Bombay High Court
Preeti Kabra vs Cl Educate Ltd on 17 June, 2025
2025:BHC-OS:9291
34-ARBAP-202-2023 copy.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION APPLICATION NO. 202 OF 2023
Anuj Kabra and anr. ... Applicants
Digitally
signed by
SHRADDHA
Vs
SHRADDHA KAMLESH
KAMLESH TALEKAR
TALEKAR Date:
2025.06.24 CL Educate Ltd.
15:14:34
+0530 (Formerly Known As Career Launcher
India Ltd.) .. Respondent
WITH
ARBITRATION APPLICATION NO. 203 OF 2023
Preeti Kabra ... Applicant
Vs
CL Educate Ltd. .. Respondent
Mr. Hrushi Narvekar a/w Shaheda Madraswala & Jenifer Mogrelia, i/b
Vashi & Vashi, for Applicants.
Mr. Sandeep Mohan Hirvadekar, for Respondent.
CORAM : SOMASEKHAR SUNDARESAN, J.
Date : June 17, 2025
Oral Judgement :
Context and Factual Background:
1. These Applications have been filed under Section 11 of the Arbitration
and Conciliation Act, 1996 (” the Act”). The disputes and differences between
the parties relate to a License Agreement dated August 25, 2016 by which
certain premises were licensed for a period of 60 months from August 25,
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2016 to August 25, 2021. On the same date, a Hire Agreement was also
executed for hire of furniture and fixtures contained in the aforesaid
premises. The Hire Agreement does not have an arbitration clause, but the
License Agreement has an arbitration clause. Learned Counsel for the parties
have no objection to proceed to arbitration in respect of disputes and
differences under both Agreements in reliance upon the arbitration
agreement contained in the License Agreement.
2. Despite the consent of the parties to proceed to arbitration, the legal
issue that emerges at this stage (as also framed by a Learned Single Judge of
this Court on an earlier occasion) is whether the nature of the License
Agreement being one of Leave and License, the dispute would at all be
arbitrable, even if the parties choose to have an arbitration agreement. Since
this issue has already been framed earlier, by consent of the parties, it is
taken up for consideration and disposal, although strictly speaking, all this
Court has to do is make a reference to an arbitral tribunal and leave it to the
arbitral tribunal to deal with jurisdiction under Section 16 of the Act.
3. The core issue that has been framed is whether in view of the decision
of Full Bench of this Court in Central Warehousing Corporation1. In that
decision, the Full Bench has held that disputes relating to Leave and License
1
Central Warehousing Corporation, Mumbai vs. Fortpoint Automotive Pvt. Ltd. – 2010 (1)
MhLJ 658
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agreements would exclusively fall in the jurisdiction of the Small Causes
Court established for this purpose under the Presidency Small Cause Court
Act, 1882 (“Presidency Act“), ousting the jurisdiction of any arbitral tribunal
that the parties may have agreed to constitute under any arbitration
agreement.
Analysis and Findings:
4. The licensed premises in the instant case are located in Vashi, Navi
Mumbai, thereby attracting the jurisdiction of the Provincial Small Cause
Court Act, 1887 (“Provincial Act“) and not the Presidency Act. However, the
Provincial Act contains terms that are in para materia and near identical to
the provisions that fell for consideration in Central Warehousing
Corporation.
5. Learned Advocates for the Applicants had been directed on earlier
occasions when the matter came up, to formally ascertain the latest position
as to whether a Small Causes Court with territorial jurisdiction in this matter
has been set up. Considering that more than two years have passed since
these applications were filed, the Applicants were asked to reconfirm
whether a Small Causes Court with territorial jurisdiction over the licensed
premises has been established by now and whether any other Court has been
designated for exercising the jurisdiction under the Provincial Act by way of
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any administrative decision of this Court. Such exercise has been carried out
by the Applicants and Learned Counsel for the Applicants has tendered a
compilation containing the correspondence in this regard.
6. It is seen from the compilation that by a response dated March 4, 2025
from the state government under the Right to Information Act 2005, the
State Government has confirmed that it has neither established any Small
Causes Court having jurisdiction in the subject matter in Navi Mumbai, nor
has it received any proposal for such establishment from the High Court.
Likewise, the Learned Advocates for the Applicants have also corresponded
with the Registrar of this Court on the Appellate Side to check whether any
Small Causes Court has been established under Section 26 of the Provincial
Act, and whether any judge or Court has been empowered and designated to
exercise the jurisdiction of the Small Causes Court in exercise of this Court’s
powers under Section 28 of the Maharashtra Civil Courts Act, 1869 (” Civil
Courts Act“).
7. In response to this endeavor, it is apparent that the Registry of this
Court has confirmed that no Small Cause Court has been established with
jurisdiction over Vashi, Navi Mumbai. In response to the queries raised by a
letter dated February 13, 2025 from the Learned Advocates for the
Applicants, the Registry of this Court has provided a reply dated March 7,
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2025 specifically confirming that no court has been designated to carry out
the function of Small Causes Court pursuant to Section 28 of the Civil Courts
Act. However, a list of Civil Judges presently working in Thane District who
have been conferred with with Small Causes power to a limited extent has
been enclosed. It is seen from a notification dated December 21, 2024 that
the pecuniary jurisdiction which is the maximum amount within which these
judges shall exercise such power has been set out. A plain reading of the same
would show that the maximum pecuniary jurisdiction conferred under this
notification on any judge is a value of Rs. 12,000/-. These limits are but
derived from the provisions of Section 28 itself which enables a jurisdiction
of Rs. 12,000 on a Civil Judge (Senior Division) and Rs. 6,000 on a Civil
Judge (Junior Division). The provisions of Section 28 of the Civil Courts Act
are extracted below:-
28. Power to invest Civil Judges with small cause powers.
(1) The High Court may invest any Civil Judge with the jurisdiction of a
Court of Small Causes for the trial of suits cognizable by such courts upto
such amount as it may deem proper, not exceeding in the case of a Civil
Judge (Senior Division) twelve thousand rupees and in the case of a Civil
Judge (Junior Division) Six thousand rupees.
(2) A Civil Judge (Senior Division) or a Civil Judge (Junior Division),
who is invested with the jurisdiction of a Court of Small Causes under sub-
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section (1), shall continue to have such jurisdiction within the local limits of
his ordinary jurisdiction so long and as often as he may fill the office of Civil
Judge (Senior Division) or Civil Judge (Junior Division), as the case may be,
without reference to the District in which he may be employed.
(3) The High Court may, whenever it thinks fir, withdraw such
jurisdiction from any Civil Judge so invested.
[Emphasis Supplied]
8. The disputes and differences in this case are said to be in the region of
approximately Rs. 16 Lakhs. Consequently, none of these judges who have
been so conferred with power can adjudicate disputes and differences under
the License Agreement pursuant to such notification. Even if one were to
focus only on the claim under the Leave and License Agreement and
disregard the connected claim under the Hire Agreement, the amount
claimed is in the order of nearly Rs. 7 Lakhs and consequently, none of these
judges who have been so designated, can exercise power of a Small Cause
Court for purposes of this dispute.
9. However, it would also be necessary to deal with Section 26 of the
Provincial Act, which is extracted below :
26. Suits or proceedings between licensors and licensees or landlords and
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Causes.–
(1) Notwithstanding anything contained elsewhere in this Act, but sub-
ject to the provisions of sub-section (2), the Court of Small Causes shall
have jurisdiction to entertain and try all suits and proceedings between a li-
censor and licensee, or a landlord and tenant, relating to the recovery of
possession of any immovable property situated in the area within the local
limits of the jurisdiction of the Court of Small Causes, or relating to the re-
covery of the licence fee or charges or rent therefor, irrespective of the
value of the subject-matter of such suits or proceedings.
(2) Nothing contained in sub-section (1) shall apply to suits or proceedings
for the recovery of possession of any immovable property or of licence fee
or charges or rent thereof, to which the provisions of the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947, the Bombay Govern-
ment Premises (Eviction) Act, 1955, the Bombay Provincial Municipal Cor-
porations Act, 1949, or the Maharashtra Housing and Area Development
Act, 1976, or any other law for the time being in force, apply.
[Emphasis Supplied]
10. It will be seen from the foregoing that the section is a non-obstante
provision, having overriding effect over any other provision of Provincial Act.
Therefore, it may indicate that potentially, regardless of the jurisdictional
limit imposed by the High Court in its notification conferring Small Cause
power over some civil judges under Section 28 of Civil Courts Act to exercise
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jurisdiction, the courts held by such judges could be regarded as a Small
Cause Court and thereby enable them to exercise jurisdiction regardless of
the size of the subject matter of the proceedings.
11. However, the careful reading of the same would indicate the words,
“irrespective of the value of the subject matter ” would have to be
harmoniously read with Section 28 of the Civil Courts Act and the
designation made under it. Even while conferring the High Court with power
to designate a Civil Judge not being a judge in a Small Cause Court, with such
power under the Civil Courts Act, care has been taken to specifically delimit
the size of disputes for which such judges may exercise such jurisdiction. The
legislature is conscious of the ingredients of Section 26 of the Provincial Act,
and yet under the Civil Courts Act, the power of the High Court to designate a
judge with such power has been limited in respect of the size of the pecuniary
jurisdiction. Besides, the non-obstante provision overrides the other
provisions of Provincial Act, and not the provisions of the Civil Courts Act
and the designation made under Section 28 of that law.
12. It cannot be forgotten that the very conferment of Small Cause power
on the designated civil judge has been effected with an inherent cap on the
size of jurisdiction conferred. If a special provision enabling conferment of
power on a civil judge has consciously has limited the size of the pecuniary
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jurisdiction that can be conferred, one would necessarily have to see it as
defining the size of disputes that could at all be considered by the civil judge
not otherwise being a judge in a duly established Small Cause Court.
Therefore, since the provision enabling a designation of civil judges and the
actual notification of such judges in Thane District for exercise of powers of
Small Causes Court, contains an inherent maximum limit of their pecuniary
jurisdiction, the necessary corollary would be that no Small Cause Court with
pecuniary jurisdiction that can handle the dispute at hand is available.
13. Learned Counsel for the Applicants points out that such a view is
supported by a view taken by a Learned Division Bench of this Court. In
Radheshyam2, the Learned Division Bench examined the question as to
whether a Court invested with Small Cause power under Section 28 of the
Civil Courts Act could function as a Small Cause Court and exercise unlimited
pecuniary jurisdiction regardless of the notification creating that jurisdiction
itself limiting the pecuniary jurisdiction.
14. Dealing with near-identical facts and the very same provisions that
arise for consideration, the Court has explicitly ruled as follows :
2
Radheshyam s/o Zumbarlal Candak vs. District Judge, Amravati & Anr. – 2011 (1) MhLJ
399
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33. From the provisions pointed out above and the
discussion followed, it is clear that the Small Cause Courts
Act deals with the jurisdiction therein to be exercised either
by a Court of Small Causes established under Section 5 of the
said Act or by a Civil Judge invested with the jurisdiction of a
Court of Small Causes by the High Court in exercise of its
powers under Section 28(1) of the Civil Courts Act. If neither
a Court of Small Causes is established at a particular place,
nor has the High Court in exercise of its powers under Section
28(1) of the Civil Courts Act invested any Civil Judge with the
jurisdiction of a Court of Small Causes for the trial of suits
cognizable by such Courts, then obviously the ordinary
original civil jurisdiction conferred upon the Civil Judge,
Junior Division, or the Civil Judge, Senior Division, is
available. However, in that event, such a suit, which is
otherwise cognizable by a Court of Small Causes, would be
tried by such Civil Judge as regular civil suit in accordance
with the provisions of the Code of Civil Procedure, depending
upon the pecuniary limits of its jurisdiction, as provided
under Section 24 of the Civil Courts Act.
36. If the value of the subject matter of the suit covered
by Section 26(1) of the Small Cause Courts Act exceeds the
pecuniary limits specified under Section 28(1) of the Civil
Courts Act, then a Civil Judge invested with the jurisdiction of
a Court of Small Causes shall not have jurisdiction to
entertain, try and decide such suit, as a small cause suit of a
summary nature, but it will have to be decided as a regular
suit and the procedure for deciding such suit will be governed
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this is that the High Court is not competent under Section
28(1) of the Civil Courts Act to invest any Civil Judge with the
jurisdiction of a Court of Small Causes beyond the pecuniary
limits specified in that Section.
15. Therefore, if the summary procedure and special jurisdiction of the
Small Cause Court is not available, it would follow that the fallback is what
the parties intended. If the parties did not have an arbitration agreement,
they would have to litigate in a civil court without the summary procedure of
the Small Cause Court. Since the parties have an arbitration agreement, it
would follow that the net effect of the notification under Section 28 of the
Civil Courts Act read with the ouster of jurisdiction under Section 26(1) of the
Provincial Act, would be that in Thane, there exists no Court vested with
Small Cause Court’s powers for exercise of jurisdiction over the License
Agreement which is of a value higher than the value for which power has
been conferred on the civil judges in Thane for exercise of Small Cause power
by the High Court.
16. This is the only logical and reasonable manner of reading all the
provisions of the applicable law harmoniously, because without such a
construction, the delimitation of the pecuniary jurisdiction conferred by the
High Court under the Civil Courts Act would be rendered otiose.
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17. Consequently, the necessary corollary would be that in the absence of
the existence of a Small Cause Court, read with the existence of the
arbitration agreement, the parties cannot be left denuded of the benefit of the
conscious remedy of arbitration chosen by them in exercise of their sovereign
autonomy. The arbitration agreement which is a conscious choice of the
parties must then be allowed to run its course in the absence of a Small Cause
Court being available with jurisdiction over the dispute at hand. Under
Central Warehousing Corporation, the ouster of jurisdiction of other courts
would occur when there is a Small Cause Court. If such a court is not
available, there is no ouster of the arbitration agreement.
Directions and Order:
18. In these circumstances, taking on board the consent of the parties to
proceed to arbitration, all disputes and differences between them, whether
under the Leave and License Agreement or under the Hire Agreement, both
dated August 25, 2016 are hereby referred to arbitration, by consent of the
parties in the following terms :
A] Mr. Yashodhan Divekar, a learned advocate of this Court is
hereby appointed as the Sole Arbitrator to adjudicate upon the
disputes and differences between the parties arising out of and in
connection with the Agreement referred to above;
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34-ARBAP-202-2023 copy.docxOffice Address: 1st Floor, Rajabahadur Mansion,
14, Ambala Doshi Marg, Fort, Mumbai – 400023Email ID: [email protected]
B] A copy of this Order will be communicated to the Learned Sole
Arbitrator by the Advocates for the Applicants within a period of one
week from the date on which this order is uploaded on the website of
this Court. The Applicants shall provide the contact and
communication particulars of the parties to the Arbitral Tribunal
along with a copy of this Order;
C] The Learned Sole Arbitrator is requested to forward the statutory
Statement of Disclosure under Section 11(8) read with Section 12(1) of
the Act to the parties within a period of two weeks from receipt of a
copy of this Order;
D] The parties shall appear before the Learned Sole Arbitrator on
such date and at such place as indicated, to obtain appropriate
directions with regard to conduct of the arbitration including fixing a
schedule for pleadings, examination of witnesses, if any, schedule of
hearings etc. At such meeting, the parties shall provide a valid and
functional email address along with mobile and landline numbers of
the respective Advocates of the parties to the Arbitral Tribunal.
Communications to such email addresses shall constitute valid service
of correspondence in connection with the arbitration;
E] All arbitral costs and fees of the Arbitral Tribunal shall be borne
by the parties equally in the first instance, and shall be subject to any
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19. Needless to say, nothing contained in this order is an expression of an
opinion on merits of the matter or the relative strength of the parties. All
issues on merits are expressly kept open to be agitated before the arbitral
tribunal appointed hereby.
20. All actions required to be taken pursuant to this order, shall be taken
upon receipt of a downloaded copy as available on this Court’s website.
[SOMASEKHAR SUNDARESAN, J.]
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