JUDGMENT :

1. The Court: The petitioners have challenged a proceeding under Sections 4 and 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (hereinafter referred to as, “the 1971 Act”) and for quashing the said proceeding. Admittedly, the Life Insurance Corporation of India (LIC), the respondent no.1, issued a letter dated July 31, 2003 asking the petitioner no.1 to vacate the disputed premises on the expiry of August 31, 2003.

2. Subsequently, there was correspondence between the parties in respect of increase in the monthly rent, followed by the respondent no.1 initiating a proceeding under Section 4 of the 1971 Act, bearing No.EO/299/1203, which was subsequently withdrawn on July 27, 2004.

3. Thereafter, a suit was filed against the petitioner no.1 for declaration and permanent injunction restraining the petitioner no.1 from sub-letting, transferring, assigning and/or carrying out any work of construction. In the suit, the temporary injunction application filed by the respondent no.1 was dismissed.

4. However, the respondent no.1/LIC issued further notices on May 25, 2005 under sections 4 and 7 of the 1971 Act, to which the petitioner no.1 responded. The LIC also instituted a proceeding under Sections 4 and 7, giving rise to Case No. EO/316/0505, in which the petitioner no.1 filed a written objection and its affidavit of examination-in-chief. Thereafter the said witness was examined and cross-examined.

5. The petitioner no.1 subsequently filed an application before the Estate Officer asking for cancellation of the orders passed in the proceeding for eviction and damages, challenging the authority of the previous Estate Officer, which question was kept open by the Estate Officer to be decided with the eviction proceeding.

6. Although initially the petitioners challenged the authority of the Estate Officer, subsequently such ground was not pressed seriously on behalf of the petitioners, particularly since the Estate Officer was changed in the meantime. Moreover, in another decision, this Court held that the person concerned was a duly authorised Estate Officer under the 1971 Act.

7. The plinth of the challenge is that the petitioner no.1 was a tenant in respect of the premises and such relationship was never severed in due course of law. Hence, it is argued that the petitioners are not unauthorised occupants within the contemplation of the 1971 Act.

8. Learned counsel for the petitioner cites Ashoka Marketing Ltd. And another Vs. Punjab National Bank and others, reported at AIR 1997 SC 855, where the Supreme Court upheld the vires of the Act but observed that care must be taken to use the powers, conferred by the Act, bona fide. It is argued that the Central Government published two sets of directions, in 1992 and 2002 respectively, essentially in the light of Ashoka Marketing (supra). As per the said directions, the provisions of the 1971 Act should not be exercised to evict genuine tenants and the powers should be used primarily to evict unauthorised occupants and retired employees of Public Sector Enterprises.

9. Section 21 of the Life Insurance Corporation Act, 1956 (for short, “the LIC Act”) specifically provides that, in discharge of its functions under the Act, the LIC shall be guided by such directions in the matter of policy involving public interest as the Central Government may give to it in writing and that the same shall be binding on the LIC.

10. That apart, it is argued that the LIC is an authority under Article 12 of the Constitution of India, for which proposition learned counsel for the petitioner cites Sukhdev Singh and others Vs. Bhagatram Sardar Singh Raghubanshi and another, reported at AIR 1975 SC 1331. As such, the LIC is expected to act fairly, reasonably and to eschew arbitrariness.

11. It is submitted that as per the bilateral agreement between the LIC and the petitioner no.1, the petitioner no.1 was a valid tenant. The rate and periodicity of increase in rent was a part of th