SHANGRILA FOOD PRODUCTS LTD. AND"ANR.

LIFE INSURANCE CORPORATION OF INDIA AND ANR.

JULY 9, 1996

[MADAN MOHAN PUNCHHI AND SUJATJ\ V. MANOHAR, JJ.j

Public Premises (Eviction of Unautlz01ized Occupants) Act, 1971-Section 7-Damages-Wlten payable.

Constitution of India-A1ticles 226 and 227-Extraordinmy Jwisdic- C tion-Scope of-Remand-Equity-Cowt can set aside any unfair advantage gained by a pa1ty before granting relief to thepmty-Pilblic Premises (Eviction of Unauth01ized Occupants) Act, 1971.

The appellant company was a sub-tenant of the Respondent Corporation. The Respondent Corporation initiated legal proceedings for D eviction of the appellant under the provisions of the public Premises (Eviction of Unauthorized Occupants) Act, 1971. The Estate Otlicer held that both the appellant Company as well as the original tenant were unauthorized occupants and passed an order of eviction in favour of the Respondent. The Estate Otlicer also awarded damages to the Respondent. E

Under Section 7 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971, the Estate Officer can rec1uire an authorized tenant to pay rent within such time and in such instalments as may be specified in his order. Likewise, an unauthorized occupant may be required to pay damages within such time and in such instalments as may be specified in F the order.

On appeal to the Civil Court, the order of eviclion was u1>held but the award of damages was <(Uashed. The appellant challenged the order of eviction by way of a writ petition. However, the Respondent did not G cha!lenge by way of a writ petition or otherwise, the order of the Lower Court quashing damages.

The Single Judge set aside the order of eviction on the ground that the Estate Officer had not dealt with the matter satisfactorily and expressed his view that he wanted to remand the matter back to the Estate H 279

A Officer for fresh decision. On this, the Respondent argued that it should be allowed to reagitate its claim for damages in case of remand. The appellant opposed the plea on the ground that as the Respondent had not tiled any petition against the order quashing damage, a right had occurred in favour of the appellant under the procedural law and it could not be

B deprived. of the advantage so gained. The Single Judge while remanding the matter, held that in the event it was proved that the appellants were unauthorized occupants, the Respondent "ill have opportunity to press its claim for damages. The Letters Patent Appeal filed by the Appellant was dismissed summarily.

C Dismissing the appeal against the order of the High Court, this Court

HELD : 1. The High Court committed no wrong in putting the negated claim of damages on the scale of justice as a balancer, before granting relief, in setting aside the orders of eviction and effecting a D remand, for fresh disposal in accordance with law. [286-B]

2. The High Court in exercise of its jurisdiction under Article 226 of the Constitution can take cognizance of the entire facts and circumstances of the case and pass appropriate orders to give the parties complete and E substantial justice. This jurisdiction of' the High Court, being extraordinary, is normally exercisable keeping in mind the principles of equity. One of the ends of the equity is to promote honesty and fair play. If' there be any unfair advantage gained by a party priorly, before invoking the jurisdiction of the High Court, the court can take into account the unfair advantage gained before granting relief. [285-B] F

3. Section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 confers power on the Estate Officer to require payment of rent or damages in respect of public premises. If a person is an authorised occupant, he can be required to pay the rent within such time G and in such instaln1ents as may be specified in the order. Likewise, an unauthorised occupant of any public premises may be rec1uired by the Estate Officer to pay damages within such time and in such instalments as may be stipulated in the order. It is thus plain and clear that unless the occupant is first adjudged as an unauthorised occupant, his liability to pay da1nages does not arise. The ciuestion of claim to damages and their H ascertainment would only arise in the event of the Respondent, succeeding

SHANGRILAFOOD PRDTS.LTD. v. L.I.C. [PUNCHHl, J.] 281

to prove that the appellant Company was an unlawful sub-tenant and A therefore, in unauthorised occupation of public premises. If the findings were to go in favour of the appellant Company and it is proved to be lawful sub-tenant and hence not an unauthorised occupant, the direction to adjudge the claim for damages would be rendered sterile and otiose.

Therefore, there is no fault in the High Court adopting such course in order to _balance the equities between the contestants especially when it otherwise had power of superintendence under Article 227 of the Constitution in addition. [284-C-E, 285-D-E]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9093 of 1996.

From the .Judgment and Order dated 14.1.94 of the Bombay High Court in L.P.A. No. 1 of 1994.

Soli J. Sorabjee, M.L. Verma, H. Devrajan, Ms. D. Kamdin and

Praveen Kumar for the Appellants.

G.L. Sanghi, Ajay Singh, S. Markandeya and Ms. Chitra Markandcya for the Respondents.

The Judgment of the Court was delivered by

PUNCHHI, J. Leave granted.

This appeal is virtually against the judgment and order of a learned Single Judge of the Bombay High Court dated 9.11.1993 passed in Writ Petition No. 2949 of 1993 against which Letters Patent Appeal No. 1 of 1994 was dismissed summarily by a Division Bench of that Court on F 14.1.1994.

The learned Single Judge was spared the ordeal of recounting the checkered history of the litigation between the parties because of the reasonable stand taken by both the sides. We assume that we too have been spared likewise and the parties continue to be reasonable. It so happens G that there is a building known as Great Social building situate at 60, Sir P .M. Road, Fort, Bombay, which once belonged to the Great Social Life Insurance Co. Ltd. It appears that M/s. Interseas Corporation had taken on rent the fourth floor of the said building sometime in the year 1944. A portion carved out therefrom by a wooden partition was apparently sublet H

A by Mis. lnterseas Corporation to the appellant M/s. Shangrila Food

Products Ltd. in July 1951. It also appears that M/s. S.M. Enterprises also became sub-lessees of M/s. lnterseas Corporation of another portion of the property.

On the setting up of the Life Insurance Corporation of India under B the Life Insurance Corporation of India Act, 1956 all the assets and liabilities of the said Great Social Life Insurance Company were taken over by the Life Insurance Corporation of India. It is appellants' case that in consequence thereof, M/s. Interseas Corporation became the tenant of the Life Insurance Corporation and the appellant company became the sub- C tenant by operation of law in relation to the premises in question. Further it is the case of the appellant company that it has become a deemed tenant under the respondent Life Insurance Corporation because of the Bombay Rents Hotel and Lodging Houses Rates Control (Amendment) Ordinance of 1959.

D Legal proceedings were initiated by the Life Insurance Corporation of India, the respondent herein, against the appellant Company and one of its shareholders-cum-Directors, for possession of the premises in question under the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (for short 'fhe Act'). The Estate Officer after con- E ducting the requisite inquiry as contemplated under the Act passed an order of e\oction of the original tenants as also the appellants- Company holding it as unauthorised occupant being unlawful subtenant of the original tenant. The Estate Officer also passed an order for damages to the tune of about Rs. 12 lakhs.

F Being aggrieved against the said order of e\iction as well as damages, appeals were preferred by the appellant Company as well as the original tenant before the Principal Bench, City Ci\11 Court, Bombay. The appellate Court upheld the order of e\iction but reversed the order relating to damages, coming to the conclusion that there was no e\idence in support G of the order. The said order of eviction was thus challenged by the appellant Company before the High Court of Bombay. But the respondent- Life Insurance Corporation of India, did not choose to file any writ petition challenging those orders whereby its claim for damages has been negatived by the appellate Court.

H The learned Single Judge of the High Court examined the files

SHANGRILAFOOD PRDTS. LTD. v. L.l.C. [PUNCHHl, J.] 283

relating to the cases and entertained the belief that the Estate Officer had A not dealt with the matter satisfactorily inasmuch as material from the earlier litigation, which had been fought prior lo the instant proceedings, had per se been inducted into the files and there was hardly any effective or clear discussion on the issue whether the appellant Company was an unlawful subtenant and therefore in unauthorised occupation. On the basis thereof, the learned Single Judge expressed his views that the interest of justice required that the matter be remanded to the Estate Officer for fresh decision. It is at that juncture that the learned counsel appearing for the insurance Corporation took exception to such course and yet at the same time bargained that if remand be considered necessary, it should open an opportunity to the Life Insurance Corporation to raise its claim for damages in accordance with law. This plea was objected to by learned counsel appearing for the appellants on the procedural plea that when the appellate court had quashed the order of damages and there had not been

any petition preferred by the Life Insurance Corporation before the High Court, the matter could not be raked up; all the more when it concerned D the original tenant as \vell, who had been deleted from the array of parties before the learned Single Judge by consent. In the result the learned Single Judge held as follows :

" ..... .!am of the clear view that if al all the matter is to be remanded to offer opportunity to the petitioners to prove their case of lawfui E sub.tenancy, in the facts and circun1stances of the case, the interest of justice also require that the Corporation as a public body should get an opportunity to press its claim for the damages, in the event of it succeeding to prove that the petitioners were unlawful subtenants and therefore in unautho1ised occlljJation of public pren1ises. 11 p (emphasis ours)

As a result, both the orders of the Estate Officer dated 17.3.1992 passed in Cases No. 187/187-A of 1991 in proceedings under Section 5 and 7 of the Act and the appellate order of the Principal Judge, City-Civil G Court, Bombay, in Miscellaneous Appeal No. 85 of 1992 were quashed in putting the matter back on the file of the Estate Officer, to be dealt with in accordance with la\v. It was made clear that the orders were set aside only insofar as the appellant company was concerned and not in respect of other parties. This order, as said before, was left uninterfered with by the Letters Patent Bench.

A The aggrieved appellant Company maintains that the High Court could not have deprived it of the advantage gained by the orders of the Principal Judge, City Civil Court, in rejecting the petition under Section 7 of the Act relating to the question of damages. It is asserted that the High Court has deprived the appellant- Company a validly accrued right, gained under the processual law of the country . Under the Act, Section 2(f) B defines 'rent' in relation to any public premises, to mean the consideration payable periodically for the authorised occupation of the premises, together with certain inclusions. Sections 4 and 5 provide for issuance of notice to show-cause against an order of eviction and the ultimate eviction of the unauthorised occupant. Section 7 confers power on the Estate C Officer to require payment of rent or damages in respect of public premises. If a person is an authorised occupant, he can be required to pay the rent within such time and in such instalments as may be specified in the order. Likewise, an unauthorised occupant of any public premises may be required by the Estate Officer to pay damages within such time and in such instahnents as may be stipulated in the order. Of course, the Estate D Officer in assessing damages would have regard to such principles of assessment of damages as may be prescribed as also to assess damages on account of use and occupation of such premises. It is thus plain and clear that unless the occupant is first adjudged as an unauthorised occupant, his liability to pay damages does not arise. In other words, if he is an authorised occupant, he may be required to pay rent but not damages. The E quality of occupation and the quality of recompense for the use and occupation of the public premises go hand in hand and are inter-dependent. Such is the scheme of the Act.

The inherent temper of restraint of the High Court under Article 226 F of the Constitution was posed and pressed into service by learned counsel for the appellants contending that the High Court should not have opened up a finalised litigation relatable to damages to barter a remand on the question of the quality of occupation of the appellant Company, i.e. whether it was authorised or unauthorised. It was maintained that by G conduct, the Life Insurance Corporation, respondent, had submitted to those orders and had not put them to challenge in proceedings under Article 226 and or Article 227 of the Constitution. On that axis it was asserted that the direction on remand to resettle the question of damages may be quashed, maintaining the other direction and order with regard to the nature of occupation. Regretfully we are not persuaded lo adopt such H course.

SHANGRILAFOOD PRDTS. LTD. v. L.l.C. [PUNCHHI, J.] 285

It is well-settled that the High Court in exercise of its jurisdiction under Article 226 of the Constitution can take cognisance of the entire facts and circumstances of the case and pass appropriate orders lo give the parties complete and substantial justice. This jurisdiction of the High Court, being extraordinary, is normally exercisable keeping in mind the principles of equity. One of the ends of the equity is to promote honesty and fair play. If there be any unfair advantage gained by a party priorly, before invoking the .iurisdiction of the High Court, the court can take into account the unfair advantage gained and can require the party to shed the unfair gain before granting relief. What precisely has been done by the learned Single Judge, is clear from the above emphasised words which be re-read with advantage. The question of claim to damages and their ascertainment would only arise in the event of the Life Insurance Corporation, respondent, succeeding to prove that the appellant Company was an unlawful sub-tenant and therefore in unauthorised occupation of public premises. If the finding were to go in favour of the appellant Company and

it is proved to be a lawful sub-tenant and hence not an unauthorised D occupant, the direction to adjudge the claim for damages would be rendered sterile and otiose. It is only in the event of the appellant Company being held to be an unlawful sub-tenant and hence an unauthorised occupant that the claim for damages would be determinable. We see therefore no fault in the High Court adopting such course in order tn balance the equities between the contestants especially when it otherwise had power of superintendance under Article 227 of the Constitution in addition. We cannot be oblivious to the fact that when the occupation of the premises in question was a factor in continuation the liability to pay for the use and occupation thereof, be it in the form of rent or dam_age.i;, was also a continuing factor. The cause of justice, as viewed by the High Court, did clearly warrwt that both these questions be viewed inter-dependently. For those who seek equity must bow to equity.

Besides, it is noteworthy that the Principal Judge of the City Civil Court, had negatived the claim of damages on taking a technical view of G the matter because in his view the assessment had been made more on assumptions than on concrete evidence which was required to be adduced.

Nowhere was the finding recorded by that Court that damages were altogether not due or that the appellant Company was not liable; the period involved therein being from 1.3.1979 to 28.2.1992. Much time has elapsed thereafter. The respondent Company continues to be in possession of the H

A premises in question. It would in any case be liable to pay for the use and occupation thereof and that liability was only required to be given a legal character, depending upon the quality of occupation. The High Court, in our view, comn1itted no wrong in putting the negated claim of damages on the scale of i ustice as a balancer, before granting relief, in setting aside the B orders of eviction and effecting a remand, for fresh disposal in accordance with law.

For the foregoing reasons, we find no case is made out for our interference. As a result, this appeal fails and is hereby dismissed, with costs,

B.K.M.

Appeal dismissed.