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1998 DIGILAW 42 (CAL)

State of West Bengal v. Blue Print

1998-02-04

BARIN GHOSH, PROBHA SHANKER MISHRA

body1998
Judgment Appeals are taken up for bearing pursuant to the order dated January 22, 1998, as in course of bearing of the applications it is felt the appeals themselves be disposed of. 2. The impugned judgment in applications under Article 226 of the Constitution of India contains the facts and the various laws which are involved, in great detail. Since, however, we have chosen to dispose of the appeals, mainly on the ground that before the questions that are decided by the learned Single Judge are addressed, it would be necessary to go into a few questions as to vires of the Great Eastern Hotel (Acquisition of Undertaking) Act, 1980, and amendments therein by the Amendment Act of 1989 and the principles as respects the efficacy of a proceeding under Article 226 of the Constitution of India to decide the questions of facts in issue and the rules of prudence that are exercised by the Court in exercising the extraordinary jurisdiction of the Court to issue any prerogatives and/or directions/orders in matters which ordinarily are left for decision by the competent authority or by the Civil Courts. 3. The facts for our purpose can briefly be stated as follows:- The premises, called Great Eastern Hotel at Nos. 1, 2 & 3, Old Court House Street, Calcutta, and also No. 29, Waterloo Street, Calcutta, originally belonged to a public limited company, called the Great Eastern Hotel Limited. In its premises, besides restaurant and boarding, the company permitted occupation by certain individuals of portions thereof in which such individuals were having their independent business. In course of time, however, the premises at Old Court House Street and also Waterloo Street, Calcutta, are acquired by an Act of the legislature of the State of West Bengal, called Great Eastern Hotel (Acquisition of Undertaking) Act, 1980. The said Act has subsequently been amended by the Amendment Act of 1989. The Government, it appears, has directed and accordingly, the Member-Secretary of the Great Eastern Hotel Authority under the said Act has issued letters to the occupants of independent portions of the premises for their independent business, requesting them to submit copies of the allotment letter/agreement in respect of the occupancy in the premises. The Government, it appears, has directed and accordingly, the Member-Secretary of the Great Eastern Hotel Authority under the said Act has issued letters to the occupants of independent portions of the premises for their independent business, requesting them to submit copies of the allotment letter/agreement in respect of the occupancy in the premises. According to the writ petitioner/respondents, they were inducted by the erstwhile owner of the premises, i.e., the public limited company, as lessees on such terms and conditions of rent and possession as were agreed to between the parties and have been paying rent. They replied, accordingly, to the letter of the Hotel Authority aforementioned and brought all relevant facts to his notice, including facts that in the case of some of them suits for eviction were filed, in one case it ended in a compromise decree and in the other cases those are pending. The Authority, however, served upon some of the petitioners letter asking them to vacate the premises. Before they replied to the said letters, however, the Hotel Authority dispossessed them. Hence, the writ petitions. 4. Section 4 of the Great Eastern Hotel (Acquisition of Undertaking) Act, 1980, has generally provided for the effect of vesting and in sub-sections (1), (2), (6) and (7) thereof provided as follows :- "4. (1) The undertaking of the company which has vested in the State Government under sub-section (1) of Section 3 shall, by force of such vesting, be freed and discharged from any trust, obligation, mortgage, charge, lien and all other incumbrances affecting it and any attachment, injunction or decree or order of any Court or tribunal restricting the use of the whole or any part of the undertaking of the company in any manner shall be deemed to have been withdrawn. (2) Any contract, whether express or implied, or other arrangement, whether under any statute or otherwise, in so far as it related to the affairs of the company in relation to its undertaking and in force immediately before the appointed day shall be deemed to have terminated on the appointed day. (2) Any contract, whether express or implied, or other arrangement, whether under any statute or otherwise, in so far as it related to the affairs of the company in relation to its undertaking and in force immediately before the appointed day shall be deemed to have terminated on the appointed day. (6) If, on the appointed day, any suit, appeal or other proceeding of whatever nature is relation to any matter or business in respect of the undertaking of the company instituted or preferred by or against the company, is pending, the same shall not abate, be discontinued or be, in any way, prejudicially affected by reason of the transfer of the undertaking of the company or of anything contained in this Act and the suit, appeal or other proceeding may be continued, proceeded with and enforced by or against the State Government and on and from the date specified in the notification under sub-section (2) of Section 3, the Hotel Authority. (7) Any person in possession or custody or control of the whole or any part of the undertaking of the company on the date immediately before the appointed day shall, on the appointed day, deliver the possession of such undertaking of the company or part thereof to the State Government or to such person as may be specified by the State Government in this behalf. 5. Section 3 of the 1980 Act has provided for the transfer to and vesting absolutely of the undertaking of the company in the State Government and in sub-section (2) provided. "Upon the vesting of the undertaking of the company in the State Government under sub- section (1), the State Government shall, for efficient management and administration thereof, provide by notification for the transfer of the undertaking of the company to, and vesting thereof in, the Hotel Authority with effect from such date as may be specified in the notification”. 6. The Amendment Act of 1989 has, however, substituted subsection (2) of the 1980 Act by the following:- "2. 6. The Amendment Act of 1989 has, however, substituted subsection (2) of the 1980 Act by the following:- "2. In Section 3 of the Great Eastern Hotel (Acquisition of Undertaking) Act, 1980 :- (a) for sub-section (2), the following sub-section shall be substituted and shall be deemed always to have been substituted:- ‘(2) Upon the vesting of the undertaking of the company in the State Government under sub-section (1), the State Government may, for efficient management and administration thereof, provide by notification for the transfer of the undertaking of the company (save the lands and buildings forming part thereof) to, and vesting thereof in, the Hotel Authority with effect from such date as may be specified in the notification.’ (b) after sub section (2), the following sub-section shall be inserted and shall be deemed always to have been inserted :- ‘(3) The State Government may allow the lands and buildings mentioned in sub-section (2) to be used by the Hotel Authority for the purpose of giving effect to this Act on such terms and conditions as may be provided by notification with effect from the date of issue of the notification under sub-section (2).’” 7. The learned Single Judge in his judgment has recorded that the fact that the petitioners were tenants under the Great Eastern Hotel Limited which was being managed and controlled by Pune and Roy is not disputed. What is disputed is as to whether after coming into force of 1980 Act as amended in the year 1989 the petitioners could continue to occupy their respective premises as tenants or otherwise. He has also recorded that although the petitioner have claimed to be the tenants, the provisions of the West Bengal Premises Tenancy Act are not applicable in their case in view of the Second Proviso appended to sub-section (3) of Section 1 in terms whereof the said Act has no application in relations to any premises belonging to or requisitioned by the Government or to any tenant by the Government in respect of the premises taken on lease by the Government. The contention, however, on behalf of the appellants herein that the power to forcibly evict the petitioner/respondents existed in the State in terms of the provisions of 1980 Acquisition Act read with the provisions of West Bengal Premises (Regulation) Occupancy Act, 1984 as existed in the State, however, has been nagatived by the learned Single Judge mainly on the ground that the Acquisition Act has left tenancy rights in any premises which is not used for residential purposes unaffected. 8. Some of the expositions of law and the principles that are applied in cases of landlord and tenant relationship, interpretations of a statute and the meanings which are extended to expressions that are used in legislations in the impugned judgment are quite illustrative and elaborative. We have no desire in the instant appeal to accept any caveat on behalf of either party to any of such expositions by the learned Single Judge in the impugned judgment. We have, however, felt substantially pursuaded to closely examine the provisions of the various Acts which are applicable to tenants or premises in tenancy as well as the law in respect of lease as found in the Transfer of Properties Act and, in particular, to the Acquisition Act aforementioned for having been noticed in the impugned judgment that the petitioners/respondents have questioned the validity of the provisions of the Acquisition Act. The learned Single Judge has inferred from some of the instances as narrated by the petitioner/respondents in some of the matters only with treating them as tenants. Notwithstanding the Acquisition Act, the competent authority instituted actions for eviction under the provisions of West Bengal Premises Tenancy Act, 1956 and notwithstanding the fact that 1980 Act had come into force when the, tendered rent to the competent authority who accepted the same, the learned Single Judge has held : “It will, therefore, be seen that the petitioner/respondents treated themselves and were represented by the concerned authorities as being lawful occupants of the premises in question despite coming into force the 1980 Act". 9. 9. Proceeding for a moment on the basis that the petitioner/respondents were in occupation of their respective tenanted portions of the Hotel premises legally and were for all purposes recognized as tenants even by the competent authority after Acquisition Act came into force can it be on the above basis said that because the petitioner/respondents were lawfully inducted as tenants and were so recognized by the competent authority, they have a right to continue their tenancy notwithstanding the Acquisition Act. 10. The learned Single Judge in his judgment, however, has said:- “The 1980 Act does not speak of extinguishment of a tenancy. There cannot be any doubt whatsoever that by reason of a tenancy an interest in the property is created. When an interest in the property is created, even a transfer of property does not extinguish the said interest………………….” 11. It is accepted that at the relevant time neither the State nor the Hotel Authority who became the owner of the property and who had also taken even the management of the Hotel pursuant to the notification issued in their favour by the State Government in terms of sub-section (3) of Section 4 of the Act exercised any such right. The Hotel Authority by reason of acceptance of rent despite 1980 Act treated the petitioners to be tenants. In fact, such tenancies were admitted as even suits for eviction were continued to be fought out by the said authority in relation to at least one case i.e., M/s. Blue Print. Such a suit could have been fought out by the authority only in terms of the provision of sub-section (6) of Section 4 of the Act and, thus, it is beyond any doubt that the petitioners were not treated as trespassers. 12. Furthermore, in view of the acceptance of rent by the Hotel Authority a relationship of landlord and tenant came into being. By reason of 1989 Act only the right, title and interest of the State in respect of the land and buildings of the undertaking which vested in the Hotel Authority by reason of the aforementioned notification revested in the State. The 1989 Amendment, however, does not specifically state that all contracts entered into of and between Hotel Authority with a third party would be affected. The 1989 Amendment, however, does not specifically state that all contracts entered into of and between Hotel Authority with a third party would be affected. It also does not contain any provision as regards effect of any decree passed in any suit or of a pending proceeding. It also did not specify that for the purpose of taking over the said right, any compensation was paid, or the tenants who were lawful tenants thus, were deprived of their right as tenants. 13. Notwithstanding thus, the Acquisition Act, the learned Single Judge has for the above reasons mainly and for other reasons held that forcible eviction of the petitioner/respondents is illegal and accordingly directed that they be put back in possession of the premises and goods, respectively held by them forthwith. 14. We are advised by the learned Counsel for the parties and we are acknowledged rightly, since we proposed to remit the matter for a fresh hearing and in accordance with law, we should avoid expression of any conclusive opinion of any of the issued of controversy between the parties. Thus, if we proceed to deal with the appeal and find ourselves confronted by the aforequoted findings in the impugned judgment, we are constrained to observe that whatever we say for the purpose of the appeal in respect of any of the matters in issue will not be taken as conclusive for, afterall, when the matter would be considered after remand afresh and views of the parties would accordingly be examined, the Court shall advert to such aspects of the matter which, before any final verdict is given must receive attention. Although petitioner/respondents have questioned the vires of the Acquisition Act, learned Single Judge has not expressed one way or the other and proceeded as we have already noticed to hold on favour of the petitioner/respondents that notwithstanding the Acquisition Act their tenancy either remained in tact or was re-established by dint of acceptance of rent or otherwise on account of pendency of the suit for eviction. He has however categorically recorded that tenancy as is understood in law of the petitioner/respondents has not been defined by the provisions in Section 4 of the Acquisition Act. He has however categorically recorded that tenancy as is understood in law of the petitioner/respondents has not been defined by the provisions in Section 4 of the Acquisition Act. It is conceded before us, however, by the learned Counsel for the petitioner/respondents that although in some petitions question of vires is raised, no arguments were advanced and no contentions on that basis railed before the learned Single Judge. 15. Can it be said that by virtue of acquisition under 1980 Act pre-existing tenancy is not defined-when in sub-section (1) of Section 4 of the Acquisition Act it is said “by force of such vesting, be freed and discharged of any trust, obligation, mortgage, charge, lien and all other encumbrances affecting it”, lessee's rights and interests are subordinate to that of the lessor’s right and interest. Transfer of Property Act spells out the liabilities of the lessees and as held by the learned Single Judge that if Transfer of Property Act has to be applied such liabilities of the lessees have to be taken notice of. A lease is a contract under which the ownership is not divested or diluted. Lessee holds the lease depending upon the nature of tenancy on such terms and conditions as are stipulated. Concept of holding over on expiry of the lease or statutory tenancy is not available in cases where there is a lawful determination of tenancy. On interpretation of the provisions aforementioned as a consequence of the vesting of the undertaking in the State unless the State Government is accepted to have stepped into the shoes of the erstwhile owner and thus become the landlord and a relationship of landlord and tenant accordingly was established, between the State Government and the petitioner/respondents, it would be difficult in view of the aforementioned provisions to hold that tenancy is survived by the vesting. On questions which are decided on facts. Courts are ordinarily reluctant to exercise extraordinary power under Article 226 of the Constitution of India without entering into the evidence and without affording opportunities to the parties to test the veracity of such evidence and finding, unless parties agree to abide by such finding recorded in a proceeding of summary nature is not proper thing to do. Courts are ordinarily reluctant to exercise extraordinary power under Article 226 of the Constitution of India without entering into the evidence and without affording opportunities to the parties to test the veracity of such evidence and finding, unless parties agree to abide by such finding recorded in a proceeding of summary nature is not proper thing to do. Total impact of sub-section (7) of Section 4 that any person in possession or custody or control of the whole or any part of the undertaking of the company on the date immediately before the appointed day shall, on the appointed day, deliver the possession of such undertaking of the company or part thereof to the State Government or to such person as may be specified by the State Government in this behalf, will have to be decided and examined with care before it is pronounced-(1) Lessees' rights remained unaffected by the vesting and (2) a lessee in possession is not obliged to deliver possession of the undertaking or portion of it in its possession or custody to the State Government. 16. Great Eastern Hotel Limited have not questioned the acquisition on the ground that they have not been paid any compensation can there be then a question as has been raised before the learned Single Judge and which has been taking notice of to hold in favour of the petitioner/respondents that acquisition is affected without paying any compensation be available to any of the petitioner/respondents as a ground questioning acquisition and the vesting of the undertaking in the State Government. Compulsory acquisition of property is duly recognized by Article 31 of the Constitution of India and if acquisition is affected by law Article 31(1) of the Constitution says the same cannot be called in question in any Court on the ground that amount so fixed or determined is not adequate or that the whole or any part of such amount is to be given otherwise than in cash, what would be the effect thus of these provisions upon the alleged tenancy of the petitioner/respondents and whether as held by the learned Single Judge same sort of relationship of landlord and tenant is recreated only on account of payment of rent and acceptance of the same by the competent authority, have to be attended to as we have observed earlier with care and with all necessary caution as to the self-imposed limitation upon exercise of extraordinary jurisdiction of the Court for inference in such actions. 17. Since a consensus is reached that a fresh examination of all aspects of the matter including the aspects indicated above is necessary and we, as we have observed earlier, have an reasons to record any specific finding contrary to what has been held by the learned Single Judie without a full breast bearing of the matter, we are of the view that the writ petitions are required to be heard afresh preferably by a Division Bench since the validity of the said Act is in question. 18. In view of the above, we have no hesitation in holding that unless decided after being fully addressed on all the aspects as above, the impugned judgment cannot be sustained. It is, accordingly set aside. 19. The case is remitted to the writ Court for a fresh hearing and the registry of the Court is directed that the matter be placed before the Chief Justice for assignment of the matter to a Division Beach for final hearing. Until, however, the writ petitions are finally decided, all concerned shall maintain status quo as prevailing today. All parties shall act on a signed xerox copy of this Dictated Order upon usual undertaking.