Case: Shah &amp; Co., Bombay Vs. The State Of Maharashtra &amp; Anr

The petitioner is a partnership firm, carrying on business of importers and dealers in wines and provisions and drugs and medicines, in Bombay. One Mrs. Dorethea Kumpig Leo, who was a tenant of shop No.1, on the ground floor of a building known as Sitaram Building, in C-Block Dadabhoy Naoroji Road, Fort, Bombay, was carrying on business of boot and shoe makers, in the name and style of Messrs. Lee and Co. She was also a tenant of Flat No. G-8/9, situate in the first floor of the same building and also of godown No. H/5, in the same building. The said flat, as well as the godown were occupied by Mrs. Dorethea, as tenant, in connection with and for the purposes of her shoe business3. By an assignment deed, dated August 18, 1964. Mrs. Dorethea Kumping Leo is stated to have assigned, in favour of the petitioners, the whole of her business, as a going concern together with the name and goodwill, as also the assets, furniture, fixtures, articles and stock-in-trade, belonging to the said shoe business, together with the full benefit of the tenancy and occupancy rights in the premises, viz., the shop, the flat and the godown, for a sum of Rs. 15,000. The recital in the document is that the parties have agreed that out of the purchase price of Rs. 15,000, Rs. 1,000 is the price of the furniture, fittings, articles and things and stock-in-trade, which have been already delivered over to the assignees, the petitioners. The further recital is that the assignor assigns and transfers to the assignees, all her beneficial interest and goodwill in the business carried on by her, in the name and style of M/s. Lee and Co., and as incidental to such assignment, the assignor transfers her entire interest in the tenancy of Shop No. C-1, on the ground floor, flat No. G/8/9, on the first door and the godown, N. H/5, in the premises, known as Sitaram Building, in Dadabhoy Naoroji Road, Bombay. There is also a recital to the effect that no cash consideration has been paid by the petitioners, as assignees, to their assignor, for the transfer, in their favour, of the tenancy rights, but, on the other hand, those rights are being transferred to them, as incidental, to the sale of the business, as a going concern4. The petitioners claim that, after the date of this assignment, in their favour, they have been carrying on, in the said premises, their business as importers of foreign liquor, wines, provisions, drugs and medicines. While so, on or about April 7, 1966, an Inspector of the Office of the Second Respondent, called at the shop of the petitioners and took a statement from one of the partners of the firm. According to the petitioners, a copy of the assignment deed dated August 18, 1964 was also given to him; and the various rent bills and other documents, evidencing their right to be in use and occupation of the shop, are also stated to have been given to the Inspector. Rut, on August 8, 1966, the second respondent issued a notice to the petitioners stating that the Government have made inquiries and are considering the question of requisitioning the premises, viz., shop No. 1. Ground Floor, Sitaram Building, C-Block, D.N. Road, Bombay. The petitioners were required to appear before the Officer, with the necessary materials, to show cause as to why the requisitioning of the premises should not be made. The petitioners legal advisers sent a reply, on August 12, 1966, stating that one of the chief partners is absent from Bombay, due to the illness of his father, and requested for postponing the hearing of the matter. A request was also made to the Officer, to indicate as to what was the nature of the inquiry that is stated to have been made by the Government and, on what basis the premises is sought to be requisitioned, especially as there is no vacancy in respect of the same5. The second respondent sent a further communication, on August 25, 1966, agreeing to the postponement of the case and fixing another date for appearance, in response to the original notice. On August 30, 1966, the partner, who was stated to be away from Bombay, sent a reply to the second respondent, from Chandigarh, stating that in view of his fathers illness, he is not able to appear before the Officer and requesting for further adjournment6. On the next day, viz., September 1, 1966, there was a further communication, by the lawyers of the petitioners, to the second respondent, reiterating the right of the petitioners to be in occupation of the premises, under the assignment, dated August 18, 1964. As there was no vacancy; a request was made in this letter, to the second respondent, to withdraw the notice, dated August 8, 19667. On September 19, 1966, the second respondent informed, by letter, the petitioners that, on the basis of the evidence produced before him, in respect of the premises, in question, he had come to the conclusion that this was a case of suppressed vacancy and, therefore, liable to be requisitioned, under S. 6 (4) (a) ofthe Bombay Land Requisition Act, 1948 (Bom. Act 33 of 1948) (hereinafter referred to as the Requisition Act). On September 24, 1966, the second respondent passed an order that the Government of Maharashtra is pleased to declare that the premises, in question, has become vacant after December 4, 1947 and to requisition the said premises for a public purpose, viz., for housing the Maharashtra State Government Office. It is also stated that on enquiry it has been found that the premises has become vacant in August 1964 and that the requisitioning is made under S. 6 (4) (a) of the Requisition Act8. The petitioners counsel sent, a further communication, on September 27, 1966, to the second respondent, expressing, surprise at the orders of requisition passed, in respect of the premises, in question. After detailing, the circumstances under which they are in possession, of the property, and adverting to the various correspondence referred to above, request, on behalf of the petitioners, is made to withdraw the order of requisition passed by the second respondent9. The second respondent sent a final reply, dated October 3. 1966 stating that the Government did not see any reason to revise the decision for regulsitioning the property, in question, as afready decided by it, and directing the petitioners to handover vacant and peaceful possession immediately.

Court's reasoning:
There are provisions relating to residential and other premises and hotels and lodging houses. It is, in that context, that S. 15 occurs, which prohibits a tenant to sub-let or transfer his rights, in the absence of a contract to the contrary. But certain types of assignment or transfer of tenancy rights can be permitted, under certain circumstances, by virtue of a notification issued by the State Government, under the proviso to S. 15 (1) of the Rent Act. But, if a transfer or assignment of a tenancy right does not come within the purview of assignments or transfers permitted by the notification issued by the State Government, a transfer or an assignment of a tenancy right will be illegal and unlawful, under S. 15 (1). Therefore, the fact that, in this case, the assignment claimed by the petitioner may come under Cl. (2) of the Notification, will only enable the petitioner to be in occupation of the premises under the Rent Act and the assignment of tenancy rights in his favour will not become illegal or unlawful, as it otherwise would, under S. 15 (1) of the Rent Act31. From the various averments, contained In the counter-affidavit of the respondents, and in view of some of the admissions made in the petition itself, by the petitioners, and, having regard to the object underlying clause 2 of the Notification, dated September 24, 1948, we are of the view that the assignment claimed by the petitioners must be regarded only as a colourable device, for really obtaining a transfer of tenancy rights, which is otherwise prohibited by S. 15 (1) of the Rent Act. We are further of the view that the transaction, in question, is not saved by clause 2 of the Notification. As the petitioners, in our opinion, cannot claim any rights on the basis of the assignment deed, either in respect of tenancy rights or to carry on any business there, it follows that they cannot complain that any fundamental rights, under Art. 19(1) (f) or (g), of the Constitution, have been infringed. On this ground, this petition must fail28. According to the petitioners the Act, considered both from the point of view of procedural and substantive aspects, affects the petitioners rights under Art. 19 (1) (f). From the procedural aspect, it is pointed out that the determination of jurisdictional fact of the existence of a vacancy, is left to the decision of an executive authority, and that decision is made conclusive and placed beyond the pale of judicial review under the proviso to S. 6 (4); there is no machinery provided in the Act for redress or for correcting any errors, in respect of adverse orders passed by the authority; there is no legal obligation, on the part of the authorities, to provide an opportunity to parties who may be affected by the orders of requisition, and there is no obligation on the authorities to give reasons for passing a particular order. From the substantive aspect, it is stressed that, as a fact, no vacancy of the premises has arisen and the vice lies in introducing a fiction in Explanation (a) to S. 6. In fact, it has also been pointed out that a decision may be taken by the authorities that there is a vacancy, even when there is no assignment as a fact and, such a decision is conclusive and not amenable for correction, by judicial review29. In this connection, we have also been referred to certain decisions of this Court, where it has been held that there will be an infringement of fundamental rights when the executive Government is given a free hand to decide, both legally and factually, and judicial review is excluded. But we do not think it necessary to refer to those decisions, in view of the opinion that is being expressed, by us, on the nature of the transaction, relied on by the petitioners.