Case: Carona Ltd Vs. M/S. Parvathy Swaminathan &amp; Sons

The appellant-tenant was the original defendant whereas the respondent-landlord was the original plaintiff in the suit instituted in the Court of Small Causes at Bombay. The landlord is a partnership firm registered under the Partnership Act, 1932. It owned a premises, bearing Shop No. 2, situated at ground floor of Plot No. 3, A.M. Ward, Chembur, Govind Road, Mumbai (hereinafter referred to as the suit premises). According to the landlord, the suit premises was let out to the tenant. It was alleged that tenant was not paying rent regularly. It also initiated certain proceedings against the landlord. The landlord did not want the tenant to continue to occupy the suit premises. Accordingly, by a notice dated February 23, 2001, the landlord determined the tenancy with effect from March 31, 2001. In spite of determination of tenancy, the tenant did not hand over vacant and peaceful possession of the suit premises to the landlord. The landlord, therefore, filed a suit in the Small Causes Court, Bombay on April 2, 2001. In a written statement, dated August 1, 2001, the tenant disputed the averments made and allegations levelled by the landlord and contended that it was not liable to be evicted. The Small Causes Court, Bombay, however, passed a decree of eviction against the tenant on December 16, 2002 which was confirmed by a Bench of that Court as also by the High Court. The said order is challenged in the present appeal.

Court's reasoning:
In our opinion, the ratio laid down in the above cases applies to the present case as well. Admittedly, on the date the tenancy was terminated, the tenant (Public Limited Company) was having a paid up share capital of rupees more than one crore. Under clause (b) of Section 3(1) of the Act, therefore, the provisions of the Act were not applicable to the suit-premises. It is true that a resolution was passed by the Company to reduce the paid up share capital to less than rupees one crore, but the said resolution was never approved by BIFR. But even otherwise, once it is proved that the tenancy was legally terminated and the Act would not apply to such premises, a unilateral act of tenant would not take away the accrued right in favour of the landlord. Unless compelled, a Court of Law would not interpret a provision which would frustrate the legislative intent and primary object underlying such provision. We, therefore, see no infirmity in the conclusions arrived at by the courts below.