Research › Search › Judgment

Allahabad High Court · body

2007 DIGILAW 2960 (ALL)

SHREE BHAGWAN GOEL (DECEASED) v. LIFE INSURANCE CORPORATION OF INDIA, AGRA

2007-12-11

JANARDAN SAHAI

body2007
JUDGMENT Hon’ble Janardan Sahai, J.—The petitioners are tenants of a premises which was owned by the Life Insurance Corporation. The tenancy of the petitioners was terminated by a notice dated 5.7.78. The respondent Life Insurance Corporation instituted proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 for short the “P.P. Act” treating the petitioners as unauthorised occupants. An order was passed by the Estate Officer in the year 1982 for the eviction of the petitioners. Against that order the petitioners preferred two appeals. The appellate authority by its order dated 13.11.84 allowed the appeals and remanded the matter to the Estate Officer to decide the same afresh in the light of observations made in that order. Against this order of the appellate authority the respondent Life Insurance Corporation filed writ petition No. 1868 of 1985. The writ petition was allowed by this Court on 26.7.02 and the case was sent back to the appellate authority for decision afresh. In consequence of the remand order the matter was again heard by the appellate authority and the appeals filed by the petitioners were dismissed by the impugned order dated 3.11.07. 2. Counter and rejoinder affidavits have been exchanged. Counsel for the parties’ agree that the writ petition may be disposed of finally at this stage. The petition is therefore being disposed of finally. Even before the present bout of litigation under the P.P. Act the respondents had sought the eviction of the petitioner under the Rent Control Act, 1947 but the respondents were unsuccessful in those proceedings. During the pendency of this long bout of litigation the Central Govt. issued certain guidelines on 8.6.02 relating to eviction proceedings under the P.P. Act. The said guidelines are quoted as follows : “2. To prevent arbitrary use of powers to evict genuine tenants from public premises and to limit the use of powers by the Estate Officers appointed under Section 3 of the PP(E) Act. 1971, it has been decided by the Government to lay down the following guidelines : (i) The provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (PP(E) Act, 1971) should be used primarily to evict totally unauthorised occupants of the premises of public authorities or sub-letees, or employees who have ceased to be in their service and thus ineligible for occupation of the premises. (ii) The provisions of the P.P. (E) Act, 1971 should not be resorted to either with a commercial motive or to secure vacant possession of the premises in order to accommodate their own employees, where the premises were in occupation of the original tenants to whom the premises were let either by the public authorities or the persons from whom the premises were acquired. (iii) A person in occupation of any premises should not be treated or declared to be an unauthorised occupant merely on service of notice of termination of tenancy, but the fact of unauthorised occupation shall be decided by following the due procedure of law. Further, the contractual agreement shall not be wound or by taking advantage of the provisions of the P.P. (E) Act, 1971. At the same time, it will be open to the public authority to secure periodic revision of rent in terms of the provisions of the Rent Control Act in each State or to move under genuine grounds under the Rent Control Act for resuming possession. In other words the public authorities would have rights similar to private landlords under the Rent Control Act in dealing with genuine legal tenants. (iv) It is necessary to give no room for allegations that evictions were selectively resorted to for the purpose of securing an unwarranted increase in rent, or that a change in tenancy was permitted in order to benefit particular individuals or institutions. In order to avoid such imputations or abuse of discretionary powers, the release of premises or change or her tenancy should be decided at the level of Board of Directors of Public Sector Undertakings. (v) All the Public Undertakings should immediately review all pending cases before the Estate Officer or Courts with reference to these guidelines, and withdraw eviction proceedings against genuine tenants on grounds otherwise than as provided under these guidelines. The provisions under the P.P.(E) Act, 1971 should be used henceforth only in accordance with these guidelines. These orders take immediate effect.” 3. Sri M.K. Gupta counsel for the petitioners has made various submissions to challenge the order passed by the appellate authority. He submits that the Life Insurance Corporation is a public sector organization. It is a statutory body and is supposed to act fairly in all its conduct including that in proceedings for eviction of the tenants. Sri M.K. Gupta counsel for the petitioners has made various submissions to challenge the order passed by the appellate authority. He submits that the Life Insurance Corporation is a public sector organization. It is a statutory body and is supposed to act fairly in all its conduct including that in proceedings for eviction of the tenants. He submits that originally the building owned by public sector authorities were covered under the provisions of the Rent Control Act and although subsequently they were exempted by amendment in the Act but that exemption does not give licence to these public sector organisations to evict lawful tenants in an arbitrary manner. He placed reliance upon a large number of authorities. These are M/s Dwarkadas Marfatia & Sons v. Board of Trustees, AIR 1989 SC 1642 . The apex Court dealt with the effect of the provisions of exemption of buildings owned by public sector corporations from the purview of the rent control legislation. The apex Court said: “Being a public body even in respect of dealing with its tenant, it must act in public interest, and an infraction of that duty is amenable to examination either in civil suitor in writ jurisdiction”. In 2004 (3) SCC 214 , Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai and another reliance was placed upon M/s. Dwarkadas Marfatia’s case and it was observed that while enacting the rent control legislations, the government seeks to achieve the object of protecting the tenants and preventing the rent from being increased and people from being ejected unreasonably; then it cannot be assumed that the very Government would itself be indulging in those very activities which it was proposing to prevent by enacting such laws. The underlying assumption behind granting exemption from the operation of the rent control legislations was that the Government would not increase rents and would not eject tenants unless it was necessary to do so in public interest and a particular building was required for the public purpose.” In 2007(6) SCC 81 , Bharat Petrolium Corporation Ltd. v. Maddula Ratnawalli, it was held that every State action must be governed by reasonableness, fairness and non-arbitrariness which are the hallmarks of such action and that reasonableness of action is required on the part of the State even where it is acting as a landlord and tenant and in contractual matters. On the strength of these authorities, it is submitted by Sri M.K. Gupta that in this case the action of the Life Insurance Corporation in taking recourse to the provisions of the Public Premises Act is arbitrary and the Corporation is not justified in resorting to those provisions. It is also submitted that the guidelines which have been issued by the Corporation are statutory directions and are relatable to Section 21 of the L.I.C. Act, which empowers the Central Government to issue directions to the L.I.C. for discharging its functions under the Act. Much emphasis was laid by Sri Gupta upon the point that when the new guidelines were framed i.e. 8.6.02 the appeal was pending and the guidelines required the Board to review all pending cases and to examine them in the light of the guidelines. He submits in this case there is no material to show that the matter was placed before the Board of Directors for review even though in the appeal an application was specifically made referring to the guidelines and pointing out that it was incumbent upon the Board to review the matter in the light of the guidelines. On the other hand it was contended by Sri Manish Goel learned counsel for the Life Insurance Corporation that the guidelines are of non statutory character and are not relatable to the provisions of Section 21 of the LIC Act. Under the said provision so it is submitted by Sri Manish Goel the guidelines can be framed only in respect of the statutory functions of the Corporation which have been enumerated in Section 6 of the LIC Act. The said functions no doubt include the function of acquiring, holding and disposing of properties but this clause cannot cover the matters relating to eviction of tenants. 4. The Bombay High Court in Persis Kothawala v. Life Insurance Corporation of India, Mumbai and another, 2004 AIHC 2613. has held that raising the rents by the LIC is related to the LIC’s business and discharge of its functions under the LIC Act and that the guidelines were issued by the Central Government in respect of a matter relating to discharge of the functions of the Corporation. On the other hand the High Courts of Calcutta and Delhi have taken a different view. On the other hand the High Courts of Calcutta and Delhi have taken a different view. The Calcutta High Court in Mitra Lina Pvt. Ltd. v. L.I.C. of India has held that the functions of the Corporation have been laid down in Section 6 of the Act and the matter relating to the eviction of tenants is not one which is covered under any of the functions of the Life Insurance Corporation Act and hence the guidelines issued by the Central Government are not relatable to Section 21 of the Act. The Delhi High Court in Uttam Prakash Bansal v. Life Insurance Corporation of India and others has taken the same view and has placed reliance upon the decision of the Calcutta High Court (supra). I have considered these authorities. The functions of the Corporation is required to perform are enumerated in Section 6 of the LIC Act. The guide lines do not deal with any of the matters covered under Section 6. The only clause of Section 6 which appears to have the nearest connection with the subject of tenancy is clause (c) which relates to the power of the Corporation “to acquire, hold and dispose of any property for the purposes of its business.” But the eviction of tenants is not the business of the Corporation. Para 24 of the reports in Persis Kothawala case decided by the Bombay High Court indicates that the LIC in that case had admitted that raising of rents by the LIC was a part of the business of the LIC. In the Bombay case the challenge was to an arbitrary raising of rent by the LIC and it was held vide para 27 of the Reports that while dealing with its tenants in the matter of rent revision the LIC is discharging its functions under the LIC Act. It appears that the observations made by the Bombay High Court related to rent revision. Moreover there was an admission of the LIC on the point. The decision of the Calcutta High Court is in a matter of eviction of a tenant and it was held that the concept of eviction of an unauthorised occupant from a shop under the 1971 Act is totally alien to the concept of holding, acquiring or disposing of property under clause (c) of sub-section (2) of Section 6 of the Act. The Delhi High Court case also arose out of proceedings under the P.P. Act. I am in respectful agreement with the view taken by the Delhi and Calcutta High Courts because in my opinion the guidelines are not relatable to the provisions of Section 21 read with Section 6 of the Act. 5. On facts too, it does not appear that any benefit can be given to the petitioner on the basis of the guidelines. The dispute in the present case is lingering since the year 1978 when the tenancy of the petitioners was terminated and the first order of eviction was passed by the Estate Officer way back in the year 1982. At that time no guidelines were in force and it was after a chequered history of the case that when it came up before this Court in writ petition No. 1868 of 1985 against the order of the appellate authority dated 13.11.84 that the guidelines were issued by the Central Government. It is common ground between the counsel for the parties that the Government had earlier issued guidelines in the year 1992 but the petitioners did not plead the applicability of those guidelines. Sri Gupta submitted in this regard that the said guidelines were not applicable to a pending litigation and, as such, aid was not taken of those guidelines. It is also to be noted that the guidelines were framed on 8.6.02 and at that time the writ petition No. 1868 of 1985 was pending in this Court and it is not in dispute that in the said writ petition the respondents did not put forward any contention on the basis of the guidelines. When the case came back to the appellate authority after remand an application was filed for the first time in the appeal making reference to the guidelines. The petitioners did not present any material in the application which they filed before the appellate Court that the Corporation had breached any particular guideline. All that was stated in the application was that the guidelines required the matter to be reviewed. It was not the case of the petitioners in the application that the Corporation had sought the eviction of the petitioners by way of commercial motive or greed. General averments were made. All that was stated in the application was that the guidelines required the matter to be reviewed. It was not the case of the petitioners in the application that the Corporation had sought the eviction of the petitioners by way of commercial motive or greed. General averments were made. The finding on the point recorded by the appellate authority is that the petitioners have not produced any material to indicate that the eviction of the petitioners was being sought for any extraneous reasons or for any reason which the guidelines had prohibited. The said finding is one of fact. Mr. M.K. Gupta made emphatic reference to para 10 of the objections wherein it was stated by the Life Insurance Corporation that the petitioners were occupying a big premises on a meagre rent causing undue loss to the Corporation. In my opinion no inference can be drawn from this averment that the proceedings had been initiated for the purpose of any commercial motive or greed. It appears that what was sought to be indicated was the inequity on the part of the petitioners to continue to occupy the premises at very meagre amount of rent. The contention of the petitioners counsel therefore cannot be accepted. The decision of the Bombay High Court is distinguishable on facts. That was a case where rent was sought to be revised many folds by the Corporation and it was in that connection that it was held by the Bombay High Court that the Corporation acted whimsically in increasing the rent in utter breach of the guidelines. 6. It was then submitted that even though the guidelines may not have statutory force they are relatable to the provisions of Article 162 of the Constitution of India in absence of any rules having been framed. Sri Manish Goel counsel for the respondent LIC submitted that Section 21 of the LIC Act read with Section 6 of that Act has already occupied the field in respect of the nature of the directions that can be issued to the LIC. He also submitted that the guidelines are only directory in nature. He placed reliance upon two decisions of the apex Court. In 2004 (2) SCC 9 , R. Sai Bharathi v. J. Jayalalitha and others the apex Court was dealing with the provisions of participation of the Chief Minister in a sale. He also submitted that the guidelines are only directory in nature. He placed reliance upon two decisions of the apex Court. In 2004 (2) SCC 9 , R. Sai Bharathi v. J. Jayalalitha and others the apex Court was dealing with the provisions of participation of the Chief Minister in a sale. The contention was that the conduct of the Chief Minister was in contravention of the code of conduct issued by the Government and therefore was an offence within the meaning of Section 169 of the IPC which applies to a public servant unlawfully buying or bidding for property. The argument was repelled by the Supreme Court. It was held that the guidelines could not be raised to the level of statutory directions and were not law and were merely directory relating to the conduct of a person. It was held even if the Government order is proved to have been issued under Article 162 such a code would not be enforceable when the language used is not mandatory. In J.R. Raghupathy v. State of Andhra Pradesh and others, AIR 1988 SC 1681 , the apex Court was dealing with certain guidelines which related to the manner of creating divisions (mandals) for revenue purposes and it was held that the guidelines in question are not mandatory. Sri M.K. Gupta submitted that the guidelines were mandatory in nature and not directory and in support of his contention he placed reliance on the decision of the apex Court in Comptroller & Auditor General of India and another v. K.S. Jagannathan and another, AIR 1987 SC 537 . It was submitted on the strength of this decision that where there is a duty cast by the guidelines they would be mandatory in nature. The case cited related to the discretion conferred on the authority to grant relaxation in marks to Scheduled Castes and Scheduled Tribes candidates. In that case the Supreme Court relied upon the provisions of Article 335 of the Constitution of India which provide that the claims of the members of the Scheduled Caste and Scheduled Tribe shall be taken into consideration consistently with the maintenance of efficiency of administration in making appointments to services and posts. The Court also relied upon Article 46 of the Constitution of India. This decision does not apply to the nature of the guidelines in the present case. The Court also relied upon Article 46 of the Constitution of India. This decision does not apply to the nature of the guidelines in the present case. It is difficult to accept this submission of the petitioners’ counsel that the guidelines are mandatory. The language employed does not indicate that the guidelines are mandatory. In case the guidelines are held to be mandatory in nature they will run counter to the provisions of the Public Premises (Unauthorised Occupants) Act inasmuch as the guidelines would narrow down the class of persons against whom proceedings for eviction can be initiated as also the definition of an unauthorised occupant. The guidelines cannot therefore be treated to be of a mandatory nature. Moreover the Life Insurance Corporation is a public sector Corporation. It is an official body. Its acts are deemed to have been regularly performed. The burden would be upon the petitioner to prove that its action was irregular. To say the least it was incumbent upon the petitioners to put forward the material to indicate that the action of the Corporation was in breach of the guidelines. In the application filed before the appellate Court, it was not even stated as to which guideline was breached. In absence of any such specific averments the initiation of the proceedings under the Public Premises Act cannot be taken exception to. 7. In Advani & Co., Kanpur and others v. Life Insurance Corporation of India and another, writ petition No. 12591 of 2003, decided on 25.3.03, this Court had an occasion to consider the effect of the guidelines. It was held by this Court that the guidelines cannot be elevated to the status of a rule. It was pointed out by Sri Manish Goel that the guidelines had been issued by Ministry of Urban Development and not by the Ministry of Finance and it is the Ministry of Finance which actually governs the Life Insurance Corporation. In view of the finding that I have recorded that the petitioners on facts could not establish that the action of the Corporation in the initiation of proceedings under the Public Premises Act is arbitrary or malafide the question about the force of the guidelines has little importance. In view of the finding that I have recorded that the petitioners on facts could not establish that the action of the Corporation in the initiation of proceedings under the Public Premises Act is arbitrary or malafide the question about the force of the guidelines has little importance. The cases relied upon by Sri Gupta upon the point that the action of public sector Corporation is subject to judicial review and any action which is arbitrary or whimsical in nature would infringe not only the guidelines but Article 14 of the Constitution of India also have no application as the petitioners have not demonstrated any arbitrariness on the part of the Corporation. The breach of the guidelines is also not proved. 8. In the end Sri M.K. Gupta counsel for the petitioners prayed that some time may be granted to the petitioners to vacate the premises. In the facts and circumstances, it appears that the ends of justice would be met by granting three months’ time to the petitioners to vacate the premises. Accordingly the petitioners are granted three months’ time to vacate the premises. Subject to these directions, the petition is dismissed. ———