Suhas H Pophale V. Oriental Ins.co.ltd.& Anr in India

Suhas H Pophale V. Oriental Ins.co.ltd.& Anr [2014] Insc 87 (11 February 2014)

Court Judgment Information

• Year: 2014
• Date: 11 February 2014
• Court: Supreme Court of India
• INSC: [2014] INSC 87

Text of the Court Opinion

(Refortable) IN THE SUPREME COURT OF INDIA

Civil Appelate Jurisdiction

CIVIL APPEAL No. 1970 OF 2014 (@ out of SPECIAL LEAVE PETITION (CIVIL) No.20625/2010) Dr. Suhas H. Pophale . Appellant Versus Oriental Insurance Co. Ltd. and Its Estate Officer . Respondents J U D G E M E N T H.L. Gokhale J.

Leave granted.

2. This appeal by special leave raises the question as to whether the rights of an occupant/licensee/ tenant protected under a State Rent Control Act (Bombay Rent Act, 1947 and its successor the Maharashtra Rent Control Act, 1999, in the instant case), could be adversely affected by application of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (‘Public Premises Act’ for short)? This question arises in the context of the eviction order dated 28.5.1993 passed by the respondent No. 2, Estate Officer of the first respondent, invoking the provisions of the Public Premises Act with respect to the premises occupied by the appellant since 20.12.1972. The eviction order has been upheld by the Bombay High Court in its impugned judgment dated 7.6.2010, rejecting the Writ Petition No.2473 of 1996 filed by the appellant herein.

The facts leading to this appeal are this wise:

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 Rent Act’ for short). Initially the suit came to be dismissed for default, but an application was made under Order 9 Rule 9 of Code of Civil Procedure to 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 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 under the General Insurance (Emergency Provisions) Act, 1971 wherefrom 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.

8. Mr. Rohinton F. Nariman, learned senior counsel has appeared for the appellant and Mr. Harin P. Raval, learned senior counsel has appeared for the respondents.

The principal issue involved in the matter:

9. To begin with, it has to be noted that the relationship between the erstwhile insurance company as the landlord and the appellant as the occupant, at all material times was governed under the Bombay Rent Act.

Like all other rent control enactments, this Act has been passed as a welfare measure, amongst other reasons to protect the tenants against unjustified increases above the standard rent, to permit eviction of the tenants only when a case is made out under the specified grounds, and to provide for a forum and procedure for adjudication of the disputes between the landlords and the tenants. The legislature of Maharashtra thought it necessary to protect the licensees also in certain situations. Therefore, this act was amended, and a section was inserted therein bearing Section No.15A to protect the licensees who were in occupation on 1.2.1973. This Section reads as follows: “15A. Certain licensees in occupation on 1st February 1973 to become tenants (1) Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any contract where any person is on the 1st day of February 1973 in occupation of any premises, or any part thereof which is not less than a room, as a licensee he shall on that date be deemed to have become, for the purpose of this Act, the tenant of the landlord, in respect of the premises or part thereof, in his occupation.

(2) The provisions of sub-section (1) shall not affect in any manner the operation of sub-section (1) of section 15 after the date aforesaid.” We may note that S 15(1) prohibits sub-letting of premises.

10. As far as the insurance business in India is concerned, prior to independence, it was owned and operated by private entities. The governing law for insurance in India was, and still is the Insurance Act, 1938. Post-independence, the Industrial Policy Resolution of 1956 stated that the Life Insurance industry in India was to be nationalised.

Therefore, the Life Insurance Corporation Act of 1956 was passed creating the Life Insurance Corporation (LIC), as a statutory corporation, and transferring the assets of all the private life insurance companies in India to LIC. Sometimes around 1970-71, it was felt that the general insurance industry was also in need of nationalisation. Therefore, first the General Insurance (Emergency Provisions) Act, 1971 was passed by the Parliament which provided for the taking over of the management of general insurance business. Though the Act received the assent of the President on 17.6.1971, it was deemed to have come into force on 13.5.1971 from which date the Central Government assumed the management of General Insurance Business as an initial step towards the nationalisation. Thereafter, the General Insurance Business (Nationalisation) Act, 1972 was passed on 20.9.1972. Section 16 of this Act contemplated the merger of the private insurance companies into certain other insurance companies. Consequently, these private insurance companies merged into four insurance companies viz., (a) The National Insurance Company Ltd., (b) The New India Assurance Company Ltd., (c) The Oriental Insurance Company Ltd., and (d) The United India Insurance Company Ltd.

These four companies are fully owned subsidiaries of the General Insurance Corporation of India which is a Government Company registered under Companies Act, 1956, but incorporated as mandated under Section 9 of the above referred Nationalisation Act. The Central Government holds not less than 51 per cent of the paid up share capital of the General Insurance Corporation. The above referred Indian Mercantile Insurance Company Ltd.

merged into the first respondent-Oriental Insurance Company Ltd. w.e.f.

1.1.1974.

11. There is one more important development which is required to be noted. The Public Premises Act, 1971 (40 of 1971) came to be passed in the meanwhile. As per its preamble, it is “an act to provide for eviction of unauthorised occupants from public premises and for certain incidental matters” such as removal of unauthorised construction, recovery of arrears of rent etc. It came into force on 23.8.1971, but Section 1(3) thereof states that it shall be deemed to have come into force on 16.9.1958, except Section 11 (on offences and penalty) and Sections 19 and 20 (on repeal and validation). This is because from 16.9.1958, its predecessor Act viz. The Public Premises (Eviction of Unauthorised Occupants) Act (32 of 1958) was in force for similar purposes, and which was repealed by the above referred Section 19 of the 1971 Act. As provided under Section 2 (e) (2) (i) of this Act, the definition of ‘Public Premises’, amongst others, covers the premises belonging to or taken on lease by or on behalf of any company in which not less than fifty one per cent of the paid up share capital was held by the Central Government. The definition of public premises under Section 2(e) of this Act reads as follows: “2. Definitions.

[(e) “public premises” means— (1) any premises belonging to, or taken on lease or requisitioned by, or on behalf of, the Central Government, and includes any such premises which have been placed by the Government, whether before or after the commencement of the Public Premises (Eviction of Unauthorised Occupants) Amendment Act, 1980, under the control of the Secretariat of either House of Parliament for providing residential accommodation to any member of the staff of that Secretariat;

(2) any premises belonging to, or taken on lease by, or on behalf of,— (i) any company as defined in Section 3 of the Companies Act, 1956 (1 of 1956), in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government or any company which is a subsidiary (within the meaning of that Act) of the first-mentioned company, (ii) any Corporation [not being a company as defined in Section 3 of the Companies Act, 1956 (1 of 1956), or a local authority] established by or under a Central Act and owned or controlled by the Central Government, (iii) any University established or incorporated by any Central Act, (iv) any Institute incorporated by the Institutes of Technology Act, 1961 (59 of 1961), (v) any Board of Trustees constituted under the Major Port Trusts Act, 1963 (38 of 1963), (vi) the Bhakra Management Board constituted under Section 79 of the Punjab Reorganisation Act, 1966 (31 of 1966), and that Board as and when renamed as the Bhakra-Beas Management Board under sub-section (6) of Section 80 of that Act;

[(vii) any State Government or the Government of any Union Territory situated in the National Capital Territory of Delhi or in any other Union Territory;

(viii) any Cantonment Board consitituted under the Cantonments Act, 1924 (2 of 1924); and] (3) in relation to the [National Capital Territory of Delhi],— (i) any premises belonging to the Municipal Corporation of Delhi, or any municipal committee or notified area committee, (ii) any premises belonging to the Delhi Development Authority, whether such premises are in the possession of, or leased out by, the said Authority, [and] [(iii) any premises belonging to, or taken on lease or requisitioned by, or on behalf of any State Government or the Government of any Union Territory;]”

12. The consequence of this development was that in view of the merger of the erstwhile insurance company into the first respondent, (of which not less than 51 per cent share holding was that of the Central Government,) the Public Premises Act became applicable to its premises. It is the contention of the appellant that although the Act is otherwise deemed to have come into force from 16.9.1958, as far as the present premises are concerned, the Act became applicable to them from 1.1.1974 when the erstwhile insurance company merged into the first respondent.

Then only it could be said that the premises ‘belonged’ to a Government Company. However, since the appellant’s occupation of the said premises was protected by Section 15A of the Bombay Rent Act which Section had become enforceable prior thereto from 1.2.1973, he could not be said to be in ‘unauthorised occupation’ and, therefore, could not be evicted by invoking the provisions of the Public Premises Act. On the other hand, the contention of the respondents is that the Public Premises Act became applicable to the concerned premises from 13.5.1971 itself, when the management of the erstwhile insurance company was taken over by the Central Government, and the rejection of the writ petition by the High Court on that ground was justified. The principal issue involved in this matter is thus about the applicability of the Public Premises Act to the premises occupied by the appellant. Submissions of the rival counsel:

13. Learned Senior Counsel for the appellant, Mr. Nariman submitted that the finding of the High Court that the Public Premises Act applies to these premises from 13.5.1971 was an erroneous one. That was the date on which the Central Government assumed the management of the erstwhile private insurance company. The erstwhile insurance company continued to exist until it merged in the appellant-company w.e.f. 1.1.1974. In the circumstances, although the Public Premises Act came into force on 23.8.1971 (with deemed date of coming into force being 16.9.1958), and although the appointed date for assuming management was 13.5.1971, the premises could be said to have ‘belonged’ to the first respondent as per the definition under Section 2(E)(2)(i) of the Act, only from 1.1.1974, when the merger took place. Prior thereto the Bombay Rent Act had been amended and the licensees in occupation, were declared as deemed tenants, by virtue of Section 15A of the said Act. The appellant has been in continuous occupation of the said premises as a licensee from 20.12.1972. On 1.2.1973 his status got elevated to that of a ‘deemed tenant’ which was prior to the respondent No. 1 becoming owner of the building from 1.1.1974. The submission of Mr. Nariman was that the appellant had a vested right under the statute passed by the State Legislature protecting the licensees, and since the Public Premises Act became applicable from 1.1.1974, the rights of the tenants and also those of the licensees protected under the State Act prior to 1.1.1974, could not be taken away by the application of the Public Premises Act which can apply only prospectively. In his submission the eviction proceedings under the Public Premises Act against the appellant were therefore, null and void. The only remedy available for the first respondent for evicting the appellant would be under the Bombay Rent Act or under the Maharashtra Rent Control Act, 1999 which has replaced the said Act with effect from 31.3.2000. We may note at this stage that Mr. Nariman made a statement that the appellant is making out a case on the basis of his legal rights as a protected licencee, and not on the basis of the earlier mentioned correspondence between the appellant and the erstwhile insurance company.

14. Learned senior counsel for the respondents Mr. Raval, on the other hand, submitted that once the management of the erstwhile insurance company was taken over, the Public Premises Act became applicable.

Therefore, it was fully permissible for the first respondent to initiate the proceedings to evict the appellant from the public premises. In his view, the legal position, in this behalf, has been settled by the judgment of the Constitution Bench in the above referred Ashoka Marketing case, and the view taken by the High Court with respect to the date of applicability of the Public Premises Act was in consonance with the said judgment.

15. As against that, it is the submission of the Mr. Nariman that the judgment in Ashoka Marketing (supra) has to be understood in its context, and that it did not lay down any such wide proposition as Mr. Raval was canvassing. He pointed out that the judgment in Ashoka Marketing (supra) was with respect to the overriding effect of the Public Premises Act vis-à-vis the Delhi Rent Control Act, which are both Acts passed by the Parliament, and where the premises fall within the ambit of both the enactments. In the 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 Premises Act.

Consideration of the submissions The Judgment in the case of Ashoka Marketing

Continue reading this Sentence: