1 ndm WP 2473.96 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2473 OF 1996 Dr.Suhas H. Pophale of Bombay Indian Inhabitant, residing at Flat No.3, 2 nd floor, Indian Mercantile Mansion, Wodehouse Road, Opposite to Regal Cinema, Bombay 400 039. ... PETITIONER VERSUS 1. The Oriental Insurance Co.Ltd. Oriental House, Asafali Road, New Delhi and its Bombay Regional Office No.1, Orient House, 7, J. Tata Road, Bombay 400 020. 2. deleted 3. deleted 4. Estate Officer, having their office at Oriental Insurance Co. Ltd. 2 nd floor, 7, J. Tata Road, Bombay 400 020. ... RESPONDENTS -------- Mr.G.S.Godbole i/b. M/s. Apte & Co. for Petitioner. Mr.V.Y.Sanglikar, for Respondent No.1. 2 -------- CORAM : A.M. KHANWILKAR and R.M. SAVANT, JJ. RESERVED ON : APRIL 22, 2010. DELIVERED ON : June 07, 2010. JUDGMENT: ( PER A.M. KHANWILKAR, J.) 1 This Writ Petition under Article 226 of the Constitution of India takes exception to the judgment and order passed by the Principal Judge of the City Civil Court at Mumbai dated 17 th January, 1996 in Miscellaneous Appeal No. 79 of 1973. 2 Briefly stated, Mr. E. Voller – original opposite party No.1 was the monthly tenant in respect of the Flat No. 3 in the Indian Mercantile Mansion, at Wode House Road, Opp. Regal Cinema, Mumbai– 39 ( hereinafter referred to “the said premises”). The said flat was part of the building, which was owned by the Indian Mercantile Insurance Company Limited(hereinafter referred to as the erstwhile company). The said Mr. 3 E. Voller by a leave and licence agreement dated 20 th December, 1972 inducted the Petitioner in the said premises. Since then the Petitioner claims to be in exclusive possession thereof. It is the case of the Petitioner that in reply to his request, the General Manager of the erstwhile Company vide letter dated 16 th January, 1973 accepted the Petitioner as tenant of the erstwhile Company in respect of the said premises. Thereafter, the Petitioner made a representation to the erstwhile company to allow change of user of the said premises, by his letter dated 14 th March, 1973. It is stated that the Petitioner received reply in response of the said request vide letter dated 18 th April, 1973. The Petitioner was, however, shocked to receive a notice dated 12 th July, 1980 from the Officer of the Respondent No.1, purportedly terminating the rights of Mr. E. Voller – original opposite party No.1; and calling upon him as well as the Petitioner to handover vacant and peaceful possession of the said premises. The notice proceeds on the basis that the said premises were public premises and after termination of the rights of the original opposite party No.1, the possession of the said premises by the original opposite party No.1 or persons claiming through him would be 4 unauthorized and liable for eviction action and for payment of damages for the unauthorized use thereof. It is stated that the Petitioner made a representation to the Chairman on 22 nd November, 1984. Later on, the Petitioner received a show-cause-notice dated 31 st March, 1992 addressed to Mr. E. Voller and copy marked to the Petitioner, issued by the Estate Officer, for eviction from the said premises and payment of damages for the unauthorized use thereof. Consequent to the said show-cause-notice, the Estate Officer proceeded with the inquiry and eventually by his order dated 28 th May 1993 directed the eviction of persons in occupation of the said premises and determining the liability of the occupants for unauthorized use of the said premises. It is relevant to mention that in the said inquiry proceedings, the original opposite party No.1 remained absent. The said proceedings were contested only by the Petitioner herein. Against the said decision of the said Estate Officer, the Petitioner alone carried the matter in appeal before the City Civil Court at Mumbai by way of Miscellaneous Appeal No. 79 of 1973. The Appellate Court partly allowed the appeal. It upheld the decision of the Estate Officer that the occupation of the said premises was without authority 5 therefor. Further, the Petitioner was liable to be evicted on account of continued occupation of the said premises in spite of the notice of termination dated 12 th July, 1980. However, insofar as the order of the Estate Officer on the question of payment of damages, the Appellate Court found that there was no proper evidence led before the Estate Officer to assess the damages and more-so about the prevailing rent in the adjoining area. It is for this limited reason, the appeal preferred by the Petitioner partly succeeded before the Appellate Court. The Appellate Court after setting aside that part of the order, has remanded the matter to the Estate Officer for fresh hearing on the question of damages alone. The operative order passed by the Appellate Court reads thus: “O R D E R Misc. Appeal No.79/93 is partly allowed. The impugned order of eviction passed by the Estate Officer in Case Nos. 10 and 10A of 1992 is hereby confirmed. However, the order regarding damages passed u/s.7 of the said P.P.Act, 1972 is set aside and for assessment and awarding of damages under section of the said P.P.Act, 1971, the matter is remanded back to the Estate Officer for fresh hearing. No fresh Show Cause Notice is necessary. However, the Estate Officer will give notice/intimation of appearance before him to both the parties. 6 After giving full opportunity to both the parties on the point of damages to be assessed and awarded u/s. 7 of the said P.P.Act, 1971, the Estate Officer will pass the order. No order as to costs. On the request of the appellant, the implementation of the present order is stayed for 3 months from today, to enable the appellant to file Writ Petition before the Hon’ble High Court, on the condition that before applying for ad-interim relief, 48 hours notice will be given to the Respondents. Sd/- I/c.Principal Judge, 17.1.1996 City Civil Court, Bombay.” 3 The Petitioner by way of this Writ Petition has accordingly challenged only that part of the decision of the Appellate Court, which upholds the order of eviction passed against the occupants of the said premises including the Petitioner herein. The substance of the challenge is that, by virtue of leave and licence agreement in favour of the Petitioner, by the original tenant, dated 20 th December 1972, the Petitioner was put in lawful occupation of the said premises and thereafter continued to remain in possession thereof till now. According to the Petitioner, since the Petitioner was put in lawful possession of the said 7 premises prior to 01 st February, 1973 and the leave and licence agreement was subsisting on that day, upon introduction of Section 15-A of Bombay Rents , Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to “Bombay Rent Act”), the Petitioner became the protected licencee. As a result, the status of the Petitioner cannot be treated as unauthorized occupant of the said premises. Moreover, the Respondent No.1 has acquired title in respect of the property owned by the erstwhile Company under the Oriental Fire and General Insurance Company Limited (Merger) Scheme, 1973 ( hereinafter referred to “the Scheme of 1973”), which has come into force only on first day of January, 1974- which is the specified date mentioned in the said Scheme. Thus, the said premises can be treated as public premises only from such date and not anterior thereto. However, before 01 st January, 1974, the Petitioner had already acquired the status of protected licensee with effect from 01 st February, 1973. From that date, the original opposite party No.1, who had inducted the Petitioner in the said premises, had no subsisting right in respect of the said premises. Further, the rights of the original opposite party No.1 in respect of the said premises came to be 8 terminated vide notice dated 12 th July, 1980. However, admittedly, no such notice of termination was issued to the Petitioner, for which reason it is not open to treat the status of the Petitioner as unauthorized occupant. According to the Petitioner, the action initiated by the Estate Officer against the Petitioner was without authority of law and could not be taken further as against the Petitioner. The Petitioner places reliance on the provisions of the General Insurance (Emergency Provisions) Act, 1971 ( hereinafter referred to “the Act of 1971” ) and on the General Insurance Business (Nationalisation) Act, 1972 (hereinafter referred to “the Act of 1972”) to contend that the same would be of no avail- as those enactments do not vest the title in the Respondent No.1 – Company. That has happened only on account of the Scheme of 1973 on and from 01 st January, 1974. In other words, the provisions of the Public Premises ( Eviction of Unauthorised Occupants ) Act, 1971 ( hereinafter referred to “the P. P. Act” for sake of brevity ) would become relevant and applicable to the said premises only from 01 st January, 1974. But before that date, the Petitioner had already become protected licensee on account of Section 15-A of the Bombay Rent Act and therefore, the Petitioner cannot 9 be treated as unauthorized occupant. The Petitioner has additionally criticized the findings and conclusion recorded by the Appellate Court, to which we shall refer to at the appropriate place. 4 Per contra, the Respondent No.1 submits that the challenge of the Petitioner is founded on complete misreading and misunderstanding of the provisions of the Act of 1971 as well as the Act of 1972 and more particularly that of the P. P. Act. According to the Respondent No.1, the said premises acquired the status of public premises and the provisions of P. P. Act became applicable thereto on and from 13 th May, 1971, which is the appointed day specified under the provisions of the Act of 1971. The said Act of 1971 was intended to takeover the management of general insurance business pending nationalization of such business. After coming into force of the said Act, it was not open to the erstwhile company to transfer or otherwise dispose of any assets or create any charge, hypothecation, lease or any encumbrance thereto without the previous approval of the persons specified by the Central Government. On account of this enactment, the 10 control with regard to the management of the General Insurance Business including that of the assets of the company were regulated and in the control of the Central Government, for which reason the said premises acquired the status of public premises within the meaning of Section 2 (e) of the Public Premises Act. As a result, the provisions of Bombay Rent Act had no effect and were not applicable to the said premises from such date i.e. 13 th May, 1971. In any case, it was not open to the erstwhile company or any of its officers to transfer or otherwise dispose of any asset of the company or enter into any transaction in that connection. Therefore, even if the communication issued under the signature of the General Manager of the erstwhile company dated 16 th January, 1973 was to be taken into account, it would be of no avail. Inasmuch as, the same has been issued by the General Manager without the previous approval of the person specified by the Central Government. Such approval was essential as the said communication had the effect of creating and/or recognizing rights of the Petitioner in respect of the said premises. The Respondent No.1 then contended that by the Act of 1972, the nationalization of the business of the erstwhile company was 11 complete and all shares in the capital of the said company stood transfered to and vested in the Central Government free of all trusts, liabilities and encumbrances affecting them; and the company was to function as a Government company. As per Section 16 of the said Act, a merger scheme was notified by the Ministry of Finance on 31 st December, 1973, which has come into force with effect from first day of January, 1974 and on account of the said scheme, the assets and properties of the erstwhile company stood transfered and vested in Respondent No.1 from the specified date. It is contended by the Respondent No.1 that since the said premises were public premises at all the relevant time from 13 th May, 1971, the provisions of Bombay Rent Act will have no application thereto. Accordingly, it has been submitted that the Petitioner has been ill- advised to invoke the provisions of Bombay Rent Act to assert that he was in lawful occupation of the said premises and was not an unauthorized occupant thereof. The fact that the original tenant inducted the Petitioner in the said premises cannot confer any right in the Petitioner, so long as, there was no approval given by the competent or authorised officer to the entry of the Petitioner in the said premises, albeit 12 the leave and licence agreement. In absence of prior permission or approval in favour of the Petitioner much less ratification, the Petitioner cannot claim any right in the said premises on his own, but was only a person claiming through the original allottee / tenant, whose rights have already been determined in terms of notice dated 12 th July, 1980. As a matter of fact, the occupation of the said premises by the Petitioner on and from 20 th December, 1972 itself was unauthorized occupation. Moreover, admittedly, the notice of termination has not been challenged by the original opposite party No.1 and has been allowed to become final. As a result, the occupation of the said premises by him or any person claiming through him was unauthorized atleast from the date of issuance of notice of termination. The Respondent No.1 contends that insofar as the concurrent findings and conclusion reached by the two authorities below, it is not open to this Court to interfere with the same. For, this Court cannot re-appreciate the evidence on record and take a different view than the concurrent findings of fact recorded by two authorities below merely because such other view was also possible. According to the Respondent No.1, neither the decision of the Estate Officer nor of the 13 City Civil Court can be said to be manifestly wrong or perverse. Accordingly, no interference is warranted in the fact situation of the present case. 5 The counsel appearing for both the parties have relied on the reported decisions to buttress their respective submission to which we shall refer to at the appropriate place. 6. We think it apposite to first analyse the view taken by the Appellate Court in the impugned decision. It has held that the claim of the Petitioner as tenant of the said premises cannot be sustained on facts and in law. That the Petitioner was not entitled for termination notice under section 106 of the Transfer of Property Act. Termination Notice was rightly given to the tenant, namely, Eric Voller. The Appellate Court rejected the argument of the Petitioner that it was the duty of the Estate Officer to consider the intention of the parties under the Leave and Licence Agreement, considering the fact that the Petitioner was put in exclusive possession of the said premises. It is further noted that the 14 Leave and Licence Agreement was not for 11 months, as is usually done to avoid registration. It was for a period of two years. Besides, the Petitioner claimed to be in exclusive possession of the said premises. Therefore, the Leave and Licence Agreement ought to have been registered. It has noted that the Leave and Licence Agreement was contrary to the terms of tenancy between the parties. The terms of tenancy postulate that the sub-letting of the premises or any part thereof is strictly prohibited. The said premises could be used by the tenant only for his own residential or office purpose and for no other purpose, whatsoever. The Appellate Court has noted that rent receipt issued by the erstwhile company were not produced by the Petitioner before the Estate Officer. The Appellate Court has also noted the plea of the Respondent that the rent receipts were produced in the Civil Suit, which was filed by the Respondent No.1 against the Petitioner in the Small Causes Court. That suit was later on withdrawn after institution of the eviction proceedings before the Estate Officer. The Court has found that the Leave and Licence Agreement is not a legal document, as there was nothing on record to indicate that there was contract to the contrary 15 between the original tenant Erix Voller and the erstwhile company to permit sub-letting of the said premises. The Court has then considered the argument of the Petitioner that he was protected by virtue of provisions of the Bombay Rent Act. The Court has found that the provisions of Bombay Rent Act were not applicable to the said premises, being the public premises. Accordingly, the occupant thereof cannot get any protection under the Bombay Rent Act. The Court has then adverted to the argument that the original tenant did not take any action against the Petitioner and the Petitioner was in exclusive possession of the said premises. The Court has found that the fact that the tenant has not taken action against the Petitioner will not bind the landlord. In any case, the Leave and Licence Agreement cannot become valid unless the original tenant had authority to sub-let as per the agreement with the landlord. That fact has not been established. The Court then considered the argument that the proposed action against the Petitioner was not as per the guidelines issued by the Central Government. That argument has been rejected on the finding that in the present case, the Petitioner was not a lawful tenant in respect of the said premises and 16 action taken by the Estate Officer was justified. The Court has also considered the argument that the Respondent No.1 had option either to pursue remedy under P.P. Act or to file suit for eviction against the Petitioner; and the Respondent No.1 having exercised the later option by filing suit, cannot now proceed against Petitioner by resorting to provisions of the P.P.Act. This argument has been rejected on the finding that there was no question of exercising any option. In that, Section 15 of the P.P.Act plainly stipulates that no Civil Court can entertain any proceeding for eviction/damages in respect of public premises, which action can proceed only as per the regime provided under the P.P.Act. The Court thus, found that institution of earlier suit for eviction against the Petitioner would be no impediment for the competent Authority to resort to action under P.P.Act, which act overrides the provisions of the Bombay Rent Act. The Court concluded that the Petitioner was not a lawful occupant in respect of the said premises. Accordingly, the Appellate Court confirmed the order of eviction passed by the Estate Officer. 7. Having considered the rival submissions, the foremost 17 question to be addressed is : on what date the said premises acquired the status of public premises ? That can be answered on the basis of the provisions of the Act of 1971, Act of 1972, the Scheme of 1973 and the provisions of the P. P. Act. 8. Before the Act of 1971 was introduced, the Law was brought into force by issuing Ordinance. Later on, the Ordinance was converted into the Act of 1971. The main purpose for the said enactment is to provide for taking over of the Management of General Insurance business pending nationalisation of such business. That was required to be done in public interest. The sweep of this Act therefore, was to take adequate steps to protect the interest of the policy holders pending nationalisation of insurance business. It is, for that reason, even the title of the Act was coined as the General Insurance(Emergency Provisions) Act 1971. The “appointed day” as per Section 2(a) of the Act, means the 13 th day of May, 1971. Section 2(b) defines the meaning of term “Custodian”. The Custodian means the person appointed under Section 4 of that Act to take over the Management of the undertaking of any 18 insurer. The term “insurer” is defined in Section 2(e) of the same Act. It is not in dispute that the activities and business of the erstwhile company is covered by this definition. The term “undertaking” has also been defined in Section 2(h) of the Act. Section 3 of this Act is of some significance. It postulates that on and from the appointed day(i.e. 13 th day of May, 1971), the management of undertakings of all insurer shall vest in the Central Government. It further provides that pending appointment of the Custodian for the undertakings of any insurer, the persons in charge of the management of such undertaking immediately before the appointed day shall, on and from the appointed day, be in charge of the management of the undertaking “for and on behalf of the Central Government”; and the management of the undertaking of the insurer shall be carried on by them subject to the provisions contained in sub- section (3) and (5) and to such further directions, if any, as the Central Government may give to them by notice addressed and sent to the principal officer of the insurer. Sub-section (3) of Section3 of the Act of 1971, mandates that no insurer shall, without the previous approval of the person specified by the Central Government in this behalf in respect of 19 that insurer shall do certain matters specified therein. One such is to transfer or otherwise dispose of any assets or create any charge, hypothecation, lien or other encumbrance thereon. This provision is wide enough to include allowing sub-letting of the property of the insurer. Clause (g) forebears the insurer from entering into any other transaction relating to the undertaking of the insurer other than a contract relating to the transaction of general insurance business or vary the terms and conditions of any agreement relating to any such transaction subsisting at the commencement of this Act. Even though, the ostensible purpose of the Act is to take over the management of General Insurance business; but considering the provisions of the Act, it is obvious that, it is also intended to provide measures for control over the transfer or otherwise disposal of the assets and properties of the insurer or to create other encumbrance thereon pending nationalisation of the business of the insurer. We shall revert to this aspect a little later. Reverting to Section 3 sub-section(4) thereof, it provides that the approval to be granted in terms of sub-section (3) by the Authorised person may be given either generally in relation to certain classes of transactions of the insurer or 20 specially in relation to any such transaction referred to in the said provision. It is noticed that neither a general approval nor any specific approval given by the Authorised person, namely, Custodian or the persons specified by the Central Government in respect of the insurer(erstwhile company) has been produced. As per sub-section (2) of Section 4 of the Act of 1971 on the appointment of custodian, the charge of the management of the undertaking of the insurer shall vest in him. In that case, all persons in charge of the management of such undertaking immediately before such appointment shall cease to be in charge of such management and shall be bound to deliver to the Custodian all books of account, registers or other documents in their custody relating to the undertaking of the insurer. Even this provision is indicative of the fact that the Custodian or the Authorised person is put in complete control of the entire business of insurer and incidental matters thereto including of managing or dealing with the assets and