No. 172 of 2017) filed by the revisionist-defendants (M/S Pankaj Hotel and its partners/heirs). Consequently, the impugned judgment and decree dated 4.5.2017 and 6.5.2017, respectively, passed by the Additional District Judge, Moradabad, which granted the landlords' eviction suit, were upheld.

2. Core Issue

The core issues before the High Court were:
* Pecuniary Jurisdiction: Whether the Additional District Judge lacked pecuniary jurisdiction to decide the SCC suit after the 2015 amendment to Section 15 of the Provincial Small Cause Courts Act, 1887, which increased the pecuniary limits for Civil Judges (Senior Division) for Small Cause Court matters.
* Validity of Findings on Material Alterations: Whether the lower court, in its post-remand judgment, validly found that the tenants had made material alterations in the demised premises diminishing its value, or if its findings were illegal or perverse.

3. Key Facts

• Parties: Bal Mukund and others (landlords/plaintiffs) are owners of a building. Sumer Chand (defendant no. 1) was a tenant, later operating "Pankaj Hotel" in partnership with Pradyumn Kumar Jain and Pradeep Kumar Jain (defendants nos. 3 & 4).
• Original Suit: Landlords filed SCC Suit No. 09 of 1979 for eviction, recovery of arrears of rent, and damages, alleging rent default, material alterations without permission causing substantial damage, and subletting. The suit valuation was Rs. 23,346.65.
• Initial Dismissal & First Revision: The trial court dismissed the suit on 22.2.1991. The landlords' Civil Revision No. 930 of 1991 was allowed by the High Court on 3.7.2015, setting aside the dismissal and remanding the matter back to the trial court (Additional District Judge, Moradabad) to re-examine Issue Nos. 3 and 4 (material alterations and reduction in property value) afresh, with specific directions regarding joint and several liability of co-tenants.
• Interim Procedural Challenges: During remand proceedings, the tenants' application to file an additional written statement was rejected on 16.11.2016. Their challenge against this rejection via a petition under Article 227 (No. 10223 of 2016) was dismissed by the High Court on 2.2.2017, affirming that no further pleadings were needed for the remanded issues.
• Impugned Judgment: Following the remand, the Additional District Judge, Court No. 12, Moradabad, allowed the SCC Suit No. 09 of 1979 by judgment dated 4.5.2017, finding that material alterations had been made without consent.
• Current Revisions: The tenants filed the present revisions challenging the 4.5.2017 judgment, primarily on grounds of pecuniary jurisdiction and the validity of findings on material alterations.

4. Arguments (Taxpayer vs Revenue)

(Note: As this is a civil property dispute, the "Taxpayer vs Revenue" framing is adapted to "Revisionist-Defendant vs Respondent-Plaintiff".)

Revisionist-Defendant (Tenants) Arguments:
* Lack of Pecuniary Jurisdiction: The Additional District Judge lacked jurisdiction to decide the suit (valuation Rs. 23,346.65) after the U.P. Civil Laws (Amendment) Act, 2015 (effective 7.12.2015) amended Section 15 of the Provincial Small Cause Courts Act, 1887. This amendment increased the jurisdiction of Civil Judges (Senior Division) to entertain such suits up to Rs. 1,00,000, rendering the Additional District Judge's judgment a nullity.
* Failure to Follow Remand Directions: The impugned judgment did not record specific findings on the period of alterations or structural changes, as directed by the High Court in the earlier remand order.
* Selective Reliance on Evidence: The court below disregarded an earlier commissioner report (dated 17.2.1982) and solely relied on a later report (dated 23.4.1983).

Respondent-Plaintiff (Landlords) Arguments:
* Specific Remand to the Court: The High Court explicitly remanded the matter to the specific Additional District Judge, which means that court retained jurisdiction. A letter from the Additional District Judge requesting transfer was overridden by the District Judge's order returning the case, citing the High Court's direction.
* Waiver of Objection: The tenants did not raise any objection regarding pecuniary jurisdiction before the Additional District Judge post-remand, nor in their Article 227 petition challenging the rejection of their additional written statement. Pecuniary jurisdiction is not inherent jurisdiction; objections must be raised at the earliest opportunity, and a consequent failure of justice must be shown, as per Section 21 CPC.
* Unlimited Jurisdiction for Eviction Suits: Under Section 25(2) of the Bengal, Agra and Assam Civil Courts Act, 1887, and the High Court's Notification No. 525 dated 25.10.1972, District Judges and Additional District Judges have unlimited pecuniary jurisdiction for eviction suits between lessor and lessee, irrespective of valuation. The 2015 amendment to Section 15 of the Provincial Small Cause Courts Act is prospective and applies to the institution of new suits, not to pending remanded cases.
* Valid Findings on Alterations: The lower court's findings on structural alterations were based on detailed evidence (landlord's witness, Advocate Commissioner's report prepared in parties' presence) and were not perverse. The tenants admitted making changes without permission.

5. Court’s Reasoning

The High Court addressed the two main questions:

Regarding Pecuniary Jurisdiction (Question No. 1):
* Prospective Nature of Amendment: The Court noted that the Statement of Objects and Reasons for the U.P. Act No. 14 of 2015 (amending Section 15 of PSCC Act) indicated its purpose was to raise pecuniary jurisdiction for the institution of civil suits and appeals, implying a prospective application. The amendment did not specify automatic transfer of pending or remanded cases.
* Distinction Between Jurisdictions: The Court reiterated the distinction between inherent lack of jurisdiction (which renders a decree void) and lack of pecuniary/territorial jurisdiction (which renders it voidable). An objection to pecuniary jurisdiction must be raised at the earliest opportunity, and a failure of justice must be demonstrated, as per Section 21 CPC. The tenants failed on both counts.
* Finality of High Court Orders: The prior High Court orders (remanding to the Additional District Judge and dismissing the Article 227 petition) had attained finality, implicitly affirming the Additional District Judge's competence to hear the remanded matter.
* Precedent on Remand: Citing M/s. Tek Chand & Co. Meerut, the Court held that when a specific court is directed by a higher court to decide a remanded matter, it retains jurisdiction despite subsequent amendments affecting pecuniary limits, especially when no objection was raised earlier.
* Section 15 CPC & Higher Grade Courts: While Section 15 CPC directs institution in the lowest grade competent court, it does not oust the jurisdiction of a higher grade court to try a suit below its pecuniary jurisdiction, as held in various precedents (Ratan Sen Vs Bhau, Sanjay Sharma Alias Pintu).
* Overriding Provisions for Eviction Suits: Crucially, the Court relied on Section 25(2) of the Bengal, Agra and Assam Civil Courts Act, 1887, and the High Court's Notification No. 525 dated 25.10.1972. These provisions confer unlimited pecuniary jurisdiction upon District Judges and Additional District Judges for eviction suits between lessors and lessees, regardless of value. This specific conferment of jurisdiction overrides the general pecuniary limits in Section 15 of the Provincial Small Cause Courts Act. The Court explicitly stated that there is no conflict between these provisions and that they can be read harmoniously.
* Critique of Tejumal: The Court found the precedent Tejumal Vs. Mohd. Sarfraz to be per incuriam as it failed to consider Kiran Singh v. Chaman Paswan and Section 21(2) CPC.

Regarding Validity of Findings on Material Alterations (Question No. 2):
* Compliance with Remand Directions: The Court found that the lower court had complied with the remand directions from the 3.7.2015 judgment, which emphasized determining whether material alterations diminishing property value were made during the period when defendants 1, 3, and 4 were co-tenants, making them jointly and severally liable.
* Evidence-Based Findings: The lower court considered detailed evidence, including the testimony of the plaintiff's witness (PW-1), the notice specifying structural alterations, and the Advocate Commissioner's report (Paper No. 148-C, prepared after inspection on 8.5.1983 in the presence of parties). The defendants' claim of consent for repairs was not proved, and their submitted receipt was found dubious.
* No Perversity: The High Court concluded that the findings of fact recorded by the lower court were based on due consideration of relevant evidence and did not suffer from any illegality or perversity. Such findings cannot be interfered with in revisional jurisdiction under Section 25 of the Provincial Small Cause Courts Act, 1887.

6. Statutory References

• Provincial Small Cause Courts Act, 1887: Section 15 (as amended by U.P. Act No. 17 of 1991 and U.P. Act No. 14 of 2015), Section 25, Section 17.
• U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972: Section 16, Section 30(1).
• Code of Civil Procedure, 1908: Section 15, Section 21, Section 21A, Section 99, Section 145.
• Bengal, Agra and Assam Civil Courts Act, 1887: Section 25 (1), (2), (3), (4).
• Suits Valuation Act, 1887: Section 11.
• Constitution of India: Article 227.
• U.P. Civil Laws (Amendment) Act, 2015 (U.P. Act No. 14 of 2015)
• U.P. Civil Laws (Amendment) Act, 1972 (U.P. Act No. 37 of 1972)

7. Precedents Cited

By Revisionist-Defendant:
* Shobhit Nigam Vs. Smt. Batulan and another, 2017 (1) JCLR 168 (Allahabad)
* Sadik Sheikh Vs. Mohd. Sarfraz, SCC Revision No.306 of 2016
* Chiranjilal Shreelal Goenka (deceased) through LRs Vs. Jasjit Singh and others, (1993) 2 BLJR 1193
* Kiran Singh and others Vs. Chaman Paswan and others, AIR 1954 SC 340
* Vandana Travels and Tours Vs. Commr. of C. Ex. and Service Tax (Appeals), 2015 (2) ADJ 149
* Shobran Singh Sharma Vs. 4th Additional District & Sessions Judge, Aligarh and others, 1993 AWC 1796
* M.P. Mishra V. Sangam Lal Agarwal, AIR 1975 Alld 425
* Trilok Singh v. Smt. Jamuna Devi and another, AIR 1978 Alld 129
* Tejumal Vs. Mohd. Sarfraz, 2016 (3) ARC 570 (Held per incuriam by the Court)
* Kwality Restaurant (M/S) Vs. Sunil Khetrapal, 2016 (3) ARC 503

By Respondent-Plaintiff (and relied upon by the Court):
* M/s. Tek Chand & Co., Meerut and others Vs. VIIIth Additional Disrtict Judge, Meerut and others, 1992 (2) ARC 386
* Ramlal Yadav and another Vs. Kulwant Rai Puri and others, 1998 (1) ARC 7
* Indramani Kirtipal Vs. Union of India and others, 1996 (2) SCC 437
* R.S.D.V. Finance Co. Pvt. Ltd. Vs. Shree Vallabh Glass Works Ltd., 1993 (2) SCC 130
* Harshad Chiman Lal Modi Vs. DLF Universal and another, 2005 (7) SCC 791

Relied upon by the Court (on statutory interpretation and jurisdiction principles):
* Sanjay Sharma Alias Pintu vs. Anil Dua Alias Titu (SCC Revision Defective No.76 of 2017, decided on 13.07.2017)
* Ratan Sen Vs Bhau, AIR 1944 All 1
* Ramamirtham Vs. Ram Film Service (1951) ILR Mad. 93 (FB)
* Venkateshwarlu Vs. Satyanarayana, AIR 1957 AP 49 (FB)
* Subhash Mahadevasa Habib Vs. Nemasa Ambasa Dharamadas, (2007) 13 SCC 650
* Devendra Upadhyay Vs. Bhudev Prasad Sharma, 2017 (7) ADJ 319
* Rajendra Shah v. Kamla Devi, 1983 ARC 337
* Kedar Nath Kanu vs. Mahabir Prasad, 1985 (1) ARC 84
* Smt. Dilip Kaur and another vs. A.D.J., J.S.C.C./ Special Judge (Dacoity Chhetra) Lalitpur and others, 2007 (67) ALR 283
* Smt. Madhu Gupta vs. Satish Chand and others, 2010 (80) ALR 180
* Various Supreme Court cases on interpretation of statutes and objects/reasons (e.g., Express Newspaper (Private) Ltd. v. Union of India, Prabhudas Damodar Kotecha, Chief Justice of Andhra Pradesh v. L.V.A. Dixitulu).
* A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602 (on per incuriam)