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M.N. Clubwala v. Fida Hussain Saheb, 1964

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M.N. Clubwala v. Fida Hussain Saheb, (1964) 6 SCR 642, 651 This case interpretation/case summary is written by Ms. Swati Sharma a student at the Faculty of Law (Delhi University). If you also want to publish your articles or case interpretations/summaries, send your work to  niyamskanoon09@gmail.com . Case Details PETITIONER:  MRS. M. N. CLUBWALA AND ANR. Vs. RESPONDENT: FIDA HUSSAIN SAHEB AND ORS. DATE OF JUDGMENT: 03/02/1964 BENCH: MUDHOLKAR, J.R. SUBBARAO, K. CITATION: 1965 AIR 610 1964 SCR (6) 642 Introduction   The case of M.N. Clubwala v. Fida Hussain Saheb (1964) under the Delhi Rent Control Act is a landmark judgment that clarifies the distinction between a lease and a license and the jurisdiction of the Rent Controller. The primary issue in this case was whether the agreements between the landlord (M.N. Clubwala) and the shopkeepers (Fida Hussain Saheb) created a lease or a license.  Facts of the Case M.N. Clubwala (Landlord) used his building as market by
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Chunilal V. Mehta v. Century Spinning and Manufacturing Co. Ltd., AIR 1962



Introduction 

  • This case will tell us 'about what constitutes substantial question of law' which is  required for further appeal in the Supreme Court for civil matters as provided under Article 133(1)(a) of the Constitution of India. 

Fact 

  • Chunnilal Mehta and Co. were appointed as managing agent of the respondent company for a term of 21 years by an agreement.
  • A resolution passed by the company transferred all the benefits of the agreement to the present appellant Chunnilal Mehta and sons Ltd.
  • Before the expiry of the tenure, the board of directors of the company removed the appellant from his position.
  • Therefore the appellant filed a civil suit in the Bombay High Court claiming Rs 50 lakhs as damages for wrongful termination of the agreement which was later decreased to Rs 28 lakhs.
  • Issue was to how much damages had to be paid by the respondent company.
  • By interpreting Clause 14 of the agreement, the Court held that appellant would get only Rs 2,34,000 by calculating the amount at 6,000 per month for the unexpired period of the term.
  • The Plaintiff was not satisfied from this judgment. He approached the HC to obtain a certificate from the HC under Article 133(1)(a) of the Constitution to appeal further but the HC did not find any substantial question of law and refused to grant certificate.
  • As a result appellant approached to the Supreme Court by Special Leave Petition under Article 136 of the Constitution.

Issues

  1. Whether the interpretation of the certain clause of the agreement involved a 'Substantial question of law' to grant the certificate to appeal. 
  2. Whether by the interpretation of the clauses of the agreement and determining the quantum of damages and it's compensation by the HC was erroneous.

Ratio Decidendi

Issue 1 
  • Test to determine Substantial question of law-
    • If it is in the interest of general public 
    • If it directly and substantially affects the rights of the parties
    • If it is an open question means it is not settled by any Court
    • If it is not free from calls for discussion of alternative views.
Issue 2
  • The words "not less than" in cl. 14 were intended only to emphasize that the compensation should not be made less than Rs 6000 p.m.
  • Though the words "salary" and "remuneration" had been used interchangeable, by examining the clauses it appeared that remuneration meant Rs 6000 p.m only because as the clause provided that remuneration should accrue from day to day and be payable at the end of the month, but profits are determinable only at the end of the year.
  • As the remuneration of 10% of the gross profit differs from day to day therefore to pay every month cannot be the nature of this clause as compensation. 
  • Compensation to the aggrieved was clearly mentioned in the clause 14 in case of the breach  of the agreement not in clause 10 of the agreement.

Judgment

Issue 1
  • In the present case, substantial question was available to grant the certificate as the question was of huge amount and also it involves the interpretation of the law (agreement) which was not simple and free from doubt. 
  • The HC was in error in refusing to grant the appellant a certificate that the appeal involves a substantial question of law. 
Issue 2
  • Affirm the decree of HC and dismiss the appeal with costs.


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Ashbury Railway Carriage and Iron Co. Ltd. v. Riche (1875)

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Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, AIR 1958 SC 353

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