& others &. Vs. Ministry of Food and Civil Supplies, Govt. of
Maharashtra, Mumbai & ANR.
[Civil Appeal Nos.
3356-3357/2012 arising out of SLP (C) Nos. 3273-327of 2011]
J U D G M E N T
Dipak Misra, J
plaintiffs, trustees of the Parsee Girls School Association, being aggrieved by
the judgment and order dated 5th March, 2010 in Writ Petition No. 1171 of 2009
and the order dated 17.9.2010 in Review Petition No. 160 of 2010 passed by the
High Court of Judicature at Bombay where by the Writ Court has overturned the
judgment and order dated 29.8.2008 of the Appellate Court of Small Causes at
Bombay in Appeal No. 123 of 2005 where in the Appellate Court had reversed the judgment
and decree passed by the Court of Small Causes at Bombay in T.E. & R. Suit
No. 241 of 2002 where in the said court had decreed the suit against defendant
No. 1 and dismissed the suit against defendant No. 2 for recovery of possession,
and decreed the suit in to and directed recovery of possession with a further direction
of an enquiry as regards the future mesne profits under Order 20Rule 12(1)(c)
of the Code of Civil Procedure (for short the Code ); have preferred the
present appeals by special leave under Article 136 of theConstitution.
of unnecessary details, the facts which are essential to be exposited are that
the appellants/plaintiffs (hereinafter referred to as the plaintiffs) filed a
suit against defendant Nos. 1 and 2 for recovery of the suit properties situate
at 4th and 5th Floor of Bengallee Girls High School, 42, Sir Vithaldas
Thackersey Marg, New Marine Lines, Mumbai and for other reliefs. The case of the
plaintiffs before the court of first instance was that the Parsee Girls School
Association is a public trust and owns the suit building where the B.S.
Bengallee Girls High School is run. In the year 1954, the plaintiffs had
permitted defendant No. 1, the New India Assurance Company Ltd., to occupy the
4th and 5th floors of the suit building on payment of rent of Rs.6114/- per
The said company, in
the year 1959, without the knowledge and consent of the plaintiffs, inducted defendant
No. 2, the Ministry of Food and Civil Supplies, Government of Maharashtra, as a
subtenant. It was pleaded that the plaintiffs had the privity of contract only
with defendant No. 1 and had no relationship whatsoever with defendant No. 2
and, therefore, defendant No.2 was in unlawful possession of the premises in question.
It was the stance of
the plaintiffs that they, being in need of the suit property for the School,
requested the defendants to deliver the possession but assphinx like silence
was maintained to the request, being compelled, they issued notice on
19.11.2001 terminating the tenancy of defendant No. 1 and instituted the suit
for recovery of possession. It was contended by the plaintiffs that the
defendants were not protected under the provisions of Section 3(1)(b) of the
Maharashtra Rent Control Act, 1999 (for brevity the1999 Act ) and were liable
for eviction. A claim for mesne profit was put forth and the same was assessed
by the plaintiffs at Rs.11,45,583/- permonth as per the market value.
No. 1, the New India Assurance Company, filed its written statement setting
forth the stance that the suit was misconceived and not maintainable as the
proper remedy on the part of the plaintiffs was to take recourse to Section 16
of the 1999 Act. It was also asserted that there was no cause of action for
eviction. The further stand of defendant No. 1was that the plaintiffs had not obtained
permission from the Charity Commissioner under the Bombay Public Trust Act,
It was asseverated that
defendant No. 1 being a Government Company was not exempted under the provisions
of the 1999 Act. It was the further stand that with the knowledge and consent
of the trustees, the predecessors of the plaintiffs, had given the suit
premises to defendant No. 2 in the year 1959 and the present trustees were aware
about these facts.
The allegation that defendant
No. 2 was in unlawful occupation was strongly refuted. The bonafide requirement
of the plaintiffs was vehemently controverted. The claim of mesne profits was
seriously resisted by the said defendant.
No. 2 filed a separate written statement stating, interalia, that the suit was
not maintainable; that it was barred by limitation; that no notice under
Section 80 of the Code was served on it; that the Insurance Company had already
shifted its premises to its own building and sublet the suit premises to defendant
No. 2 and they are in peaceful occupation of the same with the knowledge of the
plaintiffs; and that it being a protected tenant under the 1999 Act, the relief
of eviction wasuntenable.
learned trial Judge framed number of issues and came to hold that the tenancy
of defendant No. 1 had been validly and legally terminated; that the suit is not
flawed for want of permission of the Charity Commissioner or want of notice
under Section 80 of the Code; that the plaintiffs are the validly appointed trustees;
that the plaintiffs are entitled to a decree for possession in respect of the
suit premises as far as defendant No. 1 is concerned; and that defendant No. 2 had
proved that being a lawful subtenant, it is protected under the provisions of the
1999 Act and, therefore, decree for possession in respect of the said defendant
could not be granted.
The learned trial
Judge, to arrive at the conclusion that the provisions of the 1999 Act would not
apply to the Insurance Company, relied on the evidence on record, namely, the
manner in which it has come into existence and the paid-up capital is more than
rupees one crore and that it is not a Government Company. As far as defendant No.
2is concerned, an opinion was expressed that the 1999 Act is applicable as the
premises in question has been given on licence to a Government Department.
After so holding, as
is perceptible, the learned trial Judge proceeded to state that defendant No. 2
is in exclusive possession of the suit property since 1959 and, therefore, it
had acquired the status of a deemed tenant by virtue of Section 15(a) of the Bombay
Rents, Hotel and Lodging House Rates Control Act, 1947 as amended in 1987 (for short
the1947 Act). He also recorded a finding that after coming into force of the1999
Act, the status of deemed tenant of defendant No. 2 is not affected and,
therefore, it would get protection as provided under the 1999 Act. Being of
this view, he decreed the suit in part as has been indicated hereinabove.
an appeal being preferred, the Appellate Court, after concurring with the
findings recorded by the learned trial Judge and analysing the ambit, purpose
and scope of Section 3 (1) (b) of the 1999 Act, came to hold that Section
3(1)(b) of the 1999 Act is applicable to both the defendants in respect of the
suit premises and, therefore, defendant No. 2 could not become a lawful tenant
of the landlord and claim protection under the provisions of the 1999 Act. On
the basis of the aforesaid reasoning, the Appellate Court decreed the suit for
recovery of possession against both the defendants and directed for mesne
reversal of the decree led defendant No. 2, the Ministry of Food and Civil
Supplies, Government of Maharashtra, to prefer a writ petition under Article
227 of the Constitution of India in the High Court at Bombay. It was contended
before the learned Single Judge that the second defendant was inducted as a subtenant
in the year 1959 and by virtue of the provisions of the 1947 Act, it had
acquired the status of deemed tenant with effect from 1st February, 1973 in
view of the language employed in sub-section (2) of Section 15 of the said Act
and, therefore, it was entitled to protection.
The said submission was
combated by the respondents therein contending that the suit was governed under
the provisions of Transfer of Property Act and the conclusion arrived at by the
Appellate Court was absolutely impeccable. The Writ Court, analysing the evidence
and findings recorded by the courts below, came to hold that the writ petitioner
was inducted by the Insurance Company in the year 1959 as a subtenant and if
the amendment brought in Section 15 of the 1947 Act by Maharashtra Act No. VIII
of 1987 is conjointly read with sub-section (11)of Section 5 of the 1947 Act,
it would be clear that a subtenant who is inducted by the tenant before 1st
February, 1973 becomes the tenant within the meaning of Section 5(11) of the
1947 Act and hence, the irresistible conclusion would be that the second
defendant became a tenant.
The Writ Court
further opined that the 1999 Act came into force on 1st April, 2000and by that
time, by virtue of sub-section (1) of Section 4 of the 1947Act, defendant No.
2, being a Government Department, had become a tenant and, as a logical corollary,
Clause (a) of Section 3(1) of the 1999 Act would apply to the premises in
question and, therefore, defendant No. 2enjoyed the protection of the 1999 Act.
Being of this view, the Writ Court unsettled the judgment and decree for
have heard Mr. T.R. Andhiyarujina, learned senior counsel for the appellants,
Mr. Chinmoy A. Khaladkar, learned counsel for respondent No. 1,and Mr. A.K.
Raina, learned counsel for respondent No.
singular seminal issue that has emanated for consideration is whether defendant
No. 2, which is respondent No. 2 herein, would be a protected tenant under the
provisions of the 1999 Act. The learned Single Judge has treated defendant No.
2 as a deemed tenant and thereby opined that he is entitled to protection under
the 1999 Act. He has placed reliance on the amended definition of tenant and
the language employed in Section 15 of the 1947 Act to come to the conclusion
that defendant No. 2is a protected tenant under the 1999 Act.
To understand the scheme
of the1947 Act, it is apposite to refer to Section 4 of the said enactment. It deals
with exemptions. Section 4(1), being relevant, is reproduced below:- 4.
Exemptions. (1) This Act shall not apply to any premises belonging to the
Government or a local authority or apply as against the Government to any
tenancy, licence or other like relationship created by a grant from or a
licence given by the Government in respect of premises requisitioned or taken on
lease or on licence by the Government, including any premises taken on behalf
of the Government on the basis of tenancy or of licence or other like
relationship by, or in the name of any officer subordinate to the Government
authorised in this behalf; but it shall apply in respect of premises let, or given
on licence, to the Government or a local authority or taken on behalf of the
Government on such basis by, or in the name of such officer.
At this juncture, it is apt to state that Section 4(1) of the 1947Act in its
original frame had come up for consideration before this Court in Bhatia
Co-operative Housing Society Ltd. v. D.C. Patel. This Court was considering
the applicability of the 1947 Act to a local authority, regard being had to the
provisions contained in Section 4 of the Act. The crucial point that arose
before the Court was to determine the question of jurisdiction of the city
civil court to entertain the suit keeping in view the language in which Section
4 of the 1947 Act was couched. The applicability of the provision was the core
It was observed, if it
applied, the city civil court had no jurisdiction but if it did not, and then it
had such jurisdiction. After so observing, the four-Judge Bench proceeded to
deal with the fact whether the Act applied to the demised premises and, accordingly,
proceeded as to what would be the true construction of Section 4(1) of the 1947
This Court scanned the
anatomy of the provisions of Section 4 (1) into three parts, namely, (i)the Act
shall not apply to premises belonging to the Government or a local authority,
(ii) the Act shall not apply as against the Government to any tenancy or other
like relationship created by grant from the Government in respect of premises
taken on lease or requisitioned by the Government, and(iii) the Act shall apply
in respect of premises let out to the Government or a local authority. After reproducing
the contentions, the Court proceeded to state as follows: - Section 4(1)
provides for an exemption from or exception to that general object.
The purpose of the first
two parts of section 4(1) is to exempt two cases of relationship of landlord and
tenant from the operation of the Act, namely, (1) where the Government or a
local authority lets out premises belonging to it, and (2) where the Government
lets out premises taken on lease or requisitioned by it. It will be observed that
the second part of section 4(1) quite clearly exempts "any tenancy or
other like relationship" created by the Government but the first part
makes no reference to any tenancy or other like relationship at all but exempts
the premises belonging to the Government or a local authority. If the intention
of the first part were as formulated in item (1), then the first part of section
4(1), like the second part, would have run thus :-
This Act shall not
apply to any tenancy or other like relationship created by Government or local authority
in respect of premises belonging to it. The Legislature was familiar with this
form of expression, for it adopted it in the second part and yet it did not use
that form in the first. The conclusion is, therefore, irresistible that the
Legislature did not by the first part intend to exempt the relationship of
landlord and tenant but intended to confer on the premises belonging to Government
immunity from the operation of the Act. [Emphasis added]Thereafter, the Bench
proceeded to state as follows: -
It is said that if
the first part of the section is so construed as to exempt the premises from
the operation of the Act, not only as between the Government or a local
authority on the one hand and its lessee on the other, but also as between that
lessee and his sub-tenant, then the whole purpose of the Act will be
frustrated, for it is well known that most of the lands in Greater Bombay
belong to the Government or one or other local authority, e.g., Bombay Port
Trust and Bombay Municipality and the greater number of tenants will not be able
to avail themselves of the benefit and protection of the Act. In the first
place, the preamble to the Act clearly shows that the object of the Act was to
consolidate the law relating to the control of rents and repairs of certain
premises and not of all premises.
The Legislature may
well have thought that an immunity given to premises belonging to the Government
or a local authority will facilitate the speedy development of its lands by inducing
lessees to take up building leases on terms advantageous to the Government or a
local authority. Further, as pointed out by Romer L.J. in Clark v. Downes
 145 L.T. 20, which case was approved by Lord Goddard C.J. in Rudler v.
Franks  1 K.B. 530 such immunity will increase the value of the right of
reversion belonging to the Government or a local authority.
The fact that the
Government or a local authority may be trusted to act fairly and reasonably may
have induced the Legislature all the more readily to give such immunity to premises
belonging to the Government or a local authority but it cannot be overlooked
that the primary object of giving this immunity was to protect the interests of
the Government or a local authority. This protection requires that the immunity
should be held to attach to the premises itself and the benefit of it should be
available not only to the Government or a local authority but also to the
lessee deriving title from it.
If the benefit of the
immunity was given only to the Government or a local authority and not to its
lessee as suggested by learned counsel for the respondent and the Act applied
to the premises as against the lessee, then it must follow that under section
15 of the Act it will not be lawful for the lessee to sublet the premises or
any part of it. If such were the consequences, nobody will take a building
lease from the Government or a local authority and the immunity given to the
Government or a local authority will, for all practical purposes and in so far
at any rate as the building leases are concerned, be wholly illusory and
worthless and the underlying purpose for bestowing such immunity will be rendered
In our opinion, therefore,
the consideration of the protection of the interests of the subtenants in
premises belonging to the Government or a local authority cannot override the plain
meaning of the preamble or the first part of section 4(1) and frustrate the real
purpose of protecting and furthering the interests of the Government or a local
authority by conferring on its property an immunity from the operation of the
Act. [Underlining is ours]Eventually, this Court opined that the demised premises,
including the building, belonged to the local authority and are outside the operation
of the Act. The Act being out of the way the appellants were well with in their
rights to file the suit in ejectment in the City Civil Court and that Court had
jurisdiction to entertain the suit and to pass the decree.
have referred to the aforesaid dictum in extenso to highlight that the
provision exempted the premises let out and a subtenant cannot claim protection
in the premises belonging to the Government or a local authority as that would
frustrate the real purpose of affording an immunity from the operation of the
a similar situation, the Court of Appeal in England in the case of Rudler v.
Franks , speaking through Lord Goddard, C.J., has opined thus:- The reason
why the Acts do not apply when the tenants of the Crown creates a sub-tenancy
is first because, as I have just said, the Acts operate in rem and not in
personam and so are never attached to the house at all.
Percy G. Moore, Ltd. v. Stretch , it has been held that the Rent Act applies
to property and not to a person or to a tenant or a subtenant. It is worth
noting, in the said cases, the deliberation pertained to rentrestriction.
in Cow v. Casey, it has been laid down that a tenant of premises which are
not protected by the Acts cannot create a sub-tenancy, of part of those
premises which would be protected against the landlord.
this regard, we may refer with profit to the decision in Nagji Vallabhji and
Company v. Meghji Vijpar and Company and Another where in the question arose
as regards the interpretation of Section 4(1) of the1947 Act. Be it noted that
sub-section (4)(a) to Section 4 was introduced by the Bombay Rent Act by the
Act 4 of 1953. It was urged that they were lawful subtenants of the firm and
were, therefore, entitled to protection under Section 4(1) of the 1947 Act. The
Bombay City Civil Court decreed the suit for eviction. In appeal, the learned Single
Judge of the High Court of Bombay remanded the matter on two issues.
On remand, the City Civil
Court recorded a finding that the tenancy of the appellant was not validly
terminated. In appeal, the learned Single Judge came to hold that there was a
valid notice and the provisions of the Rent Act did not apply to the premises
in question. On a further appeal being preferred, the Division Bench dismissed
the same. The Bench referred to the legislative history of the 1947 Act and the
decision in Bhatia Co-operative Housing Society Ltd. (supra) and referred to
Section 4(1) and sub-section (4)(a) to Section 4 and eventually came to hold as
It is significant
that the exemption granted under the earlier part of sub-section (1) of Section
4 is in respect of the premises and not in respect of the relationship. In order
to confer the protection of the provisions of the Bombay Rent Act to the
sub-lessees occupying the premises in any building erected on Government land or
on land belonging to a local authority irrespective of the question who has put
up the building as against the lessees of the land but without affecting the immunity
conferred to the Government or local authorities as contemplated by sub-section
(1) of Section 4 of the Bombay Rent Act, we would have practically rewritten the
provisions of Section 4 and it is not open to us to do that.
Thereafter, the Bench
proceeded to state as follows: - We can only observe that if the intention of
the Legislature is that the protection should be given to the sub-lessee
against the lessee in a building taken on lease by the lessee from the Government
or a local authority, it is for the Legislature concerned to make appropriate
amendments in the Bombay Rent Act and it is not open for us to re-write the provisions
of Sub- section (4)(a) of Section 4 of the Bombay Rent Act.
this regard, we may fruitfully refer to the decision in Parwati Bai v.
Radhika. In the said case, the appellant had filed a suit for eviction in
the Civil Court. A plea was advanced by the defendants that the suit premises
are governed by the provisions of the Madhya Pradesh Accommodation Control Act,
1961. The courts below accepted the stand of the defendant and dismissed the
suit. The second appeal preferred by the plaintiff/landlord was dismissed.
This Court referred
to Section 3(1) of the 1961 Act and held as follows: - It is well settled by a
decision of this Court in Bhatia Co- operative Housing Society Ltd. v. D.C.
Patel [(1953) 4 SCR 185), wherein pari materia provisions contained in the Bombay
Rents, Hotel and Lodging House Rates Control Act, 1947 came up for consideration
of this Court.
It was held that the exemption
is not conferred on the relationship of landlord and tenant but on the premises
itself making it immune from the operation of the Act. In identical facts, as
the present case is, the decision of this Court was followed by the High Court
of Madhya Pradesh in Radheylal Somsingh v. Ratansingh Kishansingh [1977 MPLJ
335] and it was held that the immunity from operation of the Madhya Pradesh
Accommodation Control Act, 1961 is in respect of the premises and not with
respect to the parties. If a tenant in municipal premises lets out the premises
to another, a suit by the tenant for ejectment of his tenant and arrears of
rent would not be governed by the Act as the premises are exempt under Section
3(1)(b) of Act though the suit is not between the municipality as landlord and against
We find ourselves in
agreement with the view taken by the High Court of Madhya Pradesh in Radheylal s
case. It is unfortunate that this decision binding in the State of Madhya Pradesh
was not taken note of by the courts below as also by the High Court. From the
aforesaid pronouncements, it is luminescent that the provision applies to
premises and not to parties or persons. The learned Single Judge has referred
to the definition of tenant which means any person or by whom or in whose
account rent is payable and includes a tenant or subtenant as derived under a
tenant before the first day of February, 1973 and has held that the Government
becomes a protected tenant.
thrust of the matter is whether the original tenant is a protected tenant or not
and if not, what benefit would enure to asubtenant.
this stage we think it appropriate to refer to Section 3 of the1999 Act. The
said provision also deals with exemption. For our purpose Clauses (a) and (b)
of sub-Section (1) of Section 3, being relevant, are reproduced below: - 3.
Exemption. (1) This Act shall not apply (a) to any premises belonging to the Government
or a local authority or apply as against the Government to any tenancy, licence
or other like relationship created by a grant from or a licence given by the
Government in respect of premises requisitioned or taken on lease or on licence
by the Government, including any premises taken on behalf of the Government on
the basis of tenancy or of licence or other like relationship by, or in the
name of any officer subordinate to the Government authorised in this behalf; but
it shall apply in respect of premises let, or given on licence, to the
Government or a local authority or taken on behalf of the Government on such
basis by, or in the name of, such officer; (b) to any premises let or sub-let
to banks, or any Public Sector Undertakings or any Corporation established by or
under any Central or State Act, or foreign missions, international agencies, multinational
companies, and private limited companies and public limited companies having a
paid up share capital of rupees one crore or more.
From the aforesaid
provisions, it is quite plain that the Act does not apply to Government or a
local authority or to any premises let or sub-let to a bank or any public
sector undertaking or any corporation established by or under any Central or
State Act, public limited companies and some other categories. The exception
that has been carved out is that it shall apply in respect of premises let or
given in licence to the Government or a local authority or taken on behalf of
the Government on such basis by or in the name of such officer. In the case on
hand, the trust has let out the premises to the Insurance Company.
Leelabai Gajanan Pansare and Others v. Oriental Insurance Company Limited and
Others, question arose whether a Government Company falls within the compendious
expression `any public sector undertaking or` corporation established by or
under any Central or State Act enshrined under Section 7 (1) of the 1999 Act. The
respondent in the said case who was noticed was Oriental Insurance Company Limited.
It was contended before
the two-Judge Bench that the concept of a Government Company is nota part of
Section 3 (1) (a) and in the absence of the word 'Government and the presence
of other expressions in Section 3(1)(b), it is to be construed that the
Government Companies are not entitled to receive the protection of the Rent
It was contended on
behalf of the respondent company that a Government Company is sui generis in
structure and in statutory treatment thereof and, therefore, it does not fall
within the compendious expression and the exclusion clause which applies to public
sector undertakings established by or under any Central or State Act does not apply
to a Government Company like Oriental Insurance Company.
dealing with various contentions, the two-Judge Bench referred to the various
provisions of the 1999 Act, the Companies Act and dealt with Section 4(1) of
the 1947 Act and, placing reliance on Malpe Vishwanath Acharya & ors. v.
State of Maharashtra & Anr , came to hold as follows: - The above
discussion is relevant because we must understand the reason why Section
3(1)(b) came to be enacted. As stated above, in our view, with the offer of an economic
package to the landlords, the legislature has tried to maintain a balance. The provisions
of the earlier Rent Act, as stated above, have become vulnerable, unreasonable
and arbitrary with the passage of time as held by this Court in the above judgment.
The legislature was
aware of the said judgment. It is reflected in the report of the Joint
Committee. In our view, the changes made in the present Rent Act by which landlords
are permitted to charge premium, the provisions by which cash-rich entities are
excluded from the protection of the Rent Act and the provision providing for
annual increase at a nominal rate of 5% are structural changes brought about by
the present Rent Act, 1999 vis-a-vis the 1947 Act. The Rent Act of 1999 is the sequel
to the judgment of this Court in Malpe Vishwanath Acharya. The entire
discussion hereinabove is, therefore, not only to go behind Section 3(1)(b) and
ascertain the reasons for enactment of the said clause but also to enable this Court
to give purposive interpretation to the said clause.
After so stating, the
two-Judge Bench speaking, through S.H. Kapadia, J.(as His Lordship then was),
observed as follows: - 73. Moreover, if we are to hold that PSUs do not include
government companies, as held by the High Court, we would be disturbing the
package offered by the legislature of allowing increase of rent annually at 5%,
allowing the landlords to accept premium and exclusion of certain entities from
the protection of the Rent Act under Section 3 (1) (b). On the other hand,
acceptance of the arguments advanced on behalf of the respondents on the
interpretation of Section 3(1)(b) would make the Act vulnerable to challenge as
violative of Article 14 of the Constitution.
Therefore, we are of
the view that on a plain meaning of the word PSUs as understood by the legislature,
it is clear that Indias PSUs are in the form of statutory corporations, public sector
companies, government companies and companies in which the public are substantially
interested (see the Income Tax Act, 1961). When the word PSU is mentioned in Section
3 (1) (b), the State Legislature is presumed to know the recommendations of the
various Parliamentary Committees on PSUs. These entities are basically cash-rich
entities. They have positive net asset value.
They have positive
net worths. They can afford to pay rents at the market rate. 74. Thirdly, we
are of the view that, in this case, the principle of no scitur a sociis is
clearly applicable. According to this principle, when two or more words which
are susceptible to analogous meanings are coupled together, the words can take their
colour from each other. Applying this test, we hold that Section 3(1)(b) clearly
applies to different categories of tenants, all of whom are capable of paying
rent at market rates. Multinational companies, international agencies, statutory
corporations, government companies, public sector companies can certainly
afford to pay rent at the market rates.
This thought is
further highlighted by the last category in Section 3(1)(b). Private limited
companies and public limited companies having a paid-up share capital of more
than Rs.1,00,00,000 are excluded from the protection of the Rent Act. This
further supports the view which we have taken that each and every entity
mentioned in Section 3(1)(b) can afford to pay rent at the market rates. xxx xxx
As stated above,
Section 3(1)(b) strikes a balance between the interest of the landlords and the
tenants; it is neither pro- landlords nor anti-tenants. It is pro-public
interest. In this connection, one must keep in mind the fact that the said Rent
Act, 1999 involves a structural change vis-a-vis the Bombay Rent Act, 1947. As
stated above, with the passage of time, the 1947 Act became vulnerable to
challenge as violative of Article
As stated above, the legislature has to strive to balance the twin objectives
of Rent Act protection and rent restriction for those who cannot afford to pay
rents at the market rates. 77. To accept the interpretation advanced on behalf of
the respondents for excluding government companies from the meaning of the word
PSUs in Section 3(1)(b) would amount to disturbing the neat balance struck by
the aforesaid it is graphically clear that an Insurance Company is not
protected under the 1999 Act. Once it is held that defendant No. 1,the New
India Assurance Company, the original tenant, is not protected, the question
would be whether a subtenant can be protected under the Act. In the case of
Bhatia Co-operative Housing Society Ltd. (supra), it has been clearly laid down
that Section 4(1) of the 1947 Act applies to premises and not to parties or
their relationship. Section 3 uses the term premises.
commences with the non-obstante clause that the Act does not apply to any
premises belonging to the Government or a local authority. Sub-section 3(1)(b)
makes it clear that the Act does not apply to any bank, public sector
undertaking or certain other categories of tenants. The Insurance Company is
covered under Section 3(1)(b). Thus, as a logical corollary, the Act does not
apply to the premises held by the Insurance Company who is a tenant.
learned Single Judge has allowed protection to the Government Department on the
foundation that it has become a tenant. We are disposed to think that the
analysis is fundamentally erroneous. When the Act does not cover the tenant, namely,
the Insurance Company as basically the exemption applies only to premises and not
to any relationship, the subtenant who becomes a deemed tenant cannot enjoy a better
protection or privilege by ostracizing the concept of premises which is the
spine of theprovision.22. In the ultimate analysis, we are obliged to allow the
appeals, set aside the order passed by the High Court and restore that of the Appellate
Court and, accordingly, it is so directed. The parties shall bear the irrespective