Case: Suhas H Pophale Vs. Oriental Ins.Co.Ltd

3. One Mr. Eric Voller was a tenant of the Indian Mercantile Insurance Company Ltd. (hereinafter referred to as the erstwhile Insurance Co.), the predecessor in title of the first respondent in respect of the premises being Flat No.3, Second Floor, Indian Mercantile Mansion (formerly known as Waterloo Mansion), Wodehouse Road, Opposite Regal Cinema, Colaba, Mumbai. This Mr. Voller executed a leave and licence agreement in respect of these premises on 20.12.1972 in favour of the appellant initially for a period of two years, and put him in exclusive possession thereof. Mr. Voller, thereafter migrated to Canada with his family. The appellant is a practicing physician. The erstwhile insurance company did not object to the appellant coming into exclusive possession of the said premises. In fact, it is the case of the appellant that when Mr. Voller sought the transfer of the tenancy to the appellant, the General Manager of the said insurance company, by his reply dated 16.1.1973, accepted the appellant as the tenant, though for residential purposes only. The said erstwhile insurance company, thereafter, started accepting the rent directly from the appellant. It is also the case of the appellant that on 14.3.1973, he wrote to the said General Manager seeking a permission for a change of user i.e. to use the premises for his clinic. It is also his case that on 18.4.1973, the General Manager wrote back to him that the erstwhile insurance company had no objection to the change of user, provided the Municipal Corporation of Greater Mumbai gave no objection.4. The erstwhile insurance company subsequently merged on 1.1.1974 into the first respondent company which is a Government Company. The management of the erstwhile insurance company had however been taken over by the Central Government with effect from 13.5.1971, pending its nationalisation and that of other private insurance companies. The first respondent, thereafter, addressed a notice dated 12.7.1980 to Mr. E. Voller terminating his tenancy with respect to the said premises, and then filed a suit for eviction against Mr. E. Voller and the appellant being R.A.E. Suit No.1176/3742 of 1981 in the Court of Small Causes at Mumbai, under the provisions of the then applicable Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 (‘Bombay Rentfor short). Initially the suit came to be dismissed for default, but an application was made under Order 9 Rule 9 ofCode of Civil Procedureto set aside the said order. The application was allowed, and the suit remained pending.5. The appellant then sent a letter dated 22.11.1984 to the first respondent requesting them to regularize his tenancy as a statutory tenant. The first respondent, however, served the appellant notices under Section 4 and 7 of the Public Premises Act, to show cause as to why he should not be evicted from the concerned premises, and to pay damages as specified therein for unauthorised occupation as claimed. The first respondent followed it by preferring Case No.10 and 10A of 1992 before the respondent No. 2 Estate Officer under the Public Premises Act, to evict Mr. E. Voller and the appellant, and also to recover the damages. After initiating these proceedings, the first respondent withdrew on 22.2.1994 the suit filed in the Court of Small Causes. It is, however, relevant to note that in paragraph No. 4 of their case before the Estate Officer, the first respondent specifically accepted that Mr. E. Voller had sublet or given on leave and licence basis or otherwise transferred his interest in the said flat to the appellant in or about 1972, though without any authority from the respondent No. 1. The first respondent alleged that the appellant had carried out structural changes. The appellant denied the allegation. He claimed that he had effected some essential minor repairs for maintenance of the premises since the first respondent was neglecting to attend the same. The appellant filed a reply pointing out that he had been accepted as a tenant by the predecessor of the first respondent by their earlier referred letter dated 16.1.1973. The first respondent, however, responded on 5.1.1993 stating that they did not have any record of the erstwhile insurance company prior to 1975. The second respondent thereafter passed an order on 28.5.1993 directing eviction of Mr. E. Voller and the appellant, and also for recovery of damages at the rate of Rs.6750 per month from 1.9.1980.6. Being aggrieved by the said order, the appellant filed an appeal before the City Civil Court at Mumbai under Section 9 of the Public Premises Act, which appeal was numbered as Misc. Appeal No.79/93. The City Civil Court set aside the order of damages, and remanded the matter to the second respondent to reconsider that aspect, but upheld the order of eviction by its judgment and order dated 17.1.1996. The appellant thereupon filed a writ petition bearing No.2473/1996 before the High Court on 15.4.1996 to challenge that part of the appellate order which upheld the order of eviction. The High Court dismissed the Writ Petition, by the impugned judgment and order dated 7.6.2010, with costs.7. The principal contention raised by the appellant right from the stage of the proceedings before the respondent No. 2, and even before the High Court, was that his occupation of the concerned premises was protected under the newly added S 15A of the Bombay Rent Act with effect from 1.2.1973, i.e. prior to the first respondent acquiring the title over the property from 1.1.1974. Therefore, he could not be evicted by invoking the provisions of Public Premises Act, and by treating him as an unauthorised occupant under that act. The impugned order of the High Court rejected the said submission holding that the provisions of the Bombay Rent Act were not applicable to the premises concerned, and the said premises were covered under the Public Premises Act. The High Court principally relied upon the judgment of a Constitution Bench of this Court inLtd. Vs. Punjab National Bank reported in 1990 (4) SCC 406. As per the view taken by the High Court, this judgment rejects the contention that the provisions of the Public Premises Act cannot be applied to the premises which fall within the ambit of a State Rent Control Act. The High Court held that the Public Premises Act became applicable to the concerned premises from 13.5.1971 itself i.e. the appointed date underthe General Insurance (Emergency Provisions) Act, 1971wherefrom the management of the erstwhile insurance company was taken over by the Central Government, and not from the date of merger i.e. 1.1.1974. It is this judgment which is under challenge in the present appeal.

Court's reasoning:
50. We have not for a moment taken any position different from the propositions in AshokaMarketing. We are infact in agreement therewith, and we are not accepting the submission of Mr. Nariman, that only contractual tenancies were sought to be covered under that judgment, and not statutory tenancies. Tenancies of both kinds will be covered by that judgment, and they will be covered under the Public Premises Act for the subjects specified therein. The only issue is with effect from which date. That aspect was not canvassed at all before the Constitution Bench, and that is the only aspect which is being clarified by this judgment. We are only clarifying that the application of the Public Premises Act will be only from 16.9.1958, or from such later date when concerned premises become Public Premises on the concerned landlord becoming a Government Company or Public Corporation. When the law laid down by the different Benches of this Court including by the Constitution Benches on retrospectivity is so clear, and so are the provisions of the Public Premises Act, there is no occasion for this Court to take any other view. When this judgment is only clarifying and advancing the proposition laid down in AshokaMarketing, there is no reason for us to accept the objections raised by Mr. Raval, that the issues raised in this matter should not be decided by this bench but ought to be referred to a larger bench.51. In this context we may note that since the issue of retrospective application of the Public Premises Act, to tenancies entered into before 16.9.1958, or before the property in question becoming a public premises, was neither canvassed nor considered by the bench in AshokaMarketing (supra), the decision does not, in any way, prevent this Bench from clarifying the law regarding the same. This follows from the judgment of the Supreme Court in State of Haryana Vs. Ranbir @ Rana reported in (2006) 5 SCC 167 wherein it was held that a decision, it is well-settled, is an authority for what it decides and not what can logically be deduced therefrom. The following observations of this court from paragraph 39 of Commissioner of Income Tax Vs. M/s. Sun Engineering Works (P.) Ltd. reported in AIR1993 SC 43 are alsojudgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings.(emphasisis clear from a reading of the very first paragraph ofthat the question before it was‘whether the provisions of the Public Premises Act would override the provisions of the Rent Control Act in relation to premises which fall within the ambit of both theThe Court answered this in the affirmative, and we respectfully agree with the same. However, AshokaMarketing (supra) can not be said to be an authority on the retrospective application of the Public Premises Act, or where the premises fall within the ambit of only one act, as that issue was not before thethe instant case, we are concerned with one Act passed by the Parliament, and another by a State Legislature. That apart, in his submission, the Public Premises Act must firstly apply to the concerned premises, and in his submission the concerned premises did not fall within the ambit of that act. That being so, in any case, the rights of the tenants who were protected under the State Act prior to passing of this Act, could not be said to have been extinguished by virtue of coming into force of the Public Premisesis material to note that it was not a case like the present one, where the occupant has claimed protection under the State Rent Control Law available to him prior to the Public Premises Act becoming applicable.In the present matter we are concerned with the question, whether the respondents could resort to the provisions of the Public Premises Act at a time when the merger of the erstwhile insurance company into the first respondent was not complete. The question is whether taking over of the management of the erstwhile company can confer upon the respondent No. 1 the authority to claim that the premises belong to it to initiate eviction proceedings under the Public Premises Act, to the detriment of an occupant who is claiming protection under a welfare enactment passed by the State Legislature. At this juncture we may profitably refer to the judgment of this Court concerning another welfare enactment in RashtriyaMill Mazdoor Sangh, Nagpur Vs. Model Mills, Nagpur and Anr. reported in AIR 1984 SC 1813 . The issue before the Court was whether upon the appointment of an authorised controller under Section 18A ofthe Industries (Development and Regulation) Act, 1951(IDR Act short) in respect of an industrial undertaking, when it is run by him under the authority of a Department of the Central Government, the employees of the undertaking would get excluded from the application ofthe Payment of Bonus Act,in view of the provision contained in Section 32(iv) of the Bonus Act. The court made a distinction between the concept of taking over of management and taking over of ownership. Inasmuch as the taking over of the management did not result into the Central Government becoming the owner of the textile mills, the right of the workmen to receive bonus was notas far as the erstwhile Insurance Company in the present case is concerned, as an initial step, its management was taken over by the Central Government w.e.f. 13.5.1971, and it was entrusted with the custodian appointed by the Central Government. It would definitely entail a right in the custodian to take necessary steps to safeguard the property of the erstwhile insurance company. But it was a transitory arrangement. The properties of the erstwhile insurance companies did not belong to the Government Companies or the Government at that stage. The Public Premises Act, undoubtedly provides a speedy remedy to recover the premises from the unauthorised occupants. At the same time, we have also to note that in the instant case the occupant is claiming a substantive right under a welfare provision of the State Rent Control Act, which gave him a protected status in view of the amendment to that Act. The question is whether this authority of management bestowed on the Government Company can take in its sweep the right to proceed against such protected tenants under the Public Premises Act, by contending that the premises belonged to the Government Company at that stage itself, and that the State Rent Control Act no longer protected them. Considering that the Rent Control Act is a welfare enactment, and a further protective provision has been made therein, can it be permitted to be rendered otiose and made inapplicable to premises specifically sought to be covered thereunder, and defeated by resorting to the provisions of the Public Premises Act? In the present case, it must also be noted that the appellant is seeking a protection under Section 15A of the Bombay Rent Act, which has aclause. The respondent No. 1 is undoubtedly not without a remedy, and it can proceed to evict an unauthorised occupant under the Rent Control Act, if an occasion arises. It can certainly resort thereto until the managerial right fructifies into a right of ownership. However by enforcing a speedier remedy, a welfare provision cannot be rendered nugatory. The provisions of the two enactments will have to be read harmoniously to permit the operation andof both of them to the extent it can be done. Therefore, the term ‘belongingas occurring in the definition of Public Premises in Section 2(e) will have to be interpreted meaningfully to imply only the premises owned by or taken on lease by the Government Company at the relevant time. In the facts of this case what we find is that the appellant had the status of a deemed tenant under the Bombay Rent Act, 1947 prior to the concerned premises ‘belonging to a Governmentand becoming public premises. If at all he had to be evicted, it was necessary to follow the due process of law which would mean the process as available under the Bombay Rent Act or its successor Maharashtra Rent Control Act, 1999, and not the one which is provided under the provisions of the Public Premiseshas been laid down by this Court time and again that if there are rights created in favour of any person, whether they are property rights or rights arising from a transaction in the nature of a contract, and particularly if they are protected under a statute, and if they are to be taken away by any legislation, that legislation will have to say so specifically by giving it a retrospective effect. This is because prima facie every legislation is prospective (see para 7 of the Constitution Bench judgment in JanardanReddy Vs. The State reported in AIR 1951 SC 124). In the instant case, the appellant was undoubtedly protected as a ‘deemedunder Section 15A of the Bombay Rent Act, prior to the merger of the erstwhile insurance company with a Government Company, and he could be removed only by following the procedure available under the Bombay Rent Act. A ‘deemedunder the Bombay Rent Act, continued to be protected under the succeeding Act, in view of the definition of aunder Section 7(15)(a)(ii) ofthe Maharashtra Rent Control Act,Thus, as far as the tenants of the premises which are not covered under the Public Premises Act are concerned, those tenants who were deemed tenants under the Bombay Rent Act continued to have their protection underthe Maharashtra Rent Control Act,Should the coverage of their premises under the Public Premises Act make a difference to the tenants or occupants of such premises, and if so, from which date?32. It has been laid down by this Court through a number of judgments rendered over the years, that a legislation is not be given a retrospective effect unless specifically provided for, and not beyond the period that is provided therein. Thus, a Constitution Bench held in GarkiapatiVeeraya Vs. N. Subbiah Choudhry reported in AIR 1957 SC 540 that in the absence of anything in the enactment to show that it is to be retrospective, it cannot be so constructed, as to have the effect of altering the law applicable to a claim in litigation at the time when the act was passed. In that matter, the Court was concerned with the issue as to whether theright to file an appeal continued to be available to him for filing an appeal to the Andhra Pradesh High Court after it was created from the erstwhile Madras High Court. The Constitution Bench held that the right very much survived, and the vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.Having noted the aforesaid observations, it is very clear that in the facts of the present case, thestatus as a deemed tenant was accepted under the state enactment, and therefore he could not be said to be in. His right granted by the state enactment cannot be destroyed by giving any retrospective application to the provisions of Public Premises Act, since there is no such express provision in the statute, nor is it warranted by any implication. In fact his premises would not come within the ambit of the Public Premises Act, until they belonged to the respondent No. 1, i.e until 1.1.1974. The corollary is that if the respondent No. 1 wanted to evict the appellant, the remedy was to resort to the procedure available under the Bombay Rent Act or its successor Maharashtra Rent Control Act, by approaching the forum thereunder, and not by resorting to the provisions of the Public Premises Act.In the context of the present controversy, we must refer to one more aspect. As we have noted earlier in paragraph 63 of AshokaMarketing, the Constitution Bench has referred to the objects and reasons behind the Public Premises Act wherein it is stated that it has become impossible for the Government to take expeditious action even in ‘flagrant cases of unauthorisedof public premises. The Court has thereafter observed in that very paragraph that the Public Premises Act is enacted to deal with mischief of ‘rampant unauthorisedof public premises.41. It is relevant to note that there has been a criticism of the use of the powers under the Public Premises Act, and the manner in which they are used in an arbitrary way to evict the genuine tenants from the public premises causing serious hardships to them. The Central Government itself has therefore, issued the guidelines to prevent such arbitrary use of these powers.Thus as can be seen from these guidelines, it is emphasized in Clause 2(i) thereof, that the Act was meant to evict (a) totally unauthorised occupants of the public premises or subletees, or (b) employees who have ceased to be in their service, and were ineligible to occupy the premises. In Clause 2(ii), it is emphasized that the provisions should not be resorted to (a) either with a commercial motive, or (b) to secure vacant possession of the premises in order to accommodate their own employees, where the premises were in occupation of the original tenants to whom the premises were let out (i) either by the public authorities, or (ii) by persons from whom the premises were acquired, indicating thereby the predecessors of the public authorities. Clause 2 (iii) of these guidelines is very important. It states on the one hand that it will be open for the public authority to secure periodic revision of rent in terms of the provision of the Rent Control Act in each state, and to move under genuine grounds under the Rent control Act for resuming possession. This Clause on the other hand states that the public authorities would have rights similar to private landlords under the Rent Control Act in dealing with genuine legal tenants. This clause in a way indicates that for resuming possession in certain situations, where the tenants are protected under the State Rent Control Act prior to the Public Premises Act becoming applicable, the public authorities will have to move under the Rent Control Acts on the grounds which are available to the private landlords. Clause 2(iv) seeks to prevent imputations or abuse of discretionary powers in this behalf by stating that there should be no room for allegation that evictions were selectively resorted for the purpose of securing an unwarranted increase in rent or change in tenancy to benefit particular individuals or institutions. It, therefore, states that the release of premises or change of tenancy should be decided at the level of Board of Directors of Public Sector Undertakings. Clause 2(v) goes further ahead and instructs all public undertakings that they should review all pending cases before the Estate Officer or Courts with reference to these guidelines, and withdraw the proceedings against genuine tenants on grounds otherwise than as provided under the guidelines.43. The instructions contained in this Resolution are undoubtedly guidelines, and are advisory in character and do not confer any rights on the tenants as held in para 23 of New Insurance Assurance Company Vs. Nusli Neville Wadia reported in 2008 (3) SCC 279. At the same time, the intention behind the guidelines cannot be ignored by the Public Undertakings which are expected to follow the same. When it comes to the interpretation of the provisions of the statute, the guidelines have been referred herein for the limited purpose of indicating the intention in making the statutory provision, since the guidelines are issued to effectuate the statutory provision. The guidelines do throw some light on the intention behind the statute. The guidelines are issued with good intention to stop arbitrary use of the powers under the Public Premises Act. The powers are given to act for specified reasons, and are expected to be used only in justified circumstances and not otherwise.The overall consequence44. In(supra), this Court was concerned with the premises of two Nationalised Banks and the Life Insurance Corporation. As far as Life Insurance Corporation is concerned, the life insurance business was nationalised underthe Life Insurance Corporation Act,Therefore, as far as the premises of LIC are concerned, they will come under the ambit of the Public Premises Act from 16.9.1958, i.e the date from which the Act is brought into force. As far as Nationalised Banks are concerned, their nationalization is governed byThe Banking Companies (Acquisition and Transfer of Undertakings) Act,and therefore, the application of Public Premises Act to the premises of the Nationalised Banks will be from the particular date in the year 1970 or thereafter. For any premises to become public premises, the relevant date will be 16.9.1958 or whichever is the later date on which the concerned premises become the public premises as belonging to or taken on lease by LIC or the Nationalised Banks or the concerned General Insurance Companies like the first respondent. All those persons falling within the definition of a tenant occupying the premises prior thereto will not come under the ambit of the Public Premises Act and cannot therefore, be said to be persons in. Whatever rights such prior tenants, members of their families or heirs of such tenants or deemed tenants or all of those who fall within the definition of a tenant under the Bombay Rent Act have, are continued underthe Maharashtra Rent Control Act,If possession of their premises is required, that will have to be resorted to by taking steps under the Bombay Rent Act or Maharashtra Rent Control Act, 1999. If person concerned has come in occupation subsequent to such date, then of course the Public Premises Act, 1971 will apply.45. It is true that Section 15 of the Public Premises Act creates a bar of jurisdiction to entertain suits or proceedings in respect of eviction of any person in an unauthorized occupation. However, as far as the relationship between the respondent No. 1, the other General Insurance Companies, LIC, Nationalised Banks and such other Government Companies or Corporations, on the one hand and their occupants/licencees/tenants on the other hand is concerned, such persons who are in occupation prior to the premises belonging to or taken on lease by such entities, will continue to be governed by the State Rent Control Act for all purposes. The Public Premises Act will apply only to those who come in such occupation after such date. Thus, there is no occasion to have a dual procedure which is ruled out in paragraph 66 of AshokaMarketing. We must remember that the occupants of these properties were earlier tenants of the erstwhile Insurance Companies which were the private landlords. They have not chosen to be the tenants of the Government Companies. Their status as occupants of the Public Insurance Companies has been thrust upon them by the Public Premises Act.46. This Court has noted in Banatwalaand Co. Vs. LIC reported in 2011 (13) SCC 446  that the Public Premises Act, 1971 is concerned with eviction of unauthorized occupants and recovery of arrears of rent or damages for such unauthorised occupation, and incidental matters specified under the act. As far as the Maharashtra Rent Control Act is concerned, this Court noted in paragraph 25 of that judgment that as per the preamble of the said Act, it is an Act relating to five subjects, namely (i) control of rent, (ii) repairs of certain premises, (iii) eviction, (iv) encouraging the construction of new houses by assuring fair return of investment by the landlord, and (v) matters connected with the purposes mentioned above.In that matter, the Court was concerned with the issue of fixation of standard rent and restoration and maintenance of essential supplies and services by the landlord. It was held that these two subjects were not covered under the Public Premises Act, and infact were covered under the Maharashtra Rent Controlis, however, material to note that in that case the premises were owned by LIC from 19.7.1958, i.e. prior to the Delhi Rent Control Act becoming applicable from 9.2.1959. Besides, the issue of protection under a welfare legislation being available to the tenant prior to the premises becoming public premises, and the issue of retrospectivity was not under consideration before the Court. The observations of the Court in that matter will have to be understood in that context.48. As far as the eviction of unauthorised occupants from public premises is concerned, undoubtedly it is covered under the Public Premises Act, but it is so covered from 16.9.1958, or from the later date when the concerned premises become public premises by virtue of the concerned premises vesting into a Government company or a corporation like LIC or the Nationalised Banks or the General Insurance Companies like the respondent no.1. Thus there are two categories of occupants of these public corporations who get excluded from the coverage of the Act itself. Firstly, those who are in occupation since prior to 16.9.1958, i.e. prior to the Act becoming applicable, are clearly outside the coverage of the Act. Secondly, those who come in occupation, thereafter, but prior to the date of the concerned premises belonging to a Government Corporation or a Company, and are covered under a protective provision of the State Rent Act, like the appellant herein, also get excluded. Until such date, the Bombay Rent Act and its successor Maharashtra Rent Control Act will continue to govern the relationship between the occupants of such premises on the one hand, and such government companies and corporations on the other. Hence, with respect to such occupants it will not be open to such companies or corporations to issue notices, and to proceed against such occupants under the Public Premises Act, and such proceedings will be void and illegal. Similarly, it will be open for such occupants of these premises to seek declaration of their status, and other rights such as transmission of the tenancy to the legal heirs etc. under the Bombay Rent Act or its successor Maharashtra Rent Control Act, and also to seek protective reliefs in the nature of injunctions against unjustified actions or orders of eviction if so passed, by approaching the forum provided under the State Act which alone will have the jurisdiction to entertain suchis however, material to note is that this paragraph also permits discretion to be exercised when there is no declared position in law. The Bombay Rent Act exempted from its application only the premises belonging to the government or a local authority. The premises belonging to the Government Companies or Statutory Corporations were however covered under the Bombay Rent Act. This position was altered from 16.9.1958 when the Public Premises (Eviction of Unauthorised Occupation) Act, 1958 came in force which applied thereafter to the Government Companies and Statutory Corporations, and that position has been reiterated under the Public Premises Act of 1971 which replaced the 1958 Act. Under these Acts of 1958 and 1971, the Premises belonging to the Government Companies or Statutory Corporations are declared to be Public Premises. Thus, the Parliament took away these premises from the coverage of the Bombay Rent Act under Article 254(1) of the Constitution of India. This was, however, in the matter of the subjects covered under the Public Premises Act, viz. eviction of unauthorised occupants and recovery of arrears of rent etc. as stated above. Thereafter, if the State Legislature wanted to cover these subjects viz. a viz. the premises of the Government Companies and Public Corporations underthe Maharashtra Rent Control Act,it had to specifically state that notwithstanding anything in the Public Premises Act of 1971, the Government Companies and Public Corporations would be covered underthe Maharashtra Rent Control Act,If that was so done, and if the President was to give assent to such a legislation, then the Government Companies and Public Corporation would have continued to be covered underthe Maharashtra Rent Control Act,in view of the provision of Article 254(2). That has not happened. Thus, the Government Companies and Public Corporations are taken out of the coverage of the Bombay Rent Act, and they are covered under Public Premises Act, 1971, though from the date specified therein i.e. 16.9.1958. After that date, the Government Companies and Public Corporations will be entitled to claim the application of the Public Premises Act, 1971 (and not of the Bombay Rent Act or its successor Maharashtra Rent Control Act, 1999), but from the date on which premises belong to these companies or corporations and with respect to the subjects specified under the Public Premises Act. In that also the public companies and corporations are expected to follow the earlier mentioned guidelines.