NMS/2058/1996 of JHAVERCHAND HIRACHAND and ORS. Vs BIMAL VIREN VORA on 17 November 1997

1. The suit is filed for a declaration that theDefendants are not entitled to advertise on thehoarding site placed on the terrace of a building"Fulchand Niwas" owned by Seth Fulchand KasturchandTrust of which the Plaintiffs are the trustees.

2. An agreement dated 8.11.1990 was entered intobetween the Plaintiffs and the Defendants. Clauses 11and 14 read as under :- "11.The Agree will be for a period of fiveyears commencing from the date of 1st August,1991 with an option to the Advertisers tocontinue for another period of five years bygiving to the Trustees, a written notice ofsix months in that behalf prior to the expiry of the said term of five years. theAdvertisers shall at least six months beforethe expiry of the said period of five yearsinform the Trustees whether they desire tocontinue or terminate these presents.However the terms and conditions for thefollowing five years will be as mutuallyagreed upon by the parties at that time saveexcept the clause for renewal.

14. It is specifically agreed by and betweenthe parties that the Advertisers have merelythe right to use the said site and installneon sign thereon. The licence to use thesaid site and this Agreement is not intendedto and does not create any other rights,title or interest in favour of theAdvertisers either that of a tenant,sub-tenant, joint or co-tenant or lessee orsub-tenant jointwise. The Advertisers shallnot charge, hypothecate, mortgage orotherwise deal with the site or in any waytransfer the benefit of this Agreement to anyother person or persons."

.The agreement came to an end by efflux oftime on 7.11.1995.

3. By a letter dated 8.9.1995, the Defendantsexpressed their desire of continuing the agreement fora period of five years from 1.4.1996. It is allegedin the said letter that the Plaintiffs had agreed tothe agreement being renewed on the same terms andconditions except as to the consideration. This oralagreement is denied by the Plaintiffs. It is notnecessary to consider this issue in view of the factthat even assuming that what the Defendants havestated in the letter is correct, the agreement in any event came to an end on 31.3.2001.

4. The Defendants filed R.A.D. Suit No.296 of1996 in the Court of Small Causes at Bombay. In anyevent, the question of jurisdiction andmaintainability of this suit must depend upon theaverments contained in the suit. Prima-facie, theDefendants upon expiry of the agreement weretres-passers in respect of the said hoarding site.They ought to have removed themselves. They have beenusing the said site despite the Plaintiffs request notto do so.

5. By an ad-interim order dated 25.7.1996, theDefendants were ordered and directed to pay a sum ofRs.50,000/- per month. The Notice of Motion wasfinally disposed of by the learned Judge directing theDefendants to pay a sum of Rs.1,25,000/- per monthfrom November, 1997 till the suit was disposed of.That order however, was set aside on an applicationmade by the Defendants and the Notice of Motion wasrestored to file.

6. For the reasons stated above and for thereasons mentioned in the order dated 17.11.1997, withwhich I am in respectful agreement. I am of theopinion that the Defendants ought not to be permitted to continue in possession of the hoarding site withoutbeing put on terms.

7. It is true that in prayer (c) the Plaintiffshave sought a sum of Rs.1,25,000/- per month. Thathowever was in 1996. Thereafter the rates haveadmittedly risen. This is a fit case to consider therelief of ascertaining the correct and fair amount byrelying upon prayer (g) of the Notice of Motion whichseeks such further and other reliefs as the nature andcircumstances of the case require.

8. Mr.Parikh, the learnedSenior Counselappearing on behalf of the Defendants stated that theDefendants have invested an amount of about Rs.5.00 toRs.6.00 lacs for construction of the hoarding site.This is disputed by Mr.Purohit, the learned counselappearing on behalf of the Plaintiffs. However, evenassuming that Rs.5.00 to Rs.6.00 lacs have beeninvested, the Defendants would be entitled toreduction of the royalty to the extent of Rs.5000/-per month being the reasonable return on an investmentof Rs.6.00 lacs.

9. In the circumstances, the Court Receiver,High Court, Bombay is appointed as the Receiver of thehoarding site. The Court Receiver shall after calling for bids, fix the royalty and security in respect ofthe hoarding site. In the first instance, the CourtReceiver shall permit the Defendant to be his agentsubject to his bidding the highest amount. In theevent of the Defendant being appointed as the agent ofthe Court Receiver, he shall be entitled to pay theamount fixed by the Court Receiver less Rs.5000/- permonth.

10. The operation of this order is stayed for aperiod of two weeks from today to enable theDefendants to challenge this order.

11. The Notice of Motion is accordingly disposedof.