1 wp9449.10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.9449 OF 2010 WITH CIVIL APPLICATION NO.2996 OF 2010 In WRIT PETITION NO.9449 OF 2010 1. M/s.Pankaj Industries 2. Mrs.Daksha A. Desai, aged 62 years, and others, Partner of M/s.Pankaj Industries, having address at Cabin-A, Mezzanine floor, Oriental House, 7, J.T. Road, Mumbai—20. : Petitioners V/s. 1. The Oriental Insurance Co. Ltd., Oriental House, Assar Ali Road, New Delhi, and its Mumbai Regional Office No.1, and its Mumbai Regional Office No.1, Oriental House, 7, J. Tata Road, Mumbai—20. 2. M/s.Pride International, having address at Cabin `A’ Mezzanine floor, Oriental House, 7, J.T. Road, Mumbai—20. : Respondents .... Mr.Pesi Modi with Ms Anita Castelinna i/b. Ms Deepa Kamath for the petitioners. 2 wp9449.10 Mr.V.Y. Sanglikar for respondent no.1. .... CORAM : D.D. SINHA AND SMT.V.K.TAHILRAMANI, JJ. Date of Reserving ) : 12.09.2011. the Judgement. ) Date of Pronouncing ) : 15.11.2011. the Judgement. ) JUDGEMENT (Per D.D.Sinha,J.) Heard the learned counsel for the petitioners and well as the respondent no.1. 2. The facts involved in the present case are as follows:- The respondent no.1 (The Oriental Insurance Co. Ltd.) owns a building known as “Oriental House”, at 7, J. Tata Road, Churchgate, Mumbai. The said premises comprise of cabin no.`A’ on mezzanine floor of “Oriental House”, admeasuring 334 sq. mtr. The subject premises were let out to M/s.Pankaj Industries (petitioner no.1) of which Mr.P.L.Shah was the Sole Proprietor which is evident from the original Lease Deed. The lease was granted by the predecessor in title of the respondent no.1 for three years. Under clause II, the lessee was not to sub-let the subject 3 wp9449.10 premises or grant licence. The term of the lease had expired, but the petitioner no.1 continued as a monthly tenant. Condition no.5 of the lease prohibited sub-letting and it is stipulated that the premises should be used only by tenant for his own use. 3. The respondent no.1 initiated action under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (hereinafter referred to as the “Act”) against the petitioners in November 1996 in view of the change in tenancy without the consent and permission of the respondent no.1. The Estate Officer on 27.2.1997 issued notices under section 4(1) (2)(b)(ii) and section 7 of the Act for possession and damages at the rate of Rs.12,694/- per month. The petitioners were called upon to show cause why the orders accordingly should not be passed. The petitioners filed Written Submissions on 15.4.1997. 4. The defence raised and the facts stated in the Written Statement are as follows:- The petitioner no.1 is a partnership concern now, the petitioner no.2 is a partner of the petitioner no.1. When the lease was executed, Pankaj Industries was the sole proprietory concern of Mr.P.L.Shah. On 4 wp9449.10 1.1.1975 Mr.P.L.Shah made Pankaj Industries into a partnership concern and on 1.4.1975 Mr.P.L.Shah retired from the said partnership concern. The petitioner no.2 created another partnership on 31.10.1995 by inducting two more partners. It was the stand of the petitioners that anybody under Pankaj Industries could legally occupy the subject premises. The petitioners filed another Written Statement and taken a stand that Oriental Insurance Company Limited was aware of the presence of the husband of the petitioner no.2 in the premises and there were negotiations for which the petitioner no.2 was called. The respondent no.2 was not in occupation as a sub-lessee. 5. We have considered the contentions convassed by the respective counsel for the parties as well as the relevant provisions of the Act as well as carefully scrutinised the decision of the Estate Officer dated 25.6.2008 and the judgement and order dated 28.8.2009 passed by the City Civil Court, Mumbai. 6. The Estate Officer, after hearing the arguments and after considering the evidence available on record, proceeded to decide the issues. Issue no.1 reads thus:- 5 wp9449.10 “1) Whether Application Premises are “Public Premises” within the meaning of the provisions of Public Premises (Eviction of Unauthorised Occupants) Act, 1971.” So far as the said issue is concerned, the Estate Officer in the impugned order has made the following observations in respect of the said issue which read thus:- “This issue was not raised by the Opponents in the written statements filed by them. On the contrary it was submitted before the Estate Officer that the Opponents are entitled to protection provided under the Guidelines issued by the Ministry of Urban Development thereby admitting that the provisions of Public Premises (Eviction of Unauthorized Occupants) Act 1971 are applicable to the case on hand.” Similarly, the Estate Officer considering the provisions of section 2(c) of the Act held that the subject premises are public premises as defined 6 wp9449.10 under the provisions of the Act and the Estate Officer has jurisdiction to take appropriate action, in accordance with law. 7. The Estate Officer framed the second issue which reads thus:- “Whether the proceedings initiated under the provisions of Public Premises (Eviction of Unauthorised Occupants) Act 1971 violates the guideline issued by the Ministry of Urban Development.?” The Estate Officer in the order has observed that the petitioners raised a pleadings that the proceedings initiated by the respondent no.1 were violative of the guidelines issued by the Ministry of Urban Development dated 30.5.2002 only because the petitioners refused to pay the enhanced rent demanded by the respondent no.1 and, therefore, the proceedings initiated by the respondent no.1 were violative of the guidelines issued by the Ministry of Urban Development. The Estate Officer insofar as this aspect is concerned, recorded the finding which reads thus:- “This argument is totally unacceptable as no such 7 wp9449.10 case was pleaded before the Estate Officer at any point of time and no evidence is made available even to suggest that the applicants are trying to get the opponents evicted on their unwillingness to pay enhanced rent. Therefore I find that there is no violation of the notification of its Ministry of Urban Development by the Applicants in this case.” 8. So far as the issue as to whether there was valid termination of tenancy of the petitioner no.1, the Estate Officer has observed thus:- “The Applicants terminated the monthly tenancy of Opponent No.1 by issue of notice of termination dated 25.11.1996 as required under the provisions of Section 106 of the Transfer of Property Act. Neither Opponent No.1 nor Opponent No.2 has challenged the legality or sufficiency of the notice of termination. Therefore, I find that the notice of termination comply with the legal requirements and through service of notice dated 25.11.1996 there is 8 wp9449.10 valid termination of tenancy of Opponent No.1.” So far as the issue pertaining as to whether the petitioner no.1 inducted the petitioner no.2 in the subject premises without the knowledge and consent of the respondent no.1 and whether the petitioners were in unauthorised occupation of the subject premises and, therefore, liable to be evicted is concerned, the Estate Officer has observed in the order thus:- “In the case on hand, the action of the partners under the partnership dated 01.01.1975 is quite dubious. It is clear that the partnership of 01.01.1975 and the subsequent retirement of Mr.P.L.Shah from the partnership firm giving the exclusive business to Mrs.Daksha A. Desai is only an indirect way of handing over the possession of the application premises to Mrs.Daksha A. Desai. Mr.P.L.Shah renounced all his rights in Opponent No.1 firm when he retired from the partnership between himself and Mrs.Daksha A. Desai by way 9 wp9449.10 of the deed dated 1.04.1975. The recitals in the deed of retirement is reproduced hereunder: “1. The Retiring Partner has retired from the said partnership as from 1st April, 1975 leaving the continuing Partner to carry on the said business as the sole – proprietor thereof. 2. The parties hereto have made up and settled the accounts of the said partnership upto the date of retirement of the Retiring Partner and on making up such accounts it was agreed that the Continuing Partner should pay to the Retiring Partner a sum of Rs.2,500/- in full, final payment and settlement of all his claims which the Continuing Partner has on or before executing hereof paid to the Retiring Partner (the payment and receipt whereof the Retiring Partner doth hereby admit and 10 wp9449.10 acknowledge of and from the same doth hereby release and discharge the Continuing Partner for ever. 3. The Retiring Partner shall have no right, title or interest claim or demand of any nature whatsoever against the assets and effects of the said partnership and the same shall now belong to the Continuing Partner. The Retiring Partner shall also have now no claim or demand of whatsoever nature against the Continuing Partner in respect of the said partnership business or its accounts or otherwise howsoever. Without prejudice to the generality of the aforesaid, it is expressly agreed that the sum of Rs.1,320/- deposited by the Retiring Partner with the then New Great Insurance Company of India Limited as deposit in respect of the tenancy premises formerly taken by the Retiring Partner and thereafter forming part 11 wp9449.10 of the said partnership assets shall now form part of the business taken over by the Continuing Partner and she shall be entitled to receive the same as and when the same becomes refundable.” This clearly was an indirect method of collecting a consideration for creation of sub tenancy or providing a cloak or cover to conceal a transaction not permitted by law.” 9. The Estate Officer, on the basis of the letters produced by the petitioners in order to demonstrate that the respondent no.1 was aware of the occupancy of the subject premises by the petitioner no.2, has clearly held which reads thus:- “Thus it is very clear that the application premises was put in possession of Mrs.Daksha A. Desai without knowledge and consent of the Applicants.” The Estate Officer, after recording the above referred finding of fact has 12 wp9449.10 finally held that the respondent no.1 was entitled for an order of eviction of the petitioners from the subject premises and was also entitled to recover damages and, therefore, passed the impugned order dated 25.6.2008. 10. The City Civil Court decided the appeal preferred by the petitioners, after re-considering the evidence on record, by observing thus:- “8. It is the admitted case that the lease was initially in favour of Mr.P.L.Shah exclusively as a proprietor of Pankaj Industries. The appellants nowhere contended that there was any kind of contractual relationship between Atul Desai and P.L.Shah when the former was operating from the premises. Possession of Atul Desai in view of his evidence may have been a fact very much within the knowledge of the respondent. However, that would not constitute any contractual obligation. It can be said that Atul Desai used to come to the premises and operate from there. When however 13 wp9449.10 Mr.P.L.Shah decided to enter into partnership, he did not choose Atul Desai. It was his wife Daksha, with whom he constituted a firm and started running business under the same name and style. Therefore mere knowledge of the respondent that Atul Desai was operating from the premises does not legalise his possession nor gives him any right to claim discharge of legal obligation by the Company.” The observations made in paragraph 9 of the decision of the City Civil Court are thus:- “9. It is the case of the appellant that after entering into partnership with Mr.P.L.Shah on 1.1.1975, he resigned from the firm on 1.4.1975. Not only that, the retirement deed also shows besides the pleadings raised by the appellant, that Mr.P.L.Shah had relinquished all his rights in the firm property as well as the tenancy in respect of the premises. Naturally therefore, Mr.P.L.Shah, 14 wp9449.10 the sole proprietor must be taken to have inducted Mrs.Desai in possession of the premises on 1.1.1975 and then relinquishing the tenancy rights in her favour left the premises for ever on 1.4.1975. The constitution of partnership on 1.1.1975 turned out to be nothing more than facade when on 1.4.1975 Mr.Shah relinquished the tenancy rights in favour of Mrs.Desai.” In paragraph 10 of the decision, the City Civil Court has observed thus:- “10. The subsequent developments in which Mrs.Desai inducted her sons Devan and Pranav as partners may be preceded by some justification to increase the business. It is also established that Mrs.Desai continued business in the same name of Pankaj Industries and paid rent. It is also established that she was invited by the respondent for various meetings about rent revision and so on. None of these facts could confer either upon Mrs.Desai or Pankaj Industries a title of lawful 15 wp9449.10 tenancy of the respondents. It can also be said that the respondent knew possession of Mrs.Desai from a very long time and not only since 1995-96. Even that would not constitute any bar to the respondent to claim that she was an unauthorized occupant. There is nothing on record to show that the respondent had recognized either Mr. or Mrs.Desai as lawful tenant or licensee, as a result of which, they had altered their position in any sense. Therefore, neither on the principle of estoppel nor acquisance nor waiver can tenancy be claimed by the appellants or Atul Desai.” 11. The City Civil Court, in these facts and circumstances, finally observed in paragraph 14 which reads thus:- “14. The facts and the evidence thus establish that the possession of Mrs.Desai and other partners and her successors is not preceded by authority of law or agreement with the respondent. Payment of rent by Pankaj Industries is not sufficient and does 16 wp9449.10 not create any interest in favour of the appellant over the premises. No doubt, there are Central Government guidelines to regulate interests of tenants in public premises. However, they are directory in nature. No doubt, the premises previously belonged to New Great Insurance Company and at that time, it was not a public premises. However, after the nationalisation, it has become a public premises within the meaning of PPE Act. The tenancy of Mr.Shah was duly determined. For all these reasons I hold that the Estate Officer committed no error holding the appellants as unauthorised occupants.” 12. The petitioners being aggrieved by the order dated 28.8.2009 passed by the City Civil Court as well as the order dated 25.6.2008 passed by the Estate Officer preferred the present Writ Petition. After giving anxious consideration to the contentions canvassed, the facts involved and the concurrent findigns of facts recorded by the Estate Officer as well as the City Civil Court, the following situation emerges. The lease admittedly was initially executed in favour of Mr.P.L.Shah 17 wp9449.10 exclusively as a proprietor of Pankaj Industries which was a proprietory concern. Mr.P.L.Shah decided to enter into a partnership with Mrs.Dahsha A. Desai and, therefore, constituted a partnership firm on 1.1.1975 and continued to run the business of the firm under the name and style of M/s.Pankaj Industries. Mr.P.L.Shah resigned/retired from the partnership firm on 1.4.1975 and had relinquished all his rights in the firm property as well as tenancy in respect of the subject premises. Since the original lease deed was executed in favour of Mr.P.L.Shah as a sole proprietor of M/s.Pankaj industries, as per the terms and conditions of the lease deed, it was incumbent on Mr.P.L.Shah to obtain permission or consent from the respondent no.1 before inducting Mrs.Desai and put her in possession of the subject premises. In the instant case, it is not in dispute that Mr.P.l.Shah did not obtain any permission or consent before inducting Mrs.Desai as well as before putting her in possession of the subject premises. It is also not in dispute that Mr.P.L.Shah relinquished all his rights, including tenancy rights, in favour of Mrs.Desai on 1.4.1975. It is also not in dispute that there is nothing on record to show that the respondent no.1 at any point of time either recognised Mr. or Mrs.Desai as lawful tenant or licensee of the subject premises and since they were inducted without consent of the respondent no.1, the whole transaction has resulted in altering their position in that sense of the term. 18 wp9449.10 It is in these circumstances that the finding recorded by the City Civil Court that possession of Mrs.Desai and other Partner as well as her successors is not preceded by authority of law or agreement with the respondent no.1, the payment of rent by Pankaj Industries, therefore, would not create any interest in favour of the petitioners in respect of the subject premises is just and proper and sustainable in law. Similarly, the petitioners have not adduced any evidence to suggest that the respondent no.1 was trying to get them evicted because they were unwilling to pay the enhanced rent and in the absence thereof, the Courts below rightly rejected the said contention canvassed by the petitioners. Taking into consideration the overall view of the matter, the decisions cited by the counsel for the petitioners in Minoo Framroze Balsara v. Union of India (AIR 1992 Bom 375) and in Sathyaprema Manjunath Gowda v. Controller of Estate Duty, Karnataka [(1997) 10 SCC 684] do not further the case of the petitioners. It is also pertinent to to note that in the instant case, on 27.11.2009, the eviction orders were duly executed and possession of the subject premises was recovered from the petitioners. 13. In the result, the petition fails and is dismissed. No order as to costs. 19 wp9449.10 14. In view of the dismissal of the Writ Petition, the Civil Application does not survive and the same is also dismissed. (D. D. SINHA, J.) (SMT.V.K.TAHILRAMANI, J.)