UNION OF INDIA versus NARESHKUMAR BADRIKUMAR JAGAD & ORS.
[2018] 14 S.C.R. 239, Supreme Court of India, 2018
Outcome: Disposed off
Segment: Body
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UNION OF INDIA
v.
NARESHKUMAR BADRIKUMAR JAGAD & ORS.
(Review Petition (C) Diary No. 40966 of 2013)
IN
Civil Appeal No. 7448 of 2011
NOVEMBER 28, 2018
[KURIAN JOSEPH AND A. M. KHANWILKAR, JJ.]
Textile Undertakings (Nationalisation) Laws (Amendment and
Validation) Act, 2014 – ss.5,6,7,8 – Effect of – Original suit land
owners executed lease deed for 99 years which was  to expire on
21.10.1990 – A structure was erected to house a cotton mill on the
property – Thereafter, property was vested in a public charitable
trust and the respondents are the present trustees of the said Trust –
Suit land was leased to ‘P’ Mills for the residue of the unexpired
period of lease – Textile Undertakings Act, 1983 was enacted to
take over the management of textile undertakings including ‘P’ Mills,
pending their nationalization – Lease granted in favour of ‘P’ Mills
expired by efflux of time, however, it continued to occupy the suit
property as a protected or statutory tenant in terms of Bombay Rents,
Hotels and Lodging House Rates Control Act, 1947 – Trust issued a
legal notice to appellant-National Textile Corporation Ltd. (NTC)
terminating its tenancy qua the suit property – Textile Undertaking
(Nationalisation) Act, 1995 came into force on 01.04.1994 – The
1947 Act stood repealed by the Maharashtra Rent Control Act, 1999
– Trust filed a suit under the Transfer of Property Act, 1882 only
against the appellant-NTC, which was decreed in favour of Trust
and appellant-NTC was
directed to hand over the vacant and
peaceful possession of the suit premises – Appellate Court affirmed
the judgment and decree of the trial Court – Appeal was dismissed
by the Supreme Court – Review Petition by Union of India – During
the pendency of review petition, the Validation Act 2014 came into
effect – Review Petitioner contended that subsequent legislation
has completely altered the status of the parties retrospectively qua
the suit property with effect from 01.04.1994 by legal fiction, as a
result of which the cause of action against NTC as referred to in the
[2018] 14 S.C.R. 239
239
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subject suit had become non-existent – Held: S.3 of the 1995 Act
stands amended by virtue of the 2014 Act – Now, as per the amended
s.3 of the 1995 Act w.e.f. 01.04.1994, by operation of law the
statutory or protected tenancy rights of ‘P’ Mills in respect of the
suit property stood transferred to and vested in the Central
Government and it continues to so vest in it and that the decree
against NTC including the undertaking given by NTC has been
rendered unenforceable by a legal fiction – As a result, the Trust
being the landlord is obliged to take recourse to remedy against the
Central Government (Union of India) to get back possession of the
suit property, as per the dispensation specified in the concerned
Rent Legislation – Textile Undertakings Act, 1983 – Bombay Rents,
Hotels and Lodging House Rates Control Act, 1947 – Textile
Undertaking (Nationalisation) Act, 1995 – s.3 – Maharashtra Rent
Control Act, 1999 – Transfer of Property Act, 1882 – s.111.
Review – Remedy of – Third party to the proceeding – Held:
s.114 and Or.XLVII of CPC states that any person considering himself
aggrieved can file a review petition – Further, neither Or.XLVII of
CPC nor Or.XLVII of the Supreme Court Rules limits the remedy of
review only to the parties to the judgment under review – Therefore,
even a third party to the proceedings, if he considers himself an
aggrieved person, may take recourse to the
remedy of review petition
– Code of Civil Procedure, 1908 – s.114 and Or.XLVII – Supreme
Court Rules – Or.XLVII.
National Textile Corporation Ltd. v. Nareshkumar
Badrikumar Jagad & Ors. (2011) 12 SCC 695 : [2012]
14 SCR 472 ; Raja Shatrunji v. Mohammad Azmal Azim
Khan and Ors. (1971) 2 SCC 200 : [1971] Suppl. SCR
433 ; S. Bagirathi Ammal v. Palani Roman Catholic
Mission (2009) 10 SCC 464 : [2007] 12 SCR 1050
Union of India v. Sandur Manganese and Iron Ores
Limited and Ors. (2013) 8 SCC 337 : [2013] 2 SCR
1045 ; Champsey Bhara and Company v. Jivraj Balloo
Spinning and Weaving Company Limited (1923) Vol. L
(IA) 324 ; B. Arvind Kumar v. Govt. of India and Others
(2007) 5 SCC 745 ; Shree Chamundi Mopeds Ltd. v.
Church of South India Trust Association CSI Cinod
Secretariat, Madras (1992) 3 SCC 1 : [1992] 2 SCR
999 ; Bhoolchand and Another v. Kay Pee Cee
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Investments and Another (1991) 1 SCC 343 : [1990] 2
Suppl. SCR 251 ; State of Tamil Nadu v. State of Kerala
and Another (2014) 12 SCC 696 : [2014] 12 SCR 875
; Madan Mohan Pathak and Ors. v. Union of India
(UOI) and Ors. (1978) 2 SCC 50 : [1978] 3 SCR 334 ;
Shri Prithvi Cotton Mills Ltd. and Ors. v. Broach
Borough Municipality and Ors. (1969) 2 SCC 283 :
[1970] 1 SCR 388 ; T. Sudhakar Prasad v. Govt. of
A.P. and Ors.(Paragraph Nos. 9 to 22.) (2001) 1 SCC
516 : [2000] 5 Suppl. SCR 610 ; Firm Ganpat Ram
Rajkumar v. Kalu Ram and Ors. (Paragraph Nos. 5 and
6) (1989) Supp. (2) SCC 418 : [1989] Suppl. SCR 223 ;
Noorali Babul Thanewala v. K.M.M. Shetty and Ors.
(1990) 1 SCC 259 : [1989] 2 Suppl. SCR 561 ; Office
of The Chief Post Master General and Ors.v. Living
Media India Ltd. and Ors.(2012) 3 SCC 563 : [2012] 1
SCR1045 – referred to.
Case Law Reference
[2012] 14 SCR 472
referred to
Para 1
[1971] Suppl. SCR 433
referred to
Para 26
[2007] 12 SCR 1050
referred to
Para 29
[2013] 2 SCR1045
referred to
Para 29
(1923) Vol. L (IA) 324
referred to
Para 29
(2007) 5 SCC 745
referred to
Para 44
[1992] 2 SCR 999
referred to
Para 46
[1990] 2 Suppl. SCR 251
referred to
Para 47
[2014] 12 SCR 875
referred to
Para 50
[1978] 3 SCR 334
referred to
Para 50
[1970] 1 SCR 388
referred to
Para 50
[2000] 5 Suppl. SCR 610
referred to
Para 52
[1989] 1Suppl. SCR 223
referred to
Para 52
1989]  2 Suppl. SCR 561
referred to
Para 52
[2012] 1 SCR1045
referred to
Para 53
UNION OF INDIA v.
NARESHKUMAR BADRIKUMAR JAGAD
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CIVIL APPELLATE JURISDICTION : Review Petition (C)
Diary No.  40966 of 2013.
From the Judgment and Order dated 05.09.2011 of the Supreme
Court of India in Civil Appeal No. 7448 of 2011.
With
M.A. No.2714 of 2018 in Civil Appeal No.7448  of  2011 and 
Contempt Petition (C) No.550 of 2014 in Civil Appeal No.7448 of 2011.
Ms. Pinky Anand, ASG, Shekhar Naphade, Maninder Singh, Mukul
Rohatgi, Ranjit Kumar, Shyam Divan, Sr. Advs., Sanjay Ghose, Kaustubh
Anshuraj, Abhikalp Pratap Singh, Prateek Rusia, Ms. Ashita Chawla,
Sanjay Ghose, Kaustubh Anshuraj, Mahesh Agarwal, Ms. Heena Chheda,
Gaurav Mehta,  Rishabh Vora, Abhinav Agarwal, Anshuman Srivastava,
E. C. Agrawala, Ms. B. Sunita Rao, Anurag, Shreekant N. Terdal,
A. K. Kaul, Raj Bahadur, Ms. Anil Katiyar, Ms. Arunima Dwivedi,
Hemant Arya, Chakitan Vikram Shekhar Papta,  Ms. Sushma Verma,
Advs. for the appearing parties.
The following Order of the Court was passed:
O R D E R
1. Union of India has filed this review petition seeking review of
the judgment and order passed by this Court on September 5, 2011 in
Civil Appeal No.7448 of 2011: National Textile Corporation Ltd. Versus
Nareshkumar Badrikumar Jagad & Ors. 1  At the same time, the
appellant National Textile Corporation Ltd. (for short “NTC”) has filed
an application for directions including for extension of time. Whereas,
respondent Nos.1 to 6 in the review petition (for short
“respondents”)
who were respondent Nos.1 to 6 in the aforementioned civil appeal,
have filed contempt petition for initiating appropriate action against the
appellant NTC. During the pendency of the review petition, an Ordinance
was promulgated titled as the Textile Undertakings (Nationalisation) Laws
(Amendment and Validation) Ordinance, 2014 which later on became
The Textile Undertakings (Nationalisation) Laws (Amendment and
Validation) Act, 2014 (for short “Validation Act 2014”), as a result of
which the Union of India has filed an application for urging additional
grounds in the Review Petition. As the issues to be decided in these
proceedings are overlapping, we propose to deal with the same by this
common order.
1(2011) 12 SCC 695
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2. Briefly stated, the property in question admeasuring 12118
square yards of land, bearing Plot No.9 in Survey No.73 of Lower Parel
Division, N.M. Joshi Marg, Chinchpokli, Mumbai, originally belonged to
one Damodar Tapidas and Dayabhai Tapidas. They executed a lease
deed on 11th March, 1893 in favour of one Hope Mills Ltd. The demise
was for 99 years to expire on 21st October, 1990. A structure was erected
to house a cotton mill on the property. The original suit land owners sold
and conveyed the said land to one Harichand Rupchand by a sale deed
dated 22nd February, 1907. As per the Will of Harichand Rupchand, the
property vested in a public charitable trust by the name of Seth Harichand
Rupchand Charitable Trust (for short “the Trust”). The respondents
are the present trustees of the said Trust. The leasehold rights then
stood transferred from Hope Mills Ltd. to Prospect Mills Ltd. and
thereafter to Diamond Spinning and Weaving Co. Pvt. Ltd.  By an
indenture of Lease dated 25th October, 1926, the property, namely, the
said land and structures thereon, were demised to Toyo Podar Cotton
Mills Ltd. (whose name was subsequently changed to Podar Mills Ltd.)
for the residue of the unexpired period of lease of 99 years commencing
from 22nd October, 1891, subject to the same terms and conditions as in
the original lease deed dated 11th March, 1893.
3. The Textile Undertakings (Taking over of Management) Act,
1983 (for short “1983 Act”) was enacted by
Parliament in order to take
over the management of 13 textile undertakings, including Podar Mills,
pending their nationalisation. The lease granted in favour of Podar Mills
Ltd. expired by efflux of time on 21st October, 1990. However, it
continued to occupy the suit property as a protected or statutory tenant
in terms of the Bombay Rents, Hotel and Lodging House Rates Control
Act, 1947 (for short “1947 Act”). The Trust issued a legal notice dated
2nd December, 1994 to the NTC terminating its tenancy qua the suit
property. The Parliament enacted the Textile Undertakings
(Nationalisation) Act, 1995 (for short “1995 Act”), which was deemed
to have come into force on 1st April, 1994.
4. On 18th July, 1995, the Trust (through respondents/trustees)
filed a suit for eviction being TER Suit 680/1568/1995, against Podar
Mills Ltd. (defendant No.1), NTC (defendant No.2) and Union of India
(defendant No.3)  under the provisions of the 1947 Act. The reliefs
claimed in the said suit read thus:
UNION OF INDIA v. NARESHKUMAR BADRIKUMAR JAGAD
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“The Plaintiffs, therefore, pray that :-
(a) the Defendants No.2&3 be ordered and decree to quit, vacate
and hand over quiet, vacant and peaceful possession of the suit
Plot No.9, Cadastral Survey No.73 of Lower Parel Division
situated at Delisle Road, (Now known as N.M. Joshi Marg),
Bombay-400011 to the Plaintiffs;
(b) that the Defendants No.2 be ordered and decreed to pay the
mesne profit to the Plaintiffs from the date of the suit till the Decree
at the rate of Rs.128.75 per month, and after passing of the Decree
a direction be given to make inquiry in the matter and such other
rate 170, at the rate prevailing in the market be fixed as the mesne
profit payable till possession is handed over to the plaintiffs;
(c) that pending the hearing and final disposal of the suit the
Defendants No.2 their servants, agents and representatives be
restrained by an order and injunction of this Hon’ble Court from
carrying out any further work of additions, alterations and/or
erections of a permanent nature or committing acts of waste into
or upon the suit lands viz., Plot No.9, Cadastral Survey No.73 of
Lower Parel Division situated at Delisle Road, (Now known as
N.M. Joshi Marg), Bombay-400011;
(d) that pending the hearing and final disposal of the suit that the
defendants No.2 their servants, agents and representatives be
restrained by an order and a permanent injunction of this Hon’ble
Court from
sub-letting and/or transferring their interest in the suit
premises or from creating a leave and licence in respect thereof
or from inducting a third party therein or from in any other manner
parting with the possession of the suit lands;
(e) that interim and ad-interim injunctions be granted in terms of
prayer (c) and (d) above during the pendency and final disposal
of this suit;
(f) that a fit and proper person be appointed as a Commissioner to
visit and inspect the suit premises being Plot No.9, Cadastral
Survey No.73 of Lower Parel Division situated at Delisle Road,
(Now known as N.M. Joshi Marg), Bombay-400011 and to make
and give his report regarding the present position and condition of
the suit lands and structures standing thereon;
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(g) that the status quo in respect of the suit premises be maintained;
(h) for costs of this suit;
for such other and further order as may be just and proper and
necessary;”
This suit was dismissed for non-prosecution on 26th August, 2002.
5. The Trust (through respondents/trustees) filed another suit on
6th May, 1997, being RAD Suit No.955/97, against the same parties
(Union of India, Ministry of Textile (defendant No.1), NTC (defendant
No.2)  and Podar Mills Ltd. (defendant No.3) for the following reliefs:
“THE PLAINTIFFS THEREFORE PRAY:-
A. It be declared that upon expiry of the Lease period by offlux
of time on 22.10.1990 the Defendants No.3 were holding over
premises and/or by operation of law become the statutory tenant
of the Plaintiffs in respect of suit property being Plot No.9,
Cadastral Survey No.73 Land admeasuring about 12,118 Sq. yards
with all buildings standing thereon, situated at Delisle Road, now
known as N.M. Joshi Marg, Bombay-400011.
B. that it be declared that on the appointed day i.e. 1st April, 1995.
The Defendants No.1, had acquired tenancy rights of the
Defendants No.3, and what has vested in Defendants No.2 is the
statutory tenancy of Defendants No.3, and as such Defendant
No.2, is the statutory tenant of the Plaintiffs, protected under
Bombay Rent Act, in respect of the suit premises being Plot No.9,
Cadastral Survey No.73, land admeasuring about 12,118 Sq. yards
with all buildings standing thereon, situated at Delisle Road,
now
known as N.M. Joshi Marg, Bombay-400011.
C. that it be also declared that Defendants No.3, as the statutory
tenants of the Plaintiffs in respect of suit premises being Plot
No.9, Cadastral Survey No.73, land admeasuring about 12,118
Sq. yards with all buildings standing thereon, situated at Delisle
Road, now known as N.M. Joshi Marg, Bombay-400011, had no
right to claim and/or receive any compensation from the
Defendants No.1 and/or Defendant No.2, for the acquirement
and/or vesting of their statutory tenancy right, in the Defendants
No.1.
UNION OF INDIA v. NARESHKUMAR BADRIKUMAR JAGAD
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D. that the Defendants No.1 and 2 be directed to furnish the
detail bifurcation of the payment mentioned in Schedule I item
No.4 of the said Ordinance 6 of 1995.
E. that the Defendants No.1 be also restrained from making any
payment to the extent of Defendants No.3, allege lease right, title,
and interest in the suit property being Plot No.9, Cadastral Survey
No.73, land admeasuring about 12,118 sq. yards with all buildings
standing thereon, situated at Delisle Road, now known as N.M.
Joshi Marg, Bombay-400011, fixed by the Defendants No.1, and/
or No.2, as the Defendants No.1 had only acquired statutory
tenancy rights thereon.
F. that it be declared that the Defendants No.1 and 2 as the
statutory tenant of the Plaintiffs have no right to deal with transfer,
mortgage, sell and/or otherwise disposed off and/or induct any
third party in the suit promises, being Plot No.9, Cadastral Survey
No.73, land admeasuring about 12,118 sq. yards with all buildings
standing thereon, situated at Delisle Road, now known as N.M.
Joshi Marg, Bombay-400011.
G. Interim and ad-interim reliefs in terms of prayers (d) to (f) be
granted.
H. Costs and any other and such reliefs be granted as this Hon’ble
Court may deem fit and proper.”
This suit was eventually withdrawn on 22nd December, 2004.
6. The 1947 Act stood repealed by the Maharashtra Rent Control
Act, 1999 (for short “1999 Act”). The Trust issued a
notice for
terminating the tenancy of NTC vide notice dated 26th September, 2000.
The Trust (through respondents/ trustees)  filed a fresh suit on 20th April,
2001 under the Transfer of Property Act, 1882 only against the appellant
NTC, in the Small Causes Court at Bombay being  TER 311/326/01 for
the following reliefs:
“The Plaintiffs, therefore, pray:
(a) that the Defendants be ordered and decree to vacate and
hand over to the Plaintiffs vacant peaceful possession of the suit
premises i.e. premises being land with the building admeasuring
about 12,118 sq. yards (equivalent to 10131.85 sq. mtrs.) bearing
Plot No.9, Cadastral Survey No.73 of Lower Parel Division
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situated at Delisle Road, now known as N.M. Joshi Marg,
Chinchpokli, Bombay-400011;
(b) the Defendants be ordered and decree to pay to the Plaintiffs
mesne profits at the market rate and at some other rate fixed by
this Hon’ble Court for the use and occupation of the said land and
building having area of about 12,118 sq. yards (equivalent to
10131.85 sq. mtrs.) from November 2000 till the Defendants hand
over peaceful possession of the said premises viz. land with building
admeasuring about 12118 sq. yards, bearing Plot No.9, Cadastral
Survey No.73 of Lower Parel Division situated at Delisle Road,
now known as N.M. Joshi Marg, Chinchpokli, Bombay-400011 to
the Plaintiffs or at such amount as this Hon’ble Court may deem
fit and proper, after due inquiry under Order XX Rule 12 (c) of
the Civil Procedure Code;
(c) pending hearing and final disposal of the suit Defendants by
themselves, their agents, officers, servants be restrained by order
and injunction of this Hon’ble Court from parting with possession
or occupation of the suit premises under any assignment or part in
whatsoever manner of induct any third party therein;
(d) pending the hearing and final disposal of the suit some fit and
proper person be appointed Receiver with all power under Order
40 Rule 4 of the Code of Civil Procedure to take charge of the
suit premises;
(e) pending the hearing and final disposal of the suit Defendants
be ordered to pay to the Plaintiffs damages/equally profit at Rs.7
lacs per month subject to adjustment of said amount when
damages/mesne profit is finally determined by the Hon’ble Court;
(f) interim and ad-interim reliefs in terms of prayers (c), (d) and
(e) above;
(g) cost of this suit be provided for; and
(h) for such other and further reliefs as the nature and
circumstances of the case may required be granted.”
7. The appellant NTC filed its written statement denying the pleas
taken by the plaintiffs. The suit was decreed in favour of the plaintiffs
(Trust) vide judgment and decree dated 5th August, 2006 by virtue of
which the NTC was directed to hand over vacant and peaceful possession
of the suit premises to the plaintiffs within four months.
UNION OF INDIA v. NARESHKUMAR BADRIKUMAR JAGAD
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8. Being aggrieved, the appellant NTC preferred Appeal No. 627
of 2006 before the Division Bench of the Small Causes Court at Bombay
on 13th November, 2006 which was dismissed by the appellate court by
affirming the judgment and decree of the trial court vide judgment and
decree dated 14th August, 2008. The appellant preferred civil revision
before the High Court of Bombay, which came to be dismissed vide
judgment and order dated 3rd August, 2009.
9. Being aggrieved, NTC assailed the aforementioned decision of
the High Court before this Court by way of a Special Leave Petition
converted to Civil Appeal No.7448 of 2011, which came to be dismissed
on 5th September, 2011. That decision is the subject matter of the review
petition filed on 20th December, 2013 by the Union of India as a third
party. The principal ground urged by the Union of India is that the right,
title and interest in the suit property had vested absolutely in the Central
Government by virtue of Section 3(1) of the 1995 Act. Nevertheless, in
the subject suit for possession filed by the Trust, Union of India had not
been impleaded as a party-defendant. Notably, the Trust had impleaded
Union of India as a party defendant in both the previous suits filed including
for eviction under the provisions of the 1947 Act. That pre-supposes
that the respondents were cognizant of the effect of the statutory vesting
of the tenancy
absolutely in favour of the Central Government.
10. As aforementioned, during the pendency of the review petition,
the Validation Act 2014 came into effect, necessitating Union of India to
take out an application for urging additional grounds in the pending review
petition, in light of the provisions contained in the said enactment.
11. This Court while dismissing the appeal preferred by NTC,
gave time to vacate upto 31st December, 2013 subject to filing of usual
undertaking within four weeks, to hand over peaceful and vacant
possession to the Trust.  The General Manager of NTC filed an affidavit
of undertaking on behalf of NTC on 3rd October, 2011, with the approval
of the Union of India, in compliance of the order dated 5th September,
2011 passed by this Court.
12. Before the expiry of the time to vacate, NTC filed an application
for extension of time to hand over possession of the suit premises on
23rd December, 2013, for reasons stated in the application. This Court
acceded to that request vide order dated 31st January, 2014 and extended
the time to vacate until 30th June, 2014. NTC filed a fresh undertaking
on 24th March, 2014, with the approval of the Union of India, in
compliance of the order dated 31st January, 2014.
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13. NTC has filed a fresh application on 27th June, 2014 before the
expiry of the time to vacate, being I.A. No.6 of 2014 for directions and
praying for the following reliefs:
“PRAYERS:
(a) To grant time to the Applicants herein to comply with all the
laws, rules, regulations as required for sub-division of the said
land so that the land of the Respondent as well as Applicant could
be demarcated and sub-divided;
(b) That this Hon’ble Court may be pleased to declare the Order
dated 5.8.2006 of the Hon’ble Small Causes Court as regards the
handling over of the building structure standing on the said suit
land does not imply that the buildings are to be handed over free
of cost or that the Respondent Trust is the owner therein;
(c) That in any event this Hon’ble Court may be pleased to vary
the said order of the Small Cases Court dated 05.8.2006 in-as-
much-as it directs handing over of building in-as-much-as the said
order is impossible of compliance since in the process of sub-
division, the structures on the land of the Respondent as also the
land of the Applicant will stand demolished;
(d) That this Hon’ble Court may be pleased to direct the
Respondent Trust to pay to the Applicants the salvage value at
the market rate/value of the demolished structure standing on the
lease hold land to be handed over to the Respondent.
(e) That this Hon’ble Court may be pleased to permit and also
issue a direction permitting the Applicant to hand over juridical
possession to the Respondent Trust without handling over the
physical possession until such time as the land has been demarcated
and the structure demolished.
(f) Pass any such other order/s as may be deemed fit and proper.”
14. The respondents have filed a contempt petition on 20th
November, 2014 including for enforcement of the directions given to
NTC to vacate the suit premises and to hand over peaceful and vacant
possession thereof to them. They allege that it is a case of willful
disobedience and more particularly, breach of the undertaking given to
this Court by the party concerned warranting appropriate action against
NTC and its officials.
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15. The respondents would contend that Union of India has no
locus to file a review petition against the judgment of this Court dated 5th
September, 2011.  It is then contended that the grounds urged by the
Union of India in the review petition regarding the purport of the 1995
Act were specifically raised and have been answered appropriately.
Secondly, the fact now asserted by the Union of India by way of review
petition and which contention is supported by NTC, namely, that the
tenancy rights in the suit property of the erstwhile Podar Mills Ltd. vested
absolutely in the Union of India after the taking over of the management
of the subject Textile Undertaking by operation of the provisions of the
1983 Act and followed by acquisition by virtue of the 1995 Act, was not
specifically raised in the written statement filed by NTC. It is too late in
the day to permit Union of India or NTC to raise that plea.  It is not open
for the review court to travel beyond the pleadings in the written statement
filed by NTC.  No evidence can be led either by Union of India or NTC
in respect of any factual matter which has not been pleaded in the written
statement. The plea taken by NTC in the written statement has been
duly considered right up to this Court, which culminated into the decision
of this Court.  In fact, the review petition by Union of India  is a subterfuge
so as to circumvent the decree of
possession passed against NTC in
respect of the suit premises, and moreso, in defiance of the undertaking
already given to this Court, with the approval of the Union of India, to
hand over peaceful and vacant possession. According to the respondents,
the review petition by Union of India as well as the application for
extension of time by NTC are nothing but an abuse of the process of the
Court and must be dismissed. The respondents have also invited our
attention to the interim orders passed by this Court in the present
proceedings and would contend that the Commission’s Report exposes
the stand taken by NTC that the suit premises are still being used for its
activities.
16. We have heard Ms. Pinky Anand, learned Additional Solicitor
General appearing for the review petitioner, Mr. Shekhar Naphade &
Mr. Maninder Singh, learned senior counsel appearing for NTC and Mr.
Mukul Rohatgi, Mr. Ranjit Kumar & Mr. Shyam Divan, learned senior
counsel appearing for the respondents.
17. From the judgment under review, it is seen that the main ground
urged by Union of India in the review petition was pressed into service
by NTC. In paragraph 7 of the judgment, the argument canvassed on
behalf of  NTC has been noted as under:
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“7. Shri Parag P. Tripathi, learned Additional Solicitor General,
appearing for the appellant has submitted that the judgments and
decrees of the courts below have to be set aside as none of the
courts below has taken into consideration the effect of the
provisions of the 1995 Act by virtue of which the textile undertaking
stood absolutely vested in the Central Government and further
vested in the appellant. As on the expiry of the lease of 99 years
on 22-10-1990, the 1947 Act was in force, the then tenant, Podar
Mills became the statutory tenant. Such tenancy rights stood
vested absolutely in the Central Government on the
commencement of the 1995 Act by operation of law. The
appellant stepped in the shoes of the Central Government
merely as an agent, thus, the Central Government remained
the tenant. The Central Government continued to be a
tenant in the suit premises and thus, would be protected in
terms of Section 3(1)(a) of the 1999 Act being premises let
out to the Government. The courts below failed to consider
this vital legal issue. The suit filed by the respondents was not
maintainable. The judgments and decrees of the courts below are
liable to be set aside.”
(emphasis supplied)
18. This Court, after considering the rival submissions, held that
NTC had not specifically pleaded in the written statement that the
tenancy stood vested absolutely in the Central Government and resultantly,
no issue in that behalf was framed nor any argument was
advanced
before the Trial Court, Appellate Court or the Revisional Court. That
contention was taken for the first time in the appeal before the Supreme
Court by way of an application to urge additional grounds regarding the
application of the 1995 Act, without seeking amendment to the pleadings
(written statement).  The Court then considered the question as to whether
the Government is a tenant or whether NTC can be termed as
“Government” or “Government Department” or “Agent” of the Central
Government in the context of the 1999 Act. The Court, in unambiguous
terms held that NTC could neither be treated as “Government” or
“Government Department” nor could it be treated as an “Agent” of the
Central Government. Whereas, NTC was controlled by the provisions
of the 1995 Act and not by the Central Government. The Court also
considered the purport of the expression “vesting” and noted that the
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Trust had rented out the suit premises to Podar Mills and what had
vested was that right, title and interest of the Podar Mills and nothing
else. It will be apposite to  reproduce paragraphs 42 and 43 of the judgment
under review, which rejects the claim of NTC in the following words:
“42. It is not permissible for the appellant to canvass that the
Central Government has any concern so far as the tenancy rights
are concerned. Right vested in the Central Government stood
transferred and vested in the appellant. Both are separate legal
entities and are not synonymous. The appellant being neither the
Government nor the government department cannot agitate that
as it has been substituted in place of the Central Government, and
acts merely as an agent of the Central Government, thus protection
of the 1999 Act is available to it. The appellant cannot be permitted
to say that though all the rights vested in it but it merely remained
the agent of the Central Government. Acceptance of such a
submission would require interpreting the expression “vesting” as
holding on behalf of some other person. Such a meaning cannot
be given to the expression “vesting”.
43. It is a settled legal proposition that an agent cannot be sued
where the principal is known. In the instant case, the appellant
has not taken the plea before either of the courts below. In view
of the provisions of Order 8 Rule 2 CPC, the
appellant was under
an obligation to take a specific plea to show that the suit was not
maintainable which it failed to do so. The vague plea to the extent
that the suit was bad for non-joinder and, thus, was not
maintainable, did not meet the requirement of law. The appellant
ought to have taken a plea in the written statement that it was
merely an “agent” of the Central Government, thus the suit against
it was not maintainable. More so, whether A is an agent of B is a
question of fact and has to be properly pleaded and proved by
adducing evidence. The appellant miserably failed to take the
required pleadings for the purpose.”
19. Reverting to the question of whether Union of India has locus
to file the review petition, we must immediately advert to Section 114 of
the Code of Civil Procedure (“CPC”) which, inter alia, postulates that
“any person considering himself aggrieved” would have locus to file a
review petition. Order XLVII of CPC restates the position that any person
considering himself aggrieved can file a review petition. Be that as it
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may, the Supreme Court exercises review jurisdiction by virtue of Article
137 of the Constitution which predicates that the Supreme Court shall
have the power to review any judgment pronounced or order made by it.
Besides, the Supreme Court has framed Rules to govern review petitions.
Notably, neither Order XLVII of CPC nor Order XLVII of the Supreme
Court Rules limits the remedy of review only to the parties to the
judgment under review. Therefore, we have no hesitation in enunciating
that even a third party to the proceedings, if he considers himself an
aggrieved person, may take recourse to the remedy of review petition.
The quintessence is that the person should be aggrieved by the judgment
and order passed by this Court in some respect.
20. The next question is whether Union of India can be   considered
as an aggrieved person so as to pursue the remedy of review petition. It
is indisputable that the management of Podar Mills-Textile Undertaking
was taken over by the Central Government after the commencement of
the 1983 Act. The scope of management would obviously include
possession and permissible use of the suit property of the Textile
Undertaking so taken over. In due course, the 1995 Act came into force.
As a consequence of Section 3 of this Act, the right, title and interest of
the owners of the subject Textile Undertaking (Podar Mills Ltd.) including
the statutory tenancy rights in relation to the suit property stood transferred
to and vested
absolutely in the Central Government. By the same
provision, vide sub-section (2) thereof, the Textile Undertaking which
stood vested in the Central Government immediately thereafter stood
transferred to and vested in the National Textile Corporation. That
included subsisting statutory tenancy rights in respect of the suit property
enjoyed by the concerned Textile Undertaking. However, Section 3
stands amended by virtue of the 2014 Act. That amendment by a legal
fiction is deemed to have been inserted into the 1995 Act w.e.f. 1st January,
1994. The purport of the amended sub-sections (3) and (4), inserted in
section 3 is that the leasehold rights of the Textile Undertaking would
continue to remain vested in the Central Government and no Court could
exercise jurisdiction to order divestment from the NTC of the property
vested in it by the Central Government. In addition, the Amendment Act
of 2014 has introduced Section 39 in the 1995 Act, titled as ‘Validation’.
We shall dilate on the efficacy of these provisions a little later.
21. Suffice it to observe that since Union of India is asseverating
that the suit property had vested absolutely in the Central Government
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and continues to so vest in it by virtue of a legal fiction in the Validation
Act 2014, would be justified in contending that it is a person aggrieved
and has locus to point out that the decree for possession of the suit
premises against NTC could not have been passed and in any case, the
same could not be enforced in law. It is an inexecutable decree and
including the undertaking given by NTC, assuming that the concerned
court had jurisdiction to pass such a decree.
22.  Having said this, we may now turn to the question of scope of
review jurisdiction to be exercised by this Court in civil proceedings.
The power to review any judgment pronounced or order made by this
Court flows from Article 137 of the Constitution of India, which reads
thus:
“137.  Review of judgments or orders by the Supreme Court
Subject to the provisions of any law made by Parliament or any
rules made under Article 145, the Supreme Court shall have
power to review any judgment pronounced or order made by
it.”
23. The power to frame rules is posited in Article 145 of the
Constitution. As per Rule 1 of Order XLVII of the Supreme Court Rules
framed under Article 145, the Court can review its judgment or order on
the grounds mentioned in Order XLVII, Rule 1 of the CPC. It will be,
therefore, apposite to advert to Rule 1 of Order XLVII of CPC. The
same reads thus:
“ORDER XLVII
REVIEW
1. Application for review of
judgement.-
(1) Any person considering himself aggrieved-
        (a) by a decree or order from which an appeal is allowed,
but from no appeal has been preferred,
        (b) by a decree or order from which no appeal is allowed, or
        (c) by a decision on a reference from a Court of Small
Causes,
and who, from the discovery of new and important matter or
evidence which, after the exercise of due diligence, was not within
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his knowledge or could not be produced by him at the time when
the decree was passed or order made, or on account of some
mistake or error apparent on the face of the record or for any
other sufficient reason, desires to obtain a review of the decree
passed or order made against him, may apply for a review of
judgement to the Court which passed the decree or made the
order.
(2) A party who is not appealing from a decree or order may
apply for a review of judgement notwithstanding the pendency of
an appeal by some other party except where the ground of such
appeal is common to the applicant and the appellant, or when,
being respondent, he can present to the Appellate Court the case
on which he applies for the review.”
24. The grounds for review are specified in clause (1) noted above.
The factual scenario in the present case is certainly not ascribable to
discovery of new or important matters or evidence which was “available
or existing” at the time of the decree but could not be produced despite
exercise of due diligence. In the present case, the asseveration of the
review petitioner is about the mistake or error apparent on the face of
the record committed by the Court and more particularly founded on the
effect of the subsequent enactment of Validation Act 2014 which
completely changes the status of the parties, namely, Union of India and
NTC qua the suit property and bars the enforcement of any decree and
including the undertaking given to the Court by
NTC.
25. Ordinarily, enactment of a subsequent legislation by itself
cannot be the basis to review the judgment already rendered by the
Court. But the argument of the review petitioner proceeds on the premise
that the subsequent legislation has completely altered the status of the
parties retrospectively qua the suit property with effect from 1st April,
1994 by a legal fiction, as a result of which the cause of action against
NTC as referred to in the subject suit had become non-existent; and
including any decree or order passed against NTC or for that matter, an
undertaking filed by NTC in any court or tribunal or authority has been
rendered unenforceable by operation of law and cannot be continued or
taken forward. In other words, even if a valid decree has been passed
against NTC, the same had become inexecutable by operation of law.
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26. This Court in Raja Shatrunji Vs. Mohammad Azmal Azim
Khan and Ors.2 had an occasion to consider the impact of Amendment
Act having retrospective effect on the decree already passed. The
discussion in paragraphs 11 to 13 of this decision is quite instructive. It
accepts the argument that the Court must give full effect to the statutory
fiction, which should be carried to its logical conclusion - no matter in
review jurisdiction. The said paragraphs read thus:
“11. The Amendment Act therefore provided that the
amendment took effect as if the Amendment Act had been
in force on all material dates. The effect of such a deeming
clause was stated by this Court in State of Bombay v. Pandurang
Vinayak Chaphalkar 3 as follows:
‘When a statute enacts that something shall be deemed to
have been done, which in fact and truth was not done, the
court is entitled to ascertain for what purposes and between
what persons the statutory fiction is to be resorted to and
full effect must be given to the statutory fiction and it should
be carried to its logical conclusion.’
The statutory fiction was introduced to give full effect to Section
4 of the 1952 Act by conferring on the debtors and creditors the
right to apply to the court for calculation and reduction of debt. It
was realised that courts always passed simple decrees. It was
noticed that mortgaged property was not and could not be charged
under the
decree. It was therefore appreciated that unless the
words “charged under the decree” were deleted the section could
never give any relief to any landlord whose estate had been
acquired.
12. This Court in the Bombay case referred to the observations
of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury
Borough Council, 1952 AC 109 that “If you are bidden to treat
an imaginary state of affairs as real, you must surely, unless
prohibited from doing so, also imagine as real the consequences
and incidents which, if the putative state of affairs had in fact
existed, must inevitably have flowed from or accompanied it....
The statute says that you must imagine a certain state of affairs;
it does not say that having done so, you must cause or permit your
2(1971) 2 SCC 200
3AIR 1953 SC 244 = 1953 SCR 773
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imagination to boggle when it comes to the inevitable corollaries
of that state of affairs”. These observations indicate that the words
“charged under the decree” in Section 4(2) of the 1952 Act were
never there with the inevitable consequence that the only statutory
requirement is whether the mortgaged property consists of estate
which has been acquired under the provisions of the U.P. Zamindari
Abolition and Land Reforms Act, 1950.
13. On November 27, 1962 when the matter was heard by the
High Court, this amendment did not come into the statute-book.
That is why the judgment-debtor made an application to bring it to
the notice of the High Court that the law was that the words
“charged under the decree” were always deemed to have been
deleted and this law was effective from the date of coming into
force of the 1952 Act on May 25, 1953. The High Court by a
majority opinion was of the view that the judgment-debtors should
be given relief under Order 47 of the Code of Civil Procedure the
principles of review are defined by the Code and the words “any
other sufficient reason” in Order 47 of the Code would mean a
reason sufficient on grounds analogous to those specified
immediately previously in that order. The grounds for review are
the discovery of new matters or evidence which, after the exercise
of due diligence, was not within his knowledge or could not be
produced by him at the time when the decree was passed or
order made, or the review is asked for on
account of some mistake
or error apparent on the face of the record. In Rajah Kotagiri
Venkata Subbamma Rao v. Rajah Vellanki Venkatrama Rao,
Lord Davey at p. 205 of the Report said that “the section does not
authorise the review of a decree which was right when it was
made on the ground of the happening of some subsequent event”.
Counsel for the appellant submitted that when the High
Court decided the matter, the High Court applied the law
as it stood and a subsequent change of law could not be a
ground for review. The appellant’s contention is not
acceptable in the present case for two principal reasons;
first, it is not a subsequent law. It is the law which all along
was there from 1952. The deeming provision is fully
effective and operative as from May 25, 1953 when the 1952
Act came into force. The result is that the court is to apply
the legal provision as it always stood. It would, therefore,
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be error on the face of the record. The error would be that
the law that was applied was not the law which is applicable.
Secondly, Section 4 of the 1952 Act confers power on the court to
apply the law notwithstanding any provision contained in the Code
of Civil Procedure. Therefore the application though intituled
an application for review was not so. The substance and not
the form of the application will be decisive.”
(emphasis supplied)
27. Applying the underlying principle and as jurisdictional issues
have been raised which are essentially founded on the law enacted by
the Parliament with retrospective effect containing a legal fiction and
for doing complete justice to the parties, besides the power of review
under Article 137 of the Constitution, it is open to this Court to exercise
its plenary power under Article 142 of the Constitution.
28. Reverting to the judgment under review, it is noticed that the
provisions of the 1983 Act and 1995 Act have been generally adverted
to while dealing with the plea taken by the appellant NTC that it was in
possession of the suit property merely as an agent of the Central
Government. However, the Court declined to entertain that plea of NTC
as it was not so specifically pleaded in the written statement. The Court
then concluded that the appellant NTC was neither the “Government”
nor “Government Department” nor “Agent” of the Central Government
in
the context of the Maharashtra Rent Control Act, 1999.  That view
has been taken in reference to the 1983 Act and the “un-amended”
provisions of 1995 Act.  Indeed, the review petitioners would argue that
on a fair reading of the un-amended provisions contained in 1995 Act
and juxtaposed with the provisions of 1983 Act, the inescapable conclusion
is that the leasehold rights continued to vest in the Central Government.
However, we are not inclined to countenance this argument.
29. The review petitioners may be justified in pointing out that this
Court committed an error apparent on the face of the record in observing
that the appellant had never raised the issue before the courts below
that the Central Government was the tenant and the appellant was holding
the premises merely as an agent; and that a vague plea was taken about
the non-joinder of the parties - which plea was not even pursued before
the Trial Court. Those errors, in our opinion, would not affect the final
conclusion recorded by this Court in the judgment under review,
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considering the effect of the provisions as were applicable at the relevant
time in the form of “un-amended” Section 3 of the 1995 Act. For, by
virtue of sub-section (2) of Section 3 of that Act, the rights which had
vested absolutely in the Central Government including in respect of the
suit property, stood transferred to and vested in the appellant NTC on
coming into force of the 1995 Act w.e.f. 1st April, 1994. That view taken
by this Court does not merit any review. Resultantly, it is not necessary
to dilate on the decisions in S. Bagirathi Ammal Vs. Palani Roman
Catholic Mission4, Union of India Vs. Sandur Manganese and Iron
Ores Limited and Ors.5 and Champsey Bhara and Company Vs.
Jivraj Balloo Spinning and Weaving Company Limited6, on the
principle of the purport of expression “error apparent” postulated in the
rules governing the scope of review jurisdiction.
30. However, the legal situation has undergone a sea-change
retrospectively after the coming into force of the Validation Act  2014.
The Validation Act makes it explicit that the amendment to the 1995 Act
specified therein shall be deemed to have been inserted on or from the
date of commencement of the 1995 Act i.e. 1st April, 1994. The preamble
of the Validation Act and the relevant chapter applicable to the case on
hand, being Chapter III of that Act, read thus:
“THE TEXTILE UNDERTAKINGS (NATIONALISATION)
LAWS (AMENDMENT AND VALIDATION) ACT, 2014
NO.36 OF 2014
[17th December, 2014.]
An Act
further to amend the Sick Textile Undertakings
(Nationalisation) Act, 1974 and the Textile Undertakings
(Nationalisation) Act, 1995, in order to continue with the lease-
hold rights vested in the National Textile Corporation on
completion of the lease-hold tenure.
WHEREAS the National Textile Corporation subserves the
interests of the general public and the land continue to be in
possession of the said Corporation;
AND WHEREAS various other textile undertakings have
been nationalised from time to time and their assets vested
4(2009) 10 SCC 464
5(2013) 8 SCC 337
6(1923) Vol. L (IA) 324
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absolutely in the Central Government and thereafter
transferred to the National Textile Corporation Limited by
the Central Government free from all encumbrances;
AND WHEREAS after the nationalisation of the textile
undertakings, a large sum of money have been invested with
a view to making the said textile undertakings viable;
AND WHEREAS the Central Government has taken initiative
to revive certain sick undertakings including the National
Textile Corporation under a revival scheme sanctioned by the
Board for Industrial and Financial Reconstruction under the Sick
Industrial Companies (Special Provisions) Act, 1985;
AND WHEREAS it is necessary for the proper and
effective implementation of the revival scheme and to
protect the public investment in the acquired textile
undertakings and to explicitly clarify the status of such
vesting of the lease-hold rights in the Central Government.
BE it enacted by Parliament in the Sixty-fifth Year of the
Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Textile Undertakings
(Nationalisation) Laws (Amendment and Validation) Act, 2014.
(2) It shall be deemed to have come into force with effect from
the 24th October, 2014.
CHAPTER II
AMENDMENTS TO THE SICK TEXTILE UNDERTAKINGS
(NATIONALISATION) ACT, 1974
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
CHAPTER III
AMENDMENTS TO THE TEXTILE UNDERTAKINGS
(NATIONALISATION) ACT,
1995
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5. On and from the date of commencement of the Textile
Undertakings (Nationalisation) Act, 1995 (hereafter in this Chapter
referred to as the principal Act), in section 3, after sub-section
(2), the following sub-sections shall be inserted and shall
be deemed to have been inserted, namely:—
“(3) Notwithstanding the transfer and vesting of any textile
undertaking to the National Textile Corporation by virtue of
sub-section (2), the lease-hold rights of the textile
undertakings shall continue to remain vested in the
Central Government on payment of lease-hold rents and
shall be discharged, for and on behalf of that Government, by
the National Textile Corporation as and when payment of such
lease-hold rents or any amount becomes due and payable.
(4) Subject to sub-section (3), no court shall have jurisdiction
to order divestment from the National Textile
Corporation of the property vested in it by the Central
Government.”.
6. On and from the date of commencement of the principal
Act, in section 4, after sub-section (7), the following sub-sections
shall be inserted and shall be deemed to have been inserted,
namely:—
“(8) Notwithstanding the fact that the textile operations
have been discontinued in any textile undertaking being
revived, shall for all effects and purposes be deemed
that the textile operations are being continued and no
suit or proceeding shall be instituted or if instituted be
maintainable against the National Textile Corporation
on the ground
that it has discontinued such activity in
the textile undertaking.
(9) For the removal of doubts, it is hereby declared that the
continued deemed vesting of the lease-hold land in the Central
Government shall not affect, impair or in any manner prejudice
the rights of the National Textile Corporation to prosecute or
defend any proceedings as a subsequent vestee in respect of
any such lease-hold rights and no such proceedings shall fail
only on account of the non-impleadment of that Government.”.
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7. After section 38 of the principal Act, the following section shall
be inserted, namely:—
“39. Notwithstanding anything contained in any judgment,
decree or order of any court, tribunal or other authority,—
(a) the provisions of this Act, as amended by the Textile
Undertakings (Nationalisation) Laws (Amendment and
Validation) Act, 2014, shall have and shall be deemed always
to have effect for all purposes as if the provisions of this
Act, as amended by the said Act, had been in force at all
material times;
(b) any lease-hold property divested from the National Textile
Corporation to any person under the provisions of this Act, as it
stood immediately before the commencement of the Textile
Undertakings (Nationalisation) Laws (Amendment and Validation)
Act, 2014, shall stand transferred to and vest or continue to vest,
free from all encumbrances, in the National Textile Corporation
in the same manner as it was vested in the National Textile
Corporation before such divesting of that property under the
provisions of this Act as if the provisions of this Act, as amended
by the aforesaid Act, were in force at all material times;
(c) no suit or other proceedings shall, without prejudice to
the generality of the foregoing provisions, be maintained
or continued in any court or tribunal or authority for the
enforcement of any decree or order or direction given by
such court or tribunal or
authority, notwithstanding any
undertaking filed by the National Textile Corporation in
any court or tribunal or authority, directing divestment of such
lease-hold property from the National Textile Corporation vested
in it under section 3 of this Act, as it stood before the
commencement of the Textile Undertakings (Nationalisation)
Laws (Amendment and Validation) Act, 2014, and such lease-
hold property shall continue to vest in the National Textile
Corporation under section 3 of this Act, as amended by the
aforesaid Act, as if the said section was in force at all
material times;
(d) any transfer of any property, vested in the National Textile
Corporation, by virtue of any order of attachment, seizure or sale
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in execution of a decree of a civil court or orders of any tribunal
or other authority in respect of lease-hold property vested in the
National Textile Corporation which is contrary to the provisions
of this Act, as amended by the Textile Undertakings
(Nationalisation) Laws (Amendment and Validation) Act, 2014,
shall be deemed to be null and void and notwithstanding such
transfer, continue to vest in the National Textile Corporation under
this Act.”.
8.(1) The Textile Undertakings (Nationalisation) Laws
(Amendment and Validation) Ordinance, 2014 is hereby repealed.
(2) Notwithstanding the repeal of the Textile Undertakings
(Nationalisation) Laws (Amendment and Validation) Ordinance,
2014, anything done or any action taken under the principal Acts
as amended by the said Ordinance shall be deemed to have been
done or taken under the principal Acts, as amended by this Act.”
(emphasis supplied)
31. We may hasten to add that the validity of the provisions of
Validation Act 2014 is not put in issue in these proceedings. As is noticed,
the effect of the Validation Act 2014 is to incorporate sub-sections (3) &
(4) in Section 3 and sub-sections (8) & (9) in Section 4 of the Principal
Act i.e. 1995 Act, with retrospective effect for all purposes, by a deeming
provision, as if it had always been in force at all material times w.e.f. 1st
April, 1994. In addition, Section 39 has been inserted in the Principal
Act.
32. The effect of insertion of sub-sections (3) & (4)
in Section 3
of the Principal Act is that Section 3, as on 1st April, 1994, would read as
follows:
“3. (1) On the appointed day, the right, title and interest of the
owner in relation to every textile undertaking shall stand transferred
to and shall and shall vest absolutely in, the Central Government.
(2) Every textile undertaking which stands vested in the Central
Government by virtue of sub-section (1) shall immediately after it
has so vested, stand transferred to, and vested in, the National
Textile Corporation.
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(3) Notwithstanding the transfer and vesting of any textile
undertaking to the National Textile Corporation by virtue of
sub-section (2), the lease-hold rights of the textile
undertakings shall continue to remain vested in the Central
Government on payment of lease-hold rents and shall be
discharged, for and on behalf of that Government, by the National
Textile Corporation as and when payment of such lease-hold rents
or any amount becomes due and payable.
(4) Subject to sub-section (3), no court shall have jurisdiction
to order divestment from the National Textile Corporation
of the property vested in it by the Central Government.”
(emphasis supplied)
Similarly, in light of the amendment of 2014, Section 4, as on 1st
April, 1994, would read as follows:
“4. (1) The textile undertakings referred to in section 3 shall be
deemed to include all assets, rights, lease-holds, powers, authorities
and privileges and all property, movable and immovable, including
lands, buildings, workshops, stores, instruments machinery and
equipment, cash balances, cash on hand, reserve funds, investment
and book debts pertaining to the textile undertakings and all other
rights and interests in, or arising out -of, such property as were
immediately before the appointed day in the ownership, possession,
power or control of the textile company in relation to the said
undertakings, whether within or outside India,
and all books of
account, registers and all other documents of whatever nature
relating thereto and shall also be deemed to include the liabilities
and obligations specified in sub-section (2) of section 5.
(2) All property as aforesaid which have vested in the Central
Government under sub-section (1) of section 3 shall, by force of
such vesting, be freed and discharged from any trust, obligation
mortgage, charge, lien and all other incumbrances affecting it,
and any attachment, injunction or decree or order of any court or
other authority restricting the use of such property in any manner
shall be deemed to have been withdrawn.
(3) Where any licence or other instrument in relation to a textile
undertaking had been granted at any time before the appointed
day to the owner by the Central Government or a State Government
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or any other authority, the National Textile Corporation shall, on
and from such date, be deemed to be substituted in such licence
or other instrument in place of the owner referred to therein as if
such licence or such other instrument had been granted to it and
shall hold such licence or the textile undertaking specified in such
other instrument for the remainder of the period for which the
owner would have held such licence or the textile undertaking
under such other instrument.
(4) Every mortgagee of any property which has vested under this
act in the Central Government and every person holding any charge,
lien or other interest in, or in relation to, any such property shall
give, within such time and in such manner as may be prescribed,
an intimation to the Commissioner of such mortgage, charge, lien
or other interest.
(5) For the removal of doubts, it is hereby declared that the
mortgagee of any property referred to in sub-section (2) or any
other person holding any charge, lien or other interest in, or in -
relation to, any such property’ shall be entitled” to claim, in
accordance with his-rights and interests, payment of the mortgage
maps or other-dues, in whole or in part, out of the amounts specified
in relation to such property in the First Schedule, but no such
mortgage, charge, lien or other interest shall be enforceable against
any property which has vested in the Central Government.
(6) If, on the appointed day, any suit, appeal or other
proceeding
of whatever nature in relation to any property which has vested in
the Central Government under section 3, instituted or preferred
by or against the textile company is pending, the same shall not
abate, be discontinued or be, in any way, prejudicially affected by
reason of the transfer of the textile undertakings or of anything
contained in this act, but the suit, appeal or other proceeding may
be continued, prosecuted or enforced by or against the National
Textile Corporation.
(7) Any person who, on the date on which the Textile Undertakings
(Nationalisation) Ordinance, 1995 was promulgated, was in
possession of, or had under his custody or control, the whole or
any part of any textile undertaking referred to in section 3, the
management of which could not be taken over by the Central
Government by reason of any decree, order or injunction of any
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court or otherwise, shall deliver forthwith the possession of such
undertaking or part and all books of account, registers and all
other documents of whatever nature relating to such undertaking
or part to the Central Government or the National Textile
Corporation, as the case may be, may specify in this behalf.
(8) Notwithstanding the fact that the textile operations have
been discontinued in any textile undertaking being revived,
shall for all effects and purposes be deemed that the textile
operations are being continued and no suit or proceeding
shall be instituted or if instituted be maintainable against
the National Textile Corporation on the ground that it has
discontinued such activity in the textile undertaking.
(9) For the removal of doubts, it is hereby declared that the
continued deemed vesting of the lease-hold land in the Central
Government shall not affect, impair or in any manner prejudice
the rights of the National Textile Corporation to prosecute or defend
any proceedings as a subsequent vestee in respect of any such
lease-hold rights and no such proceedings shall fail only on account
of the non-impleadment of that Government.”
(emphasis supplied)
 33. Reverting to Section 3 as “amended” and which by operation
of law had come into force with effect from 1st April, 1994, the right, title
and interest of Podar Mills Ltd. in relation to the Textile Undertaking
including in
respect of the suit property, stood transferred to and vested
absolutely in the Central Government. By virtue of sub-section (2), all
such right, title and interest of Podar Mills as vested in the Central
Government under sub-section (1), immediately stood transferred to and
vested in the appellant NTC “except the leasehold rights in the suit
property” which continued to remain vested in the Central Government.
For, the amended Section 3(3) explicitly postulates that the leasehold
rights of the Textile Undertaking (Podar Mills) in respect of the suit
property as on 1st April, 1994, continued to remain vested in the Central
Government. That right was never transferred to NTC by operation of
law. It pre-supposes that “only the other rights” of the Textile Undertaking
as vested in the Central Government in terms of sub-section (1), stood
transferred to and vested in the NTC under sub-section (2).
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34. In the present case, the management of Podar Mills was taken
over by the Central Government in exercise of powers under 1983 Act
whereafter the lease in respect of the suit property expired on 21st October,
1990. On expiry of the lease term, indisputably, Podar Mills became the
protected tenant or statutory tenant within the purview of the Bombay
Rents, Hotel and Lodging House Rates Control Act, 1947 (for short
“1947 Act”). Section 5(11) of the said Act defines the term “tenant”,
as under:
(11) “tenant” means any person by whom or any whose account
rent is payable for any premises and includes,-
(a) such sub-tenants and other persons as have derived title under
a tenant before the 1st day of February 1973;
(aa) any person to whom interest in premises, has been assigned
or  transferred as permitted or deemed to be permitted, under
section 15;
(b) any person remaining after the determination of the lease, in
possession, with or without the assent of the landlord, of the title
[before the first day of February 1973;]
[(bb) such licensees as share deemed to be tenants for the purposes
of this Act by section 15A]
[(bba) the State Government, or as the case may be, the
Government allottee, referred to in sub-clause (b) of clause (1A),
deemed to be a tenant, for the purposes of this Act by section
15B;].
[(c) (i) in relation to any premises let for residence, when the
tenant dies, whether the death has occurred before or after the
commencement of the Bombay
Rents, Hotel and Lodging House
Rates Control (Amendment) Act, 1978, any member of the tenant’s
family residing with the tenant at the time of his death or, in the
absence of such member, any heir of the deceased tenant, as
may be decided in default of agreement by the Court;
(ii) in relation to any permission let for the purposes of education,
business, trade or storage, when the tenant dies, whether the death
has occurred before or after the commencement of the said Act,
any member of the tenant’s family using the premises for the
purposes of education of carrying on business, trade or storage in
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the premises, with the tenant at the time of his death, or, in the
absence of such member, any heir of the deceased tenant, as
may be decided in default of agreement by the Court.
Explanation.- the provisions of this clause for transmission of
tenancy, shall not be restricted to the death of the original tenant,
but shall apply, and shall be deemed always to have applied, even
on the death of any subsequent tenant, who becomes tenant under
these provisions on the death of the last preceding tenant.]”
In the 1999 Act the expression “tenant” has been defined in Section
7(15) as follows:
“(15) “tenant” means any person by whom or on whose account
rent is payable for any premises and includes,-
(a)
such person,-
(i)
who is a tenant, or
(ii)
who is a deemed tenant, or
(iii) who is a sub-tenant as permitted under a contract or
by the permission or consent of the landlord, or
(iv) who has derived title under a tenant, or
(v) to whom interest in premises has been assigned or
transferred as permitted,
by virtue of, or under the provisions of, any of the repealed Acts;
(b)
a person who is deemed to be a tenant under
section 25;
(c) a person to whom interest in premises has been assigned
or transferred as permitted under section 26;
(d) in relation to any premises, when the tenant dies, whether
the death occurred before or after the commencement of this
Act, any member of the tenant’s family, who,-
(i) where they are let for residence, is residing, or
(ii) where they are let for education, business, trade or
storage, is using the premises for any such purpose,
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with the tenant at the time of his death, or, in the absence of such
member, any heir of the deceased tenant, as may be decided in
the absence of agreement, by the court.
Explanation.- The provisions of this clause for transmission of
tenancy shall not be restricted to the death of the original tenant,
but shall apply even on the death of any subsequent tenant, who
becomes tenant under these provisions on the death of the last
preceding tenant.”
35. Being a protected or statutory tenant, Podar Mills could be
dispossessed from the suit premises by the Trust only on the grounds
permissible under that Act by instituting eviction proceedings before the
competent Rent Court having exclusive jurisdiction to entertain the dispute
between the landlord and tenant, who in turn would then have to record
its satisfaction about the entitlement of the landlord to recover possession
of the suit property.  The right so enjoyed by the Podar Mills Ltd. stood
transferred to and vested in the Central Government with effect from
1st April, 1994. Further, by virtue of “amended” Section 3 of the 1995
Act, by operation of law, the rights of the Textile Undertaking, in respect
of the suit property, of being a statutory or protected tenant, continued to
vest in the Central Government even after the coming into force of the
1999 Act and repeal of the 1947 Act. Resultantly, the provisions of the
1999 Act would squarely apply to the suit property in terms of Sections
2 & 3 of the
said Act. The said provisions read thus:
“2. Application. (1) This Act shall, in the first instance, apply to
premises let for the purposes of residence, education, business,
trade or storage in the areas specified in Schedule I and Schedule
II.
(2) Notwithstanding anything contained in sub-section (1), it shall
also apply to the premises or, as the case may be, houses let out in
the areas to which the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947 or the Central Provinces and Berar Letting
of Houses and Rent Control Order, 1949 issued under die Central
Provinces and Berar Regulation of Letting of Accommodation
Act, 1946 and The Hyderabad Houses (Rent, Eviction and Lease)
Control Act, 1954 were extended and applied before the date of
commencement of this Act and such premises or houses continue
to be so let on that date in such areas which are specified in
Schedule 1 to this Act, notwithstanding that the area ceases to be
of the description therein specified.
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(3) It shall also apply to the premises let for the purposes specified
in sub-section (1) in such of the cities or towns as specified in
Schedule II.
(4) Notwithstanding anything contained hereinabove, the State
Government may, by notification in the Official Gazette, direct
that –
(a) this Act shall not apply to any of the areas specified in
Schedule I or Schedule II or that it shall not apply to any one or
all purposes specified in sub-section (1);
(b) this Act shall apply to any premises let for any or all purposes
specified in sub-section (1) in the areas other than those
specified in Schedule 1 and Schedule II.
3. Exemption. (1) This Act shall not apply –
(a) to any premises belonging to the Government or a local authority
or apply as against the Government to any tenancy, licence or
other like relationship created by a grant from or a licence given
by the Government in respect of premises requisitioned or taken
on lease or on licence by the Government, including any premises
taken on behalf of the Government on the basis of tenancy or of
licence or other like relationship by, or in the name of any officer
subordinate to the Government authorised 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 more than
rupee 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
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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 India Act, 1934.
(2) The State Government may direct that all or any of the
provisions of this Act shall, subject to such conditions and terms
as it may specify, not apply-
(i) to premises used for public purposes of a charitable nature or
to any class of premises used for such purposes; (ii) to premises
held by a public trust for a religious or charitable purpose and let
at a nominal or concessional rent; (iii) to premises held by a public
trust for a religious or charitable purpose and administered by a
local authority; or (iv) to premises belonging to or vested in an
university established by any law for the time being in force.
Provided that, before issuing any direction under this sub-section,
the State Government shall ensure that the tenancy rights of the
existing tenants are not adversely affected.
(3) The expression “premises belonging to the Government or a
local authority” in subsection (1) shall, notwithstanding anything
contained in the said sub-section or in any judgment, decree or
order of a court, not include a building erected on any land held by
any person from the Government or a local authority under an
agreement, lease, licence or other grant, although having regard
to the provisions of such agreement, lease, licence or grant the
building so erected may belong or continue to belong to the
Government or the local authority, as the case may be, and such
person shall be entitled to create a tenancy in respect of such
building or a part thereof.”
(emphasis supplied)
The latter part of clause (a) of sub-section (1) of Section 3 of the
1999 Act makes it amply clear that the Act shall apply in respect of the
premises let or given on licence to Government or a local authority or
taken on behalf of the Government on such basis by, or in the name of,
such officer.
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36. As aforementioned, since the Central Government continued
to remain as the protected or statutory tenant in respect of the suit
property w.e.f. 1st April, 1994, the fact that the appellant NTC was
carrying on its activities therein would not extricate the landlord (Trust)
from initiating eviction proceedings against the real tenant, namely, the
Central Government or Union of India; and such eviction proceedings
could be maintained only before the jurisdictional Rent Court having
exclusive jurisdiction to decide any dispute between the landlord and
tenant. The present suit, however, came to be filed only against the
appellant NTC and that too before the jurisdictional civil court under the
Transfer of Property Act. It is obvious that the Trust acted on the legal
advice and instituted the present suit, despite having filed two suits
(namely, TER Suit 680/1568 of 1995 and RAD Suit 955/1997) in earlier
point of time, for possession of the suit property, in both of which Union
of India was made party-defendant. But those suits were eventually
dismissed for non-prosecution and withdrawn, respectively, during the
pendency of the subject suit, for reasons best known to the Trust.
37. To put it differently, the present suit instituted by the Trust
under the provisions of the Transfer of Property Act, which culminated
with the decree of eviction, affirmed up to this Court vide judgment
under
review, has been rendered without jurisdiction, by operation of
law. This being the position after coming into force of the Validation Act
2014 and in particular, the purport of Section 39 as inserted, the decree
so passed or undertaking given by NTC cannot be continued or enforced.
38. According to the learned counsel for the respondents, the
amended provision introduced by the Validation Act 2014 has no
application to the present case. This contention is founded on the
interpretation of the expression “leasehold rights” of the Textile
Undertaking. It is argued that this expression pre-supposes that there
must be an existing or subsisting leasehold rights. Only such right would
be governed by the amended provision. To buttress this submission,
reliance is placed on Section 4 of the 1995 Act which explicitly adverts
to different types of rights enjoyed by the Textile Undertaking.
“Leaseholds” is one such right separately noted. Since there was no
“subsisting” leasehold right enuring in favour of Podar Mills, inevitably
no such right vested in the Central Government. Whereas, the right
transferred to and vested in the Central Government under sub-section
(1) is only that of a protected or statutory tenant enjoyed by Podar Mills
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at the relevant time i.e. 1st April, 1994.  That right vested in the Central
Government is not saved in terms of sub-section (3). Resultantly, the
right of a protected or statutory tenant vested in Central Government
stood transferred to and vested in NTC in terms of sub-section (2) and
continued to remain so vested in the NTC. If so, the relief of eviction or
possession could be pursued by the Trust only against NTC. Further,
admittedly, NTC did not enjoy the status of a statutory or protected
tenant after coming into force of the 1999 Act and repeal of the 1947
Act. In that situation, the subject suit for possession against the appellant
NTC came to be justly filed before the civil court under the provisions of
the Transfer of Property Act.
39. This argument, in our opinion, is an attempt to over-simplify
the purport of Section 3(3), if not indulging in hair-splitting of the contextual
meaning of the expression “leasehold rights” therein and in Section 4(1)
or elsewhere in the 1995 Act. Section 3(1) refers to right, title and interest
of the owner of the Textile Undertaking generally. That encompasses all
the rights as are spelt out in Section 4(1) of the Act. One such right can
be leasehold rights. Concededly, the expression “leasehold rights”
mentioned in the 1995 Act must be  construed as referring to the rights
under the Transfer of Property Act, 1882 as well as under the applicable
Rent Act recognizing “tenancy rights” without exception. The
expression
“leasehold rights” has not been defined in the 1983 Act or in the 1995
Act or for that matter, in the concerned Rent Act.  That expression can
be discerned from the Transfer of Property Act, 1882. The expression
“lease” is defined in  Section 105 thereof which reads thus:
“105. Lease defined.- A lease of immoveable property is a
transfer of a right to enjoy such property, made for a certain time,
express or implied, or in perpetuity, in consideration of a price
paid or promised, or of money, a share of crops, service or any
other thing of value, to be rendered periodically or on specified
occasions to the transferor by the transferee, who accepts the
transfer on such terms.
Lessor, lessee, premium and rent defined.- the transferor is
called the lessor, the transferee is called the lessee, the price is
called the premium, and the money, share, service or other thing
to be so rendered is called the rent.”
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Chapter V of the Transfer of Property Act deals with matters
concerning Leases of Immovable Property. The rights and liabilities of a
lessor and lessee are specified in Section 108. The provision regarding
determination of a lease can be culled out from Section 111 and the
effect of holding over in the event of a lessee or under-lessee of a property
remaining in possession thereof after the determination of the lease
granted to the lessee,  is provided in Section 116, which reads thus:
“116. Effect of holding over.- if a lessee or under-lessee of
property remains in possession thereof after the determination of
the lease granted to the lessee, and the lessor or his legal
representative accepts rent from the lessee or under-lessee, or
lessor or his legal representative accepts rent from the lessee or
under-lessee, or otherwise assents to his continuing in possession,
the lease is, in the absence of an agreement to the contrary,
renewed from year to year, or from month to month, according to
the purpose for which the property is leased, as specified in section
106.
Illustrations
(a) A lets a house to B for five years. B underlets the house to C
at a monthly rent of Rs.100. The five years expire, but C continues
in possession of the house and pays the rent to A. C’s lease is
renewed from month to month.
(b) A lets a farm to B for the life of C. C dies, but B continues in
possession with A’s
assent. B’s lease is renewed from year to
year.”
40. We must quote with profit the meaning of the expression ‘lease’,
‘leasehold’, ‘leasehold interest’, ‘tenancy’, and ‘tenancy at sufferance’;
as predicated in Black’s Law Dictionary (9th Edn.). The same read as
follows:
Lease, n. (14c) 1- A contract by which a rightful possessor of
real property conveys the right to use and occupy the property in
exchange for consideration, usu.rent. – The lease can be for a
fixed period, or for a period terminable at will. [Cases: Landlord
and Tenant-20.] 2- Such a conveyance plus all covenants attached
to it. 3- The written instrument memorializing such a conveyance
and its covenants. – all termed lease agreement; lease contract.
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4- The price of real property so conveyed. 5- A contact by which
the rightful possessor of personal property conveys
the right to use that property in exchange for consideration.
[Cases: Bailment-1.]
Leasehold, n. (18c) A tenant’s possessory estate in land
or premises, the four types being the tenancy for years, the periodic
tenancy, the tenancy at will, and the tenancy at sufferance.
• Although a leasehold has some of the characteristics of real
property, it has historically been classified as a chattel real. – Also
termed leasehold estate; leasehold interest. See TENANCY. Cf.
FREEHOLD. [Cases: Landlord and Tenant-70, 113, 117.]
Leasehold interest. (18c) 1- LEASEHOLD; esp. for purposes
of eminent domain, the lessee’s interest in the lease itself, measured
by difference between the total remaining rent and the rent the
lessee would pay for similar space for the same period. [Cases:
Eminent Domain -147] 2- Lessor’s or lessee’s interest under a
lease contract.[Cases: Bailment-7] 3. WORKING INTEREST.
[Cases: Landlord and Tenant-20.]
Tenancy. (16c) 1. The possession or occupancy of land under a
lease; a leasehold interest in real estate. 2. The period of such
possession or occupancy. See ESTATE (1). [Cases: Landlord and
Tenant-20] 3. The possession of real or personal property by right
or title, esp. under a conveying instrument such as a deed or will.
Tenancy at sufferance. (18c) A tenancy arising when a person
who has been in lawful possession of property
wrongfully remains
as a holdover after his or her interest has expired. • A tenancy at
sufferance takes the form of either a tenancy at will or a periodic
tenancy.- Also termed holdover tenancy; estate at sufferance.
See HOLDING OVER (1). [Cases: Landlord and Tenant-117,
119.]
“A tenancy at sufferance arises where a tenant, having
entered upon land under a valid tenancy, holds over
without the landlord’s assent or dissent. Such a tenant
differs from a trespasser in that his original entry was
lawful, and from a tenant at will in that his tenancy exists
without the landlord’s assent. No rent, as such, is payable,
but the tenant is liable to pay compensation for his use
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and occupation of the land. The tenancy may be determined
[i.e., terminated] at any time, and may be converted into a
yearly or other periodic tenancy in the usual way, e.g., if
rent is paid and accepted with reference to a year in
circumstances where the parties intended there to be a
tenancy.” Robert E. Megarry & M.P. Thompson, A Manual
of the Law of Real Property 319 (6th ed. 1993).
 It will be useful to also advert to the expression ‘Tenant’  and
‘Holdover Tenant’  in Black’s Law Dictionary which are as follows:
Tenant, n. (14c) 1. One who holds or possesses lands or tenements
by any kind of right or title. See TENANCY. [Cases: Landlord
and Tenant-1]
Holdover tenant: A person who remains in possession of real
property after a previous tenancy (esp. one under a lease) expires,
thus giving rise to a tenancy at sufferance.- Sometimes shortened
to holdover. See tenancy at sufferance under TENANCY. [Cases:
Landlord and Tenant-119(2).]
41. Indeed, if the matter in issue is to be decided dehors the
provisions of the applicable Rent Act, then it is possible to say that the
expression “leasehold rights” would be limited to a subsisting lease.
However, in the present case, we are required to reckon the status of
the Union of India and NTC qua the suit property in the context of the
rights accrued in terms of the provision of the Rent Act of 1947 and
1999, respectively. The expression
“leasehold rights” in 1995 Act,
obviously, must receive wider meaning so as to encompass “tenancy
rights” flowing from the applicable Rent Act. For, the expression “tenancy
rights” accruing under the Rent Act is analogous to and interchangeable
with the expression “leasehold rights”. There is no reason to exclude the
expression “statutory right” so enjoyed by the owners of the Textile
Undertaking from the expression “leasehold rights” referred to in sub-
section (3), so long as it has not been so expressly excluded.
42. Considering the legislative intent for enacting the 1995 Act
and the Validation Act 2014 also, it is not possible to give a restricted
meaning to the expression “leasehold rights” occurring in sub-section
(3) of Section 3, as amended, or elsewhere in the said enactment. Thus,
the expression leasehold rights in 1995 Act must include “tenancy rights”
flowing from the provisions of the applicable rent legislation. Any other
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interpretation would be doing violence to the legislative intent and be a
pedantic approach.
43. According to the respondents, the status of Podar Mills and
resultantly, of the Union of India is that of a tenant at sufferance. We
have already adverted to the provisions of the concerned Rent Act.
From the scheme of the 1947 Act as also in the 1999 Act, it is indisputable
that after determination of the lease period, the status of Podar Mills had
become that of a protected or statutory tenant under the Rent Act. Thus,
it would continue to enjoy tenancy rights stipulated under the concerned
Rent Act. Once that status has been acquired by the Central Government
by operation of law, the action of eviction, could be only as per the
prescribed dispensation under the concerned Rent Act.
44. Our attention was invited to paragraph 9 in B. Arvind Kumar
Vs. Govt. of India and Others7, wherein the essential ingredients of
lease have been delineated as under:
“9. Section 105 of the Transfer of Property Act, 1882 defines
lease as follows:
“105. ……….
Thus, the essential ingredients of a lease are: (a) there should
be a transfer of a right to enjoy an immovable property; (b)
such transfer may be for a certain term or in perpetuity; (c)
the transfer should be in consideration of a premium or rent;
(d) the transfer should be a bilateral transaction, the transferee
accepting the terms of transfer.”
Relying on these ingredients, it was argued that the leasehold rights
of
Podar Mills had expired by efflux of time on 21st October, 1990.
Since, Podar Mills had no subsisting leasehold rights, the vesting of right,
title and interest of Podar Mills in the suit property as on 1st April, 1994
by virtue of 1995 Act was of other than leasehold rights. Whereas, Section
3 including the amended provision sub-section (3) could be invoked only
in respect of a subsisting leasehold rights acquired under the 1995 Act.
We have already observed that even though the leasehold rights of Podar
Mills had expired on 21st October, 1990, it continued to enjoy the rights
of a protected or statutory tenant in terms of the 1947 Act and ascribable
to  “leasehold rights”  referred  to in  Section 3(3)   of 1995 Act.  Therefore,
the argument of holding over or tenant at  sufferance,   will be inapplicable
7(2007) 5 SCC 745
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as the rights of a protected or statutory tenant under the 1947 Act would
be governed by that Act and such a tenant could be evicted only on the
grounds postulated under the Rent Act upon an order passed by the
jurisdictional Rent Court in that regard.
45. In the present case, admittedly, the Trust proceeded on a clear
understanding that the rights enjoyed by Podar Mills Ltd. after
determination of lease period was that of a protected or statutory tenant
within the meaning of the rent legislation (1947 Act). That right had
been transferred to and vested in the Central Government by virtue of
Section 3(1) of the 1995 Act and continues to so vest in it in terms of
Section 3(3) which had come into force w.e.f. 1st April, 1994 and deemed
always to have effect for all purposes as if it had been in force at all
material times.
46. Relying on the dictum in Shree Chamundi Mopeds Ltd. Vs.
Church of South India Trust Association CSI Cinod Secretariat,
Madras8, it was contended that Podar Mills having continued in
occupation of the suit property only by virtue of the protection of the
then applicable Rent Act, namely, the 1947 Act, even after 21st October,
1990, it had no subsisting right whatsoever. Reliance is placed on
paragraph Nos. 13 and 15 of the said decision, which read thus:
“13. We are also unable to agree with the contention of the learned
counsel for the appellant-company that the
leasehold interest of
the appellant-company in premises leased out to it is property for
the purpose of Section 22(1). It is no doubt true that leasehold
interest of the lessee in the premises leased out to him is property
which can be transferred and the said interest can also be attached
and sold by way of execution in satisfaction of a decree against a
lessee. In that sense, it can be said that the leasehold interest of a
company is its property. But the question is whether the same is
true in respect of the interest of a company which is in occupation
of the premises as a statutory tenant by virtue of the protection
conferred by the relevant rent law because in the instant case on
the date of reference to the Board the proceedings for eviction of
the appellant-company were pending and the appellant-company
was in occupation of the premises only as a statutory tenant
governed by the provisions of the Karnataka Rent Control Act. In
Gian Devi Anand v. Jeevan Kumar1 this Court has laid down
8(1992) 3 SCC 1
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that the termination of a contractual tenancy does not bring about
a change in the status and legal position of the tenant unless there
are contrary provision in the relevant Rent Act and the tenant,
notwithstanding the termination of tenancy, does enjoy an estate
or interest in the tenanted premises. It is further laid down that
this interest or estate which the tenant continues to enjoy despite
termination of the contractual tenancy creates a heritable interest
in the absence of any provision to the contrary. This Court has
also held that the legislature which by the Rent Act seeks to confer
the benefit on the tenants and to afford protection against eviction,
is perfectly competent to make appropriate provision regulating
the nature of protection and the manner and extent of enjoyment
of such tenancy rights after the termination of contractual tenancy
of the tenant including the rights and the nature of protection of
the heirs on the death of the tenant.”
“15. From these provisions, it would appear that except in cases
covered by the two provisos to sub-section (1) of Section 23,
there is a prohibition for a tenant to sublet whole or any part of the
premises let to him or to assign or transfer in any other manner
his interest therein. This prohibition is, however, subject to a
contract to the contrary. A tenant who sublets or assigns or
transfers the premises in contravention of this prohibition loses
the protection of law and can be evicted by the
landlord under
Section 21(1)(f). In the case of a statutory tenant, the relationship
is not governed by contract. The prohibition against assignment
and transfer is, therefore, absolute and the interest of a statutory
tenant can neither be assigned nor transferred. This means that
the interest of the statutory tenant in the premises in his occupation,
as governed by the Karnataka Rent Control Act is a limited interest
which enables the surviving spouse or any son or daughter or
father or mother of a deceased tenant who had been living with
the tenant in the premises as a member of the tenant’s family up
to the death of the tenant and a person continuing in possession
after the termination of the tenancy in his favour, to inherit the
interest of the tenant on his death. The said interest of the tenant
is, however, not assignable or transferable and, therefore, the
interest of a company which is continuing in occupation of the
premises as a statutory tenant by virtue of the protection conferred
by the Karnataka Rent Control Act, cannot be regarded as property
of the company for the purpose of sub-section (1) of Section 22
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of the Act and for that reason also the provisions of Section 22(1)
were not attracted to the eviction proceedings instituted by the
respondents against the appellant-company. The provisions of
Section 22(1) did not, therefore, bar the prosecution of the said
proceedings by the respondents and the order dated September
30, 1989 passed by the XII Additional Small Causes Judge,
Bangalore allowing the eviction petition cannot be held to have
been passed in contravention of the provisions of Section 22(1) of
the Act. Civil Appeal No. 2553 of 1991 also, therefore, fails and is
liable to be dismissed.”
The issue examined in this part of the reported judgment is in the
context of the provisions of the Karnataka Rent Control Act, 1961,
stipulating absolute prohibition against assignment and transfer of interest
of a statutory tenant and in particular, the purport of Section 22 of the
Sick Industrial Companies (Special Provisions) Act, 1985 regarding
suspension of legal proceedings etc. In the present case, it is not an
assignment or transfer of interest by the statutory tenant but a case of
involuntary transfer and vesting of the right, title and interest of the
statutory tenant in respect of the suit premises in the Central Government
by operation of law made by the Parliament. The purpose of retrospective
insertion of sub-section(3) of Section 3 of the 1995 Act is intended to
take away the
basis of the status acquired by the appellant-NTC qua the
suit property or the rights to be enjoyed in relation thereto.   So   long as
the amended   provisions   of the 1995  Act  or of the Validation Act 2014
are in force by operation of law, interest of Podar Mills as that of a
statutory tenant stood transferred to and vested absolutely in the Central
Government and would continue to so vest in it.  The concomitant of this
indisputable  factual  position is  that  the  Trust could and ought to seek
eviction of the Union of India from the suit property if it intends to do so,
on grounds permissible under and in the manner prescribed for in the
municipal Rent Legislation as applicable at the relevant time.
47. Reliance was then placed on the exposition in paragraph Nos.
14 to 18 in Bhoolchand and Another Vs. Kay Pee Cee Investments
and Another9. The Court noted the factual position of that case and the
submissions of the counsel in paragraphs 14 to 16; and then proceeded
to consider the same in paragraphs 17 and 18, which read as follow:-
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“17. The decision in Damadilal case  and others in the same line
related primarily to the question of heritable interest in the premises
of the legal representatives of the deceased tenant who was in
occupation as statutory tenant. Pointing out that the concept of
statutory tenancy under the English Rent Acts and under Indian
statutes like the one with which we are concerned rests on different
foundations, it was held that the statutory tenant had a heritable
interest in the premises which was not merely a personal interest
but an interest in the estate like that of a contractual tenant. On
this conclusion, the right of legal representatives of the statutory
tenant to protect the possession and prosecute the appeal against
eviction order was upheld. The main question for decision in
Damadilal case  was the heritable nature of the statutory tenancy
and it was in this context that the terms and conditions of a statutory
tenancy were held to be the same as those of the contractual
tenancy preceding it. No question arose in Damadilal case  of
the right of a statutory tenant to create a sub-tenancy after
replacement of the contractual tenancy with the statutory tenancy.
The observations made and the decision rendered in Damadilal
case cannot, therefore, be construed as holding that a statutory
tenant has a right to create a sub-tenancy during subsistence of
statutory tenancy after expiry of the contractual tenancy when
the Rent Acts give the same protection
against eviction to the
tenant except on one or more of the specified grounds. Obviously,
the protection to the statutory tenant and the heritable nature of
the statutory tenancy providing the same protection against eviction
to the tenant’s heirs does not further require conferral of the right
of inducting a sub-tenant which is not necessary for enjoyment of
the tenancy and the protection against eviction given by the Rent
Acts. There is no rationale for inferring or extending the landlord’s
written consent for sub-letting beyond the period of contractual
tenancy for which alone it is given. No separate discussion for
the later decisions in the same line is necessary because of the
same distinction in all of them.
18. One decision which requires specific mention and is obviously
nearest on facts to the present case is Mahabir Prasad Verma
v. Surinder Kaur. In that case, the contractual tenancy was for a
period of one month from April 1, 1974 to April 30, 1974 with the
landlord’s consent for sub-letting. The tenant continued to occupy
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the premises even after expiry of the contractual tenancy on April
30, 1974 and inducted therein a sub-tenant. The landlord sued for
eviction of the tenant on the ground of unlawful sub-letting of the
premises which was a ground for eviction under the relevant Rent
Act. There was some dispute about the time of induction of the
sub-tenant, it being claimed by the tenant that the induction of the
sub-tenant was in the month of April 1974 during subsistence of
the contractual tenancy while the landlord contended that the sub-
letting was after the month of April 1974. It was found as a fact
that the tenant had sublet in the month of April 1974 when the
written consent of the landlord subsisted and not subsequent to it
in May as claimed by the landlord. The crux of the question for
decision therein was stated thus: (SCC p. 269, para 24)
“The crux of the question, therefore, is whether the sub-letting
by the tenant with the written consent of landlord during the
currency of the tenancy becomes unlawful and illegal on the
determination of the tenancy and furnishes a ground for eviction
within the meaning of Section 13(2)(ii)(a) of the Act.”
On the finding that the sub-tenant had been inducted during the
period of contractual tenancy on the basis of the written consent
for sub-letting given by the landlord, the sub-letting did not become
unlawful merely because the contractual tenancy of the
tenant
came to an end and the protection against eviction to the tenant
as a statutory tenant also enured to the benefit of the lawful sub-
tenant recognised by the statute. It was held as under: (SCC p.
271, paras 26 & 27)
“Sub-letting lawfully done with the written consent of the
landlord does not become unlawful merely on the ground that
the contractual tenancy has come to an end. Sub-letting to
constitute a valid ground for eviction must be without the consent
in writing of the landlord at the time when the tenant sublets
any portion to the sub-tenant.
A sub-letting by the tenant with the consent in writing of the
landlord does not become unlawful on the expiry of the
contractual tenancy of the tenant, unless there is any fresh
sub-letting by the tenant without the written consent of the
landlord. Mere continuance in possession of a sub-tenant
lawfully inducted does not amount to any fresh or further
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sub-letting. We are, therefore, satisfied that in the instant case
the tenant has not sublet any portion without the written consent
of the landlady after the commencement of the Act…. Mere
continuance of possession by the sub-tenants lawfully inducted
by the tenant with the written consent of the landlady contained
in rent note does not afford any ground to the landlady for
eviction of the tenant on the ground of sub-letting, as the tenant
has not sublet after the commencement of the Act any
portion without the consent in writing of the landlady.”
(emphasis supplied)
Of all the decisions cited at the bar, this decision is, admittedly,
nearest on facts to the present case with the only difference that
the sub-letting in the present case was after expiry of the
contractual tenancy and after the commencement of the Act
prohibiting sub-letting without the written consent of the landlord
when it was made on April 1, 1948, while the sub-letting in
Mahabir Prasad case was during the period of contractual
tenancy when the express written consent of the landlord for sub-
letting was available. The principle for application, however, is
the same with the only difference in the result since in Mahabir
Prasad case the sub-letting was made during subsistence of the
contractual tenancy with the written consent of the landlord. It is
significant that the judgment in Mahabir Prasad case  was by
A.N. Sen, J. who also wrote the opinion in Gian Devi case relied
on by Dr
Chitale as one of the decisions in line with Damadilal
case. It is clear that A.N. Sen, J., who wrote the opinion of the
bench in Mahabir Prasad case as well as in Gian Devi case did
not construe the earlier decisions starting with Damadilal case in
the manner read by Dr Chitale. If Dr Chitale is correct in his
submission on this point, then the entire emphasis in Mahabir
Prasad case on the sub-letting being made during the period of
contractual tenancy in April 1974 and not thereafter being decisive
of the validity of sub-letting was misplaced and a futile exercise.
In our opinion this was not so and the correct premise is that
landlord’s written consent for sub-letting during the period of
contractual tenancy cannot be construed as his consent subsisting
after expiry of the contractual tenancy. The submission of learned
counsel for the appellants runs counter to the clear decision in
Mahabir Prasad case which, in our opinion, is in no way contrary
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to the decisions starting with Damadilal case, the observations
wherein are in the context of heritability of the statutory tenancy.
In fact, it is rightly not even contended by Dr Chitale that the
decision in Mahabir Prasad case  runs counter to Damadilal
case and other decisions following them. This is sufficient to
indicate that the appellants’ contention is untenable.”
We fail to understand as to how the principle expounded in the
reported decision will be of any avail to the respondents (Trust). As
already noted, it is not a case of subletting by the statutory tenant (Podar
Mills Ltd.) but instead a case of involuntary transfer and vesting of rights
and interest of the statutory or protected tenant in respect of the suit
property in the Central Government by operation of law.  In any case, if
the Trust intends to proceed against the  statutory tenant on the ground
of unlawful subletting or such other ground, it will be obliged to initiate
eviction proceedings against the Union of India before the competent
jurisdictional Rent Court on that count. In the present case, the subject
suit for eviction has been instituted against NTC only. Suffice it to observe
that the subject suit not having been filed against the Union of India, the
statutory tenant as on the date of filing of the suit; and not invoking the
jurisdiction of the Rent Court for seeking eviction of the statutory tenant,
the decree as passed by the civil court is rendered unenforceable against
the Union of India and, in any case, inexecutable due to legal fiction.
48. The respondents (Trust) may be justified in pointing out that
the judgment and decree rendered by this Court has not been nullified by
the Validation Act 2014 as such. However, the said decree is not against
the real tenant in whom the rights of the statutory tenant had vested and
continue to vest. That right could be snapped only by resorting to the
dispensation prescribed for in the rent legislation, as the concerned Rent
Act continued to apply to the suit property – consequent to vesting of
the rights and interest therein in the Central Government.
49. That takes us to the next argument of the respondents that Section
39 inserted in the 1995 Act operates prospectively and would not impact
the judgment delivered by this Court on 5th September, 2011.  Second,
the said provision applies to only subsisting leasehold rights.  Taking the
last argument first, the same needs to be rejected on the basis of the
view already taken by us that the expression “leasehold rights” or
“leasehold property” would include tenancy rights or tenanted property
in occupation of a statutory or protected tenant as per the applicable
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municipal rent legislation at the relevant time. Be that as it may, Section
39 opens with a non obstante  clause and makes it more explicit that
the provisions of the Amendment Act, 2014 shall have and shall be
deemed always to have effect for all purposes as if the provisions of the
Act have been amended by the said Act, had been in force at all material
times. It then predicates that no suit or “other proceedings” shall be
maintained or continued in any court for the enforcement of any decree
or order or direction notwithstanding any undertaking filed by the NTC
in any court. Having observed that Section 3 has been amended w.e.f.
1st April, 1994 and upon giving full effect to the amendment, it must
necessarily follow that the Central Government had acquired the status
of protected or statutory tenant qua the suit property from that date and
continue to remain so, and could be evicted only in the manner prescribed
by the concerned rent legislation. The decree passed against NTC is on
the assumption that the 1999 Act had no application to the suit property
as the right had vested in NTC – which did not enjoy the protection of
the 1999 Act.  Resultantly, it must follow that the subject suit and the
proceedings arising from or in relation thereto cannot proceed in law
and moreso because NTC is not the real tenant. Further, as the tenancy
rights in relation to the suit property continue to vest in the Central
Government by operation of law, the provisions of
the 1999 Act will be
attracted, warranting suit for eviction to be filed against the Union of
India before the jurisdictional Rent Court having exclusive jurisdiction to
decide the dispute between the landlord and tenant. We must hasten to
add that the validity of the provisions of the Validation Act 2014 is not
put in issue in the present proceedings and we do not intend to deal with
the same. All questions in that behalf are kept open.
50. Reliance was placed on State of Tamil Nadu Vs. State of
Kerala and Another10, (in paragraph Nos. 127, 148 and 149) to buttress
the argument that a judicial decision rendered by recording a finding of
fact cannot be made ineffective by enacting a validating law, thereby
fundamentally altering or changing its character retrospectively. On a
bare perusal of relevant paragraphs of this decision, the Court
unambiguously found that the judgment was given by this Court in the
context of disputed factual position between the two States in respect of
the safety of a Dam for raising the water level. The Court went on to
observe that such decision must be binding upon the parties and
enforceable according to the decision being a plain and simple decision
10(2014) 12 SCC 696
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on the fact which cannot be altered by the legislative decision. In that
case, the validity of the amended Act was put in issue. In the present
case, however, we are not called upon to examine the validity of the
provisions of the Validation Act 2014.Whether such a legislation is valid
or in excess of legislative competence can be examined in an appropriate
proceeding.  It is open to the respondents (Trust) to challenge the validity
of the Validation Act 2014, if they so desire.  For the same reason, the
decisions in Madan Mohan Pathak and Ors. Vs. Union of India (UOI)
and Ors.11 (in paragraph Nos. 9, 20, 21 and 31) and Shri Prithvi Cotton
Mills Ltd. and Ors. Vs. Broach Borough Municipality and Ors.12,
will be of no avail to the respondents.
51. In view of the above, we have no hesitation in concluding that
it is not a case for taking contempt action for non-compliance of the
direction of this Court inasmuch as the basis for issuing such direction
has become non-existent in law. Similarly, the fact that NTC has already
filed two undertakings with the approval of the Union of India, assuring
to vacate the suit property, will be of no effect and cannot be enforced
by operation of law. Further, the decree though validly passed at the
relevant time by the concerned Court, would be of no avail nor could it
be enforced against the Union of India in whom the rights of the protected
or statutory
tenant stood transferred to and vested in w.e.f 1st April,
1994. The Trust may have to take recourse to appropriate remedy under
the provisions of the applicable rent legislation to evict the real tenant,
the Central Government. Those proceedings will have to be decided on
their own merits in accordance with law, without being influenced by
any observation made in the proceedings which have culminated in the
judgment under review.
52. Considering the above, we are not inclined to continue with the
contempt proceeding or for that matter application for extension of time
filed by NTC. As a result, the dictum of this Court in T. Sudhakar
Prasad Vs. Govt. of A.P. and Ors.13,(Paragraph Nos. 9 to 22.), Firm
Ganpat Ram Rajkumar Vs. Kalu Ram and Ors.14 (Paragraph Nos. 5
and 6) and Noorali Babul Thanewala Vs. K.M.M. Shetty and Ors.15
(Paragraph 11), will be of no avail.
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13(2001) 1 SCC 516
14(1989) Supp. (2) SCC 418
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53. The respondents are seriously opposed to showing any indulgence to
NTC in the garb of Review Petition by the Union of India. For, the
review petition is hopelessly time barred as there is delay of 837 days
coupled with conduct of Union of India in according approval to NTC
for filing two successive undertakings in compliance of the direction of
this Court. The objection appears to be attractive at the first blush but it
cannot be taken forward, because of the legal fiction introduced by the
amendment Act and giving retrospective effect to the event of vesting
of the rights of the statutory tenant in respect of the suit property in the
Central Government and also rendering the decree and order including
the undertaking given by NTC unenforceable. As a result, the decision
in the case of Office of The Chief Post Master General and Ors.Vs.
Living Media India Ltd. and Ors.16 (Paragraph Nos.27 to 29), need
not detain us.
54. Considering the above, we do not deem it necessary to dilate
on other submissions urged by the parties as it would not have any bearing
on the conclusion that we have already reached.
55. To sum up, we  hold that as  per the  amended Section 3 of the
1995 Act  w.e.f. 1st April, 1994,  by operation of law  the statutory or
protected tenancy  rights of Podar Mills Ltd. in respect  of the suit
property stood  transferred to  and  vested in the Central Government
and it continues to so vest in it and that the decree against NTC including
the undertaking given by NTC has been rendered unenforceable by a
legal fiction.   As a result,  the Trust being the landlord is  obliged  to take
recourse to remedy   against  the  Central  Government  (Union of India)
to get back possession of the suit property, as per the dispensation
specified in the concerned Rent Legislation, if it so desires. It is open to
the respondents (Trust) to challenge the validity of the Validation Act
2014, if they so desire.
56. We further deem it appropriate to grant liberty to the Trust to
revive the contempt action in the event the challenge to the validity of
the provisions of the Validation Act 2014 is upheld and as a result whereof
that Act is struck down.  We say so because, it is common ground that
the challenge to that Act is pending consideration before the Bombay
High Court at the instance of a third party in Writ Petition No.526 of
2015 (Byramjee Jeejeebhoy Pvt. Ltd. & Ors. Vs. Union of India &
Ors.) If that challenge succeeds, the position as it stood before the coming
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into force of the Validation Act 2014 would get revived and then the
judgment of this Court dated September 5, 2011 in Civil Appeal No.7448
of 2011 can be taken to its logical end against the NTC.  For the same
reason, it is not necessary to continue with the application for extension
of time filed by the NTC.
57. Accordingly, we dispose of these proceedings in the following
terms:
 (i) Application for condonation of delay in filing review petition is
allowed;
(ii) Application for urging additional grounds in the review petition
is allowed;
(iii) The review petition is disposed of with liberty to the respondents
(Trust) to pursue other appropriate legal remedy as per law;
(iv) Contempt petition stands disposed of with liberty to the
respondents as aforementioned;
(v) Application for direction filed by the NTC is also disposed of
in the above terms;
(vi) All applications are disposed of in the above terms.
There shall be no order as to costs.
Ankit Gyan
Petitions and applications disposed of.