Commercial Suit for Declaration of Sub-Lease Rights Not Barred by Section 41 of the PSCC Act
Judgment dated of the High Court of Bombay in Commercial Suit No.135 of 2025 and Interim Application No.7681 of 2025 – in the matter between National Insurance Company Ltd Vs. Municipal Corporation of Greater Mumbai and others.
The plaintiff filed the suit for mandatory injunction directing defendant no. 1 (“the Corporation”) to enter the plaintiff’s name as ‘sub-lessee’ in respect of the land. The plaintiff has also prayed for a declaration that the plaintiff is the bona fide sub-lessee by virtue of a registered indenture of sub-lease dated 15th February 1965 and a registered deed of assignment dated 26th March 1971.
The suit property is described as a plot of land bearing 254-C, Scheme No. 52 of Worli Estate of Municipal Corporation of Greater Mumbai situated at Dr. Annie Besant Road, Worli, Mumbai, admeasuring 4480 square yards, owned by the corporation. By a Deed of Indenture dated 8th May 1963, registered on 12th November 1963, the corporation granted a lease in perpetuity to Blackwood Hodge (India) Private Limited. Blackwood Hodge executed a sub lease in respect of the suit property on 15th February 1965, registered on 18th August 1966, in favour of M/s Ghai Lamba Pvt. Ltd. for 97 years, also granting development rights and the right to rent out the construction. Ghai Lamba constructed a building. Under the sub lease dated 15th February 1965, a portion of about 8000 square feet was leased to Blackwood Hodge on the top floor of the building. Thus, Blackwood Hodge was the original lessee of the land and became a sub-lessee in respect of the constructed portion of 8000 square feet. 4) By an indenture of lease dated 8th April 1965, Ghai Lamba leased out an area of 72,000 square feet on the first, second, third and fourth floors of the building to Indian Oil Corporation (“IOCL”). By an indenture of lease dated 23rd February 1966, Ghai Lamba leased 3/34 Uploaded on – 29/10/2026 Downloaded on – 03/11/2026 15:49:30 901-ia-7681-2025-coms-135-2025.doc an additional 3,910 square feet to IOCL. 5) In 1966 and 1970, Ghai Lamba obtained a loan form M/s India Reinsurance Corporation Limited and mortgaged its rights in the land. On 20th November 1969, Blackwood Hodge assigned its leasehold rights in the land to defendant no. 3. On 26th March 1971, Ghai Lamba assigned all its sub-leasehold rights in the land and the building to India Reinsurance Corporation for the balance term of 97 years. In 1972, under the General Insurance Business (Nationalisation) Act 1972, India Reinsurance Corporation Limited merged into the National Insurance Company Limited (“the plaintiff”). Under the terms of the Indenture of lease dated 15th February 1965, the plaintiff claims sole right to receive rent from the occupants of the building constructed on the suit land.
This judgment clarifies that Section 41 jurisdiction is relationship-centric, not merely subject-matter-centric. Even where a dispute concerns leasehold rights, possession, termination notices or redevelopment rights, the Small Causes Court’s exclusive jurisdiction does not arise unless the plaint itself shows that the contest is between a landlord and tenant or a licensor and licensee.
Bombay HC – Commercial Suit for Declaration of Sub-Lease Not Barred by Section 41 PSCC
