Case: National Textile Corporation Ltd Vs. Durga Trading Co. &amp; Ors.

3. The factual matrix of the case is asThe respondent No. 1 filed a petition being Writ Petition No. 1552 of 2000 before the Bombay High Court challenging the proceedings initiated by the appellant against it (respondent No. 1) under Section 5A (for removal of movable structures/fixtures) and under Section 4(2) (b) read with Section 7(1) and (3) (for damages and eviction) of the 1971 Act, in respect of subject premises i.e. land admeasuring 2921 sq. yards with structures thereon bearing Nos.96 and 97 situated at the premises of Shri Sitaram Mills Ltd. (hereinafter referred to asfor short) at N.M. Joshi Marg, Mumbai.3.2 In the said writ petition, respondent No. 1 submitted that the subject premises belonged to the erstwhile owner, SSML. On 25th March, 1975 an agreement to sell the subject premises was entered into between respondent No. 1 and SSML and the full consideration of Rs. 25 Lakhs was paid by respondent No. 1 to SSML. On 1st April, 1975 possession of the subject property was handed over to respondent No. 1 and has since then remained with respondent No; 1.3.3 The management of the textile undertaking of SSML was taken over by the Central Government w.e.f. 18th October, 1983 under the Textile Undertakings (Taking over of Management) Act, 1983 (hereinafter referred to as the, 1983and the appellant corporation was appointed as its Custodian. Later, the right, title and interest in relation to the textile undertakings got transferred and vested in Central Government under the Textile Undertakings (Nationalization) Act, 1995 (hereinafter referred to as the, ‘1995w.e.f. 1st April, 1995.3.4 On 23rd June, 2000, the Estate Officer of the appellant Corporation passed an order under(3) of Section 5A of the 1971 Act treating the subject premises as ‘publicand directed respondent No. 1 to remove the movable structures and fixtures from the said premises. Thereafter, on 17th November, 2000 the said authority issued two show cause notices to respondent No. 1 under Sections 4(1) and 7(3) of the 1971 Act calling upon respondent No. 1 to show cause why it should not be evicted from the subject premises and why it should not be made liable to pay damages. The appellant Corporation initiated the aforesaid action against respondent No. 1 on the ground that the premises were required for bona fide use. Moreover, the appellant Corporation urged before the High Court that since conveyance deed was not executed between the erstwhile owner SSML and respondent No. 1, it was merely an agreement to sell and hence, the subject premises got vested in the Central Government under the 1995 Act.3.5 The High Court allowed the said writ petition by the impugned judgment and order dated 6th February, 2003.

Court's reasoning:
Therefore, it is clear that the property in question stood vested in the Central Government and, in turn, stood transferred and vested with National Textile Corporation under(2) of Section 3 of 1995 Act. Even if it is admitted that respondent No. 1 has acted on the agreement to sell and has paid the entire consideration, it cannot be a ground to hold that respondent No. 1 is authorized occupant within the meaning of Section 2(g) of the 1971 Act18. We are of the view that the Division Bench of the High Court failed to analyze the provisions correctly and wrongly presumed that the property in question has been sold to the Textile Undertaking prior to the commencement of 1983 Act. The Court wrongly relied on Section 53A of the Transfer of Property Act to hold that respondent No. 1 has valid defence available under the said provision and hence erred in holding that respondent No. 1 is an authorized occupant within the meaning of Section 2(g) of the 1971 Act.