2002 (7) TMI 17 - HC - Income Tax

Court rules in favor of petitioner, setting aside possession notice under Income-tax Act.

The court ruled in favor of the petitioner, setting aside the notice requiring possession solely based on the Income-tax Act order. It emphasized the ... Petitioner has stated that it has been a tenant of premises from 1955 on a monthly rental of Rs. 300, and has claimed the protection of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. - The impugned notice, in so far as it requires the tenant to hand over possession solely on the ground that an order had been made under Chapter XX-C of the Income-tax Act cannot, therefore, be sustained. The same is accordingly set aside. - The petition is allowed. Issues:1. Applicability of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 to buildings owned by the Central Government.2. Conflict between State and Central laws regarding eviction procedures.3. Effect of an order under the Income-tax Act on tenancy rights.4. Validity of notice requiring possession solely based on an order under the Income-tax Act.Analysis:Issue 1: Applicability of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 to Central Government buildingsThe petitioner claimed protection under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, for tenancy of premises owned by the Central Government. The Act defines 'Government' as the 'State Government,' thus limiting the exemption to buildings owned by the State Government. However, the court analyzed whether the State Act can prevail over the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, enacted by Parliament for eviction from Central Government premises.Issue 2: Conflict between State and Central laws on eviction proceduresReferring to the case law, the court highlighted that when special enactments by State and Central governments deal with eviction, the legislative intent and purpose should determine which law prevails. The court cited the Ashoka Marketing Ltd. v. Punjab National Bank case, emphasizing that the Public Premises Act, 1971, enacted by Parliament, prevails over State rent control laws for Central Government properties.Issue 3: Effect of an order under the Income-tax Act on tenancy rightsThe court clarified that an order under the Income-tax Act does not automatically terminate tenancy rights unless specified in the agreement. Citing the C.B. Gautam v. Union of India case, the court noted that termination of lease depends on the agreement terms. In this case, the agreement allowed the purchaser to receive rents from the tenant, indicating that tenancy rights were not automatically terminated by the Income-tax Act proceedings.Issue 4: Validity of notice based on an order under the Income-tax ActThe court ruled that a notice requiring possession solely based on an order under the Income-tax Act cannot be sustained. Once the building vests in the Union of India due to an order under Chapter XX-C of the Income-tax Act, the State law governing eviction ceases to apply. The Union of India can then proceed under the Public Premises Act, 1971, for eviction of unauthorized occupants.In conclusion, the court allowed the petition, setting aside the notice requiring possession solely based on the Income-tax Act order, emphasizing the application of the Public Premises Act, 1971, for eviction from Central Government properties.