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1977 DIGILAW 314 (ALL)

U. P. Industrial Co-operative Association Ltd. v. Addl. District Judge

1977-05-20

R.M.SAHAI

body1977
JUDGMENT R.M. Sahai, J. - The tenant, an 'apex society' a society registered under the Co-operative Societies Act seeks protection from ejectment under the U.P. Union Building (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as the Act) as it was a public sector corporation. 2. The facts are not in dispute, suffice it to say that the Prescribed Authority allowed the application and the order was affirmed in appeal on the ground that the premises were bona fide required by the opposite party. The findings recorded by these authorities have not been challenged. 3. It was urged by Sri Jagdish Swarup that sub-clause (p) of section 3 was added, by Act XXVIII of 1976, while the application was pending before the Prescribed Authority. The petitioner did not lay any foundation to establish, it was a public sector corporation. 4. From the order of the Additional District Judge it is clear that this point was entertained. The petitioner has rested his argument on various provisions of the Act rather than any fact stated in the petition. According to Sri S. N. Nackcker the petitioner is a public sector corporation and the benefit of section 21(8) was available to the petitioner, notwithstanding the finding of bona fide requirement. 5. A public sector corporation is defined in section 3(p) "as public sector corporation" means any corporation owned or controlled by the Government, and includes any company as defined in section 3 of the Companies Act, 1956, in which not less than fifty per cent of the paid up share capital is held by the Government. 6. Sub-section (8) of section 21 grants immunity from ejectment under section 21(a) in certain Government, semi-government bodies. 6. Sub-section (8) of section 21 grants immunity from ejectment under section 21(a) in certain Government, semi-government bodies. It reads, "nothing in clause (a) of sub-section (t) shall apply to a building let out to the State Government or to a local authority or to a public sector corporation or to a recognised educational institution unless the Prescribed Authority is satisfied that the landlord is a person to whom clause (ii) or clause (iv) of the explanation to sub-section (1) is applicable ; Provided that in the case of such a building the District Magistrate may, on the application of the landlord, enhance the monthly rent payable thereof to a sum equivalent to ore twelfth of ten per cent of the market value of the building under tenancy, and the rent so enhanced shall be payable from the commencement of the month of tenancy following the date of the application : Provided further that a similar application for further enhancement may be made after the expiration of a period of five years from the date of the last order of enhancement. 7. The first question for determination is whether the petitioner is a corporation. In Board of Trustees v. State of Delhi, AIR 1976 Supreme Court 459 it was held that the essence of a corporation consists in (1) lawful authority of in corporation (2) the person to be incorporated(3) a name by which the persons are incorporated (4) a place and (5) words sufficient in law to show in corporation. The petitioner is registered, having perpetual succession, with a name and place. It satisfies the test of being a corporation. 8. But for the applicability of section 21(2) it has further to be seen whether the petitioner is a corporation which meets the requirement of section 3(p). Sri Jagdish Swarup has relied on Sabhajat Tewary v. Union of India, AIR 1975 Supreme Court 1239 and Sukhdev Singh v. Bhagatram, AIR 1975 Supreme Court 1231 and has urged that the petitioner is not a statutory corporation but a corporation created under the Act. And it is only a corporation created by the Act that is covered under this sub-clause. These decisions were given by the Supreme Court while considering the amenability to writ jurisdiction of bodies created by the Act and under the Act. It is, difficult to agree that only bodies created by the Act are public sector corporation. And it is only a corporation created by the Act that is covered under this sub-clause. These decisions were given by the Supreme Court while considering the amenability to writ jurisdiction of bodies created by the Act and under the Act. It is, difficult to agree that only bodies created by the Act are public sector corporation. At least these decisions do not touch this controversy. 10. The petitioner does not claim to be owned by the Government nor it claims to be company registered under the Indian Companies Act. It is urged that it is a corporation controlled by the Government. 11. The phrase 'controlled by the Government' has been used in Article 19(6)(ii), Article 31(2-A) and Indian Campanies Act. But no decision has been cited on any of these provisions. 12. The Supreme Court while distinguishing between statutory corporation and corporation created by the Act in Sukhdev Singh's case considered various provisions of different Acts and held Life Insurance Corporation of India and Oil and Natural Gas Commission to be corporated created by the Act. The Industrial Financial Corporation was held to be a corporation controlled by the Government as no private citizen held any share, shares of corporation were guaranteed by the Central Government, the Chairman of the Corporation, was appointed by the Central Government, the corporation was required to furnish statement of assets and liabilities to the Government, supervision was entrusted to Board which could be superseded by Government, the Corporation could invest capital in the Union Trust of India with the approval of the Central Government and the Government could also issue directions to auditors. 13. This emphasis is, therefore, on control, all round and effective control. It is not participation. The Government may contribute share or render financial help to any body. In the present day developing economy Government's assistance may be, both, welcome and necessary. Participation cannot be equated with control. The mere fact that a high class Government servant is to manage the affairs can hardly be decisive of the control of Government. 14. On the strength of section 31-A added in the Co-operative Societies Act, 1915 by Act 12 of 1976 it was urged that the petitioner was a Public Sector Corporation controlled by the Government. 15. Sub-section (1) of section 31-A provides for deputation of a class I officer with an apex society. 14. On the strength of section 31-A added in the Co-operative Societies Act, 1915 by Act 12 of 1976 it was urged that the petitioner was a Public Sector Corporation controlled by the Government. 15. Sub-section (1) of section 31-A provides for deputation of a class I officer with an apex society. Sub-section (2) makes him an ex-officio member of the Committee of Management. Sub-section (4) makes him subject to the Control of the committee of Management, The duties of the officer are enumerated in various sub-clauses of sub-section (4) of section 31-A. The significance of sub-section 14) cannot be over-looked. Moreover the duties enumerated are more with a view to look, after the interest of Government than to exercise control by the Government. 16. Nor can section 34 of the Act be of any assistance. It deals with Government nominees to committee of Management on the basis of assistance rendered by it to a society. 17. The affairs of every co-operative society including an apex society have to be managed by a Committee of Management consisting of elected and nominated members, to be headed by a Chairman and Vice-Chairman (elected or nominated) who is responsible for control, supervision and guidance of the affairs and business of society. The power of the supervision of the committee vests in the Registrar. 18. Considering the objective and various provisions of the Act in the light of the Supreme Court decision it is difficult to accept that petitioner is a corporation controlled by the Government. 19. It was then pointed out that it was never intended by the legislature that public corporation like the petitioner may be evicted under section 21 of the Act. In this connection the counsel for the petitioner has placed reliance on section 2(f) dealing with the exemption from operation of the Act. This section obviously does not apply. The intention of the legislature is expressed in clear words. There is no scope for probing. 20. The petition fails and is dismissed. The parties shall however bear their own costs. The petitioner shall vacate within six months from today.