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Supreme Court of India
S.H. KAPADIA & B. SUDERSHAN REDDY
Smt. Leelabai Gajanan Pansare & Others
Versus
The Oriental Insurance Co. Ltd. & Others
Civil Appeal No.5136 of 2008 (Arising out of SLP(C) No.5855 of 2007) with Civil Appeal Nos.5137-5138 of 2008 @ SLP (C) No.24789-24790 of 2007 and Civil Appeal No.5139 of 2008 @ SLP (C) No.16237 of 2008
Decided on: 20-08-2008
Constitution Of India,1950 - Article 14 – Payment Maharashtra Rent Control Act, 1999 - Section 3(1)(b) - Rent Act, 1999 - Section 3(1)(b) - Insurance Company – Payment - Appellants-landlords had let out suit-premises admeasuring - Thane to Oriental Insurance Company Ltd. rent Vide notice Section Transfer of Property Act appellant terminated the tenancy of said Company - On failure of OIC vacate premises they instituted a suit for eviction - OIC took plea that it not covered Section Rent Act as was protected tenant said Rent and therefore could not be evicted said suit landlord pleaded that OIC is Public Sector Undertaking and/or Corporation having a total paid share capital of more - OIC resisted suit by filing its written statement inter alia contending that neither PSU nor Corporation that it was not exempted Section Rent Act that it was neither bank nor PSU nor foreign mission nor MNC and nor a public limited company having paid up share capital of more - According to OIC it was Government company carrying on its own insurance business and that premises let stood fully protected by provisions of the Rent Act as they did not fall in any categories mentioned in Section said Rent Act –Held, Government companies as held by High Court would be disturbing package offered by Legislature of allowing increase of rent annually allowing landlords to accept premium and exclusion of certain entities from protection of the Rent Act Section - On other hand acceptance of arguments advanced on behalf of respondents on interpretation of Section would make Act vulnerable to challenge as violative of Article Constitution - Therefore Court are of view that plain meaning of words `PSUs understood by the Legislature is clear that India PSUs are in form statutory corporations public sector companies Government companies and companies in which the public are substantially interested see income tax When word PSU mentioned in Section State Legislature presumed to know recommendations of the various Parliamentary Committees on PSUs - These entities are basically cash-rich entities - They have positive net asset value - Rent Act - This further supports view which we have taken that each and every entities mentioned in Section can afford to pay rent at market rates – Court may note that o meet challenge discrimination Article not sufficient to state that there intelligible differentia but it is further essential requirement to show that the differentia has rational nexus object sought to be achieved by the Statute in question - State of Rajasthan - As stated above Section strikes balance between interest of landlords and the tenants is neither pro-landlords nor anti-tenants - It pro-public interest - In this connection one must keep mind the fact that the said Rent Act involves a structural change vis-à-vis the Bombay Rent Act - As stated above with passage of time Act became vulnerable challenge as violative Article stated above legislature has strike balance the twin objectives of Rent Act protection and rent restriction for those who cannot afford to pay rents at market rates - To accept the interpretation advanced on behalf of the respondents for excluding Government companies from the meaning of words PSUs in Section would amount to disturbing the neat balance struck by Legislature Government company - In other words High Court states that OIC/UIC and BPCL are public undertakings however they are Government companies incorporated Section and therefore stand excluded from Section - In this connection it may be stated that High Court has relied upon definition of Government Company Section Companies Act - In case of Union of India and others v. R.C. Jain and others - Court has enunciated the principle that definition of an expression in one Act must not be imported into another It would be a new terror in the construction of Acts if we were required to limit word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for purposes of that Act alone - Lastly interpretation placed by the High Court on word PSUs in Section amounts to judicial legislation and further it defeats the very object - Petition dismissed
Judgment
S.H. Kapadia, J.
Civil Appeals arising out of S.L.P.(C) Nos. 5855/07 and S.L.P. (C) No.16237/08:
1. Leave granted.
2. Applications for interventions are allowed.
3. An important question of law regarding interpretation of Section 3(1) (b) of the Maharashtra Rent Control Act, 1999 is involved in the present appeal, namely:-
"Whether a Government Company falls within the compendious expression "any public sector undertakings or corporation established by or under any Central or State Act" in Section 3(1)(b) of the Maharashtra Rent Control Act, 1999 ("Rent Act" in short)."
4. For the sake of convenience we may state the facts of the case in SLP (C) No. 5855/07 in the case of Leelabai Gajanan Pansare & Ors. v. Oriental Insurance Company Ltd. & Ors.
Facts:
5. Appellants-landlords had let out the suit-premises admeasuring 3214 sq. ft. (approx.) in Thane to Oriental Insurance Company Ltd. ("OIC" for short). The rent was Rs. 10,000/- per month. Vide notice dated 15.4.2002 under Section 106 of the Transfer of Property Act, appellant terminated the tenancy of the said Company. On failure of OIC to vacate the premises, they instituted a suit for eviction. OIC took the plea that it is not covered under Section 3(1)(b) of the Rent Act as it was "a protected tenant" under the said Rent Act, 1999 and, therefore, could not be evicted. In the said suit, the landlord pleaded that OIC is a Public Sector Undertaking and/or Corporation having a total paid up share capital of more than Rs. 1,00,00,000.
6. OIC resisted the suit by filing its written statement inter alia contending that it is neither a PSU nor a Corporation; that it was not exempted under Section 3(1)(b) of the Rent Act; that it was neither a bank nor a PSU, nor a foreign mission, nor MNC and nor a public limited company having paid up share capital of more than Rs. 1,00,00,000. According to OIC, it was a Government company carrying on its own insurance business and that the premises let to it stood fully protected by the provisions of the Rent Act as they did not fall in any of the categories mentioned in Section 3(1)(b) of the said Rent Act.
7. By Judgment and Order dated 9.7.2004 in Special Civil Suit No.202/03 the trial court held that OIC is a Government company under Section 617 of the 1956 Act over which the GOI has overall control qua insurance business. The trial court further held that OIC stood established as a subsidiary of GIC that came into existence in 1972 pursuant to nationalization of General Insurance. According to the trial court since OIC is a Government company under Section 617 of the 1956 Act and since GOI has overall control over its functioning, it is entitled to protection from eviction by the landlords under Section 3(1)(a) which gives protection to premises let to the Government or local authority or to premises taken on behalf of the Government. In other words, according to the trial court, since GOI exercises deep and pervasive control over the respondent company herein, the said premises occupied by it were entitled to protection under the second part of Section 3(1)(a). According to the said Judgment and Order dated 9.7.2004 the said suit stood dismissed by the trial court.
8. Aggrieved by the dismissal of the suit by the trial court, appellants herein preferred an appeal being FA No. 1245/04. By the impugned judgment dated 20.12.2006, the Bombay High Court held that exempted premises under Section 3(1)(b) of the Rent Act, 1999 are PSUs but not Government Companies incorporated under the Companies Act, 1956. It was further held that a Government Company stands in a different category and by the very absence of the words "Government Company" in Section 3 (1)(b) it is clear that the Legislature did not intend their exemption from the protection under the said Rent Act, 1999 consequently, the High Court dismissed FA No. 1245/04 filed by the appellants. Hence, this civil appeal. Contentions:
9. The basic ground of challenge in this civil a
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