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2015 Supreme(Bom) 1049

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M.S. SONAK, J.
Eloff Hansson (India) Private Limited – Applicant
Versus
Rahul I. Kadri – Respondent
Civil Revision Application No. 630 of 2009
Decided On : 10.7.2015

Advocates:
Advocate Appeared:
Mr. Girish Godbole a/w Mr. Shyam Kapadia i/b Chitnis & Co. for Applicant.
Mr. Vijay A. Thorat, Senior Advocate, a/w Ms. Prachi Tatake for Respondents.

Headnote:Maharashtra Rent Control Act, 1999 - Section 3(1)(b)Expression "multinational company" Meaning of. - If a company performing business by itself or with its sister companies or amalgamated companies and business of such company has been extended to many countries, said company would be regarded as multinational company for purposes of Section 3(1)(b) of the Rent Act. - In the present case, forty percent of the shareholding of the applicant is admittedly held by the Eloff Hansson Pulp Paper Pvt. Ltd., London, which in turn is an affiliate of Eloff Hansson AB, Sweden. Yet another definition or test refers to a multinational company being a cluster of corporations of diverse nationality joined together by ties of common ownership and responsive to a common management strategy. Rather, the emphasis has to be upon the substance, particularly in the context of interpreting the provision of the Rent Act, which professes to strike a reasonable balance between the competing interests of the landlords and tenants. The organizational structure which a multinational company adopts may have nexus with its functional strategies, its market strategies or even its tax planning. For example, in defining the term `Multinational Corporation’, Sir Arnold Hall of Hawker Siddeley, provided a tongue-in-cheek definition, which goes as follows : "A multinational corporation is an American registered company manufacturing its products where labor is cheapest, and channeling its profits to another country where taxation is lowest or preferably nonexistent." [Macrea, The Future of International Business. THE ECONOMIST, January 22, 1972]. The structure may be relevant, but certainly not conclusive in the context of defining the expression "multinational companies" under Section 3(1)(b) of the Rent Act.

       Maharashtra Rent Control Act, 1999 - Section 3(1)(b)Expression "multinational company" Scope and meaning of. - Such domestic company as has been defined under Section 22-A of I.T. Act is regarded as multinational company for purposes of Section 3(1)(b) of the Rent Act. - In case of Paramount Films, 2013 (3) All MR 660, by reference to the punctuations employed by the Legislature in Section 3(1)(b) of the Rent Act as also the principle of noscitur a sociis. There is a comma (,) and the word `and’ is used between private limited company and public limited company and only thereafter, the words `having paid up share capital’ find place. Drawing sustenance upon the principles laid down by the Apex Court in cases of Shambhu Nath Sarkar v. State of West Bengal and others, AIR 1973 SC 1425; Mohd. Shabbir v. State of Maharashtra, AIR 1979 SC 564 and M.K. Salpekar (Dr.) v. Sunil Kumar Shamsunder Choudhary, AIR 1988 SC 1841, in the context of importance of punctuation marks in statutory provisions, this Court held that the requirement of share capital exceeding rupees one core is inapplicable to multinational companies. Further, this Court, also noted that the foreign mission, international agencies and multinational companies came to be grouped together because of the foreign or international element inherent in each of them. Such element leads to a reasonable inference that they have the financial capacity and capability to afford the market rates in the matters of lease of immovable properties.

JUDGMENT

M.S. SONAK, J.

1. This Civil Revision Application challenges Judgment and Order dated 11/02/2005 made by the Small Causes Court, Mumbai (Trial Court) and Judgment and Order dated 06/08/2009 made by the Appellate Bench of the Small Causes Court, Mumbai (Appeal Court), directing the eviction of the Applicant from the suit premises upon record of concurrent findings that the Applicant is a multinational company and therefore disentitled to the protection of The Maharashtra Rent Control Act, 1999 ('Rent Act').

2. The Applicant was the tenant in respect of office premises No. 5/F, 5th floor, Court Chambers, 35, New Marine Lines, Mumbai, admeasuring about 921 sq.ft. (suit premises), of which, the Respondents are landlords. On or about 07/07/1993, the Respondents, by written notice, terminated the tenancy and sought for delivery of possession. The Respondents instituted R.A.E. Suit No. 709/1702 of 1993, inter alia, on the ground that they required the suit premises reasonably and bonafide, for their own use and occupation. The suit was decreed by the Trial Court, but such decree was set aside by the Appeal Court on 28/08/2003. The Respondents have preferred Writ Petition as against the Judgment and Order dated 28/08/2003, which is pending.

3. Whilst the matter was pending before the Appeal Court, the Rent Act came into force with effect from 31/03/2000. Section 3(1)(b) of the Rent Act exempts any premises let out or sublet to multinational companies from the application of the Rent Act. Accordingly, the Respondents instituted another suit against the Applicant i.e. T.E. Suit No. 284/299 of 2001 before the Trial Court seeking possession of the suit premises. The trial Court, vide Judgment and Order dated 11/02/2005, after holding that the Applicant was a multinational company and hence ineligible for the protection of the Rent Act, directed eviction of the Applicant. The Appeal Court has, by its Judgment and Order dated 06/08/2009, confirmed the Judgment and Order dated 11/02/2005 made by the trial Court. Hence the present Revision Application.

4. Mr. Girish Godbole, learned Counsel for Applicant, has made the following three submissions in support of this Revision Application:-

(a) That Section 3(1)(b) of the Rent Act denies the protection of Rent Act only to multinational company which has paid up share capital of more than rupees one crore. In the present case, there is and there can be no dispute that the paid up share capital of the Applicant is less than rupees one crore. Accordingly, the Applicant was entitled to protection of the Rent Act.

(b) In any case, the Applicant is not at all a multinational company. Rather, the Applicant is a company incorporated and registered in India. Its operations are restricted in India and it does not carry out any business beyond the territorial limits of India. The material on record, including admissions on behalf of the Respondents, at the highest, indicate that the Applicant is an agent of a multinational company and that circumstance by itself, does not render the Applicant itself, a multinational company. Accordingly, the provisions under Section 3(1)(b) of the Rent Act have no applicability and the protection of the Rent Act applies to both, the Applicant as well as the suit premises let out to the Applicant.

(c) The findings recorded by the two Courts to the effect that the Applicant is a multinational company are vitiated by clear perversity. Relevant evidence, which would support the case of the applicant, has been overlooked and admissions, never made by or on behalf of the Applicant, have been attributed to the applicant's witness. The jurisdictional finding of fact is therefore vitiated.

5. Ms. Prachi Tatake, learned Advocate for Respondents, defended the impugned orders by submitting that the concurrent findings of fact are well borne by the material on record and there is no perversity whatsoever. Ms. Tatake placed reliance upon the decision of the Hon'ble Apex Court in t







































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