TaxTMI 
TaxTMI 
2015 (8) TMI 1220
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....this appeal are this wise:- 3. One Mr. Eric Voller was a tenant of the Indian Mercantile Insurance Company Ltd. (hereinafter referred to as the erstwhile Insurance Co.), the predecessor in title of the first respondent in respect of the premises being Flat No.3, Second Floor, Indian Mercantile Mansion (formerly known as Waterloo Mansion), Wodehouse Road, Opposite Regal Cinema, Colaba, Mumbai. This Mr. Voller executed a leave and licence agreement in respect of these premises on 20.12.1972 in favour of the appellant initially for a period of two years, and put him in exclusive possession thereof. Mr. Voller, thereafter migrated to Canada with his family. The appellant is a practicing physician. The erstwhile insurance company did not object to the appellant coming into exclusive possession of the said premises. In fact, it is the case of the appellant that when Mr. Voller sought the transfer of the tenancy to the appellant, the General Manager of the said insurance company, by his reply dated 16.1.1973, accepted the appellant as the tenant, though for residential purposes only. The said erstwhile insurance company, thereafter, started accepting the rent directly from the appellant.....
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.... in the said flat to the appellant in or about 1972, though without any authority from the respondent No. 1. The first respondent alleged that the appellant had carried out structural changes. The appellant denied the allegation. He claimed that he had effected some essential minor repairs for maintenance of the premises since the first respondent was neglecting to attend the same. The appellant filed a reply pointing out that he had been accepted as a tenant by the predecessor of the first respondent by their earlier referred letter dated 16.1.1973. The first respondent, however, responded on 5.1.1993 stating that they did not have any record of the erstwhile insurance company prior to 1975. The second respondent thereafter passed an order on 28.5.1993 directing eviction of Mr. E. Voller and the appellant, and also for recovery of damages at the rate of Rs. 6750 per month from 1.9.1980. 6. Being aggrieved by the said order, the appellant filed an appeal before the City Civil Court at Mumbai under Section 9 of the Public Premises Act, which appeal was numbered as Misc. Appeal No.79/93. The City Civil Court set aside the order of damages, and remanded the matter to the second respo....
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....ther rent control enactments, this Act has been passed as a welfare measure, amongst other reasons to protect the tenants against unjustified increases above the standard rent, to permit eviction of the tenants only when a case is made out under the specified grounds, and to provide for a forum and procedure for adjudication of the disputes between the landlords and the tenants. The legislature of Maharashtra thought it necessary to protect the licensees also in certain situations. Therefore, this act was amended, and a section was inserted therein bearing Section No.15A to protect the licensees who were in occupation on 1.2.1973. This Section reads as follows:- "15A. Certain licensees in occupation on 1st February 1973 to become tenants (1) Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any contract where any person is on the 1st day of February 1973 in occupation of any premises, or any part thereof which is not less than a room, as a licensee he shall on that date be deemed to have become, for the purpose of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his ....
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....s required to be noted. The Public Premises Act, 1971 (40 of 1971) came to be passed in the meanwhile. As per its preamble, it is "an act to provide for eviction of unauthorised occupants from public premises and for certain incidental matters" such as removal of unauthorised construction, recovery of arrears of rent etc. It came into force on 23.8.1971, but Section 1(3) thereof states that it shall be deemed to have come into force on 16.9.1958, except Section 11 (on offences and penalty) and Sections 19 and 20 (on repeal and validation). This is because from 16.9.1958, its predecessor Act viz. The Public Premises (Eviction of Unauthorised Occupants) Act (32 of 1958) was in force for similar purposes, and which was repealed by the above referred Section 19 of the 1971 Act. As provided under Section 2 (e) (2) (i) of this Act, the definition of 'Public Premises', amongst others, covers the premises belonging to or taken on lease by or on behalf of any company in which not less than fifty one per cent of the paid up share capital was held by the Central Government. The definition of public premises under Section 2(e) of this Act reads as follows:- "2. Definitions..... [(e) "public ....
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.... first respondent, (of which not less than 51 per cent share holding was that of the Central Government,) the Public Premises Act became applicable to its premises. It is the contention of the appellant that although the Act is otherwise deemed to have come into force from 16.9.1958, as far as the present premises are concerned, the Act became applicable to them from 1.1.1974 when the erstwhile insurance company merged into the first respondent. Then only it could be said that the premises 'belonged' to a Government Company. However, since the appellant's occupation of the said premises was protected by Section 15A of the Bombay Rent Act which Section had become enforceable prior thereto from 1.2.1973, he could not be said to be in 'unauthorised occupation' and, therefore, could not be evicted by invoking the provisions of the Public Premises Act. On the other hand, the contention of the respondents is that the Public Premises Act became applicable to the concerned premises from 13.5.1971 itself, when the management of the erstwhile insurance company was taken over by the Central Government, and the rejection of the writ petition by the High Court on that ground was justified. The ....
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.... the appellant and the erstwhile insurance company. 14. Learned senior counsel for the respondents Mr. Raval, on the other hand, submitted that once the management of the erstwhile insurance company was taken over, the Public Premises Act became applicable. Therefore, it was fully permissible for the first respondent to initiate the proceedings to evict the appellant from the public premises. In his view, the legal position, in this behalf, has been settled by the judgment of the Constitution Bench in the above referred Ashoka Marketing case, and the view taken by the High Court with respect to the date of applicability of the Public Premises Act was in consonance with the said judgment. 15. As against that, it is the submission of the Mr. Nariman that the judgment in Ashoka Marketing (supra) has to be understood in its context, and that it did not lay down any such wide proposition as Mr. Raval was canvassing. He pointed out that the judgment in Ashoka Marketing (supra) was with respect to the overriding effect of the Public Premises Act vis-à-vis the Delhi Rent Control Act, which are both Acts passed by the Parliament, and where the premises fall within the ambit of both....
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....tion by any person of the public premises without authority for such occupation, and includes the continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever." As can be seen from this definition, it consists of two parts. In paragraph 30 of the above judgment also, this Court noted that the definition of 'unauthorized occupation' in Section 2(g) of the Public Premises Act, was in two parts. The first part of this definition deals with persons who are in occupation of the Public Premises 'without authority for such occupation', and the second part deals with those in occupation of public premises, whose authority to occupy the premises 'has expired or has been determined for any reason whatsoever'. As stated in paragraph 1 of the judgment, the Constitution Bench was concerned with the second part of the definition. As far as these two parts are concerned, the Court observed in paragraph 30 as follows:- "30. The definition of the expression 'unauthorised occupation' contained in Section 2(g) of ....
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..... Mamanchand Ratilal Agarwal (1980) 3 SCC 162 : (1980) 3 SCR 224, and Accountant and Secretarial Services Pvt. Ltd. Vs. Union of India (1988) 4 SCC 324." 19. As far as Public Premises Act is concerned, paragraph 48 of this judgment, referred to the earlier judgments in Accountant and Secretarial Services Pvt. Ltd. Vs. Union of India reported in 1988 (4) SCC 324, and Smt. Saiyada Mossarrat Vs. Hindustan Steel Ltd. reported in 1989 (1) SCC 272. In Accountant and Secretarial Service Pvt. Ltd. (supra), this Court had held that the Public Premises Act is also referable to Entries 6, 7 and 13 of the Concurrent List. At the end of paragraph 48, of Ashoka Marketing this Court held:- "...........There is no inconsistency between the decisions of this Court in Accountant and Secretarial Services Pvt. Ltd. and Smt. Saiyada Mossarrat case in as much as in both the decisions it is held that the Public Premises Act insofar as it deals with a lessee or licensee of premises other than premises belonging to the Central Government has been enacted in exercise of the legislative powers in respect of matters enumerated in the Concurrent List. We are in agreement with this view." 20. Thereafte....
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....special statute and not a general enactment the exception contained in the principle that a subsequent general law cannot derogate from an earlier special law cannot be invoked and in accordance with the principle that the later laws abrogate earlier contrary laws, the Public Premises Act must prevail over the Rent Control Act." (emphasis supplied) 21. In paragraph 62, this Court noted the objects and reasons of the Delhi Rent Control Act, which are as follows:- 62. ....(a) to devise a suitable machinery for expeditious adjudication of proceedings between landlords and tenants; (b) to provide for the determination of the standard rent payable by tenants of the various categories of premises which should be fair to the tenants, and at the same time, provide incentive for keeping the existing houses in good repairs, and for further investments in house construction; and (c) to give tenants a larger measure of protection against eviction........ 22. In paragraph 63, this Court noted the statement of objects and reasons of the Public Premises Act, which are as follows:- "63........."The court decisions, referred to above, have created serious difficulties for the government inasm....
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....The reason underlying the exclusion of property belonging to the Government from the ambit of the Rent Control Act, is that the Government while dealing with the citizens in respect of property belonging to it would not act for its own purpose as a private landlord but would act in public interest......" (emphasis supplied) 24. Paragraph 66 of the judgment makes it clear that this Court was concerned with a contractual tenancy and ruled out a dual procedure for eviction. In that context it observed as follows:- "66..........This would mean that in order to evict a person who is continuing in occupation after the expiration or termination of his contractual tenancy in accordance with law, two proceedings will have to be initiated. First, there will be proceedings under Rent Control Act before the Rent Controller followed by appeal before the Rent Control Tribunal and revision before the High Court. After these proceedings have ended they would be followed by proceedings under the Public Premises Act, before the Estate Officer and the Appellate Authority. In other words, persons in occupation of public premises would receive greater protection than tenants in premises owned by priv....
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....ncipal contractual tenant. In our view, this judgment does not state so, nor can it lead us to accept any such proposition as it would mean accepting an incongruous situation. From what date would the Public Premises Act apply to the concerned premises? 26. The question that is required to be examined, however, is whether the tenants as well as licencees, who are protected under the State Law, could be called unauthorised occupants by applying the Public Premises Act to their premises as 'belonging' to a Government Company, and if so from what date. As we have noted earlier, to initiate the eviction proceedings under this statute, the premises concerned have to be public premises as defined under Section 2(e) of the Act. Besides, as far as the present premises are concerned, it is necessary that they must belong to a Government Company. The definition of public premises will, therefore, have to be looked into, and it will have to be examined as to from what date the premises can be said to be belonging to a Government Company. Section 19 of the Public Premises Act, 1971 repeals the Public Premises (Eviction of Unauthorised Occupants) Act, 1958. While repealing this predecessor Ac....
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....ants therein were government employees occupying premises allotted to them as service premises. The premises were situated in privately owned buildings, and taken on lease by the Government. The appellants had retired from their services, but were not vacating the premises, and hence eviction orders were passed against them under the Public Premises Act. The premises were admittedly taken on lease, and were therefore premises belonging to the Central Government. At the end of paragraph 21 of its judgment, the High Court in terms held as follows, "Once the factum of lease is established, which has been done in the present case, the authorities under the act get jurisdiction to inquire under the act." The submission of the appellants therein was that the premises could not be said to be belonging to the respondents, and therefore, not public premises. It is in this context that the High Court held that the expression 'belonging to' will take within its sweep rights lesser than that of ownership. The observations quoted above will have to be read in that context. It is however, relevant to note what the Division Bench has thereafter added:- "It must be remembered in this connection t....
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....over of ownership. Inasmuch as the taking over of the management did not result into the Central Government becoming the owner of the textile mills, the right of the workmen to receive bonus was not extinguished. The Court held as follows: "10. Thus the significant consequence that ensues on the issue of a notified order appointing authorised controller is to divert the management from the present managers and to vest it in the authorised controller. Undoubtedly, the heading of Chapter III-A appears to be slightly misleading when it says that the Central Government on the issue of a notified order assumes direct management of the industrial undertaking, in effect on the issuance of a notified order, only the management of the industrial undertaking undergoes a change. This change of management does not tantamount to either acquisition of the industrial undertaking or a take over of its ownership because if that was to be the intended effect of change of management, the Act would have been subjected to challenge of Article 31 and 19 (1) (f) of the Constitution. One can say confidently that was not intended to be the effect of appointment of an authorised controller. The industrial ....
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....usiness. In the 'History of Insurance of India' published by Insurance Regulatory and Development Authority' (IRDA) on its official website on 12.07.2007 under Ref: IRDA/GEN/06/2007 it is stated as follows: "The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number or insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business." Thus, as far as the erstwhile Insurance Company in the present case is concerned, as an initial step, its management was taken over by the Central Government w.e.f. 13.5.1971, and it was entrusted with the custodian appointed by the Central Government. It would definitely entail a right in the custodian to take necessary steps to safeguard the property of the erstwhile insurance company. But it was a transitory arrangement. The properties of the erstwhile insurance companies did not belong to the Government Companies or the Government at that stage. The Public Premises Act, undoubtedly provides a speedy remedy to recover the premises from the unauthorised occupants. At the same time, ....
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....ter. Mr. Raval, learned senior counsel for the respondents has contended that the appellant's submission that he was protected under the Bombay Rent Act, and that protection has been continued under the Maharashtra Rent Control Act, 1999, is not available before the Estate Officer. The question, therefore, comes to our mind as to what happens to the rights of the appellant made available to him under the State Act at a time when the erstwhile company had not merged in the first respondent Government Company? Can it be said that he was occupying the premises without the authority for such occupation? Can it be said that with the application of the Public Premises Act to the premises occupied by the appellant, those rights get extinguished? It has been laid down by this Court time and again that if there are rights created in favour of any person, whether they are property rights or rights arising from a transaction in the nature of a contract, and particularly if they are protected under a statute, and if they are to be taken away by any legislation, that legislation will have to say so specifically by giving it a retrospective effect. This is because prima facie every legislation i....
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....The principles that have to be applied for interpretation of statutory provisions of this nature are well- established. The first of these is that statutory provisions creating substantive rights or taking away substantive rights are ordinarily prospective; they are retrospective only if by express words or by necessary implication......" 34. In Amireddi Raja Gopala Rao Vs. Amireddi Sitharamamma reported in AIR 1965 SC 1970, a Constitution bench was concerned with the issue as to whether the rights of maintenance of illegitimate sons of a sudra as available under the Mitakshara School of Hindu Law was affected by introduction of Sections 4, 21 and 22 of the Hindu Adoption and Maintenance Act, 1956. The Court held that they were not, and observed in paragraph 7 as follows:- "A statue has to be interpreted, if possible so as to respect vested rights, and if the words are open to another construction, such a construction should never be adopted." The same has been the view taken by a bench of three Judges of this Court in J.P. Jani, Income Tax Officer, Circle IV, Ward G, Ahmedabad Vs. Induprasad Devshanker Bhatt reported in AIR 1969 SC 778 in the context of a provision of the Income....
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....which relates to procedure or evidence or is declaratory in nature inasmuch as while a statute dealing with substantive rights is prima facie prospective unless it is expressly or by necessary implication made to have retrospective effect, a statute concerned mainly with matters of procedure or evidence or which is declaratory in nature has to be construed as retrospective unless there is a clear indication that such was not the intention of the legislature. A statute is regarded retrospective if it operates on cases or facts coming into existence before its commencement in the sense that it affects, even if for the future only, the character or consequences of transactions previously entered into or of other past conduct. By virtue of the presumption against retrospective applicability of laws dealing with substantive rights transactions are neither invalidated by reason of their failure to comply with formal requirements subsequently imposed, nor open to attack under powers of avoidance subsequently conferred. They are also not rendered valid by subsequent relaxations of the law, whether relating to form or to substance. Similarly, provisions in which a contrary intention does no....
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....to evict the appellant, the remedy was to resort to the procedure available under the Bombay Rent Act or its successor Maharashtra Rent Control Act, by approaching the forum thereunder, and not by resorting to the provisions of the Public Premises Act. When are the provisions of Public Premises Act to be resorted to? 40. In the context of the present controversy, we must refer to one more aspect. As we have noted earlier in paragraph 63 of Ashoka Marketing, the Constitution Bench has referred to the objects and reasons behind the Public Premises Act wherein it is stated that it has become impossible for the Government to take expeditious action even in 'flagrant cases of unauthorised occupation' of public premises. The Court has thereafter observed in that very paragraph that the Public Premises Act is enacted to deal with mischief of 'rampant unauthorised occupation' of public premises. 41. It is relevant to note that there has been a criticism of the use of the powers under the Public Premises Act, and the manner in which they are used in an arbitrary way to evict the genuine tenants from the public premises causing serious hardships to them. The Central Government itself has ....
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....l Act in dealing with genuine legal tenants. (iv) It is necessary to give no room for allegations that evictions were selectively resorted to for the purpose of securing an unwarranted increase in rent, or that a change in tenancy was permitted in order to benefit particular individuals or institutions. In order to avoid such imputations or abuse of discretionary powers, the release of premises or change of tenancy should be decided at the level of Board of Directors of Public Sector Undertakings. (v) All the public Undertakings should immediately review all pending cases before the Estate Officer or Courts with reference to these guidelines, and withdraw eviction proceedings against genuine tenants on grounds otherwise than as provided under these guidelines. The provisions under the P.P. (E) Act, 1971 should be used henceforth only in accordance with these guidelines. 3. These orders take immediate effect." 42. Thus as can be seen from these guidelines, it is emphasized in Clause 2(i) thereof, that the Act was meant to evict (a) totally unauthorised occupants of the public premises or subletees, or (b) employees who have ceased to be in their service, and were ineligible to o....
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....ot be ignored by the Public Undertakings which are expected to follow the same. When it comes to the interpretation of the provisions of the statute, the guidelines have been referred herein for the limited purpose of indicating the intention in making the statutory provision, since the guidelines are issued to effectuate the statutory provision. The guidelines do throw some light on the intention behind the statute. The guidelines are issued with good intention to stop arbitrary use of the powers under the Public Premises Act. The powers are given to act for specified reasons, and are expected to be used only in justified circumstances and not otherwise. The overall consequence 44. In Ashoka Marketing (supra), this Court was concerned with the premises of two Nationalised Banks and the Life Insurance Corporation. As far as Life Insurance Corporation is concerned, the life insurance business was nationalised under the Life Insurance Corporation Act, 1956. Therefore, as far as the premises of LIC are concerned, they will come under the ambit of the Public Premises Act from 16.9.1958, i.e the date from which the Act is brought into force. As far as Nationalised Banks are concerned, ....
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....Companies. Their status as occupants of the Public Insurance Companies has been thrust upon them by the Public Premises Act. 46. This Court has noted in Banatwala and Co. Vs. LIC reported in 2011 (13) SCC 446 that the Public Premises Act, 1971 is concerned with eviction of unauthorised occupants and recovery of arrears of rent or damages for such unauthorised occupation, and incidental matters specified under the act. As far as the Maharashtra Rent Control Act is concerned, this Court noted in paragraph 25 of that judgment that as per the preamble of the said Act, it is an Act relating to five subjects, namely (i) control of rent, (ii) repairs of certain premises, (iii) eviction, (iv) encouraging the construction of new houses by assuring fair return of investment by the landlord, and (v) matters connected with the purposes mentioned above. In that matter, the Court was concerned with the issue of fixation of standard rent and restoration and maintenance of essential supplies and services by the landlord. It was held that these two subjects were not covered under the Public Premises Act, and infact were covered under the Maharashtra Rent Control Act. Operative para 99(c) of the ju....
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....elf. Firstly, those who are in occupation since prior to 16.9.1958, i.e. prior to the Act becoming applicable, are clearly outside the coverage of the Act. Secondly, those who come in occupation, thereafter, but prior to the date of the concerned premises belonging to a Government Corporation or a Company, and are covered under a protective provision of the State Rent Act, like the appellant herein, also get excluded. Until such date, the Bombay Rent Act and its successor Maharashtra Rent Control Act will continue to govern the relationship between the occupants of such premises on the one hand, and such government companies and corporations on the other. Hence, with respect to such occupants it will not be open to such companies or corporations to issue notices, and to proceed against such occupants under the Public Premises Act, and such proceedings will be void and illegal. Similarly, it will be open for such occupants of these premises to seek declaration of their status, and other rights such as transmission of the tenancy to the legal heirs etc. under the Bombay Rent Act or its successor Maharashtra Rent Control Act, and also to seek protective reliefs in the nature of injunc....
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....r, if the State Legislature wanted to cover these subjects viz. a viz. the premises of the Government Companies and Public Corporations under the Maharashtra Rent Control Act, 1999, it had to specifically state that notwithstanding anything in the Public Premises Act of 1971, the Government Companies and Public Corporations would be covered under the Maharashtra Rent Control Act, 1999. If that was so done, and if the President was to give assent to such a legislation, then the Government Companies and Public Corporation would have continued to be covered under the Maharashtra Rent Control Act, 1999 in view of the provision of Article 254(2). That has not happened. Thus, the Government Companies and Public Corporations are taken out of the coverage of the Bombay Rent Act, and they are covered under Public Premises Act, 1971, though from the date specified therein i.e. 16.9.1958. After that date, the Government Companies and Public Corporations will be entitled to claim the application of the Public Premises Act, 1971 (and not of the Bombay Rent Act or its successor Maharashtra Rent Control Act, 1999), but from the date on which premises belong to these companies or corporations and ....