AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2008 (8) TMI 887
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....d let out the suit-premises admeasuring 3214 sq. ft. (approx.) in Thane to Oriental Insurance Company Ltd. ("OIC" for short). The rent was Rs. 10,000/- per month. Vide notice dated 15.4.2002 under Section 106 of the Transfer of Property Act, appellant terminated the tenancy of the said Company. On failure of OIC to vacate the premises, they instituted a suit for eviction. OIC took the plea that it is not covered under Section 3(1)(b) of the Rent Act as it was "a protected tenant" under the said Rent Act, 1999 and, therefore, could not be evicted. In the said suit, the landlord pleaded that OIC is a Public Sector Undertaking and/or Corporation having a total paid up share capital of more than Rs. 1,00,00,000. 6. OIC resisted the suit by filing its written statement inter alia contending that it is neither a PSU nor a Corporation; that it was not exempted under Section 3(1)(b) of the Rent Act; that it was neither a bank nor a PSU, nor a foreign mission, nor MNC and nor a public limited company having paid up share capital of more than Rs. 1,00,00,000. According to OIC, it was a Government company carrying on its own insurance business and that the premises let to it stood fully pr....
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.... Government companies". According to the appellants, by such exclusion of Government companies from the PSUs, the High Court has excluded a large number of PSUs from the purview of Section 3(1)(b), which is not the intention of the Legislature. This, according to the appellants, is contrary to the legislative policy and such interpretation defeats the very purpose of Section 3(1)(b) of the Rent Act. According to the appellants, in the alternative, in any event, OIC is a public limited company having a paid up share capital of rupees more than one crore and, therefore, in any event, the said company would fall in the second part of Section 3(1)(b) which denies to such public limited companies the protection of the said Rent Act, 1999. 10. Shri Shyam Divan, learned senior counsel appearing on behalf of the appellants submitted that the concept of a "Government Company" is alien to the scheme of Section 3(1)(b). The legislature, according to the learned counsel, has not used the expression "Government Company" anywhere in Section 3(1)(b). There was no justification, according to the learned counsel, for the High Court to introduce the concept of Government Company when the legislat....
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....ed counsel submitted that the expression "or any PSUs" as used in Section 3(1)(b) is a separate stand-alone category like, banks, foreign missions, international agencies etc.. The said expression is separated from the rest of the provision by the word `or" which is disjunctive and giving a natural meaning to the said word separates PSUs from the next expression relating to statutory Corporations. Therefore, according to the learned counsel, there is no reason why the expression `any PSUs" should be restricted to statutory corporations, particularly when the disjunctive word "or" separates the two phrases in Section 3(1)(b). In this connection, learned counsel submitted that the word PSU is not specifically defined in the Rent Act. It is not defined in the 1956 Act. Learned counsel submitted that under Rules of Procedure and Conduct of Business in Lok Sabha under Chapter XXVI there is reference to Constitution of Parliamentary Committees. Rule 312A refers to functions of "Committee on PSUs" specified in the Fourth Schedule. Item 5 of Part I of the Fourth Schedule (List of Public Undertakings) refers to the Life Insurance Corporation of India (LIC) whereas Part II of the same Schedu....
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....panies as done by the impugned judgment of the High Court then the larger objective of the legislature would stand defeated and the standard rent provisions under the Rent Act (1999 Act) would be rendered vulnerable. According to the learned counsel, the golden thread which runs through Section 3(1)(b) of the Rent Act is the economic criteria. In this connection, learned counsel submitted that each of the entities mentioned in Section 3(1)(b) are cash- rich entities. These entities are tenants paying rent to the landlords. These entities, according to the learned counsel, are excluded from the Rent Act protection, particularly when with the passage of time, the landlords were not able to maintain their property and, consequently, these properties became dilapidated for want of maintenance on account of poor return on their investments and on account of increase in taxes and price rise. According to the learned counsel, the Report of the Joint Committee indicates that it had taken into account all the above factors, including the judgment of this Court in Malpe Vishwanath Acharya (supra) and, accordingly, gave a package of the above three items enumerated above including Section 3(1....
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....cal authority is covered by the ambit of Section 3(1)(a) as long as it does not enter the arena of commercial activity. Learned counsel next submitted that the concept of a "Government Company" is not a part of Section 3(1)(a). According to the learned counsel, the said sub-section 3(1)(a) is bodily lifted from Section 4(1) of Bombay Rent Act, 1947. That Act was a temporary enactment. According to the learned counsel, the absence of the words "Government Company" in sub-section 3(1)(a) and the presence of the expression "any PSUs" in Section 3(1)(b) leads to the inevitable conclusion that Government Companies were not entitled to receive the protection of the said Rent Act. According to the learned counsel, banks, PSUs, statutory corporations and private and public limited companies mentioned in Section 3(1)(b) are in the commercial sector and, therefore, they will not have the protection of the Rent Act when they are the tenants. According to the learned counsel, the object of the said Rent Act is to extend protection of the said Rent Act to tenants who are Government, local authorities and those who are not affluent and who do not have the capacity to pay market rent. On the poin....
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....s of general insurance business all over India. According to the learned counsel, all the said four companies are the Government Companies which even on the narrow interpretation placed by the respondent, are corporations established under the Nationalisation Act. Therefore, learned counsel submitted that "PSUs" should be read in the widest possible term so as to include within it every kind of establishments through which the Government would do business. Therefore, according to the learned counsel, PSUs would encompass Government companies, statutory corporations, public sector companies etc. through which the Government is doing business. Reliance was placed on various statutes which have defined PSUs to include Government companies. One such statute is "Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996" which defines PSUs under Section 2(1)(a)(ii) as any corporation established by or under any Central or State Act or a Government Company as defined in Section 617 of the said 1956 Act, which is owned, controlled or managed by the Central Government. Learned counsel pointed out further that LIC is a statutory corporation establ....
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....f Rs. 1,00,00,000 or more etc. These tenants, according to the learned counsel, do not require the protection of the Rent Act. Learned counsel next submitted that in any event OIC and UIC are public limited companies having a paid up share capital of more than Rs. 1,00,00,000 and, therefore, stand excluded from the protection of the Rent Act. In this connection, learned counsel urged that Government Companies and Insurance Companies are merely sub-species of public limited companies under the 1956 Act; the genus "company" is divided into three species - "existing company", "private company" and "public company"; that various sub-species including holding and subsidiary companies, insurance companies, Government companies etc. are all public limited companies under 1956 Act. 17. Lastly, learned counsel urged that when the legislature provided under Section 3(1)(b) that private limited companies and public limited companies having a paid up share capital of Rs. 1,00,00,000 or more were to be excluded from the protection of the Rent Act, it was providing for all bodies carrying on business in the corporate form under the 1956 Act, which have a paid up share capital of Rs. 1,00,00,0....
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....nt company does not undergo metamorphosis so as to result in the emergence of a separate entity under the 1956 Act, which needs Rent Act protection to which it was formerly not entitled. The consequence, according to the learned counsel, of a company becoming a Government Company is that the Government Company is placed under a special system of control and merely because the entire share holding is owned by the Central Government will not make the incorporated company a Central Government. In this connection, learned counsel relied upon the judgment of this Court in A. K. Bindal and anr. v. Union of India and ors. 2003(5)SCC 163 at 175. According to the learned counsel, the need for Rent Act protection does not arise merely because a company is placed under strict control and regulations. The need for Rent Act protection or its absence has no nexus whatsoever with the strict regime of control imposed on a Government company by Section 619 of the 1956 Act. In this connection, learned counsel submitted that if a public limited company with paid up share capital of Rs. 1,00,00,000 is not entitled to Rent Act protection under Section 3(1)(b), that company on becoming a Government comp....
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....id Rent Act needs to be interpreted in the context of the 1956 Act. It was submitted that under the definition of "company" under Section 2(10) of the 1956 Act, which refers to Section 3 of that Act, the definition Section of Government Company refers to Section 617 of the 1956 Act. According to the learned counsel, Section 3 of the Companies Act deals with company [see section 3(1)(i)]; existing company [section 3(1) (ii)]; private company [section 3(1)(iii)] and public company [section 3(1) (iv)]. According to the learned counsel, it is not possible to proceed on the basis as if public and private companies are two sub-sets, which exhausts the "field" of companies. In this connection he submitted that Section 3 of the 1956 Act does not define a public company exhaustively as a company; that, Section 3 of the Companies Act merely states that the public limited company is not a private company and, therefore, the strict dichotomy between public or private may not be entirely correct insofar as the Companies Act is concerned. 21. According to the learned counsel, Section 617 of the 1956 Act is sui generis as is indicated by the Chapter Heading in Part XIII "General" which i....
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....undertakings". Therefore, according to the learned counsel, Section 3(1)(b) of the said Rent Act applies to PSUs and statutory corporations "established by or under any Central or State Act." Therefore, according to the learned counsel, a Government company incorporated under the Companies Act would fall outside Section 3(1)(b) and thus would be entitled to the protection of the Rent Act. In this connection, learned counsel placed reliance on the Report of the Joint Committee which vide para 19 refers to "Other PSUs including Government Undertakings or Corporations established by or under Central or State enactments." According to the learned counsel, what has emerged from the said report is that the Joint Committee intended to include Government/semi-Government undertakings or corporations within the words "other public sector undertakings", however, the Legislature has dropped the said inclusion from the expression "Public Sector Undertakings" and simply proceeded to specify "Public Sector Undertakings or Corporation" which were established by or under any Central or State Act. Therefore, according to the learned counsel, in the said sub-section 3(1)(b) the expression "Public Sec....
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....kin to the Government as is referred to in sub-section 3(1)(a) of the Act. 26. To sum up, the basic contention advanced by learned Additional Solicitor General is that a Government company does not fall within the compendious expression "any PSUs or any corporation established by or under any Central or State Act". In other words, according to the learned counsel, the impugned judgment of the High Court commends to be sustained though in a different matrix. 27. Dr. Rajeev Dhavan appearing on behalf of Bharat Petroleum Corporation Ltd.-appellant (SLP(C) Nos. 24789-90/07) submitted that the word `PSU' is a term of parlance and that it is not a term of art. Learned counsel submitted that in this case the court is required to give contextual interpretation to the words `PSUs' in Section 3(1)(b) and if such a interpretation is given then the position which emerges is that the words PSUs or any statutory corporation constitute one separate specific category and, therefore, to that extent he adopts the arguments advanced on behalf of the Oriental Insurance Company Ltd. that the Act vide Section 3(1)(b) excludes PSUs and statutory corporations established by or under Central ....
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....ection 3(1)(a) indicates that the Rent Act in question also assumes that the Government, local authorities and Government companies need protection of the Rent Act. Learned counsel submitted that there is nothing in the report of the Joint Committee or in the Statement of Objects and Reasons to exclude premises let out to Government companies. Learned counsel further submitted that if Section 3(1)(a) is to be given full interpretation then all governmental functions should be taken into account. That, Section 3(1)(a) cannot be confined to non-commercial activity. Therefore, according to the learned counsel, the distinction made between governmental functions and commercial functions to interpret Section 3(1) is erroneous. According to the learned counsel, Government operates in railways, transport and energy sectors. It operates via departments, Government companies and statutory corporations. When it operates through its department like bureau of public enterprises the matter will squarely come under Section 3(1)(a). However, in view of Section 3(1)(b) when a Government operates through a statutory corporation the matter would fall under Section 3(1)(b) because the legislature ....
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....er subordinate to the Government authorized in this behalf; but it shall apply in respect of premises let, or given on licence, to the Government or a local authority or taken on behalf of the Government on such basis by, or in the name of, such officer; (b) to any premises let or sub-let to banks, or any Public Sector Undertakings or any Corporation established by or under any Central or State Act, or foreign missions, international agencies, multinational companies, and private limited companies and public limited companies having a paid up share capital of rupees one crore or more. Explanation.- For the purpose of this clause the expression "bank" means,- (i) the State Bank of India constituted under the State Bank of India Act, 1955; (ii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959; (iii) A corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 or under section 3 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980; or (iv) any other bank, being a scheduled bank as defined in clause (e) of section 2 of the Reserve Bank of I....
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.... means a company as defined in section 3. (16) "existing company" means an existing company as defined in section 3. (18) "Government company" means a Government company within the meaning of section 617. (19) "holding company" means a holding company within the meaning of section 4. (21) "insurance company" means a company which carries on the business of insurance either solely or in conjunction with any other business or businesses. (23) "limited company" means a company limited by shares or by guarantee. (23A) "listed public companies" means a public company which has any of its securities listed in any recognized stock exchange. ... Section 3. Definitions of "company", "existing company", "private company" and "public company" (1) In this Act, unless the context otherwise requires, the expressions "company", "existing company", "private "company" and "public company" shall, subject to the provisions of subsection (2), have the meanings specified below: (i) "company" means a company formed and registered under this Act or an existing company as defined in clause (ii); (ii) "existing company" means a company formed and registered under any of the pr....
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....ompany. (2) Unless the context otherwise requires, the following companies shall not be included within the scope of any of the expressions defined in clauses (i) to (iv) of sub-section (1), and such companies shall be deemed, for the purposes of this Act, to have been formed and registered outside India:- (a) a company the registered office whereof is in Burma, Aden or Pakistan and which immediately before the separation of that country from India was a company as defined in clause (i) of sub-section (1); (3) Every private company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than one lakh rupees, shall, within a period of two years from such commencement, enhance its paid-up capital to one lakh rupees. (4) Every public company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than five lakh rupees, shall within a period of two years from such commencement, enhance its paid-up capital to five lakh rupees. (5) Where a private company or a public company fails to enhance its paid-up capital in the manner specified in sub- section (3) or sub-section (4), such compa....
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....anted, and where the grant is under sub-section (1), shall, if the Central Government so directs, be inserted in the memorandum, or in the articles, or partly in the one and partly in the other. (6) It shall not be necessary for a body to which a licence is so granted to use the word "Limited" or the words "Private Limited" as any part of its name and, unless its articles otherwise provide, such body shall, if the Central Government by general or special order so directs and to the extent specified in the directions, be exempt from such of the provisions of this Act as may be specified therein. (7) The licence may at any time be revoked by the Central Government, and upon revocation, the Registrar shall enter the word "Limited" or the words "Private Limited" at the end of the name upon the register of the body to which it was granted; and the body shall cease to enjoy the exemption granted by this section: Provided that, before a licence is so revoked, the Central Government shall give notice in writing of its intention to the body, and shall afford it an opportunity of being heard in opposition to the revocation. (8)(a) A body in respect of which a licence under this sect....
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....ply of electricity, except in so far as the said provisions are inconsistent with the provisions of the Indian Electricity Act, 1910 or the Electricity Supply 1948; (d) to any other company governed by any special Act for the time being in force, except in so far, as the said provisions are inconsistent with the provisions of such special Act; (e) to such body corporate, incorporated by any Act for the time being in force, as the Central Government may, by notification in the Official Gazette, specify in this behalf, subject to such exceptions, modifications or adaptation, as may be specified in the notification. ... Section 617. Definition of "Government Company". For the purposes of this Act Government company means any company in which not less than fifty one per cent of the paid- up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined. Point for Determination: 29. Whether the High Court was right in holding that the words PSUs in Section 3(1)(b) excluded Go....
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....o housing, repairing and reconstructing dangerous buildings. In the Statement of Objects and Reasons it is mentioned that in urban areas and, particularly in Greater Mumbai area the old buildings had outlived their lives and have rendered themselves in a bad state of repairs and in order to prevent possible collapse of old buildings necessity was felt to take up the programme of repairs and reconstruction of such buildings. 33. To continue our discussion on Bombay Rent Act, 1947, Section 5(10) defined `standard rent'. Under that section there were six types of standard rent, namely, rent fixed by the court under the previous Rent Acts of 1939 and 1944, rent charged on 1.9.1940 if the premises were let for the first time on that date, if the premises were let before 1.9.1940 then the rent first charged, if the premises were let after 1.9.1940 then the rent first charged when let, if the premises were exempted from standard rent then after the five years period the rent was not to exceed 15% on the investment made in construction and outgoings and in any other cases rent fixed by the court which may vary from time to time. Thus, the fixed date-line was 1.9.1940. The standard r....
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....ises, particularly in South Mumbai stood occupied by cash-rich entities like, statutory corporations and corporate bodies who insisted on paying meager standard rent under the 1947 Act. 36. Ultimately, the economic reasons led one of the landlords by the name Malpe Vishwanath Acharya to challenge the provisions of Section 5 (10), 7, 9(2)(b) and 11(1)(a) of the 1947 Act. We quote hereinbelow paras 8, 15, 17, 22, 25, 26, 27, 28, 29, 30 and 31of the judgment of this Court in the case of Malpe Vishwanath Acharya and ors. v. State of Maharashtra and anr. (1998) 2 SCC 1: "8. There is considerable judicial authority in support of the submission of learned counsel for the appellants that with the passage of time a legislation which was justified when enacted may become arbitrary and unreasonable with the change in circumstances. In the State of M.P. v. Bhopal Sugar Industries Ltd. (1964) 6 SCR 846 dealing with a question whether geographical classification due to historical reasons would be valid this Court at SCR p. 853 observed as follows: "Differential treatment arising out of the application of the laws so continued in different regions of the same reorganis....
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....nstrated from the facts in the case of Petitioner 3 who owns Unit No. A-18 on the first floor admeasuring 808 sq. ft. in the property known as Shri Ram Industrial Estate situated at 13 J.D. Ambedkar Road, Mumbai. The said building belongs to a cooperative society and Unit No. A-18 was given on lease and licence basis by an agreement dated 23-8-1964 by the appellant to Lokmitra Sahakari Printing and Publishing Society Ltd. on a monthly compensation of Rs. 686.80 per month. Liabilities of repairs is on the appellant and according to it this amount received in respect of the said unit by the appellant is Rs. 563.65 per month inclusive of all taxes. Out of this sum Appellant 3 has to pay Rs. 216.33 as municipal taxes leaving a balance of Rs. 320.22. From this amount the society outgoings is Rs. 250 per month, leaving a balance of only Rs. 70.20 per month with the said appellant. Another instance which has been given is that of Appellant 4 who owns a property known as Ram Mahal situated at 8, Dinshaw Vachha Road, Mumbai. The said building has 20 residential flats and the building was purchased by Appellant 4 in the year 1955, although it had been constructed prior to 1940. Flat No. 15 o....
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....ar illicit payments which are widely prevalent. The construction of new tenements on rental basis has considerably ceased with the result that low and middle income groups are not getting premises on rent...." (emphasis added) 26. Notwithstanding the fact that the State Legislature was conscious of the illegal payments which are made because of the rent restriction law no effective steps have been taken so far to strike a balance between the interests of the landlords and the tenants. 27. It is true that whenever a special provision, like the Rent Control Act, is made for a section of the society it may be at the cost of another section, but the making of such a provision or enactment may be necessary in the larger interest of the society as a whole but the benefit which is given initially if continued results in increasing injustice to one section of the society and an unwarranted largess or windfall to another, without appropriate corresponding relief, then the continuation of such a law which necessarily, or most likely, leads to increase in lawlessness and undermines the authority of the law can no longer be regarded as being reasonable. Its continuance becomes arbitrary.....
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....e represents the people but also because in representing them the entire spectrum of views is expected to be taken into account. The legislature is not shackled by the same constraints as the courts of law. But its power is coupled with a responsibility. It is also the responsibility of the courts to look at legislation from the altar of Article 14 of the Constitution. This article is intended, as is obvious from its words, to check this tendency; giving undue preference to some over others. 31. Taking all the facts and circumstances into consideration we have no doubt that the existing provisions of the Bombay Rent Act relating to the determination and fixation of the standard rent can no longer be considered to be reasonable. The said provisions would have been struck down as having now become unreasonable and arbitrary but we think it is not necessary to strike down the same in view of the fact that the present extended period of the Bombay Rent Act comes to an end on 31-3-1998. The Government's thinking reflected in various documents itself shows that the existing provisions have now become unreasonable and, therefore, require reconsideration. The new bill is under consi....
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....to the landlords under the present Rent Act. The third item of the Rent Act was to give the benefit of annual increase of rent @ 5% under the present Rent Act. All three items constituted one composite package for the landlords. The underlying object behind the said economic package is to balance and maintain the two-fold objects of the Rent Act, namely, tenancy protection and rent protection. The idea behind excluding cash-rich entities from the protection of the Rent Act is also to continue to give protection to tenants who cannot afford to pay rent at market rate. 39. The above discussion is relevant because we must understand the reason why Section 3(1)(b) came to be enacted. As stated above, in our view, with the offer of an economic package to the landlords, the legislature has tried to maintain a balance. The provisions of the earlier Rent Act, as stated above, have become vulnerable, unreasonable and arbitrary with the passage of time as held by this Court in the above judgment. The legislature was aware of the said judgment. It is reflected in the report of the Joint Committee. In our view, the changes made in the present Rent Act by which landlords are permitted to cha....
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....ntities are the same when it comes to autonomy and flexibility as compared to departmental undertakings. One point may be noted at this stage. The concept of PSU and the concept of Government company became relevant after introduction of economic reforms in 1991. With the said reforms, market orientation was given to our economy. It is around this time that the role of PSU became important. Both, the PSU as well as the Government company, were given autonomy and flexibility in commercial sectors. Annexure I to the Report of the Study Team on PSUs dated 10.6.1967 indicates clearly that Government companies stood covered under the concept of PSUs. In the present matter, the High Court has taken a view that Government companies stands excluded from PSU under Section 3(1)(b) as Government companies are separate and distinct entities from PSUs and since Government Company is not in the enumerated items in Section 3(1)(b) one cannot include the said entity within the meaning of the word PSU. This view of the High Court is erroneous for the simple reason that the word PSU is not defined under any Act. The word PSU is indicated in various Parliamentary Committees on Administrative Reforms ....
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....t companies which are also shown as PSUs. According to Bishwa Nath Singh, author of "Public Enterprise in Theory and Practice" for "efficient working of public enterprises a combination of economy and accountability is essential. The corporate form of undertaking has an advantageous position because it has necessary flexibility and operational freedom. The statutory corporations are set up under specific Statute of Parliament which statute indicates the extent of their accountability and the nature of Parliamentary control. On the other hand, a Government company is possessed with the merits of easy formation, flexibility in administration, wider source of resources mobilization, freedom from accounting and audit laws and procedures applicable to Government departments as well as providing a balance between autonomy and control. For its formation, there is no need of a separate enactment. Under the Indian Companies Act, 1956, a company may be established by issue of executive order by a Gazette notification or on a formal registration by a Memorandum and Articles of Association. This form of organization is free from day-to-day Government Interference. Thus, all the important forms....
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....ublic sector companies and Government companies are merely corporate forms. India's PSUs may be in the corporate forms or in the form of statutory corporations or in the form of public sector companies. This is the legislative understanding indicated by various Parliamentary Committees like Estimates Committee, Administrative Reforms Commission and Study Team on PSUs constituted by Administrative Reforms Commission. The insurance industry in India has private players in it like Bajaj Allianz Life. It also has SBI Life as one of the players. It also has LIC in the said sector/industry besides OIC, UIC etc. This aspect is important. 46. According to the respondents, the words `PSUs' in Section 3(1)(b) has to be read with the words any corporation established by or under Central or State Act. In other words, according to the respondents, only those PSUs which are established by or under any Central or State Act alone stand excluded from the protection of the Rent Act. According to the respondents, PSUs which are Government companies incorporated under Section 617 of the 1956 Act are entitled to the protection as they are not expressly excluded under Section 3(1)(b). We do n....
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....on under Article 14 to the Constitution. In the case cited by Mr. Soli J. Sorabjee, learned counsel for the appellants, namely, Shah and Co. v. State of Maharashtra (1967) 3 SCR 466 this Court held that to place such a construction as will save the statute from constitutional challenge is a well settled principle of interpretation. In the said Judgment, it has been held as follows: "to place such a construction as will save the statute from constitutional challenge ... having special regard for the principle of constitutional adjudication which makes it decisive in the choice of fair alternatives that one construction may raise serious constitutional questions avoided by another. ...". (emphasis supplied) 47. Moreover, if we are to hold that PSUs do not include Government companies, as held by the High Court, we would be disturbing the package offered by the Legislature of allowing increase of rent annually at 5%, allowing the landlords to accept premium and exclusion of certain entities from the protection of the Rent Act under Section 3(1)(b). On the other hand, acceptance of the arguments advanced on behalf of the respondents on the interpretation of Sec....
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....ural change vis-`-vis the Bombay Rent Act, 1947. As stated above, with the passage of time, the 1947 Act became vulnerable to challenge as violative of Article 14. As stated above, the legislature has strike to balance the twin objectives of Rent Act protection and rent restriction for those who cannot afford to pay rents at the market rates. To accept the interpretation advanced on behalf of the respondents for excluding Government companies from the meaning of the words "PSUs" in Section 3(1)(b) would amount to disturbing the neat balance struck by the Legislature. OIC and UIC are Government companies. They have paid up capital of more than Rs. 100 crores. They can easily afford to pay rents at the market rates. The legislature in its wisdom has kept PSUs, including Government companies, outside the Rent Act. We have to proceed on the basis that the State Legislature was aware of the meaning of the words PSUs as understood by the various Parliamentary Committees. If Government companies are to be excluded from Section 3(1)(b) then the test of intelligible differentia having rational nexus to the objects sought to be achieved by the said Rent Act would stand defeated. We cannot ex....