Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
REVIEW PETITION (C) D. NO. 40966 OF 2013
IN
CIVIL APPEAL NO.7448 OF 2011
Union of India …..Appellant(s)
:Versus:
Nareshkumar Badrikumar Jagad & Ors. ....Respondent(s)
WITH
M.A. NO.2714 OF 2018 IN CIVIL APPEAL NO.7448 OF 2011
AND
CONTEMPT PETITON (C) NO.550 OF 2014 IN CIVIL APPEAL NO.7448
OF 2011
O R D E R
A.M. Khanwilkar, J.
1. Union of India has filed this review petition seeking
review of the judgment and order passed by this Court on
September 5, 2011 in Civil Appeal No.7448 of 2011:
National
Textile Corporation Ltd. Versus Nareshkumar
2
1
Badrikumar Jagad & Ors. At the same time, the appellant
National Textile Corporation Ltd. (for short “ ”) has filed an
NTC
application for directions including for extension of time.
Whereas, respondent Nos.1 to 6 in the review petition (for
short “ ”) who were respondent Nos.1 to 6 in the
respondents
aforementioned civil appeal, have filed contempt petition for
initiating appropriate action against the appellant NTC. During
the pendency of the review petition, an Ordinance was
promulgated titled as the Textile Undertakings
(Nationalisation) Laws (Amendment and Validation)
Ordinance, 2014 which later on became The Textile
Undertakings (Nationalisation) Laws (Amendment and
Validation) Act, 2014 (for short “ Validation Act 2014 ”), as a
result of which the Union of India has filed an application for
urging additional grounds in the Review Petition. As the issues
to be decided in these proceedings are overlapping, we propose
to deal with the same by this common order.
1
(2011) 12 SCC 695
3
2. Briefly stated, the property in question admeasuring
12118 square yards of land, bearing Plot No.9 in Survey No.73
of Lower Parel Division, N.M. Joshi Marg, Chinchpokli,
Mumbai, originally belonged to one Damodar Tapidas and
th
Dayabhai Tapidas. They executed a lease deed on 11 March,
1893 in favour of one Hope Mills Ltd. The demise was for 99
st
years to expire on 21 October, 1990. A structure was erected
to house a cotton mill on the property. The original suit land
owners sold and conveyed the said land to one Harichand
nd
Rupchand by a sale deed dated 22 February, 1907. As per
the Will of Harichand Rupchand, the property vested in a
public charitable trust by the name of Seth Harichand
Rupchand Charitable Trust (for short “ the Trust ”). The
respondents are the present trustees of the said Trust. The
leasehold rights then stood transferred from Hope Mills Ltd. to
Prospect Mills Ltd. and thereafter to Diamond Spinning and
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Weaving Co. Pvt. Ltd. By an indenture of Lease dated 25
October, 1926, the property, namely, the said land and
structures thereon, were demised to Toyo Podar Cotton Mills
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Ltd. (whose name was subsequently changed to Podar Mills
Ltd.) for the residue of the unexpired period of lease of 99
nd
years commencing from 22 October, 1891, subject to the
same terms and conditions as in the original lease deed dated
th
11 March, 1893.
3. The Textile Undertakings (Taking over of Management)
Act, 1983 (for short “ ”) was enacted by Parliament in
1983 Act
order to take over the management of 13 textile undertakings,
including Podar Mills, pending their nationalisation. The lease
granted in favour of Podar Mills Ltd. expired by efflux of time
st
on 21 October, 1990. However, it continued to occupy the
suit property as a protected or statutory tenant in terms of the
Bombay Rents, Hotel and Lodging House Rates Control Act,
1947 (for short “ 1947 Act ”). The Trust issued a legal notice
nd
dated 2 December, 1994 to the NTC terminating its tenancy
qua the suit property. The Parliament enacted the Textile
Undertakings (Nationalisation) Act, 1995 (for short “ 1995
st
Act ”), which was deemed to have come into force on 1 April,
1994.
5
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On 18 July, 1995, the Trust (through
4.
respondents/trustees) filed a suit for eviction being TER Suit
680/1568/1995, against Podar Mills Ltd. (defendant No.1),
NTC (defendant No.2) and Union of India (defendant No.3)
under the provisions of the 1947 Act. The reliefs claimed in the
said suit read thus:
“The Plaintiffs, therefore, pray that :
(a) the Defendants No.2&3 be ordered and decree to quit,
vacate and hand over quiet, vacant and peaceful possession
of the suit Plot No.9, Cadastral Survey No.73 of Lower Parel
Division situated at Delisle Road, (Now known as N.M. Joshi
Marg), Bombay400011 to the Plaintiffs;
(b) that the Defendants No.2 be ordered and decreed to
pay the mesne profit to the Plaintiffs from the date of the suit
till the Decree at the rate of Rs.128.75 per month, and after
passing of the Decree a direction be given to make inquiry in
the matter and such other rate 170, at the rate prevailing in
the market be fixed as the mesne profit payable till
possession is handed over to the plaintiffs;
(c) that pending the hearing and final disposal of the suit
the Defendants No.2 their servants, agents and
representatives be restrained by an order and injunction of
this Hon’ble Court from carrying out any further work of
additions, alterations and/or erections of a permanent
nature or committing acts of waste into or upon the suit
lands viz., Plot No.9, Cadastral Survey No.73 of Lower Parel
Division situated at Delisle Road, (Now known as N.M. Joshi
Marg), Bombay400011;
(d) that pending the hearing and final disposal of the suit
that the defendants No.2 their servants, agents and
representatives be restrained by an order and a permanent
injunction of this Hon’ble Court from subletting and/or
transferring their interest in the suit premises or from
creating a leave and licence in respect thereof or from
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inducting a third party therein or from in any other manner
parting with the possession of the suit lands;
(e) that interim and adinterim injunctions be granted in
terms of prayer (c) and (d) above during the pendency and
final disposal of this suit;
(f) that a fit and proper person be appointed as a
Commissioner to visit and inspect the suit premises being
Plot No.9, Cadastral Survey No.73 of Lower Parel Division
situated at Delisle Road, (Now known as N.M. Joshi Marg),
Bombay400011 and to make and give his report regarding
the present position and condition of the suit lands and
structures standing thereon;
(g) that the status quo in respect of the suit premises be
maintained;
(h) for costs of this suit;
for such other and further order as may be just and proper
and necessary;”
th
This suit was dismissed for nonprosecution on 26 August,
2002.
5. The Trust (through respondents/trustees) filed another
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suit on 6 May, 1997, being RAD Suit No.955/97, against the
same parties (Union of India, Ministry of Textile (defendant
No.1), NTC (defendant No.2) and Podar Mills Ltd. (defendant
No.3) for the following reliefs:
“THE PLAINTIFFS THEREFORE PRAY:
A. It be declared that upon expiry of the Lease period by
offlux of time on 22.10.1990 the Defendants No.3 were
holding over premises and/or by operation of law become the
statutory tenant of the Plaintiffs in respect of suit property
being Plot No.9, Cadastral Survey No.73 Land admeasuring
about 12,118 Sq. yards with all buildings standing thereon,
situated at Delisle Road, now known as N.M. Joshi Marg,
Bombay400011.
7
st
B. that it be declared that on the appointed day i.e. 1
April, 1995. The Defendants No.1, had acquired tenancy
rights of the Defendants No.3, and what has vested in
Defendants No.2 is the statutory tenancy of Defendants
No.3, and as such Defendant No.2, is the statutory tenant of
the Plaintiffs, protected under Bombay Rent Act, in respect
of the suit premises being Plot No.9, Cadastral Survey No.73,
land admeasuring about 12,118 Sq. yards with all buildings
standing thereon, situated at Delisle Road, now known as
N.M. Joshi Marg, Bombay400011.
C. that it be also declared that Defendants No.3, as the
statutory tenants of the Plaintiffs in respect of suit premises
being Plot No.9, Cadastral Survey No.73, land admeasuring
about 12,118 Sq. yards with all buildings standing thereon,
situated at Delisle Road, now known as N.M. Joshi Marg,
Bombay400011, had no right to claim and/or receive any
compensation from the Defendants No.1 and/or Defendant
No.2, for the acquirement and/or vesting of their statutory
tenancy right, in the Defendants No.1.
D. that the Defendants No.1 and 2 be directed to furnish
the detail bifurcation of the payment mentioned in Schedule
I item No.4 of the said Ordinance 6 of 1995.
E. that the Defendants No.1 be also restrained from
making any payment to the extent of Defendants No.3, allege
lease right, title, and interest in the suit property being Plot
No.9, Cadastral Survey No.73, land admeasuring about
12,118 sq. yards with all buildings standing thereon,
situated at Delisle Road, now known as N.M. Joshi Marg,
Bombay400011, fixed by the Defendants No.1, and/or No.2,
as the Defendants No.1 had only acquired statutory tenancy
rights thereon.
F. that it be declared that the Defendants No.1 and 2 as
the statutory tenant of the Plaintiffs have no right to deal
with transfer, mortgage, sell and/or otherwise disposed off
and/or induct any third party in the suit promises, being
Plot No.9, Cadastral Survey No.73, land admeasuring about
12,118 sq. yards with all buildings standing thereon,
situated at Delisle Road, now known as N.M. Joshi Marg,
Bombay400011.
G. Interim and adinterim reliefs in terms of prayers (d) to
(f) be granted.
H. Costs and any other and such reliefs be granted as
this Hon’ble Court may deem fit and proper.”
8
nd
This suit was eventually withdrawn on 22 December, 2004.
6. The 1947 Act stood repealed by the Maharashtra Rent
Control Act, 1999 (for short “ 1999 Act ”). The Trust issued a
notice for terminating the tenancy of NTC vide notice dated
th
26 September, 2000. The Trust (through respondents/
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trustees) filed a fresh suit on 20 April, 2001 under the
Transfer of Property Act, 1882 only against the appellant NTC,
in the Small Causes Court at Bombay being TER 311/326/01
for the following reliefs:
“The Plaintiffs, therefore, pray:
(a) that the Defendants be ordered and decree to vacate
and hand over to the Plaintiffs vacant peaceful possession of
the suit premises i.e. premises being land with the building
admeasuring about 12,118 sq. yards (equivalent to 10131.85
sq. mtrs.) bearing Plot No.9, Cadastral Survey No.73 of
Lower Parel Division situated at Delisle Road, now known as
N.M. Joshi Marg, Chinchpokli, Bombay400011;
(b) the Defendants be ordered and decree to pay to the
Plaintiffs mesne profits at the market rate and at some other
rate fixed by this Hon’ble Court for the use and occupation of
the said land and building having area of about 12,118 sq.
yards (equivalent to 10131.85 sq. mtrs.) from November
2000 till the Defendants hand over peaceful possession of
the said premises viz. land with building admeasuring about
12118 sq. yards, bearing Plot No.9, Cadastral Survey No.73
of Lower Parel Division situated at Delisle Road, now known
as N.M. Joshi Marg, Chinchpokli, Bombay400011 to the
Plaintiffs or at such amount as this Hon’ble Court may deem
fit and proper, after due inquiry under Order XX Rule 12 (c)
of the Civil Procedure Code;
9
(c) pending hearing and final disposal of the suit
Defendants by themselves, their agents, officers, servants be
restrained by order and injunction of this Hon’ble Court from
parting with possession or occupation of the suit premises
under any assignment or part in whatsoever manner of
induct any third party therein;
(d) pending the hearing and final disposal of the suit some
fit and proper person be appointed Receiver with all power
under Order 40 Rule 4 of the Code of Civil Procedure to take
charge of the suit premises;
(e) pending the hearing and final disposal of the suit
Defendants be ordered to pay to the Plaintiffs
damages/equally profit at Rs.7 lacs per month subject to
adjustment of said amount when damages/mesne profit is
finally determined by the Hon’ble Court;
(f) interim and adinterim reliefs in terms of prayers (c),
(d) and (e) above;
(g) cost of this suit be provided for; and
(h) for such other and further reliefs as the nature and
circumstances of the case may required be granted.”
7. The appellant NTC filed its written statement denying the
pleas taken by the plaintiffs. The suit was decreed in favour of
th
the plaintiffs (Trust) vide judgment and decree dated 5
August, 2006 by virtue of which the NTC was directed to hand
over vacant and peaceful possession of the suit premises to
the plaintiffs within four months.
Being aggrieved, the appellant NTC preferred Appeal No.
8.
627 of 2006 before the Division Bench of the Small Causes
th
Court at Bombay on 13 November, 2006 which was
10
dismissed by the appellate court by affirming the judgment
and decree of the trial court vide judgment and decree dated
th
14 August, 2008. The appellant preferred civil revision before
the High Court of Bombay, which came to be dismissed vide
rd
judgment and order dated 3 August, 2009.
9. Being aggrieved, NTC assailed the aforementioned
decision of the High Court before this Court by way of a
Special Leave Petition converted to Civil Appeal No.7448 of
th
2011, which came to be dismissed on 5 September, 2011.
That decision is the subject matter of the review petition filed
th
on 20 December, 2013 by the Union of India as a third party.
The principal ground urged by the Union of India is that the
right, title and interest in the suit property had vested
absolutely in the Central Government by virtue of Section 3(1)
of the 1995 Act. Nevertheless, in the subject suit for
possession filed by the Trust, Union of India had not been
impleaded as a partydefendant. Notably, the Trust had
impleaded Union of India as a party defendant in both the
previous suits filed including for eviction under the provisions
11
of the 1947 Act. That presupposes that the respondents were
cognizant of the effect of the statutory vesting of the tenancy
absolutely in favour of the Central Government.
As aforementioned, during the pendency of the review
10.
petition, the Validation Act 2014 came into effect,
necessitating Union of India to take out an application for
urging additional grounds in the pending review petition, in
light of the provisions contained in the said enactment.
This Court while dismissing the appeal preferred by NTC,
11.
st
gave time to vacate upto 31 December, 2013 subject to filing
of usual undertaking within four weeks, to hand over peaceful
and vacant possession to the Trust. The General Manager of
rd
NTC filed an affidavit of undertaking on behalf of NTC on 3
October, 2011, with the approval of the Union of India, in
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compliance of the order dated 5 September, 2011 passed by
this Court.
12. Before the expiry of the time to vacate, NTC filed an
application for extension of time to hand over possession of
rd
the suit premises on 23 December, 2013, for reasons stated
12
in the application. This Court acceded to that request vide
st
order dated 31 January, 2014 and extended the time to
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vacate until 30 June, 2014. NTC filed a fresh undertaking on
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24 March, 2014, with the approval of the Union of India, in
st
compliance of the order dated 31 January, 2014.
th
13. NTC has filed a fresh application on 27 June, 2014
before the expiry of the time to vacate, being I.A. No.6 of 2014
for directions and praying for the following reliefs:
“ PRAYERS:
(a) To grant time to the Applicants herein to comply with
all the laws, rules, regulations as required for subdivision of
the said land so that the land of the Respondent as well as
Applicant could be demarcated and subdivided;
(b) That this Hon’ble Court may be pleased to declare the
Order dated 5.8.2006 of the Hon’ble Small Causes Court as
regards the handling over of the building structure standing
on the said suit land does not imply that the buildings are to
be handed over free of cost or that the Respondent Trust is
the owner therein;
(c) That in any event this Hon’ble Court may be pleased to
vary the said order of the Small Cases Court dated
05.8.2006 inasmuchas it directs handing over of building
inasmuchas the said order is impossible of compliance
since in the process of subdivision, the structures on the
land of the Respondent as also the land of the Applicant will
stand demolished;
(d) That this Hon’ble Court may be pleased to direct the
Respondent Trust to pay to the Applicants the salvage value
at the market rate/value of the demolished structure
13
standing on the lease hold land to be handed over to the
Respondent.
(e) That this Hon’ble Court may be pleased to permit and
also issue a direction permitting the Applicant to hand over
juridical possession to the Respondent Trust without
handling over the physical possession until such time as the
land has been demarcated and the structure demolished.
(f) Pass any such other order/s as may be deemed fit and
proper.”
th
14. The respondents have filed a contempt petition on 20
November, 2014 including for enforcement of the directions
given to NTC to vacate the suit premises and to hand over
peaceful and vacant possession thereof to them. They allege
that it is a case of willful disobedience and more particularly,
breach of the undertaking given to this Court by the party
concerned warranting appropriate action against NTC and its
officials.
15. The respondents would contend that Union of India has
no locus to file a review petition against the judgment of this
th
Court dated 5 September, 2011. It is then contended that
the grounds urged by the Union of India in the review petition
regarding the purport of the 1995 Act were specifically raised
14
and have been answered appropriately. Secondly, the fact now
asserted by the Union of India by way of review petition and
which contention is supported by NTC, namely, that the
tenancy rights in the suit property of the erstwhile Podar Mills
Ltd. vested absolutely in the Union of India after the taking
over of the management of the subject Textile Undertaking by
operation of the provisions of the 1983 Act and followed by
acquisition by virtue of the 1995 Act, was not specifically
raised in the written statement filed by NTC. It is too late in
the day to permit Union of India or NTC to raise that plea. It
is not open for the review court to travel beyond the pleadings
in the written statement filed by NTC. No evidence can be led
either by Union of India or NTC in respect of any factual
matter which has not been pleaded in the written statement.
The plea taken by NTC in the written statement has been duly
considered right up to this Court, which culminated into the
decision of this Court. In fact, the review petition by Union of
India is a subterfuge so as to circumvent the decree of
possession passed against NTC in respect of the suit premises,
15
and moreso, in defiance of the undertaking already given to
this Court, with the approval of the Union of India, to hand
over peaceful and vacant possession. According to the
respondents, the review petition by Union of India as well as
the application for extension of time by NTC are nothing but
an abuse of the process of the Court and must be dismissed.
The respondents have also invited our attention to the interim
orders passed by this Court in the present proceedings and
would contend that the Commission’s Report exposes the
stand taken by NTC that the suit premises are still being used
for its activities.
16. We have heard Ms. Pinky Anand, learned Additional
Solicitor General appearing for the review petitioner, Mr.
Shekhar Naphade & Mr. Maninder Singh, learned senior
counsel appearing for NTC and Mr. Mukul Rohatgi, Mr. Ranjit
Kumar & Mr. Shyam Divan, learned senior counsel appearing
for the respondents.
17. From the judgment under review, it is seen that the main
ground urged by Union of India in the review petition was
16
pressed into service by NTC. In paragraph 7 of the judgment,
the argument canvassed on behalf of NTC has been noted as
under:
“7. Shri Parag P. Tripathi, learned Additional Solicitor
General, appearing for the appellant has submitted that the
judgments and decrees of the courts below have to be set
aside as none of the courts below has taken into
consideration the effect of the provisions of the 1995 Act by
virtue of which the textile undertaking stood absolutely
vested in the Central Government and further vested in the
appellant. As on the expiry of the lease of 99 years on 2210
1990, the 1947 Act was in force, the then tenant, Podar Mills
became the statutory tenant. Such tenancy rights stood
vested absolutely in the Central Government on the
commencement of the 1995 Act by operation of law.
The
appellant stepped in the shoes of the Central
Government merely as an agent, thus, the Central
Government remained the tenant. The Central
Government continued to be a tenant in the suit
premises and thus, would be protected in terms of
Section 3(1)( a ) of the 1999 Act being premises let out to
the Government. The courts below failed to consider this
vital legal issue. The suit filed by the respondents was not
maintainable. The judgments and decrees of the courts
below are liable to be set aside.”
(emphasis supplied)
18. This Court, after considering the rival submissions, held
that NTC had not specifically pleaded in the written statement
that the tenancy stood vested absolutely in the Central
Government and resultantly, no issue in that behalf was
framed nor any argument was advanced before the Trial
17
Court, Appellate Court or the Revisional Court. That
contention was taken for the first time in the appeal before the
Supreme Court by way of an application to urge additional
grounds regarding the application of the 1995 Act, without
seeking amendment to the pleadings (written statement). The
Court then considered the question as to whether the
Government is a tenant or whether NTC can be termed as
“Government” or “Government Department” or “Agent” of the
Central Government in the context of the 1999 Act. The Court,
in unambiguous terms held that NTC could neither be treated
as “Government” or “Government Department” nor could it be
treated as an “Agent” of the Central Government. Whereas,
NTC was controlled by the provisions of the 1995 Act and not
by the Central Government. The Court also considered the
purport of the expression “vesting” and noted that the Trust
had rented out the suit premises to Podar Mills and what had
vested was that right, title and interest of the Podar Mills and
nothing else. It will be apposite to reproduce paragraphs 42
18
and 43 of the judgment under review, which rejects the claim
of NTC in the following words:
“42. It is not permissible for the appellant to canvass that
the Central Government has any concern so far as the
tenancy rights are concerned. Right vested in the Central
Government stood transferred and vested in the appellant.
Both are separate legal entities and are not synonymous.
The appellant being neither the Government nor the
government department cannot agitate that as it has been
substituted in place of the Central Government, and acts
merely as an agent of the Central Government, thus
protection of the 1999 Act is available to it. The appellant
cannot be permitted to say that though all the rights vested
in it but it merely remained the agent of the Central
Government. Acceptance of such a submission would require
interpreting the expression “vesting” as holding on behalf of
some other person. Such a meaning cannot be given to the
expression “vesting”.
43. It is a settled legal proposition that an agent cannot be
sued where the principal is known. In the instant case, the
appellant has not taken the plea before either of the courts
below. In view of the provisions of Order 8 Rule 2 CPC, the
appellant was under an obligation to take a specific plea to
show that the suit was not maintainable which it failed to do
so. The vague plea to the extent that the suit was bad for
nonjoinder and, thus, was not maintainable, did not meet
the requirement of law. The appellant ought to have taken a
plea in the written statement that it was merely an “agent” of
the Central Government, thus the suit against it was not
maintainable. More so, whether A is an agent of B is a
question of fact and has to be properly pleaded and proved
by adducing evidence. The appellant miserably failed to take
the required pleadings for the purpose.”
19. Reverting to the question of whether Union of India has
locus to file the review petition, we must immediately advert to
19
Section 114 of the Code of Civil Procedure ( “CPC” ) which,
inter alia, postulates that “any person considering himself
aggrieved” would have locus to file a review petition. Order
XLVII of CPC restates the position that any person considering
himself aggrieved can file a review petition. Be that as it may,
the Supreme Court exercises review jurisdiction by virtue of
Article 137 of the Constitution which predicates that the
Supreme Court shall have the power to review any judgment
pronounced or order made by it. Besides, the Supreme Court
has framed Rules to govern review petitions. Notably, neither
Order XLVII of CPC nor Order XLVII of the Supreme Court
Rules limits the remedy of review only to the parties to the
judgment under review. Therefore, we have no hesitation in
enunciating that even a third party to the proceedings, if he
considers himself an aggrieved person, may take recourse to
the remedy of review petition. The quintessence is that the
person should be aggrieved by the judgment and order passed
by this Court in some respect.
20
20. The next question is whether Union of India can be
considered as an aggrieved person so as to pursue the remedy
of review petition. It is indisputable that the management of
Podar MillsTextile Undertaking was taken over by the Central
Government after the commencement of the 1983 Act. The
scope of management would obviously include possession and
permissible use of the suit property of the Textile Undertaking
so taken over. In due course, the 1995 Act came into force. As
a consequence of Section 3 of this Act, the right, title and
interest of the owners of the subject Textile Undertaking
(Podar Mills Ltd.) including the statutory tenancy rights in
relation to the suit property stood transferred to and vested
absolutely in the Central Government. By the same provision,
vide subsection (2) thereof, the Textile Undertaking which
stood vested in the Central Government immediately thereafter
stood transferred to and vested in the National Textile
Corporation. That included subsisting statutory tenancy rights
in respect of the suit property enjoyed by the concerned Textile
Undertaking. However, Section 3 stands amended by virtue of
21
the 2014 Act. That amendment by a legal fiction is deemed to
st
have been inserted into the 1995 Act w.e.f. 1 January, 1994.
The purport of the amended subsections (3) and (4), inserted
in section 3 is that the leasehold rights of the Textile
Undertaking would continue to remain vested in the Central
Government and no Court could exercise jurisdiction to order
divestment from the NTC of the property vested in it by the
Central Government. In addition, the Amendment Act of 2014
has introduced Section 39 in the 1995 Act, titled as
‘Validation’. We shall dilate on the efficacy of these provisions
a little later.
21. Suffice it to observe that since Union of India is
asseverating that the suit property had vested absolutely in
the Central Government and continues to so vest in it by
virtue of a legal fiction in the Validation Act 2014, would be
justified in contending that it is a person aggrieved and has
locus to point out that the decree for possession of the suit
premises against NTC could not have been passed and in any
case, the same could not be enforced in law. It is an
22
inexecutable decree and including the undertaking given by
NTC, assuming that the concerned court had jurisdiction to
pass such a decree.
Having said this, we may now turn to the question of
22.
scope of review jurisdiction to be exercised by this Court in
civil proceedings. The power to review any judgment
pronounced or order made by this Court flows from Article 137
of the Constitution of India, which reads thus:
“137. Review of judgments or orders by the Supreme Court
Subject to the provisions of any law made by Parliament or
any rules made under Article 145, the Supreme Court shall
have power to review any judgment pronounced or order
made by it.”
23. The power to frame rules is posited in Article 145 of the
Constitution. As per Rule 1 of Order XLVII of the Supreme
Court Rules framed under Article 145, the Court can review its
judgment or order on the grounds mentioned in Order XLVII,
Rule 1 of the CPC. It will be, therefore, apposite to advert to
Rule 1 of Order XLVII of CPC. The same reads thus:
“ ORDER XLVII
REVIEW
1. Application for review of judgement.
23
(1) Any person considering himself aggrieved
(a) by a decree or order from which an appeal is
allowed, but from no appeal has been preferred,
(b) by a decree or order from which no appeal is
allowed, or
(c) by a decision on a reference from a Court of Small
Causes,
and who, from the discovery of new and important matter or
evidence which, after the exercise of due diligence, was not
within his knowledge or could not be produced by him at the
time when the decree was passed or order made, or on
account of some mistake or error apparent on the face of the
record or for any other sufficient reason, desires to obtain a
review of the decree passed or order made against him, may
apply for a review of judgement to the Court which passed
the decree or made the order.
(2) A party who is not appealing from a decree or order may
apply for a review of judgement notwithstanding the
pendency of an appeal by some other party except where the
ground of such appeal is common to the applicant and the
appellant, or when, being respondent, he can present to the
Appellate Court the case on which he applies for the review.”
24. The grounds for review are specified in clause (1) noted
above. The factual scenario in the present case is certainly not
ascribable to discovery of new or important matters or
evidence which was “available or existing” at the time of the
decree but could not be produced despite exercise of due
diligence. In the present case, the asseveration of the review
petitioner is about the mistake or error apparent on the face of
the record committed by the Court and more particularly
24
founded on the effect of the subsequent enactment of
Validation Act 2014 which completely changes the status of
the parties, namely, Union of India and NTC qua the suit
property and bars the enforcement of any decree and
including the undertaking given to the Court by NTC.
25. Ordinarily, enactment of a subsequent legislation by
itself cannot be the basis to review the judgment already
rendered by the Court. But the argument of the review
petitioner proceeds on the premise that the subsequent
legislation has completely altered the status of the parties
st
retrospectively qua the suit property with effect from 1 April,
1994 by a legal fiction, as a result of which the cause of action
against NTC as referred to in the subject suit had become non
existent; and including any decree or order passed against
NTC or for that matter, an undertaking filed by NTC in any
court or tribunal or authority has been rendered
unenforceable by operation of law and cannot be continued or
taken forward. In other words, even if a valid decree has been
25
passed against NTC, the same had become inexecutable by
operation of law.
26. This Court in Raja Shatrunji Vs. Mohammad Azmal
2
had an occasion to consider the impact
Azim Khan and Ors.
of Amendment Act having retrospective effect on the decree
already passed. The discussion in paragraphs 11 to 13 of this
decision is quite instructive. It accepts the argument that the
Court must give full effect to the statutory fiction, which
should be carried to its logical conclusion no matter in review
jurisdiction. The said paragraphs read thus:
“11. The Amendment Act therefore provided that the
amendment took effect as if the Amendment Act had
been in force on all material dates. The effect of such a
deeming clause was stated by this Court in State of Bombay
3
v. Pandurang Vinayak Chaphalkar as follows:
‘
When a statute enacts that something shall be deemed
to have been done, which in fact and truth was not done,
the court is entitled to ascertain for what purposes and
between what persons the statutory fiction is to be
resorted to and full effect must be given to the statutory
fiction and it should be carried to its logical conclusion. ’
The statutory fiction was introduced to give full effect to
Section 4 of the 1952 Act by conferring on the debtors and
creditors the right to apply to the court for calculation and
reduction of debt. It was realised that courts always passed
simple decrees. It was noticed that mortgaged property was
not and could not be charged under the decree. It was
2
(1971) 2 SCC 200
3
AIR 1953 SC 244 = 1953 SCR 773
26
therefore appreciated that unless the words “charged under
the decree” were deleted the section could never give any
relief to any landlord whose estate had been acquired.
12. This Court in the Bombay case referred to the
observations of Lord Asquith in East End Dwellings Co. Ltd.
v. Finsbury Borough Council , 1952 AC 109 that “If you are
bidden to treat an imaginary state of affairs as real, you
must surely, unless prohibited from doing so, also imagine
as real the consequences and incidents which, if the putative
state of affairs had in fact existed, must inevitably have
flowed from or accompanied it.... The statute says that you
must imagine a certain state of affairs; it does not say that
having done so, you must cause or permit your imagination
to boggle when it comes to the inevitable corollaries of that
state of affairs”. These observations indicate that the words
“charged under the decree” in Section 4(2) of the 1952 Act
were never there with the inevitable consequence that the
only statutory requirement is whether the mortgaged
property consists of estate which has been acquired under
the provisions of the U.P. Zamindari Abolition and Land
Reforms Act, 1950.
13. On November 27, 1962 when the matter was heard by
the High Court, this amendment did not come into the
statutebook. That is why the judgmentdebtor made an
application to bring it to the notice of the High Court that the
law was that the words “charged under the decree” were
always deemed to have been deleted and this law was
effective from the date of coming into force of the 1952 Act
on May 25, 1953. The High Court by a majority opinion was
of the view that the judgmentdebtors should be given relief
under Order 47 of the Code of Civil Procedure the principles
of review are defined by the Code and the words “any other
sufficient reason” in Order 47 of the Code would mean a
reason sufficient on grounds analogous to those specified
immediately previously in that order. The grounds for review
are the discovery of new matters or evidence which, after the
exercise of due diligence, was not within his knowledge or
could not be produced by him at the time when the decree
was passed or order made, or the review is asked for on
account of some mistake or error apparent on the face of the
record. In Rajah Kotagiri Venkata Subbamma Rao v. Rajah
Vellanki Venkatrama Rao, Lord Davey at p. 205 of the
27
Report said that “the section does not authorise the review of
a decree which was right when it was made on the ground of
the happening of some subsequent event”. Counsel for the
appellant submitted that when the High Court decided
the matter, the High Court applied the law as it stood
and a subsequent change of law could not be a ground for
review. The appellant’s contention is not acceptable in
the present case for two principal reasons; first, it is not
a subsequent law. It is the law which all along was there
from 1952. The deeming provision is fully effective and
operative as from May 25, 1953 when the 1952 Act came
into force. The result is that the court is to apply the
legal provision as it always stood. It would, therefore, be
error on the face of the record. The error would be that
the law that was applied was not the law which is
applicable. Secondly, Section 4 of the 1952 Act confers
power on the court to apply the law notwithstanding any
provision contained in the Code of Civil Procedure. Therefore
the application though intituled an application for review was
not so. The substance and not the form of the application
will be decisive.”
(emphasis supplied)
Applying the underlying principle and as jurisdictional
27.
issues have been raised which are essentially founded on the
law enacted by the Parliament with retrospective effect
containing a legal fiction and for doing complete justice to the
parties, besides the power of review under Article 137 of the
Constitution, it is open to this Court to exercise its plenary
power under Article 142 of the Constitution.
28
28. Reverting to the judgment under review, it is noticed that
the provisions of the 1983 Act and 1995 Act have been
generally adverted to while dealing with the plea taken by the
appellant NTC that it was in possession of the suit property
merely as an agent of the Central Government. However, the
Court declined to entertain that plea of NTC as it was not so
specifically pleaded in the written statement. The Court then
concluded that the appellant NTC was neither the
“Government” nor “Government Department” nor “Agent” of
the Central Government in the context of the Maharashtra
Rent Control Act, 1999. That view has been taken in reference
to the 1983 Act and the “unamended” provisions of 1995 Act.
Indeed, the review petitioners would argue that on a fair
reading of the unamended provisions contained in 1995 Act
and juxtaposed with the provisions of 1983 Act, the
inescapable conclusion is that the leasehold rights continued
to vest in the Central Government. However, we are not
inclined to countenance this argument.
29
29. The review petitioners may be justified in pointing out
that this Court committed an error apparent on the face of the
record in observing that the appellant had never raised the
issue before the courts below that the Central Government
was the tenant and the appellant was holding the premises
merely as an agent; and that a vague plea was taken about the
nonjoinder of the parties which plea was not even pursued
before the Trial Court. Those errors, in our opinion, would not
affect the final conclusion recorded by this Court in the
judgment under review, considering the effect of the provisions
as were applicable at the relevant time in the form of “un
amended” Section 3 of the 1995 Act. For, by virtue of sub
section (2) of Section 3 of that Act, the rights which had vested
absolutely in the Central Government including in respect of
the suit property, stood transferred to and vested in the
st
appellant NTC on coming into force of the 1995 Act w.e.f. 1
April, 1994. That view taken by this Court does not merit any
review. Resultantly, it is not necessary to dilate on the
decisions in
S. Bagirathi Ammal Vs. Palani Roman
30
4
Catholic Mission , Union of India Vs. Sandur Manganese
5
and
and Iron Ores Limited and Ors. Champsey Bhara
and Company Vs. Jivraj Balloo Spinning and Weaving
6
Company Limited , on the principle of the purport of
expression “error apparent” postulated in the rules governing
the scope of review jurisdiction.
30. However, the legal situation has undergone a seachange
retrospectively after the coming into force of the Validation Act
2014. The Validation Act makes it explicit that the amendment
to the 1995 Act specified therein shall be deemed to have been
inserted on or from the date of commencement of the 1995 Act
st
i.e. 1 April, 1994. The preamble of the Validation Act and the
relevant chapter applicable to the case on hand, being Chapter
III of that Act, read thus:
“THE TEXTILE UNDERTAKINGS (NATIONALISATION) LAWS
(AMENDMENT AND VALIDATION) ACT, 2014
NO.36 OF 2014
[17th December, 2014.]
4
(2009) 10 SCC 464
5
(2013) 8 SCC 337
6
(1923) Vol. L (IA) 324
31
An Act further to amend the Sick Textile Undertakings
(Nationalisation) Act, 1974 and the Textile Undertakings
(Nationalisation) Act, 1995,
in order to continue with the
leasehold rights vested in the National Textile
.
Corporation on completion of the leasehold tenure
WHEREAS the National Textile Corporation subserves
the interests of the general public and the land continue to
be in possession of the said Corporation;
AND WHEREAS various other textile undertakings
have been nationalised from time to time and their
assets vested absolutely in the Central Government and
thereafter transferred to the National Textile
Corporation Limited by the Central Government free
from all encumbrances ;
AND WHEREAS after the nationalisation of the textile
undertakings, a
large sum of money have been invested
with a view to making the said textile undertakings
;
viable
AND WHEREAS the Central Government has taken
initiative to revive certain sick undertakings including
the National Textile Corporation under a revival scheme
sanctioned by the Board for Industrial and Financial
Reconstruction under the Sick Industrial Companies (Special
Provisions) Act, 1985;
AND WHEREAS it is necessary for the proper and
effective implementation of the revival scheme and to
protect the public investment in the acquired textile
undertakings and to explicitly clarify the status of such
vesting of the leasehold rights in the Central
Government .
BE it enacted by Parliament in the Sixtyfifth Year of the
Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. ( 1 ) This Act may be called the Textile Undertakings
(Nationalisation) Laws (Amendment and Validation) Act,
2014.
32
( 2 ) It shall be deemed to have come into force with effect
from the 24th October, 2014.
CHAPTER II
AMENDMENTS TO THE SICK TEXTILE UNDERTAKINGS
(NATIONALISATION) ACT, 1974
xxx xxx xxx xxx xxx
xxx xxx xxx xxx xxx
CHAPTER III
AMENDMENTS TO THE TEXTILE UNDERTAKINGS
(NATIONALISATION) ACT, 1995
the Textile
5. On and from the date of commencement of
Undertakings (Nationalisation) Act, 1995 (hereafter in this
Chapter referred to as the principal Act ), in section 3, after
subsection (2), the following subsections shall be
inserted and shall be deemed to have been inserted ,
namely:—
"(3) Notwithstanding the transfer and vesting
of any textile undertaking to the National Textile
Corporation by virtue of subsection (2), the
leasehold rights of the textile undertakings
shall continue to remain vested in the
Central Government on payment of leasehold
rents and shall be discharged, for and on behalf
of that Government, by the National Textile
Corporation as and when payment of such lease
hold rents or any amount becomes due and
payable.
(4) Subject to subsection (3), no court shall
have jurisdiction to order divestment from
the National Textile Corporation of the
property vested in it by the Central
”.
Government.
33
6. On and from the date of commencement of the
principal Act , in section 4, after subsection (7), the
following subsections shall be inserted and shall be
deemed to have been inserted , namely:—
“(8) Notwithstanding the fact that the textile
operations have been discontinued in any
textile undertaking being revived, shall for all
effects and purposes be deemed that the
textile operations are being continued and no
suit or proceeding shall be instituted or if
instituted be maintainable against the
National Textile Corporation on the ground
that it has discontinued such activity in the
textile undertaking .
(9) For the removal of doubts, it is hereby
declared that the continued deemed vesting of
the leasehold land in the Central Government
shall not affect, impair or in any manner
prejudice the rights of the National Textile
Corporation to prosecute or defend any
proceedings as a subsequent vestee in respect of
any such leasehold rights and no such
proceedings shall fail only on account of the
nonimpleadment of that Government.”.
7. After section 38 of the principal Act, the following section
shall be inserted, namely:—
"39. Notwithstanding anything contained in
any judgment, decree or order of any court,
tribunal or other authority ,—
(a) the provisions of this Act, as amended by
the Textile Undertakings (Nationalisation)
Laws (Amendment and Validation) Act, 2014,
shall have and shall be deemed always to
have effect for all purposes as if the
provisions of this Act, as amended by the
34
said Act, had been in force at all material
times ;
(b) any leasehold property divested from the
National Textile Corporation to any person
under the provisions of this Act, as it stood
immediately before the commencement of the
Textile Undertakings (Nationalisation) Laws
(Amendment and Validation) Act, 2014, shall
stand transferred to and vest or continue to vest,
free from all encumbrances, in the National
Textile Corporation in the same manner as it
was vested in the National Textile Corporation
before such divesting of that property under the
provisions of this Act as if the provisions of this
Act, as amended by the aforesaid Act, were in
force at all material times;
(c) no suit or other proceedings shall, without
prejudice to the generality of the foregoing
provisions, be maintained or continued in
any court or tribunal or authority for the
enforcement of any decree or order or
direction given by such court or tribunal or
authority, notwithstanding any undertaking
filed by the National Textile Corporation in
any court or tribunal or authority, directing
divestment of such leasehold property from the
National Textile Corporation vested in it under
section 3 of this Act, as it stood before the
commencement of the Textile Undertakings
(Nationalisation) Laws (Amendment and
Validation) Act, 2014, and
such leasehold
property shall continue to vest in the
National Textile Corporation under section 3
of this Act, as amended by the aforesaid Act,
as if the said section was in force at all
;
material times
(d) any transfer of any property, vested in the
National Textile Corporation, by virtue of any
35
order of attachment, seizure or sale in execution
of a decree of a civil court or orders of any
tribunal or other authority in respect of lease
hold property vested in the National Textile
Corporation which is contrary to the provisions
of this Act, as amended by the Textile
Undertakings (Nationalisation) Laws
(Amendment and Validation) Act, 2014, shall be
deemed to be null and void and notwithstanding
such transfer, continue to vest in the National
Textile Corporation under this Act.”.
8. (1) The Textile Undertakings (Nationalisation) Laws
(Amendment and Validation) Ordinance, 2014 is hereby
repealed.
(2) Notwithstanding the repeal of the Textile Undertakings
(Nationalisation) Laws (Amendment and Validation)
Ordinance, 2014, anything done or any action taken under
the principal Acts as amended by the said Ordinance shall
be deemed to have been done or taken under the principal
Acts, as amended by this Act.”
(emphasis supplied)
31. We may hasten to add that the validity of the provisions
of Validation Act 2014 is not put in issue in these proceedings.
As is noticed, the effect of the Validation Act 2014 is to
incorporate subsections (3) & (4) in Section 3 and sub
sections (8) & (9) in Section 4 of the Principal Act i.e. 1995 Act,
with retrospective effect for all purposes, by a deeming
provision, as if it had always been in force at all material times
36
st
w.e.f. 1 April, 1994. In addition, Section 39 has been inserted
in the Principal Act.
32. The effect of insertion of subsections (3) & (4) in
st
Section 3 of the Principal Act is that Section 3, as on 1 April,
1994, would read as follows:
“3. ( 1 ) On the appointed day, the right, title and interest of
the owner in relation to every textile undertaking shall stand
transferred to and shall and shall vest absolutely in, the
Central Government.
( 2 ) Every textile undertaking which stands vested in the
Central Government by virtue of subsection (1) shall
immediately after it has so vested, stand transferred to, and
vested in, the National Textile Corporation.
( 3 ) Notwithstanding the transfer and vesting of any textile
undertaking to the National Textile Corporation by virtue
of subsection (2), the leasehold rights of the textile
undertakings shall continue to remain vested in the
Central Government on payment of leasehold rents and
shall be discharged, for and on behalf of that Government,
by the National Textile Corporation as and when payment of
such leasehold rents or any amount becomes due and
payable.
( 4 ) Subject to subsection (3), no court shall have
jurisdiction to order divestment from the National
Textile Corporation of the property vested in it by the
.”
Central Government
(emphasis supplied)
Similarly, in light of the amendment of 2014, Section 4, as on
st
1 April, 1994, would read as follows:
“4. ( 1 ) The textile undertakings referred to in section 3 shall
be deemed to include all assets, rights, leaseholds, powers,
authorities and privileges and all property, movable and
immovable, including lands, buildings, workshops, stores,
instruments machinery and equipment, cash balances, cash
37
on hand, reserve funds, investment and book debts
pertaining to the textile undertakings and all other rights
and interests in, or arising out of, such property as were
immediately before the appointed day in the ownership,
possession, power or control of the textile company in
relation to the said undertakings, whether within or outside
India, and all books of account, registers and all other
documents of whatever nature relating thereto and shall also
be deemed to include the liabilities and obligations specified
in subsection (2) of section 5.
( 2 ) All property as aforesaid which have vested in the Central
Government under subsection (1) of section 3 shall, by force
of such vesting, be freed and discharged from any trust,
obligation mortgage, charge, lien and all other incumbrances
affecting it, and any attachment, injunction or decree or
order of any court or other authority restricting the use of
such property in any manner shall be deemed to have been
withdrawn.
( 3 ) Where any licence or other instrument in relation to a
textile undertaking had been granted at any time before the
appointed day to the owner by the Central Government or a
State Government or any other authority, the National
Textile Corporation shall, on and from such date, be deemed
to be substituted in such licence or other instrument in
place of the owner referred to therein as if such licence or
such other instrument had been granted to it and shall hold
such licence or the textile undertaking specified in such
other instrument for the remainder of the period for which
the owner would have held such licence or the textile
undertaking under such other instrument.
( 4 ) Every mortgagee of any property which has vested under
this act in the Central Government and every person holding
any charge, lien or other interest in, or in relation to, any
such property shall give, within such time and in such
manner as may be prescribed, an intimation to the
Commissioner of such mortgage, charge, lien or other
interest.
( 5 ) For the removal of doubts, it is hereby declared that the
mortgagee of any property referred to in subsection (2) or
any other person holding any charge, lien or other interest
38
in, or in relation to, any such property' shall be entitled" to
claim, in accordance with hisrights and interests, payment
of the mortgage maps or otherdues, in whole or in part, out
of the amounts specified in relation to such property in the
First Schedule, but no such mortgage, charge, lien or other
interest shall be enforceable against any property which has
vested in the Central Government.
( 6 ) If, on the appointed day, any suit, appeal or other
proceeding of whatever nature in relation to any property
which has vested in the Central Government under section
3, instituted or preferred by or against the textile company is
pending, the same shall not abate, be discontinued or be, in
any way, prejudicially affected by reason of the transfer of
the textile undertakings or of anything contained in this act,
but the suit, appeal or other proceeding may be continued,
prosecuted or enforced by or against the National Textile
Corporation.
( 7 ) Any person who, on the date on which the Textile
Undertakings (Nationalisation) Ordinance, 1995 was
promulgated, was in possession of, or had under his custody
or control, the whole or any part of any textile undertaking
referred to in section 3, the management of which could not
be taken over by the Central Government by reason of any
decree, order or injunction of any court or otherwise, shall
deliver forthwith the possession of such undertaking or part
and all books of account, registers and all other documents
of whatever nature relating to such undertaking or part to
the Central Government or the National Textile Corporation,
as the case may be, may specify in this behalf.
( 8 )
Notwithstanding the fact that the textile operations
have been discontinued in any textile undertaking being
revived, shall for all effects and purposes be deemed that
the textile operations are being continued and no suit or
proceeding shall be instituted or if instituted be
maintainable against the National Textile Corporation on
the ground that it has discontinued such activity in the
textile undertaking.
( 9 ) For the removal of doubts, it is hereby declared that the
continued deemed vesting of the leasehold land in the
Central Government shall not affect, impair or in any
39
manner prejudice the rights of the National Textile
Corporation to prosecute or defend any proceedings as a
subsequent vestee in respect of any such leasehold rights
and no such proceedings shall fail only on account of the
nonimpleadment of that Government.”
(emphasis supplied)
33. Reverting to Section 3 as “amended” and which by
st
operation of law had come into force with effect from 1 April,
1994, the right, title and interest of Podar Mills Ltd. in relation
to the Textile Undertaking including in respect of the suit
property, stood transferred to and vested absolutely in the
Central Government. By virtue of subsection (2), all such
right, title and interest of Podar Mills as vested in the Central
Government under subsection (1), immediately stood
transferred to and vested in the appellant NTC “except the
leasehold rights in the suit property” which continued to
remain vested in the Central Government. For, the amended
Section 3(3) explicitly postulates that the leasehold rights of
the Textile Undertaking (Podar Mills) in respect of the suit
st
property as on 1 April, 1994, continued to remain vested in
the Central Government. That right was never transferred to
NTC by operation of law. It presupposes that “only the other
40
rights” of the Textile Undertaking as vested in the Central
Government in terms of subsection (1), stood transferred to
and vested in the NTC under subsection (2).
In the present case, the management of Podar Mills was
34.
taken over by the Central Government in exercise of powers
under 1983 Act whereafter the lease in respect of the suit
st
property expired on 21 October, 1990. On expiry of the lease
term, indisputably, Podar Mills became the protected tenant or
statutory tenant within the purview of the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947 (for short
“1947 Act” ). Section 5(11) of the said Act defines the term
“tenant”, as under:
(11) “tenant” means any person by whom or any whose
account rent is payable for any premises and includes,
(a) such subtenants and other persons as have derived title
st
under a tenant before the 1 day of February 1973;
(aa) any person to whom interest in premises, has been
assigned or transferred as permitted or deemed to be
permitted, under section 15;
(b) any person remaining after the determination of the
lease, in possession, with or without the assent of the
landlord, of the title [before the first day of February 1973;]
[(bb) such licensees as share deemed to be tenants for the
purposes of this Act by section 15A]
[(bba) the State Government, or as the case may be, the
Government allottee, referred to in subclause (b) of clause
(1A), deemed to be a tenant, for the purposes of this Act by
section 15B;].
41
[(c) (i) in relation to any premises let for residence, when the
tenant dies, whether the death has occurred before or after
the commencement of the Bombay Rents, Hotel and Lodging
House Rates Control (Amendment) Act, 1978, any member of
the tenant’s family residing with the tenant at the time of his
death or, in the absence of such member, any heir of the
deceased tenant, as may be decided in default of agreement
by the Court;
(ii) in relation to any permission let for the purposes of
education, business, trade or storage, when the tenant dies,
whether the death has occurred before or after the
commencement of the said Act, any member of the tenant’s
family using the premises for the purposes of education of
carrying on business, trade or storage in the premises, with
the tenant at the time of his death, or, in the absence of
such member, any heir of the deceased tenant, as may be
decided in default of agreement by the Court.
Explanation. the provisions of this clause for transmission
of tenancy, shall not be restricted to the death of the original
tenant, but shall apply, and shall be deemed always to have
applied, even on the death of any subsequent tenant, who
becomes tenant under these provisions on the death of the
last preceding tenant.]”
In the 1999 Act the expression “tenant” has been defined in
Section 7(15) as follows:
“(15) “tenant” means any person by whom or on whose
account rent is payable for any premises and includes,
(a) such person,
(i) who is a tenant, or
(ii) who is a deemed tenant, or
(iii) who is a subtenant as permitted under a
contract or by the permission or consent of the landlord, or
(iv) who has derived title under a tenant, or
(v) to whom interest in premises has been assigned or
transferred as permitted,
by virtue of, or under the provisions of, any of the repealed
Acts;
(b) a person who is deemed to be a tenant under
42
section 25;
(c) a person to whom interest in premises has been
assigned or transferred as permitted under section 26;
(d) in relation to any premises, when the tenant dies,
whether the death occurred before or after the
commencement of this Act, any member of the tenant’s
family, who,
(i) where they are let for residence, is residing, or
(ii) where they are let for education, business, trade or
storage, is using the premises for any such purpose,
with the tenant at the time of his death, or, in the absence of
such member, any heir of the deceased tenant, as may be
decided in the absence of agreement, by the court.
Explanation . The provisions of this clause for transmission
of tenancy shall not be restricted to the death of the original
tenant, but shall apply even on the death of any subsequent
tenant, who becomes tenant under these provisions on the
death of the last preceding tenant.”
35. Being a protected or statutory tenant, Podar Mills could
be dispossessed from the suit premises by the Trust only on
the grounds permissible under that Act by instituting eviction
proceedings before the competent Rent Court having exclusive
jurisdiction to entertain the dispute between the landlord and
tenant, who in turn would then have to record its satisfaction
about the entitlement of the landlord to recover possession of
the suit property. The right so enjoyed by the Podar Mills Ltd.
stood transferred to and vested in the Central Government
st
with effect from 1 April, 1994. Further, by virtue of
43
“amended” Section 3 of the 1995 Act, by operation of law, the
rights of the Textile Undertaking, in respect of the suit
property, of being a statutory or protected tenant, continued to
vest in the Central Government even after the coming into
force of the 1999 Act and repeal of the 1947 Act. Resultantly,
the provisions of the 1999 Act would squarely apply to the suit
property in terms of Sections 2 & 3 of the said Act. The said
provisions read thus:
“ . (1) This Act shall, in the first instance,
2. Application
apply to premises let for the purposes of residence,
education, business, trade or storage in the areas specified
in Schedule I and Schedule II.
(2) Notwithstanding anything contained in subsection (1), it
shall also apply to the premises or, as the case may be,
houses let out in the areas to which the Bombay Rents,
Hotel and Lodging House Rates Control Act, 1947 or the
Central Provinces and Berar Letting of Houses and Rent
Control Order, 1949 issued under die Central Provinces and
Berar Regulation of Letting of Accommodation Act, 1946 and
The Hyderabad Houses (Rent, Eviction and Lease) Control
Act, 1954 were extended and applied before the date of
commencement of this Act and such premises or houses
continue to be so let on that date in such areas which are
specified in Schedule 1 to this Act, notwithstanding that the
area ceases to be of the description therein specified.
(3) It shall also apply to the premises let for the purposes
specified in subsection (1) in such of the cities or towns as
specified in Schedule II.
(4) Notwithstanding anything contained hereinabove, the
State Government may, by notification in the Official
Gazette, direct that –
44
(a) this Act shall not apply to any of the areas
specified in Schedule I or Schedule II or that it
shall not apply to any one or all purposes
specified in subsection (1);
(b) this Act shall apply to any premises let for
any or all purposes specified in subsection (1)
in the areas other than those specified in
Schedule 1 and Schedule II.
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 or 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, or in the
;
name of, such officer
(b) to any premises let or sublet 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 more than rupee one crore or more.
Explanation. For the purpose of this clause the expression
"bank" means, (i) the State Bank of India constituted under
the State Bank of India Act, 1955; (ii) a subsidiary bank as
defined in the State Bank of India (Subsidiary Banks) Act,
1959; (iii) a corresponding new bank constituted under
section 3 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 or under section 3 of the
Banking Companies (Acquisition and Transfer of
Undertaking) Act, 1980; or (iv) any other bank, being a
scheduled bank as defined in clause (e) of section 2 of the
Reserve Bank of India Act, 1934.
45
(2) The State Government may direct that all or any of the
provisions of this Act shall, subject to such conditions and
terms as it may specify, not apply
(i) to premises used for public purposes of a charitable
nature or to any class of premises used for such purposes;
(ii) to premises held by a public trust for a religious or
charitable purpose and let at a nominal or concessional rent;
(iii) to premises held by a public trust for a religious or
charitable purpose and administered by a local authority; or
(iv) to premises belonging to or vested in an university
established by any law for the time being in force.
Provided that, before issuing any direction under this sub
section, the State Government shall ensure that the tenancy
rights of the existing tenants are not adversely affected.
(3) The expression "premises belonging to the Government or
a local authority" in subsection (1) shall, notwithstanding
anything contained in the said subsection or in any
judgment, decree or order of a court, not include a building
erected on any land held by any person from the
Government or a local authority under an agreement, lease,
licence or other grant, although having regard to the
provisions of such agreement, lease, licence or grant the
building so erected may belong or continue to belong to the
Government or the local authority, as the case may be, and
such person shall be entitled to create a tenancy in respect
of such building or a part thereof.”
(emphasis supplied)
The latter part of clause (a) of subsection (1) of Section 3 of
the 1999 Act makes it amply clear that the Act shall apply in
respect of the premises let or given on licence to Government
or a local authority or taken on behalf of the Government on
such basis by, or in the name of, such officer.
46
36. As aforementioned, since the Central Government
continued to remain as the protected or statutory tenant in
st
respect of the suit property w.e.f. 1 April, 1994, the fact that
the appellant NTC was carrying on its activities therein would
not extricate the landlord (Trust) from initiating eviction
proceedings against the real tenant, namely, the Central
Government or Union of India; and such eviction proceedings
could be maintained only before the jurisdictional Rent Court
having exclusive jurisdiction to decide any dispute between
the landlord and tenant. The present suit, however, came to be
filed only against the appellant NTC and that too before the
jurisdictional civil court under the Transfer of Property Act. It
is obvious that the Trust acted on the legal advice and
instituted the present suit, despite having filed two suits
(namely, TER Suit 680/1568 of 1995 and RAD Suit 955/1997)
in earlier point of time, for possession of the suit property, in
both of which Union of India was made partydefendant. But
those suits were eventually dismissed for nonprosecution and
47
withdrawn, respectively, during the pendency of the subject
suit, for reasons best known to the Trust.
37. To put it differently, the present suit instituted by the
Trust under the provisions of the Transfer of Property Act,
which culminated with the decree of eviction, affirmed up to
this Court vide judgment under review, has been rendered
without jurisdiction, by operation of law. This being the
position after coming into force of the Validation Act 2014 and
in particular, the purport of Section 39 as inserted, the decree
so passed or undertaking given by NTC cannot be continued
or enforced.
38. According to the learned counsel for the respondents, the
amended provision introduced by the Validation Act 2014 has
no application to the present case. This contention is founded
on the interpretation of the expression “leasehold rights” of the
Textile Undertaking. It is argued that this expression pre
supposes that there must be an existing or subsisting
leasehold rights. Only such right would be governed by the
amended provision. To buttress this submission, reliance is
48
placed on Section 4 of the 1995 Act which explicitly adverts to
different types of rights enjoyed by the Textile Undertaking.
“Leaseholds” is one such right separately noted. Since there
was no “subsisting” leasehold right enuring in favour of Podar
Mills, inevitably no such right vested in the Central
Government. Whereas, the right transferred to and vested in
the Central Government under subsection (1) is only that of a
protected or statutory tenant enjoyed by Podar Mills at the
st
relevant time i.e. 1 April, 1994. That right vested in the
Central Government is not saved in terms of subsection (3).
Resultantly, the right of a protected or statutory tenant vested
in Central Government stood transferred to and vested in NTC
in terms of subsection (2) and continued to remain so vested
in the NTC. If so, the relief of eviction or possession could be
pursued by the Trust only against NTC. Further, admittedly,
NTC did not enjoy the status of a statutory or protected tenant
after coming into force of the 1999 Act and repeal of the 1947
Act. In that situation, the subject suit for possession against
49
the appellant NTC came to be justly filed before the civil court
under the provisions of the Transfer of Property Act.
39. This argument, in our opinion, is an attempt to over
simplify the purport of Section 3(3), if not indulging in hair
splitting of the contextual meaning of the expression
“leasehold rights” therein and in Section 4(1) or elsewhere in
the 1995 Act. Section 3(1) refers to right, title and interest of
the owner of the Textile Undertaking generally. That
encompasses all the rights as are spelt out in Section 4(1) of
the Act. One such right can be leasehold rights. Concededly,
the expression “leasehold rights” mentioned in the 1995 Act
must be construed as referring to the rights under the
Transfer of Property Act, 1882 as well as under the applicable
Rent Act recognizing “tenancy rights” without exception. The
expression “leasehold rights” has not been defined in the 1983
Act or in the 1995 Act or for that matter, in the concerned
Rent Act. That expression can be discerned from the Transfer
of Property Act, 1882. The expression “lease” is defined in
Section 105 thereof which reads thus:
50
“ 105. Lease defined . A lease of immoveable property is a
transfer of a right to enjoy such property, made for a certain
time, express or implied, or in perpetuity, in consideration of
a price paid or promised, or of money, a share of crops,
service or any other thing of value, to be rendered
periodically or on specified occasions to the transferor by the
transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined. the transferor
is called the lessor, the transferee is called the lessee, the
price is called the premium, and the money, share, service or
other thing to be so rendered is called the rent.”
Chapter V of the Transfer of Property Act deals with matters
concerning Leases of Immovable Property. The rights and
liabilities of a lessor and lessee are specified in Section 108.
The provision regarding determination of a lease can be culled
out from Section 111 and the effect of holding over in the
event of a lessee or underlessee of a property remaining in
possession thereof after the determination of the lease granted
to the lessee, is provided in Section 116, which reads thus:
“ 116. Effect of holding over. if a lessee or underlessee of
property remains in possession thereof after the
determination of the lease granted to the lessee, and the
lessor or his legal representative accepts rent from the lessee
or underlessee, or lessor or his legal representative accepts
rent from the lessee or underlessee, or otherwise assents to
his continuing in possession, the lease is, in the absence of
an agreement to the contrary, renewed from year to year, or
from month to month, according to the purpose for which
the property is leased, as specified in section 106.
Illustrations
51
(a) A lets a house to B for five years. B underlets the
house to C at a monthly rent of Rs.100. The five years
expire, but C continues in possession of the house and pays
the rent to A. C’s lease is renewed from month to month.
(b) A lets a farm to B for the life of C. C dies, but B
continues in possession with A’s assent. B’s lease is renewed
from year to year.”
We must quote with profit the meaning of the expression
40.
‘lease’, ‘leasehold’, ‘leasehold interest’, ‘tenancy’, and ‘tenancy
th
at sufferance’; as predicated in Black’s Law Dictionary (9
Edn.). The same read as follows:
Lease, n. (14c) 1 A contract by which a rightful possessor of
real property conveys the right to use and occupy the
property in exchange for consideration, usu.rent. – The lease
can be for a fixed period, or for a period terminable at will.
[Cases: Landlord and Tenant20.] 2 Such a conveyance plus
all covenants attached to it. 3 The written instrument
memorializing such a conveyance and its covenants. – all
termed lease agreement; lease contract. 4 The price of real
property so conveyed. 5 A contact by which the rightful
possessor of personal property conveys the right to use that
property in exchange for consideration. [Cases: Bailment1.]
Leasehold , n. (18c) A tenant’s possessory estate in land or
premises, the four types being the tenancy for years, the
periodic tenancy, the tenancy at will, and the tenancy at
sufferance. • Although a leasehold has some of the
characteristics of real property, it has historically been
classified as a chattel real. – Also termed leasehold estate;
leasehold interest. See TENANCY. Cf. FREEHOLD. [Cases:
Landlord and Tenant70, 113, 117.]
Leasehold interest. (18c) 1 LEASEHOLD; esp. for purposes
of eminent domain, the lessee’s interest in the lease itself,
measured by difference between the total remaining rent and
the rent the lessee would pay for similar space for the same
52
period. [Cases: Eminent Domain 147] 2 Lessor’s or lessee’s
interest under a lease contract.[Cases: Bailment7] 3.
WORKING INTEREST. [Cases: Landlord and Tenant20.]
Tenancy. (16c) 1. The possession or occupancy of land
under a lease; a leasehold interest in real estate. 2. The
period of such possession or occupancy. See ESTATE (1).
[Cases: Landlord and Tenant20] 3. The possession of real or
personal property by right or title, esp. under a conveying
instrument such as a deed or will.
Tenancy at sufferance. (18c) A tenancy arising when a
person who has been in lawful possession of property
wrongfully remains as a holdover after his or her interest has
expired. • A tenancy at sufferance takes the form of either a
tenancy at will or a periodic tenancy. Also termed holdover
tenancy; estate at sufferance. See HOLDING OVER (1).
[Cases: Landlord and Tenant117, 119.]
“A tenancy at sufferance arises where a tenant, having
entered upon land under a valid tenancy, holds over
without the landlord’s assent or dissent. Such a tenant
differs from a trespasser in that his original entry was
lawful, and from a tenant at will in that his tenancy exists
without the landlord’s assent. No rent, as such, is payable,
but the tenant is liable to pay compensation for his use and
occupation of the land. The tenancy may be determined
[i.e., terminated] at any time, and may be converted into a
yearly or other periodic tenancy in the usual way, e.g., if
rent is paid and accepted with reference to a year in
circumstances where the parties intended there to be a
tenancy.” Robert E. Megarry & M.P. Thompson, A Manual of
th
the Law of Real Property 319 (6 ed. 1993).
It will be useful to also advert to the expression ‘Tenant’ and
‘Holdover Tenant’ in Black’s Law Dictionary which are as
follows:
n. (14c) 1. One who holds or possesses lands or
Tenant,
tenements by any kind of right or title. See TENANCY.
[Cases: Landlord and Tenant1]
53
Holdover tenant: A person who remains in possession of
real property after a previous tenancy (esp. one under a
lease) expires, thus giving rise to a tenancy at sufferance.
Sometimes shortened to holdover. See tenancy at sufferance
under TENANCY. [Cases: Landlord and Tenant119(2).]
Indeed, if the matter in issue is to be decided dehors the
41.
provisions of the applicable Rent Act, then it is possible to say
that the expression “leasehold rights” would be limited to a
subsisting lease. However, in the present case, we are required
to reckon the status of the Union of India and NTC qua the
suit property in the context of the rights accrued in terms of
the provision of the Rent Act of 1947 and 1999, respectively.
The expression “leasehold rights” in 1995 Act, obviously, must
receive wider meaning so as to encompass “tenancy rights”
flowing from the applicable Rent Act. For, the expression
“tenancy rights” accruing under the Rent Act is analogous to
and interchangeable with the expression “leasehold rights”.
There is no reason to exclude the expression “statutory right”
so enjoyed by the owners of the Textile Undertaking from the
expression “leasehold rights” referred to in subsection (3), so
long as it has not been so expressly excluded.
54
42. Considering the legislative intent for enacting the 1995
Act and the Validation Act 2014 also, it is not possible to give
a restricted meaning to the expression “leasehold rights”
occurring in subsection (3) of Section 3, as amended, or
elsewhere in the said enactment. Thus, the expression
leasehold rights in 1995 Act must include “tenancy rights”
flowing from the provisions of the applicable rent legislation.
Any other interpretation would be doing violence to the
legislative intent and be a pedantic approach.
43. According to the respondents, the status of Podar Mills
and resultantly, of the Union of India is that of a tenant at
sufferance. We have already adverted to the provisions of the
concerned Rent Act. From the scheme of the 1947 Act as also
in the 1999 Act, it is indisputable that after determination of
the lease period, the status of Podar Mills had become that of
a protected or statutory tenant under the Rent Act. Thus, it
would continue to enjoy tenancy rights stipulated under the
concerned Rent Act. Once that status has been acquired by
the Central Government by operation of law, the action of
55
eviction, could be only as per the prescribed dispensation
under the concerned Rent Act.
44. Our attention was invited to paragraph 9 in B. Arvind
7
, wherein the essential
Kumar Vs. Govt. of India and Others
ingredients of lease have been delineated as under:
“9. Section 105 of the Transfer of Property Act, 1882 defines
lease as follows:
“105. ……….
Thus, the essential ingredients of a lease are: ( a ) there
should be a transfer of a right to enjoy an immovable
property; ( b ) such transfer may be for a certain term or in
perpetuity; ( c ) the transfer should be in consideration of a
premium or rent; ( d ) the transfer should be a bilateral
transaction, the transferee accepting the terms of transfer.”
Relying on these ingredients, it was argued that the leasehold
st
rights of Podar Mills had expired by efflux of time on 21
October, 1990. Since, Podar Mills had no subsisting leasehold
rights, the vesting of right, title and interest of Podar Mills in
st
the suit property as on 1 April, 1994 by virtue of 1995 Act
was of other than leasehold rights. Whereas, Section 3
including the amended provision subsection (3) could be
invoked only in respect of a subsisting leasehold rights
7
(2007) 5 SCC 745
56
acquired under the 1995 Act. We have already observed that
even though the leasehold rights of Podar Mills had expired on
st
21 October, 1990, it continued to enjoy the rights of a
protected or statutory tenant in terms of the 1947 Act and
ascribable to “leasehold rights” referred to in Section 3(3)
of 1995 Act. Therefore, the argument of holding over or
tenant at sufferance, will be inapplicable as the rights of a
protected or statutory tenant under the 1947 Act would be
governed by that Act and such a tenant could be evicted only
on the grounds postulated under the Rent Act upon an order
passed by the jurisdictional Rent Court in that regard.
45. In the present case, admittedly, the Trust proceeded on a
clear understanding that the rights enjoyed by Podar Mills Ltd.
after determination of lease period was that of a protected or
statutory tenant within the meaning of the rent legislation
(1947 Act). That right had been transferred to and vested in
the Central Government by virtue of Section 3(1) of the 1995
Act and continues to so vest in it in terms of Section 3(3)
st
which had come into force w.e.f. 1 April, 1994 and deemed
57
always to have effect for all purposes as if it had been in force
at all material times.
46. Relying on the dictum in Shree Chamundi Mopeds Ltd.
Vs. Church of South India Trust Association CSI Cinod
8
Secretariat, Madras , it was contended that Podar Mills
having continued in occupation of the suit property only by
virtue of the protection of the then applicable Rent Act,
st
namely, the 1947 Act, even after 21 October, 1990, it had no
subsisting right whatsoever. Reliance is placed on paragraph
Nos. 13 and 15 of the said decision, which read thus:
“13. We are also unable to agree with the contention of the
learned counsel for the appellantcompany that the
leasehold interest of the appellantcompany in premises
leased out to it is property for the purpose of Section 22(1).
It is no doubt true that leasehold interest of the lessee in
the premises leased out to him is property which can be
transferred and the said interest can also be attached and
sold by way of execution in satisfaction of a decree against a
lessee. In that sense, it can be said that the leasehold
interest of a company is its property. But the question is
whether the same is true in respect of the interest of a
company which is in occupation of the premises as a
statutory tenant by virtue of the protection conferred by the
relevant rent law because in the instant case on the date of
reference to the Board the proceedings for eviction of the
appellantcompany were pending and the appellant
company was in occupation of the premises only as a
statutory tenant governed by the provisions of the
Karnataka Rent Control Act. In Gian Devi Anand v. Jeevan
8
(1992) 3 SCC 1
58
Kumar 1 this Court has laid down that the termination of a
contractual tenancy does not bring about a change in the
status and legal position of the tenant unless there are
contrary provision in the relevant Rent Act and the tenant,
notwithstanding the termination of tenancy, does enjoy an
estate or interest in the tenanted premises. It is further laid
down that this interest or estate which the tenant continues
to enjoy despite termination of the contractual tenancy
creates a heritable interest in the absence of any provision
to the contrary. This Court has also held that the legislature
which by the Rent Act seeks to confer the benefit on the
tenants and to afford protection against eviction, is perfectly
competent to make appropriate provision regulating the
nature of protection and the manner and extent of
enjoyment of such tenancy rights after the termination of
contractual tenancy of the tenant including the rights and
the nature of protection of the heirs on the death of the
tenant.”
“15. From these provisions, it would appear that except in
cases covered by the two provisos to subsection (1) of
Section 23, there is a prohibition for a tenant to sublet
whole or any part of the premises let to him or to assign or
transfer in any other manner his interest therein. This
prohibition is, however, subject to a contract to the
contrary. A tenant who sublets or assigns or transfers the
premises in contravention of this prohibition loses the
protection of law and can be evicted by the landlord under
Section 21(1)( f ). In the case of a statutory tenant, the
relationship is not governed by contract. The prohibition
against assignment and transfer is, therefore, absolute and
the interest of a statutory tenant can neither be assigned
nor transferred. This means that the interest of the
statutory tenant in the premises in his occupation, as
governed by the Karnataka Rent Control Act is a limited
interest which enables the surviving spouse or any son or
daughter or father or mother of a deceased tenant who had
been living with the tenant in the premises as a member of
the tenant’s family up to the death of the tenant and a
person continuing in possession after the termination of the
tenancy in his favour, to inherit the interest of the tenant on
his death. The said interest of the tenant is, however, not
assignable or transferable and, therefore, the interest of a
company which is continuing in occupation of the premises
59
as a statutory tenant by virtue of the protection conferred
by the Karnataka Rent Control Act, cannot be regarded as
property of the company for the purpose of subsection (1)
of Section 22 of the Act and for that reason also the
provisions of Section 22(1) were not attracted to the eviction
proceedings instituted by the respondents against the
appellantcompany. The provisions of Section 22(1) did not,
therefore, bar the prosecution of the said proceedings by the
respondents and the order dated September 30, 1989
passed by the XII Additional Small Causes Judge, Bangalore
allowing the eviction petition cannot be held to have been
passed in contravention of the provisions of Section 22(1) of
the Act. Civil Appeal No. 2553 of 1991 also, therefore, fails
and is liable to be dismissed.”
The issue examined in this part of the reported judgment is in
the context of the provisions of the Karnataka Rent Control
Act, 1961, stipulating absolute prohibition against assignment
and transfer of interest of a statutory tenant and in particular,
the purport of Section 22 of the Sick Industrial Companies
(Special Provisions) Act, 1985 regarding suspension of legal
proceedings etc. In the present case, it is not an assignment or
transfer of interest by the statutory tenant but a case of
involuntary transfer and vesting of the right, title and interest
of the statutory tenant in respect of the suit premises in the
Central Government by operation of law made by the
Parliament. The purpose of retrospective insertion of sub
60
section(3) of Section 3 of the 1995 Act is intended to take away
the basis of the status acquired by the appellantNTC qua the
suit property or the rights to be enjoyed in relation thereto.
So long as the amended provisions of the 1995 Act or of
the Validation Act 2014 are in force by operation of law,
interest of Podar Mills as that of a statutory tenant stood
transferred to and vested absolutely in the Central
Government and would continue to so vest in it. The
concomitant of this indisputable factual position is that the
Trust could and ought to seek eviction of the Union of India
from the suit property if it intends to do so, on grounds
permissible under and in the manner prescribed for in the
municipal Rent Legislation as applicable at the relevant time.
47. Reliance was then placed on the exposition in paragraph
Nos. 14 to 18 in
Bhoolchand and Another Vs. Kay Pee Cee
9
Investments and Another . The Court noted the factual
position of that case and the submissions of the counsel in
9
(1991) 1 SCC 343
61
paragraphs 14 to 16; and then proceeded to consider the same
in paragraphs 17 and 18, which read as follow:
“17. The decision in Damadilal case and others in the
same line related primarily to the question of heritable
interest in the premises of the legal representatives of the
deceased tenant who was in occupation as statutory
tenant. Pointing out that the concept of statutory tenancy
under the English Rent Acts and under Indian statutes like
the one with which we are concerned rests on different
foundations, it was held that the statutory tenant had a
heritable interest in the premises which was not merely a
personal interest but an interest in the estate like that of a
contractual tenant. On this conclusion, the right of legal
representatives of the statutory tenant to protect the
possession and prosecute the appeal against eviction order
was upheld. The main question for decision in Damadilal
case was the heritable nature of the statutory tenancy and
it was in this context that the terms and conditions of a
statutory tenancy were held to be the same as those of the
contractual tenancy preceding it. No question arose in
Damadilal case of the right of a statutory tenant to create
a subtenancy after replacement of the contractual tenancy
with the statutory tenancy. The observations made and the
decision rendered in Damadilal case cannot, therefore, be
construed as holding that a statutory tenant has a right to
create a subtenancy during subsistence of statutory
tenancy after expiry of the contractual tenancy when the
Rent Acts give the same protection against eviction to the
tenant except on one or more of the specified grounds.
Obviously, the protection to the statutory tenant and the
heritable nature of the statutory tenancy providing the
same protection against eviction to the tenant’s heirs does
not further require conferral of the right of inducting a sub
tenant which is not necessary for enjoyment of the tenancy
and the protection against eviction given by the Rent Acts.
There is no rationale for inferring or extending the
landlord’s written consent for subletting beyond the period
of contractual tenancy for which alone it is given. No
separate discussion for the later decisions in the same line
is necessary because of the same distinction in all of them.
62
18. One decision which requires specific mention and is
obviously nearest on facts to the present case is Mahabir
Prasad Verma v. Surinder Kaur . In that case, the
contractual tenancy was for a period of one month from
April 1, 1974 to April 30, 1974 with the landlord’s consent
for subletting. The tenant continued to occupy the
premises even after expiry of the contractual tenancy on
April 30, 1974 and inducted therein a subtenant. The
landlord sued for eviction of the tenant on the ground of
unlawful subletting of the premises which was a ground for
eviction under the relevant Rent Act. There was some
dispute about the time of induction of the subtenant, it
being claimed by the tenant that the induction of the sub
tenant was in the month of April 1974 during subsistence of
the contractual tenancy while the landlord contended that
the subletting was after the month of April 1974. It was
found as a fact that the tenant had sublet in the month of
April 1974 when the written consent of the landlord
subsisted and not subsequent to it in May as claimed by the
landlord. The crux of the question for decision therein was
stated thus: (SCC p. 269, para 24)
“The crux of the question, therefore, is whether
the subletting by the tenant with the written
consent of landlord during the currency of the
tenancy becomes unlawful and illegal on the
determination of the tenancy and furnishes a
ground for eviction within the meaning of
Section 13(2)( ii )( a ) of the Act.”
On the finding that the subtenant had been inducted
during the period of contractual tenancy on the basis of the
written consent for subletting given by the landlord, the
subletting did not become unlawful merely because the
contractual tenancy of the tenant came to an end and the
protection against eviction to the tenant as a statutory
tenant also enured to the benefit of the lawful subtenant
recognised by the statute. It was held as under: (SCC p.
271, paras 26 & 27)
“Subletting lawfully done with the written
consent of the landlord does not become
unlawful merely on the ground that the
contractual tenancy has come to an end. Sub
letting to constitute a valid ground for eviction
63
must be without the consent in writing of the
landlord at the time when the tenant sublets
any portion to the subtenant.
A subletting by the tenant with the consent in
writing of the landlord does not become
unlawful on the expiry of the contractual
tenancy of the tenant, unless there is any fresh
subletting by the tenant without the written
consent of the landlord. Mere continuance in
possession of a subtenant lawfully inducted
does not amount to any fresh or further sub
letting . We are, therefore, satisfied that in the
instant case the tenant has not sublet any
portion without the written consent of the
landlady after the commencement of the Act….
Mere continuance of possession by the sub
tenants lawfully inducted by the tenant with the
written consent of the landlady contained in
rent note does not afford any ground to the
landlady for eviction of the tenant on the
ground of subletting, as the tenant has not
sublet after the commencement of the Act any
portion without the consent in writing of the
landlady .”
(emphasis supplied)
Of all the decisions cited at the bar, this decision is,
admittedly, nearest on facts to the present case with the
only difference that the subletting in the present case was
after expiry of the contractual tenancy and after the
commencement of the Act prohibiting subletting without
the written consent of the landlord when it was made on
April 1, 1948, while the subletting in Mahabir Prasad case
was during the period of contractual tenancy when the
express written consent of the landlord for subletting was
available. The principle for application, however, is the same
with the only difference in the result since in Mahabir
Prasad case the subletting was made during subsistence of
the contractual tenancy with the written consent of the
landlord. It is significant that the judgment in Mahabir
Prasad case was by A.N. Sen, J. who also wrote the opinion
in Gian Devi case relied on by Dr Chitale as one of the
decisions in line with Damadilal case . It is clear that A.N.
64
Sen, J., who wrote the opinion of the bench in Mahabir
Prasad case as well as in Gian Devi case did not construe
the earlier decisions starting with Damadilal case in the
manner read by Dr Chitale. If Dr Chitale is correct in his
submission on this point, then the entire emphasis in
Mahabir Prasad case on the subletting being made during
the period of contractual tenancy in April 1974 and not
thereafter being decisive of the validity of subletting was
misplaced and a futile exercise. In our opinion this was not
so and the correct premise is that landlord’s written consent
for subletting during the period of contractual tenancy
cannot be construed as his consent subsisting after expiry
of the contractual tenancy. The submission of learned
counsel for the appellants runs counter to the clear decision
in Mahabir Prasad case which, in our opinion, is in no way
contrary to the decisions starting with Damadilal case , the
observations wherein are in the context of heritability of the
statutory tenancy. In fact, it is rightly not even contended
by Dr Chitale that the decision in Mahabir Prasad case
runs counter to Damadilal case and other decisions
following them. This is sufficient to indicate that the
appellants’ contention is untenable.”
We fail to understand as to how the principle expounded in
the reported decision will be of any avail to the respondents
(Trust). As already noted, it is not a case of subletting by the
statutory tenant (Podar Mills Ltd.) but instead a case of
involuntary transfer and vesting of rights and interest of the
statutory or protected tenant in respect of the suit property in
the Central Government by operation of law. In any case, if
the Trust intends to proceed against the statutory tenant on
the ground of unlawful subletting or such other ground, it will
65
be obliged to initiate eviction proceedings against the Union of
India before the competent jurisdictional Rent Court on that
count. In the present case, the subject suit for eviction has
been instituted against NTC only. Suffice it to observe that the
subject suit not having been filed against the Union of India,
the statutory tenant as on the date of filing of the suit; and not
invoking the jurisdiction of the Rent Court for seeking eviction
of the statutory tenant, the decree as passed by the civil court
is rendered unenforceable against the Union of India and, in
any case, inexecutable due to legal fiction.
The respondents (Trust) may be justified in pointing out
48.
that the judgment and decree rendered by this Court has not
been nullified by the Validation Act 2014 as such. However,
the said decree is not against the real tenant in whom the
rights of the statutory tenant had vested and continue to vest.
That right could be snapped only by resorting to the
dispensation prescribed for in the rent legislation, as the
concerned Rent Act continued to apply to the suit property –
66
consequent to vesting of the rights and interest therein in the
Central Government.
49. That takes us to the next argument of the respondents
that Section 39 inserted in the 1995 Act operates prospectively
and would not impact the judgment delivered by this Court on
th
5 September, 2011. Second, the said provision applies to
only subsisting leasehold rights. Taking the last argument
first, the same needs to be rejected on the basis of the view
already taken by us that the expression “leasehold rights” or
“leasehold property” would include tenancy rights or tenanted
property in occupation of a statutory or protected tenant as
per the applicable municipal rent legislation at the relevant
time. Be that as it may, Section 39 opens with a non obstante
clause and makes it more explicit that the provisions of the
Amendment Act, 2014 shall have and shall be deemed always
to have effect for all purposes as if the provisions of the Act
have been amended by the said Act, had been in force at all
material times. It then predicates that no suit or “other
proceedings” shall be maintained or continued in any court for
67
the enforcement of any decree or order or direction
notwithstanding any undertaking filed by the NTC in any
court. Having observed that Section 3 has been amended w.e.f.
st
1 April, 1994 and upon giving full effect to the amendment, it
must necessarily follow that the Central Government had
acquired the status of protected or statutory tenant qua the
suit property from that date and continue to remain so, and
could be evicted only in the manner prescribed by the
concerned rent legislation. The decree passed against NTC is
on the assumption that the 1999 Act had no application to the
suit property as the right had vested in NTC – which did not
enjoy the protection of the 1999 Act. Resultantly, it must
follow that the subject suit and the proceedings arising from or
in relation thereto cannot proceed in law and moreso because
NTC is not the real tenant. Further, as the tenancy rights in
relation to the suit property continue to vest in the Central
Government by operation of law, the provisions of the 1999
Act will be attracted, warranting suit for eviction to be filed
against the Union of India before the jurisdictional Rent Court
68
having exclusive jurisdiction to decide the dispute between the
landlord and tenant. We must hasten to add that the validity
of the provisions of the Validation Act 2014 is not put in issue
in the present proceedings and we do not intend to deal with
the same. All questions in that behalf are kept open.
50. Reliance was placed on
State of Tamil Nadu Vs. State
10
of Kerala and Another , (in paragraph Nos. 127, 148 and
149) to buttress the argument that a judicial decision
rendered by recording a finding of fact cannot be made
ineffective by enacting a validating law, thereby fundamentally
altering or changing its character retrospectively. On a bare
perusal of relevant paragraphs of this decision, the Court
unambiguously found that the judgment was given by this
Court in the context of disputed factual position between the
two States in respect of the safety of a Dam for raising the
water level. The Court went on to observe that such decision
must be binding upon the parties and enforceable according to
the decision being a plain and simple decision on the fact
10
(2014) 12 SCC 696
69
which cannot be altered by the legislative decision. In that
case, the validity of the amended Act was put in issue. In the
present case, however, we are not called upon to examine the
validity of the provisions of the Validation Act 2014.Whether
such a legislation is valid or in excess of legislative competence
can be examined in an appropriate proceeding. It is open to
the respondents (Trust) to challenge the validity of the
Validation Act 2014, if they so desire. For the same reason,
the decisions in
Madan Mohan Pathak and Ors. Vs. Union
11
of India (UOI) and Ors. (in paragraph Nos. 9, 20, 21 and 31)
and Shri Prithvi Cotton Mills Ltd. and Ors. Vs. Broach
12
, will be of no avail to the
Borough Municipality and Ors.
respondents.
51. In view of the above, we have no hesitation in concluding
that it is not a case for taking contempt action for non
compliance of the direction of this Court inasmuch as the
basis for issuing such direction has become nonexistent in
law. Similarly, the fact that NTC has already filed two
11
(1978) 2 SCC 50
12
(1969) 2 SCC 283
70
undertakings with the approval of the Union of India, assuring
to vacate the suit property, will be of no effect and cannot be
enforced by operation of law. Further, the decree though
validly passed at the relevant time by the concerned Court,
would be of no avail nor could it be enforced against the Union
of India in whom the rights of the protected or statutory tenant
st
stood transferred to and vested in w.e.f 1 April, 1994. The
Trust may have to take recourse to appropriate remedy under
the provisions of the applicable rent legislation to evict the real
tenant, the Central Government. Those proceedings will have
to be decided on their own merits in accordance with law,
without being influenced by any observation made in the
proceedings which have culminated in the judgment under
review.
52. Considering the above, we are not inclined to continue
with the contempt proceeding or for that matter application for
extension of time filed by NTC. As a result, the dictum of this
13
Court in T. Sudhakar Prasad Vs. Govt. of A.P. and Ors. ,
13
(2001) 1 SCC 516
71
(Paragraph Nos. 9 to 22.), Firm Ganpat Ram Rajkumar Vs.
14
(Paragraph Nos. 5 and 6) and
Kalu Ram and Ors. Noorali
15
Babul Thanewala Vs. K.M.M. Shetty and Ors. (Paragraph
11), will be of no avail.
53. The respondents are seriously opposed to showing any
indulgence to NTC in the garb of Review Petition by the Union
of India. For, the review petition is hopelessly time barred as
there is delay of 837 days coupled with conduct of Union of
India in according approval to NTC for filing two successive
undertakings in compliance of the direction of this Court. The
objection appears to be attractive at the first blush but it
cannot be taken forward, because of the legal fiction
introduced by the amendment Act and giving retrospective
effect to the event of vesting of the rights of the statutory
tenant in respect of the suit property in the Central
Government and also rendering the decree and order including
the undertaking given by NTC unenforceable. As a result, the
decision in the case of
Office of The Chief Post Master
14
(1989) Supp. (2) SCC 418
15
(1990) 1 SCC 259
72
16
General and Ors.Vs. Living Media India Ltd. and Ors.
(Paragraph Nos.27 to 29), need not detain us.
Considering the above, we do not deem it necessary to
54.
dilate on other submissions urged by the parties as it would
not have any bearing on the conclusion that we have already
reached.
55. To sum up, we hold that as per the amended Section 3
st
of the 1995 Act w.e.f. 1 April, 1994, by operation of law the
statutory or protected tenancy rights of Podar Mills Ltd. in
respect of the suit property stood transferred to and vested
in the Central Government and it continues to so vest in it and
that the decree against NTC including the undertaking given
by NTC has been rendered unenforceable by a legal fiction.
As a result, the Trust being the landlord is obliged to take
recourse to remedy against the Central Government
(Union of India) to get back possession of the suit property, as
per the dispensation specified in the concerned Rent
Legislation, if it so desires. It is open to the respondents
16
(2012) 3 SCC 563
73
(Trust) to challenge the validity of the Validation Act 2014, if
they so desire.
56. We further deem it appropriate to grant liberty to the
Trust to revive the contempt action in the event the challenge
to the validity of the provisions of the Validation Act 2014 is
upheld and as a result whereof that Act is struck down. We
say so because, it is common ground that the challenge to that
Act is pending consideration before the Bombay High Court at
the instance of a third party in Writ Petition No.526 of 2015
( Byramjee Jeejeebhoy Pvt. Ltd. & Ors. Vs. Union of India & Ors .)
If that challenge succeeds, the position as it stood before the
coming into force of the Validation Act 2014 would get revived
and then the judgment of this Court dated September 5, 2011
in Civil Appeal No.7448 of 2011 can be taken to its logical end
against the NTC. For the same reason, it is not necessary to
continue with the application for extension of time filed by the
NTC.
57. Accordingly, we dispose of these proceedings in the
following terms:
74
(i) Application for condonation of delay in filing review
petition is allowed;
(ii) Application for urging additional grounds in the review
petition is allowed;
(iii) The review petition is disposed of with liberty to the
respondents (Trust) to pursue other appropriate legal remedy
as per law;
(iv) Contempt petition stands disposed of with liberty to
the respondents as aforementioned;
(v) Application for direction filed by the NTC is also
disposed of in the above terms;
(vi) All applications are disposed of in the above terms.
There shall be no order as to costs.
…………………………..….J.
(Kurian Joseph)
…………………………..….J.
(A.M. Khanwilkar)
New Delhi;
November 28, 2018.