W.P. No.5023 of 2009

8th September, 2009

Petitioner Counsel: V. Y. SANGLIKAR
Respondent Counsel: HIRALAL THAKKAR, JOSEPH FERNANDES, REHANA KESURI, JEETENDRA RANAWAT, MANOJ DALVI

Cases Cited:
Ashoka Marketing Ltd. Vs. Punjah National Bank, (1990)4 SCC 406 [Para 3,4,5,9,16]
Crawford Bayley and Co. Vs. Union of India, 2006(5) ALL MR 26 (S.C.) =(2006)6 SCC 25 [Para 3,10,14]
M/s. Jain Ink Manufacturing Company Vs. Life Insurance Corporation of India, (1980)4 SCC 435 [Para 3,11]
Jamshed Homusji Wadia Vs. Board of Trustees, Port of Mumbai, AIR 2004 SCC 1815 [Para 3]
Pradeep Babubhai Chinal Vs. Sindhu Resettlement Corporation Ltd., Bombay, 2009(3) Mh.L.J 671 [Para 3,13]
Kaiser-I-Hind Pvt. Ltd. Vs. National Textile Corporation (Maharashtra North) Ltd., 2003(1) ALL MR 314 (S.C.)=(2002)8 SCC 182 [Para 4,10,12]
Bharath Gold Mines Ltd. Vs. Kannappa, 1989 All India Rent Control Journal-II 154 [Para 4,16]
Dwarkadas Marfatia and Sons Vs. Board of Trustees of the Port of Bombay, (1989)3 SCC 293 [Para 7]
2003(9) LJSOFT 27 [Para 10]
Accountant and Secretarial Services (P) Ltd. Vs. Union of India, (1988)4 SCC 324 [Para 10]

JUDGMENT

JUDGMENT :- The writ petition is taken up for final disposal. Following questions are involved in this writ petition :

(i) Whether the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (hereinafter referred to as the said Act of 1971) have overriding effect over the provisions of the Maharashtra Rent Control Act, 1999 (hereinafter referred to as the said Act of 1999)?

(ii)Whether an application for fixation of standard rent under the provisions of the said Act of 1999 is maintainable to the premises to which provisions of the said Act of 1971 are applicable?

2. The 1st petitioner Life Insurance Corporation of India is constituted under the Life Insurance Corporation Act, 1956 (hereinafter referred to as the said Act of 1956). The 2nd petitioner is an officer of the 1st petitioner. It is not in dispute that the premises belonging to the 1st petitioner are "public premises" under section 2(e) of the said Act of 1971. The dispute relates to a commercial premises admeasuring 1289.16 sq. ft situated in Reliance Building at D.N. Road, Fort, Mumbai 400 001 owned by the 1st petitioner. The said commercial premises (hereinafter referred to as the suit premises) were let out by the 1st petitioner to the respondent with effect from 1st August, 1998. The respondent filed an application before the Court of Small Causes at Bombay praying for fixation of standard rent in respect of the suit premises. The said application was opposed by the 1st petitioner by contending that the said Act of 1971 has overriding effect on provisions of the said Act of 1999 and therefore, the application for fixation of standard rent was not maintainable. A preliminary objection was raised by the petitioner to the maintainability of the application for fixation of standard rent. An application was moved by the 1st petitioner purporting to be an application under section 9-A of the Code of Civil Procedure, 1908 praying for framing a preliminary issue of jurisdiction. By the impugned order dated 30th March, 2001, the said application has been rejected. The learned trial Judge held that "public premises" are not exempted from the applicability of the said Act of 1999. The learned trial Judge held that an application for fixation of standard rent is not a proceeding for eviction of a tenant. The learned Judge observed that section 3 of the said Act of 1999 does not exempt the 1st petitioner from the applicability of the said Act of 1999.

3. Mr. Sanglikar, learned counsel appearing for the petitioners relied upon the following decisions of the Apex Court :

1.Ashoka Marketing Ltd. and anr. Vs. Punjah National Bank and ors., (1990)4 SCC 406; 2. Crawford Bayley and Co and ors. Vs. Union of India and ors., (2006)6 SCC 25 : [2006(5) ALL MR 26 (S.C.)]; 3. M/s. Jain Ink Manufacturing Company Vs. Life Insurance Corporation of India and anr., (1980)4 SCC 435; 4. Jamshed Homusji Wadia Vs. Board of Trustees, Port of Mumbai and anr., AIR 2004 SCC 1815.

He also placed reliance on a decision of the learned single Judge of this Court in the case of Pradeep Babubhai Chinal and anr. Vs. Sindhu Resettlement Corporation Ltd., Bombay and ors., 2009(3) Mh.L.J 671. He submitted that the Apex Court has held that the provisions of the said Act of 1971 will prevail over the Rent Control Legislations enacted by the State. He submitted that once provisions of the said Act of 1971 are applicable to a premises, the rights and liabilities of the parties will be governed by the said Act of 1971 which will override the provisions of the Rent Control Legislation. He submitted that, therefore, to such premises provisions of the Transfer of Property Act, 1882 will be applicable. He, therefore, submitted that application for fixation of standard rent in respect of such premises will not be maintainable as provisions of the said Act of 1999 cannot be applied to such premises.

4. Mr. Thakkar, learned senior counsel appearing for the respondent invited the attention of the Court to the decision of the Apex Court in the case of Ashoka Marketing Ltd. (supra) and submitted that as there is no provision under the said Act of 1971 for fixation of reasonable rent, the provision relating to fixation of standard rent in the said Act of 1999 is not affected by the provisions of the said Act of 1999. He submitted that the said Act of 1971 will operate only insofar as mechanism provided for eviction of tenants is concerned, but, the tenant will continue to have protection of all other provisions of the said Act of 1999. He invited my attention to certain observations made by the Apex Court in the case of Kaiser-I-Hind Pvt. Ltd. and anr. Vs. National Textile Corporation (Maharashtra North) Ltd. and ors., (2002)8 SCC 182 : [2003(1) ALL MR 314 (S.C.)]. Lastly, he placed reliance on decision of the Division Bench of Karnataka High Court in the case of Bharath Gold Mines Ltd. Vs. Kannappa, 1989 All India Rent Control Journal-II 154.

5. I have carefully considered the submissions. There is no dispute that the suit premises are "public premises" under the provisions of the said Act of 1971. It will be necessary to refer to the decision of the Apex Court in the case of Ashoka Marketing Ltd. (supra). The question before the Apex Court was whether a person who was inducted as a tenant in public premises for the purposes of the said Act of 1971 can be evicted from the said premises as a person being in unauthorised occupation under the provisions of the said Act of 1971 and whether such a person can invoke the protection of the Delhi Rent Control Act, 1958. The question which was considered specifically by the Apex Court was whether the provisions of the said Act of 1971 would override the provisions of the Rent Control Act in relation to the premises which fall within the ambit of both the enactments. The Apex Court observed that the Rent Control Legislations fall within the ambit of Entries 6, 7 and 13 of List III of Seventh schedule to the Constitution of India. The Delhi Rent Control Act was enacted by the Parliament in relation to union territory of Delhi in exercise of power conferred under Article 246(4) of the Constitution of India. The Apex Court observed that the said Act of 1971 in relation to the properties belonging to various legal entities mentioned in clauses 2 and 3 of section 2(e) is covered by Entries 6, 7 and 46 of List III of the Seventh schedule to the Constitution of India. The Apex Court observed that the said Act of 1971 and the Delhi Rent Control Act have been enacted by the same legislature in exercise of powers in respect of matters enumerated in the concurrent list. The Apex Court also observed that in relation to the properties belonging to the Central Government the said Act of 1971 would fall within the Entry 32 of List I being a law with respect to property of the Union. In paragraph 54 of the decision, the Apex Court observed that the said Act of 1971 was later enactment. The argument before the Apex Court was that the said Act of 1971 was a general enactment and whereas the Rent Control Act is a special enactment and therefore Rent Control Act should prevail over the said Act of 1971. The other argument was that the said Act of 1971 is also a special enactment making a provision for speedy recovery of possession of public premises in unauthorised occupation of a person. Thus, the argument was both the enactments are special legislations. It will be necessary to refer to what is held by the Apex Court in paragraph 55 of the said decision. The relevant portion of the said paragraph reads thus :

" ...... Therefore, the Public Premises Act is also a special statute relating to eviction of unauthorised occupants from public premises. In other words, both the enactments, namely, the Rent Control Act and the Public Premises Act, are special statutes in relation to the matters dealt with therein. Since, the Public Premises Act is a special statute and not a general enactment the exception contained in the principle that a subsequent general law cannot derogate from an earlier special law cannot be invoked and in accordance with the principle that the later laws abrogate earlier contrary laws, the Public Premises Act must prevail over the Rent Control Act."

6. In paragraph 56 the Apex Court observed thus :

"We arrive at the same conclusion by applying the principle which is following for resolving a conflict between the provisions of two special enactments made by the same legislature. We may in this context refer to some of the cases which have come before this Court where the provisions of two enactments made by the same legislature were found to be inconsistent and each enactment was claimed to be a special enactment and had a non-obstante clause giving overriding effect to its provisions."

7. In paragraph No.69 of the judgment, the Apex Court referred to its earlier decision in the case of Dwarkadas Marfatia and Sons Vs. Board of Trustees of the Port of Bombay, (1989)3 SCC 293. The Apex Court observed that the observations in the said case were made in the context of the provisions of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 (hereinafter referred to as the said Act of 1947) under which an exemption from applicability of the provisions of the said Act of 1947 was granted to the premises belonging to the Bombay Port Trust. Thereafter, the Apex Court proceeded to observe thus :

"..... The consequence of giving overriding effect to the provisions of the Public Premises Act is that premises belonging to companies and statutory bodies referred to in clauses (2) and (3) of section 2(e) of the Public Premises Act would be exempted from the provisions of the Rent Control Act. The actions of the companies and statutory bodies mentioned in clauses (2) and (3) of section 2(e) of the Public Premises Act while dealing with their properties under the Public Premises Act will, 'therefore, have to be judged by the same standard."

8. In paragraph 70 the Apex Court held thus :

"..... In our opinion, the provisions of the Public Premises Act, to the extent they cover premises falling within the ambit of the Rent Control Act, override the provisions of the Rent Control Act and a person in unauthorised occupation of public premises under section 2(e) of the Act cannot invoke the protection of the Rent Control Act."

9. It must be remembered here that Apex Court in the case of Ashoka Marketing Ltd. (supra) was dealing with two special statutes enacted by the same legislature. In the said case, the Rent Control Legislation was prior in time to the Said Act of 1971. The Apex Court has noted that under the provisions of the said Act of 1947, the premises belonging to Bombay Port Trust are specifically exempted from the applicability of the said Act of 1947.

10. The factual position in this petition is slightly different. Here the question is whether the said Act of 1999 will prevail over the provisions of the said Act of 1971 in view of the Article 254(2) of the Constitution of India. The said Act of 1999 is a law made by the legislature of the State in respect of matters enumerated in Entries 6 and 46 of the Concurrent List and the said law has been enacted long after the said Act of 1971 was enacted. Moreover, the said Act of 1971 is also a law made under the concurrent list. The question will be what is the effect of the said Act of 1999 having being reserved for consideration of the President and having received the assent of the President of India. In this behalf, it will be necessary to refer to the decision of the Apex Court in the case of Crawford Bayley and Co. [2006(5) ALL MR 26 (S.C.)] (supra). This was a case where proceedings were sought to be initiated against the appellant before the Apex Court under the provisions of the said Act of 1971. One of the grounds urged by the appellants was that the provisions of the said Act of 1999 shall prevail over the provisions of the said Act of 1971. In a writ petition filed by the said appellant before a Division Bench of this Court a contention was raised based on the fact that the said Act of 1999 was a subsequent legislation and the same had received assent of the President of India. In fact the said contention is specifically noted by the Division Bench in paragraph 3 of its decision [2003(9) LJSOFT 27]. The said contention was elaborately dealt with in paragraph 10 of the decision of the Division Bench and was rejected relying upon the decision of the Apex Court in the case of Kaiser-I-Hind Ltd., [2003(1) ALL MR 314 (S.C.)] (supra). The Division Bench held that the provisions of the said Act of 1971 will prevail. The said decision of this Court was challenged before the Apex Court. It will be necessary to refer to the contention raised by the appellant before the Apex Court which is incorporated in paragraph 6 of the said decision in the case of Crawford Bayley and Co. (supra) which reads thus :

"6.The appellant raised five 'grounds before the High Court; first the provisions of the Maharashtra Rent Control Act, 1999 (hereinafter referred to as the Maharashtra Rent Act) shall prevail over the provisions of the said Act of 1941 in view of Article 254(2) of the Constitution of India as the Maharashtra Rent Act applies to all premises belonging to the respondent and therefore, appellant 1 is a protected tenant under the provisions of the Maharashtra Rent Act and the order of eviction for appellant cannot be made. It was submitted that the Maharashtra Rent Act is law made by the legislature of the State in respect of matters enumerated under the Concurrent List i.e. Entries 6, and 46. The Public Premises Act, 1971 is an earlier law made by Parliament under the Concurrent List i.e. Entry 6. It was submitted since it was reserved for the assent of the President of India as it contained the repugnant provisions to the earlier law made by Parliament. Therefore, the later Act i.e. the Maharashtra Rent Act having been reserved and having received the assent of the President of India, would prevail over the Act, 1971."

In paragraphs 15 and 16, the Apex Court referred to its earlier decision in the case of Accountant and Secretarial Services (P) Ltd. Vs. Union of India, (1988)4 SCC 324 which dealt with the issue whether the said Act of 1971 will prevail over the West Bengal Premises Act, 1956. In paragraph 17 of the decision the Apex Court observed thus :

"17.Therefore, His Lordship has held that the premises of the Bank shall also he governed by the provisions of the Act, 1971. In view of the decision of this Court, the argument made by the appellant has no legs to stand."

Therefore, the argument that the said Act of 1999 would prevail over the said Act of 1971 in view of Article 254(2) of the Constitution of India has been considered and rejected by a Division Bench of this Court which has been affirmed by the Apex Court.

11. It will be also necessary to consider the decision of the Apex Court in the case of M/s. Jain Ink Manufacturing Company (supra). This was a case where the 1st petitioner herein was owner of a premises. The 1st petitioner initiated proceeding under the said Act of 1971 against the appellant before the Apex Court. The matter was carried to the High Court on account of preliminary objections raised to the maintainability of proceedings. Before the Apex Court, a submission was made on the basis of the provisions of the Delhi Rent Control Act, 1958. A submission was made that the said Delhi Rent Control Act will override the provisions of the said Act of 1971. One of the contentions raised before the Apex Court was that though the said Act of 1971 was passed in 1971, it was given retrospective effect from September 15, 1958 and therefore the Delhi Rent Control Act passed subsequently will have overriding effect. However, the said argument was not accepted by the Apex Court and it was held that the said Act of 1971 is a subsequent legislation.

12. In this context, it will be necessary to refer to the decision of the Apex Court in the case of Kaiser-I-Hind Pvt. Ltd., [2003(1) ALL MR 314 (S.C.)] (supra). An argument was advanced before the Apex Court that having regard to Article 254(2) the provisions of the said Act of 1947 would prevail over the Act of 1971. Reliance was placed on the fact that the said Act of 1947 was a temporary enactment. The duration and applicability of the said Act was extended from time to time by State Legislature including Maharashtra Act No.16 of 1986. The majority view taken by the Apex Court is that the assent given by the President of India to the extension Acts of 1981 and 1986 of the said Act of 1947 was only for the limited purpose of repungency to the Transfer of Property Act, 1882 and the said assent was not applicable to the said Act of 1971. The majority view of the Apex Court is that Maharashtra Act No.16 of 1986 did not amount to new enactment and when the said Act of 1971 came into force, the existing Act, namely, said Act of 1947 would be void so far as it is repungant to the law made by the Parliament in view of Article 254(1) of the Constitution of India. The Apex Court has not considered the subsequent Rent Control Legislation in the form of the said Act of 1999.

13. As far as the decision of the learned single Judge of this Court in the case of Pradeep Babubhai Chinal (supra) is concerned, the same deals with overriding effect of the said Act of 1971 over the provisions of the said Act of 1947. The said decision does not consider the effect of the said Act of 1999.

14. Thus, in view of the decision of this Court and the Apex Court in the case of Crawford Bayley and Company [2006(5) ALL MR 26 (S.C.)] (supra), the argument that the provisions of the said Act of 1999 shall prevail over the provisions of the said Act of 1971 cannot be accepted as the said argument has not found favour with the Apex Court. The fact remains that the argument based on the said Act of 1999 having received assent of the President of India and the argument based on Article 254(2) of the Constitution of India was rejected by a Division Bench of this Court and the said argument was not accepted by the Apex Court.

15. Therefore, the submission of the learned counsel appearing for the petitioners that the provisions of the said Act of 1971 have overriding effect on the said Act of 1999 will have to be accepted in view of the aforesaid decisions of the Apex Court.

16. Now the question which remains to be decided is whether the said Act of 1971 will prevail over all the provisions of the said Act of 1999 including the provisions under the said Act of 1999 regarding fixation of standard rent. Reliance is placed in this behalf on the decision of the Karnataka High Court in the case of Bharat Gold Mines Ltd. (supra). The learned counsel appearing for the respondent relied upon what is observed by the Apex Court in paragraph 70 in the decision in the case of Ashoka Marketing Ltd. (supra). What is held by the Apex Court is the provisions of said Act of 1971 to the extent they cover premises falling within the ambit of Rent Control Act, override the provisions of the Rent Control Act. Therefore, the person in possession of the premises which is a public premises within the meaning of said Act of 1971 cannot claim the protection of the provisions of the Rent Control Act.

17. There may not be a provision to the said Act of 1971 for fixing standard rent hut there are provisions in the said Act of 1971 which empower the authorities to pass an order for recovery of rent and/or compensation from the tenant. Apart from that, in view of the overriding effect of the said Act of 1971, an occupant of the public premises cannot claim protection under the Rent Control Legislation inasmuch as section 15 of the said Act of 1971 ousts the jurisdiction of the Courts under the Rent Control Legislation to deal with the matter of recovery of rent in respect of public premises. Therefore, the said submission made by Mr. Thakkar, the learned senior counsel appearing for the petitioner cannot be accepted.

18. Thus, it will have to be held that the provisions of the said Act of 1971 override the provisions of the said Act of 1999. Consequently, application for fixation of standard rent will not be maintainable.

19. It must be stated here that by the impugned order, an application made by the petitioners for framing preliminary issue of jurisdiction has been rejected. The trial Court had not framed issue of jurisdiction. However, submissions have been made before this Court on the applicability of provisions of the said Act of 1999. In view of the answers to the said submissions, it is obvious that the application for fixation of standard rent was not maintainable and the said application will have to be dismissed.

20. Hence, I pass the following order:

ORDER

Rule is made absolute in terms of prayer clause (a).

Order accordingly.