2018 (11) TMI 1855 - SC - Indian Laws

NTC decree becomes unenforceable as statutory amendments vest tenancy rights in Central Government retrospectively

Union of India (UOI) Versus Nareshkumar Badrikumar Jagad and Ors.

The SC held that a decree for possession against NTC became unenforceable due to statutory amendments vesting tenancy rights in the Central Government ... Notice for terminating the tenancy of NTC - hand over vacant and peaceful possession of the suit premises to the Plaintiffs - principal ground urged by the Union of India is that the right, title and interest in the suit property had vested absolutely in the Central Government by virtue of Section 3(1) of the 1995 Act - expression 'Tenant' and 'Holdover Tenant' - HELD THAT:- It is not a case for taking contempt action for non-compliance of the direction of this Court inasmuch as the basis for issuing such direction has become non-existent in law. Similarly, the fact that NTC has already filed two undertakings with the approval of the Union of India, assuring to vacate the suit property, will be of no effect and cannot be enforced by operation of law. Further, the decree though validly passed at the relevant time by the concerned Court, would be of no avail nor could it be enforced against the Union of India in whom the rights of the protected or statutory tenant stood transferred to and vested in w.e.f. 1st April, 1994. The Trust may have to take recourse to appropriate remedy under the provisions of the applicable rent legislation to evict the real tenant, the Central Government. Those proceedings will have to be decided on their own merits in accordance with law, without being influenced by any observation made in the proceedings which have culminated in the judgment under review. The Respondents are seriously opposed to showing any indulgence to NTC in the garb of Review Petition by the Union of India. For, the review petition is hopelessly time barred as there is delay of 837 days coupled with conduct of Union of India in according approval to NTC for filing two successive undertakings in compliance of the direction of this Court. The objection appears to be attractive at the first blush but it cannot be taken forward, because of the legal fiction introduced by the amendment Act and giving retrospective effect to the event of vesting of the rights of the statutory tenant in respect of the suit property in the Central Government and also rendering the decree and order including the undertaking given by NTC unenforceable. As per the amended Section 3 of the 1995 Act w.e.f. 1st April, 1994, by operation of law the statutory or protected tenancy rights of Podar Mills Ltd. in respect of the suit property stood transferred to and vested in the Central Government and it continues to so vest in it and that the decree against NTC including the undertaking given by NTC has been rendered unenforceable by a legal fiction. As a result, the Trust being the landlord is obliged to take recourse to remedy against the Central Government (Union of India) to get back possession of the suit property, as per the dispensation specified in the concerned Rent Legislation, if it so desires. Application for condonation of delay in filing review petition is allowed - Application for urging additional grounds in the review petition is allowed - Review peition disposed off. Issues Involved:1. Review petition by Union of India regarding the judgment dated September 5, 2011.2. Application for directions and extension of time by National Textile Corporation Ltd. (NTC).3. Contempt petition by Respondents against NTC.4. Impact of the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Act, 2014 (Validation Act 2014).Issue-wise Detailed Analysis:1. Review Petition by Union of India:The Union of India filed a review petition against the Supreme Court's judgment dated September 5, 2011, in Civil Appeal No. 7448 of 2011. The principal ground was that the right, title, and interest in the suit property had vested absolutely in the Central Government by virtue of Section 3(1) of the 1995 Act. The Union of India contended that the tenancy rights of the erstwhile Podar Mills Ltd. vested in the Central Government and not in NTC, which was not specifically pleaded in the original written statement by NTC. The review petition also included additional grounds due to the enactment of the Validation Act 2014, which retroactively altered the status of the parties concerning the suit property.2. Application for Directions and Extension of Time by NTC:NTC filed an application for directions and extension of time to vacate the suit premises. The reliefs sought included the declaration that the buildings on the suit land were not to be handed over free of cost, the direction for the Trust to pay the salvage value of the demolished structures, and the permission to hand over juridical possession without physical possession until the land was demarcated and the structure demolished. The application was filed before the expiry of the time to vacate, citing various reasons.3. Contempt Petition by Respondents:The Respondents filed a contempt petition against NTC for not complying with the Supreme Court's direction to vacate the suit premises and hand over peaceful and vacant possession. They alleged willful disobedience and breach of the undertaking given to the Court by NTC, with the approval of the Union of India.4. Impact of the Validation Act 2014:The Validation Act 2014, which came into effect during the pendency of the review petition, retroactively amended the 1995 Act to state that leasehold rights of the textile undertakings would continue to remain vested in the Central Government. This amendment necessitated a re-evaluation of the judgment under review. The Supreme Court recognized that the Validation Act 2014 altered the status of the parties retrospectively, making the decree for possession against NTC unenforceable. The Court held that the statutory or protected tenancy rights of Podar Mills Ltd. in respect of the suit property stood transferred to and vested in the Central Government and continued to do so.Conclusion:The Supreme Court concluded that the decree against NTC, including the undertaking given by NTC, was rendered unenforceable by the Validation Act 2014. The Trust must seek eviction of the Union of India, the real tenant, under the applicable rent legislation. The contempt petition and the application for extension of time by NTC were disposed of, and the review petition was allowed with liberty to the Trust to pursue other appropriate legal remedies. The Court granted liberty to the Trust to revive the contempt action if the challenge to the validity of the Validation Act 2014 succeeds.