Da'Cunha Associates Private vs Dilip Jhangiani on 8 September, 2010

Bombay High Court

Bench: R. C. Chavan

Anand

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

CIVIL REVISION APPLICATION NO.583 OF 2008 WITH

CIVIL APPLICATION NO.217 OF 2010

da'Cunha Associates Private ..Applicant Limited

a company incorporated under

provision of the Companies Act,

1956, having its registered

office at 4th floor, Elysium

Mansion , 7 Walton Road, Colaba, Mumbai 400 005.

Versus

1. Dilip Jhangiani

Age : 47 years,

Occupation : Advocate

2. Sunil G. Jhangiani

Age : 43 years

Occupation : business

Both of Indian Inhabitant

residing at 124, Atur Terraces,

19-A, Cuffe Parade,

Mumbai 400 005.

..Respondents

3. Mohamed Anees Noorani

Age : 49 years

Occupation : Business

4. Mohamed Salman Noorani

Age : 46 years

Occupation : Business

Both of Indian inhabitant

residing at 37-D, Belmont,

16L, Jagmohan Marg,

Mumbai 400 026.

5. Oriental Insurance Company Limited a Government Company incorporated under the Companies Act, 1956

having its registered Office

at Oriental House,

A-25/27 Asaf Ali Road,

New Delhi 110 002

and its Regional Office

No.1 at 2nd floor,

Oriental House, 7,

J. Tata Road, Churchgate

Mumbai 400 020.

Mr.S.U.Kamdar, Senior Counsel with Mr.Vishal Kanade, Ms Pooja Patil, Mr.Vinay Bandivadekar, Mr.Amit Mehta i/b.M/s.Mahimtura & Co., Advocate, for the Applicant

Mr.V.A.Thorat with Mr.P.S.Dani, Mr.Karim Vakil, Mr.A.Dasgupta, Mr.Vaibhav Sugadare, Mr.Ravi Kadam, Ms Kusum Mourya i/b.Basant Tilokani & Co., Advocate, for the Respondent Nos.1 to 4 Mr.S.V.Borkar with Mr.V.V.Warerkar i/b.Warerkar and Warerkar, Advocate, for Respondent No.5

CORAM : R.C.CHAVAN, J.

JUDGMENT RESERVED ON : 28TH JULY, 2010

JUDGMENT PRONOUNCED ON : 8TH SEPTEMBER,2010

JUDGMENT

. This Civil Revision Application is

directed against Judgment and Order passed by the 3

Appellate Bench of Court of Small Causes reversing

Judgment of the Trial Judge dismissing landlord's

suit and granting decree of applicant's ejectment.

2. Facts which are material for deciding

this Civil Revision Application are as under :-

The Respondent Nos.1 to 4 (original

Plaintiffs) are the owners of the property known

as Elysium Mansion , 7, Walton Road, Colaba,

Mumbai 400 005. Premises known as Office No.9

on the West wing of 4th floor of said building

admeasuring 970 square feet are the subject matter

of these proceedings. They were let out to

Sterling General Insurance Company Limited. On

18th June, 1969 said Sterling General Insurance

Company Limited gave these premises on licence to

the present applicant. On 30th October, 1969, the

applicant claims to have acquired from Indian

Cotton Mills Federation a licence in respect of

even the remaining 508 square feet of the West

wing on the 4th floor known as Office No.10 (not a 4

subject matter of these proceedings) and thus

occupies in all 1475 square feet area on the West

wing, which, according to Applicant, constitutes

one premises.

3. Respondent No.5 (original Defendant No.1)

Oriental Insurance Company Limited is successor

of Sterling General Insurance Company Limited and

is a Public Sector Corporation having a paid up

share capital of more than Rs.100,00,000/-, and

therefore in view of provisions of Section 3 of

the Maharashtra Rent Control Act, 1999

(hereinafter referred to as 'Maharashtra Rent

Act') does not have the protection of the Rent

Act.

4. The Plaintiffs, therefore, filed a suit

before the Court of Small Causes for ejectment of

Applicant, who was in occupation, and the

Defendant No.5 Oriental Insurance Company

Limited, the tenant, from premises known as Office 5

No.9. The learned Trial Judge upheld the

Applicant's contention that since applicant was

not shown to be an entity excluded from protection

of the Rent Act, a decree could not be passed

against it, and dismissed the suit. The Appellate

Bench reversed this by its impugned Judgment.

5. I have heard the learned Senior Counsel

for Applicant as well as the Respondent Nos.1 to 4

the landlords. The decree is assailed on three

counts : first, that the decree is in- executable,

as it is in respect of property which is not

sufficiently identifiable; secondly, the pleas in

plaint were not sufficiently clear on

identification of suit premises & the Plaintiff's

affidavit dated 4th September, 2004 was construed

as a pleading without affording to applicant an

opportunity to cross examine the deponent; and

lastly and most importantly, that the Appellate

Bench erred in holding that Applicant did not have

the protection of Rent Act, misconstruing the 6

provisions of Section 3 of the Maharashtra Rent

Control Act, 1999. The learned Senior Counsel for

the Applicants submitted that even if Respondent

No.5, the original tenant, is held to have no

protection of the Rent Act, since applicant was a

licensee, who was deemed to be tenant under

Section 15A of the Bombay Rents, Hotel And Lodging

House Rates Control Act, 1947 (hereinafter

referred to as 'Bombay Rent Act') upon termination

of his tenancy, he would become direct tenant of

the landlord under Section 14 of the Bombay Rent

Act. Once the applicant is held to be the tenant

of the landlord, since applicant is not excluded

from protection of the Maharashtra Rent Act by

operation of Section 3 of the Maharashtra Rent

Act, applicant's ejectment would have to be sought

only by invoking provisions of the Maharashtra

Rent Act.

6. The learned Counsel for both the parties

relied on a number of Judgments in support of 7

their respective contentions.

7. First, I would deal with the contention

that a decree could not be passed because the

premises are not sufficiently identifiable. For

this purpose the learned Senior Counsel for the

Applicant relied on Judgment in NAHAR SINGH Versus

HARNAK SINGH AND OTHERS, reported at (1996) 6

Supreme Court Cases 699 where the Supreme Court

was considering dismissal of a second appeal by

High Court upholding reversal by the first

appellate court of decree for Specific performance

of agreement of sale granted by Trial court. The

Supreme Court upheld the finding of the 1st

appellate court that such a decree could not have

been passed as the property was not identifiable.

8. In PRATIBHA SINGH AND ANOTHER Versus

SHANTI DEVI PRASAD AND ANOTHER, reported at (2003)

2 Supreme Court Cases 330 the Court held that if 8

suit property was not capable of being identified

in a suit for specific performance the suit ought

to have been dismissed.

9. The learned Senior Counsel submitted that

the Courts below erred in granting a decree on the

basis of an affidavit about description of the

premises. The learned Counsel submitted that the

affidavit could not have taken the place of

pleadings. The affidavit was filed on 4th

September, 2004, and begins with the words that it

was being filed pursuant to directions given under

Order VII, Rule 3 of the Code of Civil Procedure,

1908. The filing was objected to by the

applicant. The learned trial Judge passed an

elaborate order on 7th September, 2004 accepting

this affidavit on record, giving liberty to both

the parties to lead evidence on this aspect.

Applicant then filed an elaborate affidavit-in-

reply dated 15th October, 2004. The landlord filed

architect Kini's affidavit dated 2nd November, 2004 9

annexing his report. Architect was elaborately

cross examined on 9th December, 2004. On behalf of

applicant architect Agshikar's affidavit was filed

on 15th March, 2005. His additional affidavit was

filed on 13th October, 2005 and he was cross

examined on 27th October, 2005.

10. In Shipping Corporation of India Ltd. v.

Machado Brothers and others, reported at AIR 2004

SUPREME COURT 2093 cited on behalf of the

applicant, the Supreme Court refused to entertain

a plea which did not have sufficient foundation in

pleadings. The learned Senior Counsel for the

Applicant, therefore, submitted that the Appellate

Bench erred in relying on an affidavit and

treating it as pleadings.

11. In SYED AND COMPANY AND OTHERS Versus

STATE OF JAMMU & KASHMIR AND OTHERS, reported at

1995 Supp (4) Supreme Court Cases 422 the Supreme 10

Court reiterated the time tested principle that

without there being pleading, evidence could not

be led. This was restated in BACHHAJ NAHAR Versus

NILIMA MANDAL AND ANOTHER, reported at (2008) 17

Supreme Court Cases 491.

12. The learned Senior Counsel for landlord

did not dispute the position that there has to be

a pleading first to enable a party to tender

evidence, but pointed out that trial Court had

treated the affidavit dated 4th September, 2004 as

pleading, affidavits were then tendered and

witnesses were cross examined on the issue.

13. There can be no doubt than an objection

to evidence illegally admitted would be raised in

a revision. But it is unfortunate that the

applicant seeks to raise a technical objection in

the context of what has been elaborated in the

preceding paragraph. Pleadings are intended to 11

put parties to a notice as to what case is being

put up, to avoid parties being taken by surprise.

Ideally, the landlord ought to have raised the

pleas in the plaint or could have raised them by

appropriate amendment. But this is a mere

irregularity and not an illegality, since

applicant was not only put to sufficient notice,

but had cross examined landlord's architect and

tendered his own architect's evidence, who too was

cross examined on behalf of adversaries. The

grievance of the applicant is that since affidavit

dated 4th September, 2004 filed by Plaintiff was

treated as pleading, he could not be cross

examined.

14. First, it is not in dispute that

Plaintiff is a subsequent purchaser, who could say

about the situation of office Nos.9 and 10 on

seeing them, just as anyone else could do.

Therefore, his word on the subject would not be of

any special value. And the parties had examined 12

two experts who gave contradictory conclusions on

the question. Therefore, it seems that the

objection is really being raised only to protract

the proceedings and has no substance.

15. In MOOLCHAND AND OTHERS Versus FATIMA

SULTANA BEGUM AND OTHERS, reported at (1995) 6

Supreme Court Cases 742 which was cited at bar,

the Supreme Court was considering the scope of

inherent powers of a Civil court. Objections to

sale had been raised under Order XXI, Rule 90 read

with Section 151 of the Code of Civil Procedure,

1908. The trial Court rejected the objection as

not maintainable. The High Court observed that

objection under Order XXI, Rule 90 did not lie but

trial Court would have examined the matter under

Section 151 of the Code of Civil Procedure, 1908.

The Supreme Court refused to interfere. However,

the objection raised in the present case is not

one which would warrant remitting the matter to

trial Court for any further enquiry as the 13

discussion to follow would show.

16. The question is not and cannot be as to

how the premises appear now-or even after the

applicant acquired licences in respect of office

premises Nos.9 and 10. It is not even the

applicant's case that office premises Nos.9 and 10

were both let out to one tenant who inducted

applicant as licencee. While Respondent No.5's

predecessor was tenant in respect of suit

premises, office No.10 was let out to Indian

Cotton Mills Federation, who inducted the

applicant. Thus, the premises were, when the

applicant came to possess them, different. His

licensors have not merged into one entity. He is

not paying licence fees for both the office

premises to Respondent No.5. In these

circumstances, it is cheeky of the applicant to

cash on his own sin of merging the two premises-

which itself is thoroughly impermissible, without

the consent of parties concerned-and then to seek 14

to take advantage of such merger. If he has

obliterated the distinctive features which

separate the two office spaces, he must suffer

consequences of slicing off the suit premises-

which will split his office. It is unfortunate

that such a plea was raised, without remembering

that licences in respect of the two premises are

from two different entities, taken at two

different points of time. Therefore, all the

contentions raised in this behalf would have to be

rejected.

17. This takes me to the question of

availability of protection of the Rent Act to the

applicant. It may be recalled that the argument

on behalf of the applicant is that protection of

Rent Act is available to the applicant as lawful

subtenant and that he does not have to go with the

tenant as the protection is withdrawn, not, for

the premises but to a class of entities occupying

the premises. On the other hand, the learned 15

Senior Counsel for the landlord submitted that the

exemption from operation of Rent Act applies to

premises tenanted by entities specified in Section

3(1)(b) of the Maharashtra Rent Act and not to

entities alone and in any case, the applicant

cannot have any protection, if the tenant is

liable to be evicted.

18. Before dealing with numerous Judgments

cited, it may be useful to quote for ready

reference provisions of Section 4 of the Bombay

Rent Act and Section 3 of the Maharashtra Rent Act

as under :-

Bombay Rent Act

4 Exemption.

(1) This Act shall not apply to any premises belonging to the Government or a local authority or apply as against the Government to any tenancy. (licence) or other like relationship created by a

grant from (or a licence given by) the Government in respect of premises (requisitioned or taken or lease) (or on licece) by the Government, including any premises 16

taken on behalf of the Government on the basis of tenancy (or of

licence) or other like relationship by, or in the name of any officer subordinate to the Government authorized in this behalf; but it shall apply in respect of (premises let, or given on licence, to) to the Government or a local authority. (or taken on behalf of the Government on such basis by, or in the name of, such officer.)

1(A) On and from such date as the State Government may, by notification in the Official Gazette, appoint, in the areas to which provisions of Part II apply under section 6 to premises let or given on licence for any of the

purposes referred to in that section, the provisions relating to standard rent and permitted increases shall, notwithstanding anything contained in this Act, not apply for a period of five years to any premises the construction or reconstruction of which is completed on or after such date :

Provided that, nothing in this sub- section shall apply :-

(a) to premises referred to in sections 17B and 17C;

(b) to premises which are constructed or reconstructed in any housing scheme undertaken by Government or the Maharashtra Housing and Area Development Authority or of any of its Boards 17

established under section 18 of the Maharashtra Housing and Area Development Act, 1976 or in any

housing scheme undertaken by any person in pursuance of any exemption or sanction granted by the State Government under the

provisions of section 20 or 21 of the Urban Land (Ceiling and Regulation) Act, 1976, for sale

thereof to persons belonging to

economically weaker sections of the people and to whom such premises are sold.

Maharashtra Rent Act

3 Exemption

(1) This Act shall not apply-

(a) to any premises belonging to the Government or a local authority or apply as against the Government to any tenancy, licence or other like relationship created by a

grant from a licence given by the Government in respect of premises requisitioned or taken on lease or on licence by the Government, including any premises taken on

behalf of the Government on the

basis of tenancy or of licence or other like relationship by, or in the name of any officer subordinate to the Government authorised in

this behalf; but it shall apply in respect of premises let, or given on licence, to the Government or a local authority or taken on behalf of the Government on such basis by, 18

or in the name of, such officer;

(b) to any premises let or sub-let to banks, or any Public Sector

Undertakings or any Corporation established by or under any Central or State Act, or foreign missions, international agencies, multinational companies, and private limited companies and public limited companies having a paid up share capital of rupees one crore or more.

19. There is no dispute that when suit was

filed the Maharashtra Rent Act was applicable.

20. It may be seen that Section 4(1) of the

Bombay Rent Act begins with the words : This Act

shall not apply to any premises.....

Relevant portion of Section 3 of the Maharashtra

Rent Act reads thus :-

(i) This Act shall not apply

(a) to any premises belonging to ....

Clause (a) of sub-section 3 is substantially

subsection (1) of Section 4 of the old Act. Both

the Clauses contain the same expression to any 19

premise . Therefore, the contention is that

Section 3(1)(b) of the new Act applies to premises

and not to particular category of tenants. For

this purpose reliance was placed by the learned

Senior Counsel for the landlord on Judgment of the

Supreme Court in BHATIA CO-OPERATIVE HOUSING

SOCIETY LTD. v. D.C.PATEL, reported at (1953)

SUPREME COURT REPORTS 185 where the Supreme Court

was considering applicability of the provision of

the Bombay Rent Act to premises belonging to local

authority in the light of provision of Section

4(1) of the said Act. The Court held as under :-

Learned counsel for the respondent took a preliminary objection, founded on the provisions of section 28 of the Bombay Act, that the City Civil Court had no jurisdiction to entertain the suit, for that section clearly states

that in Greater Bombay the Court of Small Causes alone shall have jurisdiction to entertain and try any suit between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of that Part of the Act applied and to decide any application made under the Act and to deal with any claim 20

or question arising out of the Act and no other Court should have

jurisdiction to entertain any suit or proceeding or to deal with such claim or question. If, as contended for by the appellant, the Act does not apply to the premises, then section 28, which is an integral part of the Act and takes away the jurisdiction of all Courts other than the Small Causes Court in Greater Bombay, cannot obviously be invoked by the respondent. The crucial point, therefore, in order to determine the question of the jurisdiction of the City Civil

Court to entertain the suit, is to ascertain whether, in view of section 4 of the Act, the Act

applies to the premises at all. If it does, the City Civil Court has no jurisdiction but if it does not, then it has such jurisdiction. The question at once arises as to who is to decide this point in controversy. It is well settled that a Civil Court has inherent

power to decide the question of its own jurisdiction, although, as a result of its enquiry, it may turn out that it has no jurisdiction

over the suit. Accordingly we think, in agreement with the High Court, that this preliminary objection is not well founded in principle or on authority and should be rejected.

The main controversy

between the parties is as to whether the Act applies to the 21

demised premises. The solution of that controversy depends upon a

true construction of section 4(1) of the Bombay Act LVII of 1947,

which runs as follows :-

4(1) This Act shall not apply to any premises belonging to the Government or a local authority or apply as against the Government to any tenancy or other like relationship created by a grant

from the Government in respect of premises taken on lease or requisitioned by the Government; but it shall apply in respect of premises let to the Government or a local authority.

It is clear that the above

sub-section has three parts, namely -

(1) This Act shall not

apply to premises belonging to the Government or a local authority.

(2) This Act shall not

apply as against the Government to any tenancy or other like relationship created by grant from the Government in respect of premises taken on lease or requisitioned by the Government,

(3) This Act shall apply in

respect of premises let out to the Government or a local authority.

The contention of the

appellant Society is that the 22

demised premises belonged to the Trustees for the improvement of the City of Bombay and now belong to the Bombay Municipality both of

which bodies are local authorities and, therefore, the Act does not apply to the demised premises.

Learned counsel for the respondent, however, urges that the object of the Act, as recited in the preamble, is inter alia, to control rent. It follows, therefore, that the object of the legislation was that the provisions of the Act

would be applicable only as between the landlord and tenant. Section 4(1) provides for an exemption from or exception to that general object. The purpose of the first two parts of section 4(1) is to

exempt two cases of relationship of landlord and tenant from the operation of the Act, namely, (1) where the Government or a local

authority lets out premises belonging to it, and (2) where the Government lets out premises taken on lease or requisitioned by it. It will be observed that the second part of section 4(1) quite clearly exempts any tenancy or other like relationship created by the Government, but the first part

makes no reference to any tenancy or other like relationship at all, but exempts the premises belonging to the Government or a local authority. If the intention of the first part were as formulated in item (1), then the first part of section 4(1), like the second part, 23

would have run thus :-

This Act shall not apply to

any tenancy or other like relationship created by Government or local authority in respect of premises belonging to it.

The Legislature was

familiar with this form of expression, for it adopted it in the second part and yet it did not use that form in the first. The conclusion is, therefore, irresistible that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer on the premises belonging to Government an immunity from the

operation of the Act.

Learned counsel for the

respondent next contends that the immunity given by the first part should be held to be available only to the Government or a local authority to which the premises

belong. If that were the intention then the Legislature would have

used phraseology similar to what it did in the second part, namely, it would have expressly made the Act inapplicable as against the Government or a local authority . This it did not do and the only

inference that can be drawn from this circumstance is that this

departure was made deliberately

with a view to exempt the premises itself.

It is said that if the

first part of the section is so

construed as to exempt the premises from the operation of the Act, not only as between the Government or a local authority on the one hand and its lessee on the other, but also as between that lessee and his

subtenant, then the whole purpose of the Act will be frustrated, for it is well known that most of the lands in Greater Bombay belong to the Government or one or other

local authority, e.g., Bombay Port Trust and Bombay Municipality and the greater number of tenants will not be able to avail themselves of the benefit and protection of the Act. In the first place, the preamble to the Act clearly shows that the object of the Act was to consolidate the law relating to the control of rents and repairs of

certain premises and not of all

premises. The Legislature may well have thought that an immunity given to premises belonging to the Government or a local authority

will facilitate the speedy development of its lands by inducing lessees to take up building leases on terms advantageous to the Government or a local authority. Further, as pointed out by Romar L.J. in Clark v. Downes (1931) 145 L.T.20, which case was approved by Lord Goddard C.J. in Rudler v. Franks (1947) 1 K.B.530 such immunity will increase the value of the right of reversion belonging to the Government or a 25

local authority. The fact that the Government or a local authority may be trusted to act fairly and reasonably may have induced the

Legislature all the more readily to give such immunity to premises

belonging to the Government or a local authority but it cannot be overlooked that the primary object of giving this immunity was to

protect the interests of the Government or a local authority. This protection requires that the immunity should be held to attach to the premises itself and the

benefit of it should be available not only to the Government or a

local authority but also to the

lessee deriving title from it. If the benefit of the immunity was

given only to the Government or a local authority and not to its

lessee as suggested by learned

counsel for the respondent and the Act applied to the premises as

against the lessee, then it must follow that under section 15 of the Act it will not be lawful for the lessee to sublet the premises or any part of it. If such were the consequences, nobody will take a building lease from the Government or a local authority and the immunity given to the Government or a local authority will, for all

practical purposes and in so far at any rate as the building leases are concerned, be wholly illusory and worthless and the underlying purpose for bestowing such immunity will be rendered wholly 26

ineffective. In our opinion, therefore, the consideration of the protection of the interests of the sub-tenants in premises belonging to the Government or a local authority cannot override the plain meaning of the preamble or the

first part of section 4(1) and

frustrate the real purpose of protecting and furthering the interests of the Government or a local authority by conferring on its property an immunity from the operation of the Act.

.... .... ....

In our view in the case before us the demised premises including the building belong to a local authority and are outside the operation of the Act. This Act being out of the way, the appellants were well within their rights to file the suit in ejectment in the City Civil Court and that Court had jurisdiction to entertain the suit and to pass the decree that it did.

(emphasis supplied)

21. This view was followed up by the Supreme

Court in Parwati Bai v. Radhika, reported at JT

2003(5)SC 34 to which my attention was drawn by

the learned Senior Counsel for Respondent No.1.

The Supreme Court was considering provisions of 27

the Madhya Pradesh Accommodation Control Act, 1961

which were similar to those of the Bombay Rent

Act. In that case, premises belonging to a

Municipality, taken on rent by the landlord had

been sublet to a tenant. The landlord sought

tenant's ejectment, bypassing the provision of the

Madhya Pradesh Accommodation Control Act, 1961,

contending that since ownership of premises vested

in Municipality, the provisions of the Act were

not applicable. Right up to High Court tenant's

plea that he had the protection of the Madhya

Pradesh Accommodation Control Act, 1961, as the

plaintiff was not the Municipality, was upheld.

Allowing the appeal and ordering tenant's

ejectment, the Supreme Court held :-

4. It is well settled by a decision of the Court in Bhatia Cooperative Housing Society Ltd. v. D.C.Patel, 1953 (4) SCR 185 wherein pari

materia provisions contained in the Bombay Rents, Hotel and Lodging

House Rates Control Act, 1947 came up for consideration of this Court. It was held that the exemption is not conferred on the relationship of landlord and tenant but on the

premises itself making it immune from the operation of the Act. In identical facts, as the present case is, the decision of this Court was followed by the High Court of Madhya Pradesh in Radheylal Somsingh v. Ratansingh Kishansingh, 1977 MPLJ, 335 and it was held that the immunity from operation of the Madhya Pradesh Accommodation Control Act, 1961 is in respect of the

premises and not with respect to the parties. If a tenant in municipal premises lets out the premises to another, a suit by the tenant for ejectment of his tenant and arrears of rent would not be governed by the Act as the premise are exempt under section 3(1)(b) of Act though the suit is not between the municipality as landlord and against its tenant. We find ourselves in agreement with the view taken by the High Court of Madhya Pradesh in Radheylal's case. It is unfortunate that this decision binding in the State of Madhya

Pradesh was not taken note of by the courts below as also by the High Court .

22. In Dattaram Tukaram Bordekar, since

deceased by his heirs and legal representatives

Versus Prakash Dattatraya Tiwatane, reported at

1992(2)Bom.C.R.598 a learned Single Judge of this

Court held that provision of Section 4 of the 29

Bombay Rent Act applied to premises and not

persons.

23. In CARONA LTD. Versus PARVATHY

SWAMINATHAN & SONS, reported at (2007) 8 Supreme

Court Cases 559 the Supreme Court considered

reduction of share capital by a Company after its

tenancy was terminated and held that it would

still lose the protection of Rent Act in view of

provision of Section 3(1)(b) of the Maharashtra

Rent Control Act, 1999. It is doubtful if this

Judgment could be an authority for the proposition

that Section 3(1)(b) applies to premises and not

persons. It only underlines that crucial date for

finding out which provision applies is the date on

which right is sought to be exercised.

24. In Vasudev Dhanjibhai Modi v. Rajabhai

Abdul Rehman and others, reported at AIR 1970

SUPREME COURT 1575 on which the learned Senior 30

Counsel placed reliance the Supreme Court was

considering an objection to jurisdiction of the

Court which passed the decree taken in execution

proceedings, on the ground that land in question

was agricultural land not amenable to Court

exercising jurisdiction under the Bombay Rent Act.

In this context the Supreme Court held that

crucial date for considering applicability of the

Act would be the date on which the right is sought

to be exercised.

25. It is doubtful if Judgment in M/s.

Crompton Greaves Ltd. v. State of Maharashtra,

reported at AIR 2002 BOMBAY 65 would be of help in

resolving the controversy since the challenge

therein was to the validity of S.3(1)(b) of

Maharashtra Rent Control Act, 1999. In Saraswat

Bank Vs. State, reported at (2006) 8 SCC 520, the

Supreme Court upheld constitutional validity of S.

3(1)(b) of the Maharashtra Rent Control Act, 1999. 31

26. The learned Senior Counsel for the

applicant submitted that though both subclauses

(a) and (b) of Section 3(1) of the Maharashtra

Rent Act use similar expression to any premises ,

Section (3)(1)(b) is aimed at specified entities

and not the premises themselves. He pointed out

that this question had been considered by the Apex

Court in LEELABAI PANSARE'S case and in view of

this Judgment, directly interpreting Section 3(1)

(b), it may not be necessary or permissible to

rely on earlier Judgments for interpreting the

provision by drawing analogy.

27. In LEELABAI GAJANAN PANSARE AND OTHERS

Versus ORIENTAL INSURANCE COMPANY LIMITED AND

OTHERS, reported at (2008) 9 Supreme Court Cases

720 the Supreme Court was considering the

following point for determination.

Point for determination

49. Whether the High Court was right in holding that the word PSUs in 32

Section 3(1)(b) excluded government companies as defined under Section 617 of the 1956 Act.

28. After discussing historical and other

aspects, the Court observed in paragraph 58 that

Section 3(1)(b) was introduced to exclude cash

rich entities from the protection of the Rent Act.

The Court then went on to hold as under :-

59..... In our view, the changes made in the present Rent Act by

which landlords are permitted to charge premium, the provisions by which cash-rich entities are excluded from the protection of the Rent Act and the provision providing for annual increase at a nominal rate of 5% are structural changes brought about by the present Rent Act, 1999 vis-a-vis the 1947 Act. The Rent Act of 1999 is the sequel to the judgment of this Court in Malpe Vishwanath

Acharya v. State of Maharashtra, (1998) 2 SCC.

...

61. In the light of the discussion mentioned hereinabove, we need to interpret Section 3(1)(b). The said clause excludes entities- enumerated therein from the protection of the said Rent Act, namely, banks, PSUs, statutory corporations, foreign missions, 33

international agencies, multinational companies and private limited companies and public limited companies having a paid-up share capital of Rs.1,00,00,000 or more....

70....In the present case, we find that the legislature has opted for an economic criterion, namely, entities which are in a position to pay rent at market rates are to

stand excluded from Rent Act protection. This is the test of financial capability. This is the golden thread which runs through Section 3(1)(b). Be it banks, PSUs, statutory corporations, multinational companies, foreign missions, international agencies and public and private limited

companies having a paid-up share capital of Rs.1,00,00,000 or more stand excluded from the Rent Act protection. This criterion has been selected by the legislature knowing fully well that each of

these entities including PSUs can afford to pay rent at the market rates.

74....Applying this test, we hold that Section 3(1)(b) clearly applies to different categories of tenants, all of whom are capable of paying rent at market rates. Multinational companies, international agencies, statutory corporations, government companies, public sector companies can certainly afford to pay rent at the 34

market rates. This thought is further highlighted by the last

category in Section 3(1)(b). Private limited companies and public limited companies having a paid-up share capital of more than Rs.1,00,00,000 are excluded from the protection of the Rent Act.

This further supports the view

which we have taken that each and every entity mentioned in Section 3(1)(b) can afford to pay rent at the market rates.

29. In the light of these rulings, it has to

be decided if Section 3(1)(b) applies to premises

or a class of tenants. There can be no doubt the

expression used in Section 3(1)(b) to indicate the

incidence of legislation, or its object, is same

as that used in Section 4 of the Bombay Rent Act

which has been interpreted by the Supreme Court in

BHATIA CO-OPERATIVE HOUSING SOCIETY LTD. and

followed up in Parwati Bai. It cannot also be

doubted that Judgment in BHATIA CO-OPERATIVE

HOUSING SOCIETY LTD. had not come up for

reconsideration in LEELABAI's case and has not

been (and could not have been) overruled by the 35

bench of Apex Court, deciding LEELABAI's case.

The contention that when similar expression is

used it ought to be similarly interpreted cannot

also be overlooked. But the question is, is there

any conflict in the two Judgments to infer that

Judgment in BHATIA CO-OPERATIVE HOUSING SOCIETY

LTD. will no longer be applicable ?

30. Since premises are subject matter of

any tenancy to which Rent legislation applies,

both Section 4 of the Bombay Rent Act and Section

3(1)(b) of the Maharashtra Rent Act stipulate that

the Acts will not apply to premises.- But these

premises are not identified by criteria like

geographical location or historical importance,

but, the criteria of owner's occupant's status.

Though premises are exempted, such premises have

to be identified with entities having the defined

status. The elaborate discussion LEELABAI

PANSARE's case would show as to why premises 36

tenanted by particular class of entities were

sought to be excluded. Therefore, the question

whether the tenant belongs to that class decides

whether the premises are exempt. At the cost of

repetition attention may be drawn to observations

of the Supreme Court in BHATIA CO-OPERATIVE

HOUSING SOCIETY LTD., drawing a distinction in

expression used while granting exemption to

premises taken on lease by the Government and the

premises belonging to the Government; which reads

as under :-

...The purpose of the first two

parts of section 4(1) is to exempt two cases of relationship of landlord and tenant from the operation of the Act, namely, (1) where the Government or a local

the Government or a local authority. If the intention of the first part were as formulated in item (1), then the first part of section 4(1), like the second part, would have run thus :-

This Act shall not apply to

any tenancy or other like relationship created by Government or local authority in respect of premises belonging to it.

The Legislature was

(emphasis supplied)

31. The provisions of Section 3 of the

Maharashtra Rent Act are similarly worded. There

is nothing in the Judgment in LEELABAI PANSARE's

case to indicate that exemption will not apply to

the premises tenanted by the entity fulfilling

the criteria, or would apply only to relationship. 38

It will be improper to read the Judgment out of

the context of the question which it was

considering-which was only if PSUs were excluded

from the exemption granted. Therefore, it is

impermissible to conclude that observations in

BHATIA CO-OPERATIVE HOUSING SOCIETY LTD. will not

apply to interpretation of Section 3(1)(b) of the

Maharashtra Rent Act or that any different

interpretation can be decided from Judgment in

LEELABAI PANSARE's case. It would, therefore,

follow that the premises would be excluded from

applicability of provisions of the Rent Act since

the tenant is Respondent No.5.

32. The learned Counsel for the Applicant

submitted that the object of inserting this clause

(b) in Section 3(1) of the Maharashtra Rent

Control Act, 1999 is explained in LEELABAI

PANSARE's case - namely to exclude cash rich

corporations from the protection of the Rent Act. 39

Therefore, according to the learned Counsel

excluding the premises rather than entity, would

have consequences not intended by the legislature.

He submitted that such an interpretation would

result in withdrawal of protection to entities

like the applicant which is not a cash rich entity

having a paid capital of over Rs.1 crore, and

would thus defeat the object of legislation.

33. As rightly pointed out by the learned

Senior Counsel for Respondent No.1, the landlord,

if the line of reasoning proposed by learned

Counsel for applicant were to be accepted, cash

rich corporations would be able to defeat the

exclusion from protection by simply inducting as

subtenants its employees or even entities created

by itself having a paid up capital of less than

Rs.1 crore. It cannot be the business of a

Corporation covered by Section 3(1)(b) of the Rent

Act to sublet premises taken on rent, when it does

not need them.

34. Secondly, need of going to object of

legislation for the purpose of interpretation of a

clause would arise only if there is any ambiguity.

In BHATIA CO-OPERATIVE HOUSING SOCIETY LTD., the

Supreme Court has clearly demonstrated that had

the legislature so desired, it could have phrased

the clause differently. While enacting Section

3(1)(b) of the Maharashtra Rent Control Act, 1999,

the law makers had the benefit of Judgment in

BHATIA CO-OPERATIVE HOUSING SOCIETY LTD. rendered

years ago. It will have to be presumed that the

legislature still chose the same expression for

carving out an exclusion because it intended to

exclude premises and not relationship-or an

entity. It is settled canon of interpretation

that same expression used at different places in

the same piece of legislation must be given the

same meaning wherever it is used. Accepting the

argument of the learned Senior Counsel for the

Applicant would lead to an anomalous situation of

the same expression being interpreted differently 41

in two clause of one subsection. Therefore,

howsoever inconvenient the interpretation might be

for the applicant, it has to be held that the

exclusion from protection applies to the premises

tenanted by Respondent No.5 and not just to the

relationship of Respondent No.1 with Respondent

No.5.

35. As a corollary if Respondent No.5 has to

be evicted, claim of applicant for protection

would be questionable. The learned Senior Counsel

for applicant however submitted that it is not

always necessary that a sub-tenant too would be

liable to be evicted if a decree of ejectment of

tenant is passed and in such a case, subtenant may

become direct tenant of the landlord. He relied

on a number of Judgments in support of his

contention.

36. In Jaswantrai Tricumlal Vyas v. Bai Jiwi

W/o. Somabhai Valdas and others, reported at AIR 42

1957 BOMBAY 195 on which the learned Senior

Counsel relied a FULL BENCH of this Court held

that when tenancy of a tenant is terminated,

subtenancy lawfully created would be protected by

provision of Tenancy Act, though it is true that

under S. 111 (c) of the Transfer of Property Act,

1882 (T.P.Act for short) the termination of a

tenancy brings about the termination of the sub-

tenancy, and S. 3 of the Tenancy Act has applied

the provisions of Chapter V of the Transfer of

Property Act, 1882, to the tenancies and leases of

land to which the Act applied. But at the same

time the application of the T. P. Act is subject

to the provisions not being inconsistent with any

provisions of the Tenancy Act. The Court observed

that there were at least two sections of Bombay

Tenancy Act, namely Ss. 4 and 5, which are clearly

inconsistent with the provisions of S. 111 (c) of

the Transfer of Property Act.

37. In Madhusudan A. Mahale v. P.M.Gidh and 43

others, reported at AIR 1978 BOMBAY 234 on which

the learned Senior Counsel for the applicant

relied. This Court was considering petition of an

original licensee whose ejectment was sought by

the licensor who was not the owner of the

premises. The claim was that licensee had become

direct tenant of the owner, since the owner had

terminated the tenancy of original tenant-

licensor. This Court noted that under Section

5(3) of the Bombay Rent Act, the term landlord

includes, in respect of a licensee, his licensor.

Analysing provision of Section 14(2) and 15A of

the Rent Act, the Court held that a licensee does

not become tenant of the owner, and his licensor

would continue to be the landlord till the

licensor's interest subsists. The argument

therefore is that qua the present applicant, the

landlord is Respondent No.5, the Oriental

Insurance Company Limited and therefore applicant

continued to have protection of the Rent Act, as

the applicant is not an entity excluded by 44

operation of Section 3 of the Act from the

protection of Rent Act.

38. In Hiralal Vallabhram v. Sheth Kasturbhai

Lalbhai and others, reported at AIR 1967 Supreme

Court 1853 the Court held that it was not correct

to say that as soon as a notice determining a

contractual tenancy is given, the sub-tenant of

the contractual tenant who was there from before

has to be deemed a tenant under S. 14 from the

date the time in the notice expires. It was

further observed that the interest of a tenant,

who for purposes of S. 14, is a contractual tenant

comes to an end completely only when he is not

only no longer a contractual tenant but also when

he has lost the right to remain in possession

which S. 12 has given to him, and is no longer

even a statutory tenant. In other words S. 14

would come into play in favour of the sub-tenant

only after the tenancy of the contractual tenants

has been determined by notice and the contractual 45

tenant has been ordered to be ejected under S. 28

on any of the grounds in S. 12 or S. 13. Till

that event happens, or till he gives up the

tenancy himself, the interest of a tenant who may

be a contractual tenant, for purposes of S. 14,

cannot be said to have determined i. e. come to an

end completely in order to give rise to a tenancy

between the pre-existing sub-tenant and the

landlord.

39. In ANANDRAM CHANDANMAL MUNOT AND ANOTHER

Versus BANSILAL CHUNILAL KABRA (SINCE DECEASED)

THROUGH LRs. AND OTHERS, reported at (2000) 1

Supreme Court Cases 10 the Supreme Court

reiterated that sub-tenant becomes a tenant only

after the interest of tenant comes to an end. In

this context observations in paragraphs 15, 18, 22

& 23 may be usefully reproduced as under :-

15....The assertion of Mr. Jain was that when rent is in arrears, it is qua the premises and the sub-tenant who is occupying the premises would 46

also be liable for default in

payment of rent of the premises and thus could be evicted along with the main tenant. This argument overlooks the relationship of sub- tenant with the main tenant when he would be paying the rent of the

premises under his sub-tenancy and the requirement of notice under

Section 12 of the Act. Definition of tenant under sub-tenant (11) of Section 5 of the Act does include also a sub-tenant inducted before 1-2-1973 and it means when the sub- tenant becomes a tenant on the

determination of the tenancy of the main tenant.

18. It will be thus seen that the interest of a sub-tenant who satisfies the conditions of Section 14 ripens into that of a tenant when the interest of the main tenant (who inducted him as a sub-tenant) is determined by an order of eviction passed against him....

40. The Supreme Court quoted in paragraph 22

observations of a learned Single Judge of this

Court to the following effect.

If in a suit against the tenant

other persons are joined on the

allegation that they are sub-tenants and if an eviction-is sought only on the grounds which are personal to the tenant, then a decree in ejectment against him will result in 47

conferring direct tenancy rights on the lawful sub-tenants. They cannot be ejected in that suit on those grounds. On the other hand, if the landlord seeks possession on the grounds which are not personal to the tenant and which concern the premises themselves, then it is open to the landlord in the same suit to plead and prove those grounds not only against the tenants but against the other persons impleaded in the suit and who are ultimately held to be lawful sub-tenants. In such a case the issues would be heard and decided between the landlord on the one side and the tenants and sub- tenants on the other. If the sub- tenants are not impleaded even in such a suit then the landlord, after obtaining a decree against the tenant, will have to file a fresh suit against the sub-tenants, who by then had become his direct deemed tenants by virtue of Section 14 of the Rent Act. In my opinion this would be the proper interpretation of Section 14 of the Rent Act when that section is read along with the other relevant provisions of the Rent Act.

41. In paragraph 23 the Supreme Court held as

under :-

....We generally agree with the

observations of the learned Single Judge and may add one more illustration to one given by him. 48

Clause (f) of sub-section (1) of Section 13 of the provides that a landlord is entitled to recover

possession of the premises if the court is satisfied that the premises were let to the tenant for use as a residence by reason of his being in the service or employment of the landlord, and that the

tenant has ceased, whether before or after the coming into operation of this Act, to be in such service or employment. When eviction is sought on this ground as given in clause (f) it is difficult to see how a sub-tenant can become a

direct tenant of the landlord when the tenancy of the main tenant is determined.

(emphasis supplied)

42. There can be no doubt that in view of

provision of Section 14 of the Bombay Rent Act,

(corresponding to Section 25 of the Maharashtra

Rent Control Act, 1999) upon determination of

interest of a tenant in the premises, a subtenant

would become direct tenant of the landlord-but

only in certain circumstances and not always. As

held in ANANDRAM's case (supra) by the Supreme

Court, (approving a paragraph from Judgment of 49

this Court), if ejectment is sought on grounds

which are not personal to the tenant, but which

concern the premises themselves, a landlord can

sue for ejectment of tenant and subtenant

together, as the landlord has done in the present

case. Since protection of Rent Act does not apply

to the premises, the relationship will be governed

by provisions of Transfer of Property Act and

under Section 111(c), termination of tenancy

brings about termination of subtenancy as well and

therefore the decree for applicant's ejectment

cannot be faulted.

43. The learned Counsel for the parties also

placed reliance on Judgments in Nalanikant Ramadas

Gujjar v. Tulasibai (Dead) by LRs. and others,

reported at AIR 1997 SUPREME COURT 404, M/s.

Hindustan Ferrodo Ltd. Vs. Mrs. Hari Lachman

Hasija, reported at 2003(3) ALL MR 201, ACHAL

MISRA Versus RAMA SHANKAR SINGH AND OTHERS, 50

reported at (2005)5 Supreme Court Cases 531,

JANAKLALI S. GUPTA (DECEASED) THROUGH LRS. Versus

NAMDEO MAHADEO (DECEASED) BY LRS. AND ANOTHER,

reported at (2000) 2 Supreme Court Cases 176,

which have been considered but need not be dealt

with in view of the foregoing discussion.

44. To sum up :

(i) Absence of pleading about identity of property is a self created illusion of applicant by merging two licences taken from the different licensors;

(ii) After objection was raised under Order VII, Rule 3 of the Code of Civil Procedure, 1908, the learned Trial Judge rightly treated affidavit of Respondent No.1 dated 4th September, 2004 as a pleading ;

(iii) After leading evidence of his own architect and cross examining architect of Respondent No.1 (that is after joining the issue) applicant cannot have any grievance about identity of suit premises;

(iv) Exclusion from applicability of the Maharashtra Rent Act applies to suit premises, by virtue of it having been tenanted by Respondent No.5 an entity covered by Section 3(1)(b) of the Rent Act;

(v) Since the ground for ejectment is not 51

personal to tenant(like non-payment of rent) but cocerns the premises, landlord was entitled to seek ejectment of both tenant and applicant in the same suit.

45. Consequently, the Appellate Bench must be

held to have rightly decreed the suit.

46. Civil Revision Application is dismissed.

47. In view of dismissal of Civil Revision

Application, Civil Application No.217 of 2010 does

not survive and the same is accordingly disposed

of.

(R.C.CHAVAN, J.)