Once an entity loses rent control protection due to exceeding paid-up capital, it cannot regain that protection through subsequent reduction of capital, as per legislative intent.

JUDGMENT :

Sandeep V. Marne, J.

A. ISSUE FOR CONSIDERATION

1) The issue involved in the Revision Application is permissibility to seek restoration of protection of rent control legislation by an entity, which has once lost the same. Section 3(1)(b) of the Maharashtra Rent Control Act, 1999 (MRC Act) excludes the entities enumerated therein from application of the Act. Accordingly a public or private limited company having paid up share capital of rupees one crore or more is excluded from protection of its tenancy under the MRC Act. The issue that this Court is tasked upon to decide is whether a company which had paid up share capital in excess of Rs. 1 Crore as on the date of coming into effect of MRC Act (31 March 2000) and had lost the rent control protection, can resume the lost rent control protection on account of subsequent reduction of its paid up share capital below Rs. 1 crore.

B. THE CHALLENGE

2) Applicant-lessor is aggrieved by dismissal of its Suit seeking ejectment of Respondent and has accordingly invoked revisionary jurisdiction of this Court under Section 115 of the Code of Civil Procedure, 1908 (Code) for setting up a challenge to the Judgment and Order dated 11 August 2023 passed in P. Appeal No. 508 of 2016, by which the Appellate Bench of the Small Causes Court has confirmed the decree dated 6 October 2016 passed by the Small Causes Court dismissing the T.E. & R. Suit No. 198/211 of 2006.

C. FACTS

3) The building ‘Hamilton House’ situated at 8, J.N. Heredia Marg, Ballard Estate, Mumbai 400 038 was earlier owned by BP India Ltd, which had inducted Defendant-Company as monthly tenant in respect of the preemies located on the entire second and fourth floor. B.P. India Ltd. had filed RAE Suit No.244/515 of 1995 in the Small Causes Court for ejectment of the Defendant, which was compromised, under which the Defendant handed over possession of the fourth floor to BP India Ltd. and in turn Defendant’s tenancy in respect of second floor was agreed not to be terminated and accordingly, no further steps were to be taken for recovery of possession of second floor. This is how Defendant remained as a monthly tenant of B. P. India Ltd. in respect of entire second floor admeasuring approximately 5000 sq.ft. in the building Hamilton House (suit premises). Defendant was paying Rs. 13,865/- towards rent in respect of the suit premises. Plaintiff purchased the building Hamilton House and thus became Defendant’s landlord/lessor in respect of the suit premises.

4) According to Plaintiff, Defendant being a limited company having paid up share capital of more than Rs. 1 crore as on 31 March 2000, is not entitled to claim protection under MRC Act 1999 and therefore provisions of Act are not applicable to it. Plaintiff accordingly served termination notice dated 24 December 2002 calling upon Defendant to handover vacant possession of the suit premises. Defendant replied the termination notice on 28 December 2002, to which Plaintiff sent a Rejoinder on 18 January 2003. Treating Defendant as an unprotected tenant, Plaintiff filed eviction suit under Section 41 of the Presidency Small Causes Act, 1888 (PSCC Act), being T.E. & R. Suit No. 198/211 of 2006.

5) Defendant filed Written Statement raising preliminary objection about maintainability of the suit under Section 41 of the PSCC Act and contended that tenancy between the Plaintiff and Defendant is governed by provisions of MRC Act. Defendant has further pleaded that its paid-up share capital was Rs.75,60,000/- as on 31 March 2000 by relying on the Order dated 18 April 2001 passed by this Court in Company Petition Nos. 381 of 2000, 382 of 2000 and 383 of 2000 and certificate issued by Registrar of Companies.

6) After the Defendant filed the Written Statement, Plaintiff filed an application for amendment of plaint to incorporate averments relating to Judgment and Order dated 18 April 2001 passed by this Court. The application was resisted by the Defendant. The Small Causes Court allowed the a