Public sector undertakings under rent control law include government companies where the statutory scheme targets financially capable entities.

The Supreme Court interpreted the exemption in Section 3(1)(b) of the Maharashtra Rent Control Act, 1999 in its legislative and economic context, holding that the class excluded from rent control protection consists of financially capable public sector entities. Applying noscitur a sociis and the statutory scheme, it found that Government companies are understood in legislative practice as part of the public sector undertaking fold. It rejected a narrow external definition of Government company as inconsistent with the Act and as creating arbitrary discrimination between similarly cash-rich public entities. Government companies under Section 617 of the Companies Act, 1956 therefore fall within "Public Sector Undertakings" and are excluded from the Act's protection.

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Issues: Whether Government companies fall within the expression "any Public Sector Undertakings" in Section 3(1)(b) of the Maharashtra Rent Control Act, 1999 and are therefore excluded from the Act's protection.

Analysis: The exemption scheme in Section 3 of the Maharashtra Rent Control Act, 1999 was read in light of its object of balancing tenant protection with the need to deny protection to financially capable tenants. The Court traced the legislative background to the earlier rent control regime and the structural changes introduced in 1999, including the exclusion of cash-rich entities from rent control protection. It held that "PSU" is not a term of art and is not defined in the Rent Act or the Companies Act. Examining parliamentary committee reports, public undertaking classifications and the functional context in which the expression is used, the Court found that Government companies are understood in legislative practice as part of the public sector undertaking fold. Applying the principle of noscitur a sociis, it held that the entities grouped in Section 3(1)(b) are all financially capable of paying market rent, and that excluding Government companies while retaining similar cash-rich public entities would create arbitrary and constitutionally vulnerable discrimination. The Court also rejected the High Court's approach as importing an external definition of Government company into the Rent Act and as amounting to judicial legislation.

Conclusion: Government companies defined under Section 617 of the Companies Act, 1956 fall within "Public Sector Undertakings" in Section 3(1)(b) of the Maharashtra Rent Control Act, 1999 and are not entitled to the Act's protection.

Ratio Decidendi: In construing an exemption clause in a rent control statute, the expression "Public Sector Undertakings" must be interpreted in its legislative and economic context, and Government companies may be included where the statutory scheme shows that the class excluded consists of financially capable public sector entities.

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