Full Judgment Text
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CASE NO.:
Appeal (civil) 6899 of 1999
PETITIONER:
STATE OF WEST BENGAL & ORS.
Vs.
RESPONDENT:
VISHNUNARAYAN AND ASSOCIATES (P) LTD. & ANR.
DATE OF JUDGMENT: 19/03/2002
BENCH:
Syed Shah Mohammed Quadri & S.N. Phukan
JUDGMENT:
With
CA.Nos.6900/1999, 6901/1999, 6902/1999, 6903/1999,
6904/1999, 6905/1999, 6906/1999, 6907/1999, 6908/1999,
6909/1999, 6910/1999, 6911/1999 & 6912/1999
J U D G M E N T
Phukan,J.
These appeals by special leave arise from the judgment of the
Division Bench of the Calcutta High Court by which a batch of Writ petitions filed
under Article 226 of the Constitution was disposed of. By this judgment we
dispose of all these appeals.
The undisputed facts are as follows:
The management of the Undertaking of the Company namely the
Great Eastern Hotel Ltd. was taken over by the State Government by invoking
the provisions of the Great Eastern Hotel (Taking over of Management) Act,
1975. Subsequently, by the Great Eastern Hotel (Acquisition of Undertaking) Act,
1980 (for short the ’Act of 1980’), the Undertaking of the Company i.e. the Great
Eastern Hotel was taken over by the Government. The Government transferred
the undertaking of the Company to the Great Eastern Hotel Authority (for short
Hotel Authority), which was set up under Section 5 of the Act of 1980 except the
lands and the building. On December 12, 1994, according to the direction of the
State Government, the Great Eastern Hotel Authority issued a circular to various
occupants of the premises of the hotel giving them an opportunity to establish if
they had any right to remain in occupation but there was no response. On June
28, 1997, as the occupants failed to deliver possession, the representative of the
Government went to the hotel premises and gave oral notice to the occupants to
deliver possession. They were also informed that possession if not delivered,
would be taken over by force. On June 29, 1997 the State Government removed
the occupants from the hotel premises and took possession with the help of
police.
Some of the occupants of the hotel who were evicted by use of
force are respondents in all these appeals. It is the undisputed case of the
parties that the respondents were tenants of shops, offices and go-downs in the
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hotel under the erstwhile company and were in occupation of their respective
portions. The respondents filed Writ Petitions before the High Court challenging
the action of the Government in dispossessing them by force and prayed for
restoration of possession claiming that they were lawful tenants having been
inducted by the previous owners and even after coming into force of the Act of
1980, the Hotel Authority had dealt with them as tenants by accepting rent and
that there was no lawful termination of their tenancy. It was also pleaded that
such action of eviction by force with the help of police resorted to by the
appellants lacked legal authority and was illegal, further it was also in violation of
the principle of natural justice as the respondents were not given an opportunity
of showing cause against their eviction.
On behalf of the appellant-State, writ petitions were resisted before
the High Court, inter alia, on the following grounds:
1. that the tenancy of the respondents stood automatically terminated under
the Act of 1980 and
2. that under the provisions of the said Act they were legally bound to deliver
possession of the suit premises to the State Government and on their
failure to do so, they could be evicted by force by invoking the provisions
of West Bengal Government Premises (Tenancy Regulation) Act, 1976
(hereinafter referred to as the ’Act of 1976’).
It was also pleaded that as the suit premises were required for
public purpose, so the government could resort to use of force for evicting the
respondents.
To appreciate the contention raised before us, it would be
necessary to extract the definition of the expression ’undertaking’ in clause (f) of
Section 2, Sections 3 and 4 of the Act of 1980:
"Section 2: Definitions. In this Act, unless the context
otherwise requires,-
(a) to (e)
(f) "undertaking of the company" means the properties,
both movable and immovable, cash balances,
reserve funds and other assets of the company
including lands, buildings, machineries, plants,
furniture, equipments, stores and any other property
which may be in the ownership, possession, custody
or control of the company in relation to its
undertaking immediately before the appointed day
and all books of accounts, registers and other
documents of whatever nature relating thereto.
Section 3: Acquisition of the undertaking of the
company
(1) On and from the appointed day, the
undertaking of the company shall, by virtue of this Act,
stand transferred to, and vest absolutely in the State
Government.
(2) Upon the vesting of the undertaking of the
company in the State Government under sub-section
(1), the State Government may, for efficient
management and administration thereof, provide by
notification for the transfer of the undertaking of the
company (save the lands and buildings forming part
thereof) to, and vesting thereof in, the Hotel Authority
with effect from such date as may be specified in the
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notification.
(3) The State Government may allow the lands
and buildings mentioned in sub-section (2) to be used
by the Hotel authority for the purpose of giving effect
to this Act on such terms and conditions as may be
provided by notification with effect from the date of
issue of the notification under sub-section (2).
Section 4 : General effect of vesting :
(1) The undertaking of the company which has
vested in the State Government under sub-section (1)
of Section 3, shall, by force of such vesting, be freed
and discharged from any trust, obligation, mortgage,
change, lien and all other encumbrances affecting it,
and any attachment, injunction or decree or order of
any court or tribunal restricting the use of the whole or
any part of the undertaking of the company in any
manner shall be deemed to have been withdrawn.
(2) Any contract, whether express or implied, or
other arrangement, whether under any statute or
other wise, in so far as it relates to the affairs of the
company in relation to its undertaking and in force
immediately before the appointed day shall be
deemed to have terminated on the appointed day.
(3) Where any license or other instrument in
relation to the undertaking of the company had been
granted at any time before the appointed day to the
company by the Central Government or the State
Government or any other authority, the State
Government shall, on and from the appointed day, be
deemed to be substituted in such license or other
instrument in place of the company referred to therein
as if such license or other instrument had been
granted to it.
(4) On and from the date of transfer of the
undertaking of the company to, and vesting thereof in,
the Hotel Authority, that Authority shall be deemed to
be substituted in the license or other instrument
referred to in sub-section (3) in place of the State
Government as if such license on other instrument
had been granted to the Hotel Authority.
(5) Any liability incurred by the company (including
the liability, if any, arising in respect of any loans or
amounts advanced by the State Government to the
company together with interest thereon) after the
management of the undertaking of the company had
been taken over by the State Government shall, on
and from the appointed day, be the liability of the
State Government and shall, on and from the date
specified in the notification under sub-section (2) of
section 3, stand transferred to, and shall vest in, the
Hotel Authority.
(6) If, on the appointed day, any suit, appeal or
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other proceeding of whatever nature in relation to any
matter or business in respect of the undertaking of the
company, instituted or preferred by or against the
company, is pending, the same shall not abate, be
discontinued or be, in any way, prejudicially affected
by reason of the transfer of the undertaking of the
company or of anything contained in this Act and the
suit, appeal or other proceeding may be continued,
proceeded with and enforced by or against the State
Government and on and from the date specified in the
notification under sub-section (2) of section 3, the
Hotel Authority.
(7) Any person in possession or custody or control
of the whole or any part of the undertaking of the
company on the date immediately before the
appointed day shall, on the appointed day, deliver the
possession of such undertaking of the company or
part thereof to the State Government or to such
person as may be specified by the State Government
in this behalf.
(8) The State Government may take, or cause to
be taken, such steps as it considers necessary for
securing the possession of the undertaking of the
company which has vested in the State Government
under sub-section (1) of Section 3."
The High Court rejected the contention that the eviction of the
respondents was carried out for a public purpose as the respondents were
dispossessed for improvement of the hotel, which was purely a commercial
venture and, therefore, there was no element of public interest. The High Court
also held that the Act of 1980 does not provide for use of force for eviction of
tenants in the hotel premises and this Act is a self contained one. According to
the High Court the Act of 1976 applies in respect of only residential properties of
the government and cannot be used for eviction of the respondents by force as
the premises were used for non-residential purpose.
We have heard Mr. Mukul Rohtagi, learned Additional Solicitor
General appearing for the State of West Bengal, Mr. Vishwanathan, learned
counsel for the respondents in all the appeals except Civil Appeal No.6910 of
1999 and for this appeal learned counsel Mr. Mukund made his submission.
The question, which needs our consideration is whether the action
of the State Government in taking possession of the suit premises by using force
was lawful.
It is the settled position of law that the State or its executive officers
cannot interfere with the rights of others unless they can point to some specific
provision of law, which authorises their acts. A Constitution Bench of this Court
in Bishan Das & Ors. versus The State of Punjab & Ors. [1962 (2) SCR 69]
held that State or its executive officers did not have any right to take law into their
own hands and remove a person by an executive order. The Court further
observed, ’before we part with this case, we feel it our duty to say that executive
action taken in this case by the State and its officers is destructive of the basic
principles of the rule of law’.
In State of U.P. & Ors. versus Maharaja Dharamander Prasad
Singh & Ors. [(1989) 2 SCC 505] an apprehension was raised by the learned
counsel that if the State Government, on the self assumed and self assessed
validity of its own action of cancellation of the lease, attempts at and succeeds in,
a resumption of possession extra judicially by force, it would cause great
hardship and injustice. The court held that possession can be resumed by the
government only in a manner known to or recognised by law and it cannot
resume possession otherwise than in due course of law and, therefore,
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prohibited the government from taking possession otherwise than in due course
of law.
Now let us consider whether the Act of 1980 authorises the State
Government to use police power for eviction of the respondents. Sub-sections
(1) and (2) of Section 3 and sub-sections (1), (2), (7) and (8) of Section 4 of the
Act of 1980 are relevant for the present purpose. Sub-section (1) of Section 3 of
the Act of 1980 provides that the undertaking of the company shall stand
transferred to and vested absolutely in the State Government on the appointed
day. From the definition of the undertaking as contained in clause (f) of Section 2
of the Act of 1980, the undertaking of the company also includes lands, buildings,
etc. By sub-section (2) of Section 3, the State Government may for reasons
stated in the said sub-section transfer the undertaking of the company to the
Hotel Authority except the lands and buildings forming part thereof. Clause (a) of
sub-section (2) defines ’appointed day’ to mean the date on which the Act came
into force. Therefore, on the date the notification under sub-section (1) of
Section 3 of the Act of 1980 was issued, the undertaking land and buildings
vested in the State Government absolutely. Sub-section (1) of Section 4
provides that the undertaking which vested in the State Government shall be
freed and discharged from any trust, obligation, mortgage, change, lien and all
other encumbrances affecting it. We are not concerned with the second part of
the said sub-section which relates to any attachment, injunction or decree or
order passed by any court or tribunal. According to sub-section (2) of Section 4
any contract, whether express or implied, or other arrangement, whether under
any statute or otherwise, in so far as it relates to the affairs of the erstwhile
company in relation to the undertaking and in force immediately before the
appointed day shall be deemed to have terminated on the date of vesting. Under
sub-section (7) of Section 4 any person in possession or custody or control of the
whole or any part of the undertaking on the date immediately before the
appointed day shall deliver the possession of such undertaking of the company
or part thereof to the State Government or to such person as may be specified by
the State Government in this behalf. Sub-section (8) of Section 4 empowers the
State Government to take or cause to be taken such steps as it considers
necessary for securing the possession of the undertaking of the company which
vested in the State Government under sub-section (1) of Section 3. By a
notification issued under sub-section (2) of Section 3, the State Government for
efficient management and administration, transferred the undertaking (save lands
and buildings) to the Hotel Authority constituted under
Section 5 of the Act of 1980.
Mr. Mukul Rohtagi, learned Additional Solicitor General has
submitted that as there was no transfer of the lands and buildings to the Hotel
Authority, in view of the specific bar in sub-section (2) of Section 3 of the Act of
1980, any action of the Hotel Authority vis-Ã -vis the respondents would not be
binding on the government. We shall deal with this submission at a subsequent
stage.
Mr. Mukul Rohtagi, learned Additional Solicitor General has further
submitted that as in terms of sub-section (1) of Section 3 of the Act of 1980, the
vesting of undertaking absolutely was complete on the appointed day and on
such vesting it be freed and discharged from any trust, obligation, mortgage,
change, lien and all other encumbrances affecting it, the tenancy between the
respondents and the erstwhile company came to an end. It was further
submitted that the word ’contract’ occurring in sub-section (2) includes tenancy
right and by virtue of the said sub-section (2), the tenancy between the
respondents with the erstwhile company came to an end. According to the
learned Additional Solicitor General as the tenancy had come to an end, the
respondents were in default of their legal liability to hand over the possession of
premises in question as per sub-section (7) of Section 4 of the Act of 1980 so the
State Government by invoking the provision of sub-section (8) of the said Section
could take such steps as it considered necessary for securing possession and
such steps would include eviction by force.
It is not disputed that there was a relationship of landlord and
tenants between the erstwhile company and the respondents. The rights and
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obligation of the landlord and tenant would be governed either by the Transfer of
Property Act or by rent law in force and the tenancy of the demised premises
could be terminated by taking action under the provisions of either of these two
Acts and possession thereof could be recovered in accordance with law. Though
under sub-section (1) of Section 4 of the Act of 1980, the undertaking vested in
the State Government free from any trust, obligation, mortgage, change, lien and
all other encumbrances, we are unable to agree with the learned Additional
Solicitor General that under the said sub-section (1) the relationship of landlord
and tenant in the case in hand was put to an end inasmuch as the tenancy could
not be treated as trust, obligation, mortgage and change, etc. as stated in the
said sub-section. In regard to sub-section (2) which provides that any ’contract’
in relation to the undertaking shall be deemed to have terminated on the
appointed day, on the same analogy, we hold that by this deeming provision
does not relate to the relationship of landlord and tenant which could not be said
to have come to an end. Consequently, we find no force in the submission of Mr.
Mukul Rohtagi and we hold that even after taking over the undertaking by virtue
of the Act of 1980, the relationship of the landlord and the tenant continued and
in place of the erstwhile company, the State Government stepped into the shoes
of landlord.
The Management of the hotel was handed over to the Hotel
Authority. The said Authority also accepted rents from the respondents and on
December 12, 1994 on a direction by the State Government, the said Authority
issued a circular to the respondents asking them to establish their rights, if any.
As mentioned earlier, Mr. Mukul Rohtagi has submitted that as there was no
transfer of lands and buildings to the Hotel Authority, the acceptance of rent by
the said Authority would not bind the Government. We are unable to accept the
contention as in our opinion the Authority acted on behalf of the government both
while accepting rent and also issuing notices to the respondents. The premises
in question are located within the hotel premises and on handing over the
Management to the Authority, it acted on behalf of the Government.
Let us examine the scope and ambit of sub-section (7) and (8) of
Section 4 of the Act of 1980 assuming that the tenancy came to an end as urged
by Mr. Mukul Rohtagi. Under sub-section (7) any person in possession or
custody or control of the whole or any part of the undertaking of the company
before the appointed day, shall deliver such possession to the State Government
or any person as may be specified by the State Government and in view of this
statutory obligation, the respondents were bound under the law to hand over the
possession and on failure to do so, the State Government could take steps for
securing possession by use of force. Under sub-section (8) of Section 4 of the
Act of 1980, such steps as may be considered necessary, may be taken for
securing possession. In our considered view such steps cannot and would not
include use of force. As laid down by this court in Bishan Das & Ors. (supra)
and Maharaja Dharamander Prasad Singh & Ors. (supra) possession can be
resumed by the State Government only in a manner known to or recognised by
law and it cannot resume possession otherwise than in due course of law. In
view of the ratio laid down in the aforementioned case, such legal steps would
mean action by the State Government under any relevant law for obtaining
possession and not by using police power. We make it clear that we are not
expressing any opinion whether such steps may include action under the Act of
1976 or any other law in force in the State of West Bengal. We are of the opinion
that the action of the appellants by removing the respondents from the premises
in question with the help of police is destructive of the basic principle of rule of
law.
Mr. Mukul Rohtagi has further tried to defend the action of the
appellants on the ground of public interest. We may quote below long title of the
Act of 1980 which runs as follows:-
"Whereas it is expedient to provide for the acquisition of
the undertaking of the Great Eastern Hotel Limited for
the purpose of ensuring better facilities for board and
lodging to the members of the public and for matters
connected therewith or incidental thereto."
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By the long title the legislature made it clear that the Great Eastern
Hotel was acquired by the Act of 1980 for purpose of ensuring better facilities for
boarding and lodging to the members of the public and for matters connected
therewith. As held by the High Court the hotel, which is a star hotel is meant for
use by the affluent section of the society and not for general public. The term
’members of the public’ would mean occupants of the hotel, who can use the
hotel on payment and not general public. Therefore, this is purely commercial
venture and there was no element of public purpose or public interest.
Therefore, the contention of Mr. Rohtagi is rejected.
In the absence of specific statutory provision can a person, on the
ground of public interest, be evicted by force by the State or its executive officers
without following due course of law? In view of the ratio laid down in Bishan Das
& Ors. (supra) and Maharaja Dharamander Prasad Singh & Ors. (supra), we
hold that such an action of eviction by force cannot be justified in law and for
taking possession, action has to be taken in accordance with the law.
A stand has been taken by Mr. Rohtagi that powers given to the
government and its officials by sub-section (8) of Section 4 of the Act of 1980 is
akin to Section 47 of the Land Acquisition Act of 1894. Under Section 16,
collector can take possession after the award is made and under Section 17,
possession can be taken after notice under sub-section (1) of Section 9 of the
Act of 1980 is issued. For taking the possession of the land from the landowner,
in our view Section 47 cannot be invoked. As on June 28, 1997, the
representative of the government gave oral notice to the respondents to deliver
possession, Mr. Mukul Rohtagi has contended that the respondents had
sufficient notice. We are unable to accept the contention inasmuch as direction
was given to vacate the premises in question without any opportunity to show
cause.
Lastly, it was contended by Mr. Mukul Rohtagi that as the
respondents were trespassers, the government could evict them by invoking
Section 6A of the Act of 1976. The said sub-section runs as follows: -
"6A. Eviction of unauthorised occupants and penalty for
such occupation. Where any Person, not being a tenant,
occupies, or remains in occupation of, any Government
premises without the written order of the prescribed
authority,-
(a) the prescribed authority, or any officer authorised
by it in this behalf, may take such steps and use
such force as may be necessary to take
possession of the premises and may also enter
into the premises for the said purpose; and
(b) such person shall be punishable with
imprisonment for a term which may extend to six
months, or with fine which may extend to one
thousand rupees, or with both."
Section 6A can be invoked against any person, who is not a tenant
or who remains in occupation of any government premises without written order
of the prescribed authority. The respondents were tenants under the erstwhile
company and continued to do so as held by us. Therefore, they cannot be
evicted by invoking powers conferred on the Authority under Section 6A of the
Act of 1976. However, we are not deciding the controversy as to whether this
Act would apply only to residential premises, as held by the High Court.
For what has been stated above we hold that the action of the State
Government cannot be justified in law and accordingly we uphold the impugned
judgment of the High Court. In the result appeals are dismissed. Cost on the
parties.
J.
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[Syed Shah Mohammed Quadri]
J.
[S.N. Phukan]
March 19, 2002