2010 Supreme(Bom) 725

2010 (5) ALL MR 300
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A. M. KHANWILKAR & R. M. SAVANT, JJ.
Dr. Suhas H. Pophale
Vs.
The Oriental Insurance Co. Ltd. & Ors.
Writ Petition No.2473 of 1996
Decided On : 7th June, 2010.

Headnote:Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 - Sections 13(1) and 15-A - Public Premises (Eviction of Unauthorised Occupants) Act, 1971, Sections 2(e), 3 and 4 - General Insurance Business (Nationalisation) Act, 1972, Section 16 - Rights of licensee prior to 1.2.1973 - Denied by Estate Officer - City civil Court upheld it in appeal - Referred question as to damages for occupation back to Estate Officer - Writ petition against - Held - Section 3 of P.P. Act appointed 13.5.1971 as appointed day for it - Provisions of Sections 3 and 4 of P.P. Act wide enough to encompass power of vesting complete control on assets and properties of Insurer (Company) in Central Government from 13.5.1971 - In view of Section 2(e) of P.P. Act premises in dispute acquired status of "public premises" - Leave and licence entered into by original tenant in favour of petitioner not takes matter any further - Provisions of Rent Act, 1947 stopped to apply to same from 13.5.1971 - Petition dismissed with costs of Rs. 15,000/-. - Reverting to the Act of 1972, it was intended to provide for acquisition and transfer of shares of Indian Insurance companies and undertakings of other existing insurers in order to serve better the need of the economy by securing development of general insurance business in the best interests of the community and to ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment, for the regulation and control of such business and for matters connected therewith and incidental thereto. The appointed day, as per the Act of 1972 in terms of Section 3(b) means such day not being a day later than the 2nd day of January, 1973, as the Central Government may, by notification appoint. The Central Government by notification has appointed the said day as 1st January, 1973. There is no dispute in this behalf. It is also not in dispute that the erstwhile company was covered by the definition of existing insurer within the meaning of Section 3(e) of the said Act of 1972. By virtue of Section 4 of this Act, on the appointed day (i.e. 1st January, 1973), all the shares in the capital of every Indian Insurance Company stood transferred to and vested in Central Government free of all trusts, liabilities and encumbrances affecting them. Further, the erstwhile company was to now function as a Government company. Suffice it to note that this enactment was intended to acquire the shares of the Indian Insurance Company, providing for scheme for reorganisation of general insurance business (Chapter V of the Act). Section 16 provides for scheme for mergers of companies. In the present case, the scheme in respect of erstwhile company, under Section 16 of the Act of 1972, was notified by the Central Government, vide notification dated 31st December, 1973. As per the said notification, scheme was to come into force on the 1st day of January, 1974, being the specified day. The effect of the said scheme was to transfer all undertakings of every merged company to and vested in the transferee company (respondent No. 1 herein). Clause 4(2) of the scheme provides that the undertaking shall be deemed to include all assets, rights, powers, authorities and privileges and all properties, movable and immovable, cash balance, capital and reserve fund, investments and all other rights and interests in or arising out of such property, as were immediately before the specified day in the ownership, possession, power or control of such merged company, whether within or without India and all books of accounts, registers, records and all other documents of whatever nature relating thereto, and shall be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the merged company. The effect of transfer is provided in clause 5 of the said scheme. Clause 9 stipulates that on the specified day, the merged company shall stand dissolved without winding up.

       Relying on the provisions of the Act of 1972 and the scheme referred to above, it was contended that as per the Act of 1972, all the shares in the capital of the erstwhile company stood transferred to and vested in the Central Government. That does not mean that the properties of the insurer company (erstwhile company) vested in the Central Government before the scheme was notified which came into force from 1st day of January, 1974. For the reasons already noted while dealing with the earlier submission, it is not necessary to elaborate on this matter. Inasmuch as, the provisions of the P.P. Act does not require that the Central Government should be the owner of the property. As aforesaid, even if it is shown that the Central Government has had lesser right than the ownership right in respect of the given premises, the same would acquire the status of public premises. In which case, the premises would become amenable to the rigours of P.P. Act. Court has held that by virtue of taking over the management of the undertakings of all insurers pending nationalisation, as per the scheme of the said Act of 1971, the Central Government was in complete control even in respect of the assets and properties of the insurer. This logic is reinforced even by the express provision in Clause 4(2) of the Scheme of 1973 framed in exercise of powers under Section 16 of the Act of 1972. For, the expression "undertaking" as has always been understood even by the Act of 1971, as deemed to include all assets properties and rights, powers, privileges thereto. The petitioner on the other hand, was claiming to have acquired right on the basis of leave and licence agreement executed i.e. on 20th December, 1972, executed after the said premises acquired the status of public premises. As a necessary corollary, the provisions of Rent Act would have no application to the said premises on the date of execution of the leave and licence agreement. Thus, the Entry of the petitioner in the said premises, was not lawful for the purposes of the P.P. Act as no prior consent or approval of the authorised officer under the P.P. Act was obtained. Moreover, the said leave and licence agreement dated 20th December, 1972 could not have been executed without the prior approval of the person specified by the Central Government in respect of the erstwhile company as required by Section 3 of the Act of 1971; and in any case the status of the petitioner as tenant could not have been accepted by the General Manager of the erstwhile company without the prior approval of the specified person as per the said provision.

       For the view that Court has taken, the other grounds of challenge pressed into service by the petitioner will be of no avail. Further, it is not necessary for Court to examine the grievance about the correctness of the finding of the appellate Court that the leave and licence agreement is invalid. Assuming that the said leave and licence agreement is legal and genuine, that would not take the matter any further for the petitioner. Similarly, even if Court was to consider other documents pressed into service on behalf of the petitioner, for the reasons already recorded, the same will be of no avail. Inasmuch as, in law, the entry of the petitioner in the said premises itself was unlawful, in the context of the provisions of P.P. Act. Since the provisions of P.P. Act became applicable to the said premises on and from 13th May, 1971, it is not open to the petitioner to invoke rights arising on account of the provisions of the Bombay Rent Act. In that the provisions of the Bombay Rent Act. In that the provisions of the Bombay Rent Act ceased to apply to the said premises from 13th May, 1971.

       In the circumstances, this petition must fail and the same is dismissed with cost. The counsel’s fee is assessed at Rs. 15,000/- (Rupees fifteen thousand only).