# 14 (ADDL.) S.C.R. 533 BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR

- **Citation:** [2011] 14 S.C.R. 533
- **Court:** Supreme Court of India
- **Decided:** 2011-09-19
- **Case number:** Civil Appeal No. 7171 of 2010
- **Bench:** R.V. Raveendran, H.L. Gokhale
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/14-addl-s-c-r-533-banatwala-company-v-l-l-c-of-india-anr-27569
- **Pages:** 84

## Headnote

Rent Control and eviction:
A
B
Maharashtra Rent Control Act, 1999 - s. 2(14), 8 and 29 C
- Provisions for fixation of standard rent and maintenance of
essential services under the Maharashtra Rent Control Act -
Applicability of, to public premises owned by public
corporations/undertakings - Held: The subjects of fixation of
Standard Rent and restoration of essential services by the o
lan(Jlord are covered under the Maharashtra Rent Control Act
and not under the Public Premises Act - Application of the
tenants for the said matters when necessary, are maintainable
under the Maharashtra Rent Control Act - Eviction and
recovery of arrears of rent are alone covered under the Public
E
Premises Act - Thus, the provisions of the Maharastra Rent
Control Act with respect to fixation of Standard Rent for
premises, and requiring the landlord not to cut off or withhold
essential supply or service, and to restore the same when
necessary, are not in conflict with or repugnant to any of the
provisions of the Public Premises Act - Provisions of the
Public Premises Act govern the relationship between the
public undertakings covered under the Act and their
occupants to the extent they provide for eviction of
unauthorised occupants from public premises, recovery of
arrears of rent or damages for such unauthorised occupation,
G
and other incidental matters specified under the Act -
Provisions of the Maharashtra Rent Control Act govern the
relationship between the public undertakings and their
occupants to the extent it covers the other aspects of the
F
533
H
534
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A relationship between the landlord and tenants, not covered
under the Public Premises Act - Public Premises (Eviction
of Unauthorised Occupants) Act, 1971 - ss. 2(e), 5, 7 and 15.
Public Premises (Eviction of Unauthorised Occupants)
B Act, 1971:
ss. 2(e), 5, 7, 15 - Eviction of unauthorised occupants
from Public Premises and recovery of arrears of rent from
them - Initiation of proceedings under the Public Premises
Act - Held: Proceedings initiated by the landlord would be fully
C competent under the Public Premises Act - Occupants would
not be entitled to seek any remedy under the Bombay Rent
Act or the subsequent Maharashtra Rent Control Act since
the jurisdiction of the civil court has been ousted uls. 15 -
Bombay Rents, Hotel and Lodging House Rates (Control) Act,
D 1947 - Maharashtra Rent Control Act, 1999.
ss. 10 and 15 - Jurisdiction of civil courts for the remedies
of fixation of rent or maintenance of essential services, if
ousted - Held: Jurisdiction of the civil court for these remedies
E is not ousted - Actions covered under the Public Premises
Act are concerning eviction of unauthorised occupants and
recovery of arrears of rent - Act does not speak anything
about the fixation of Standard Rent or maintenance of
essential services and no remedy is provided thereunder -
F The fact that proceeding for one purpose is provided under
one statute cannot lead to an automatic conclusion that the
remedy for a different purpose provided under another
competent statute becomes unavailable.
G
Constitution of India, 1950:
Article 254(2) - Repugnancy between the law made by
the Parliament and the law made by the State Legislature -
When arises - Held: When both the legislation occupy the
same field with respect to one of the matters enumerated in
H List Ill and where a direct conflict is seen between the two - It
!
-
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 535
·is. to be examined as to whether the two legislations occupy
A
the same field - There is no repugnancy when legislations
do not occupy the same field - Provisions of Maharashtra
Rent Control Act with respect to fixation of Standard Rent and
requiring the landlord to maintain the essential services and
supplies not in conflict or repugnant to any of the provisions
B
under the Public Premises Act - Public Premises (Eviction
of Unauthorised Occupants) Act, 1971 - Maharashtra Rent
Cont

## Text

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[2011] 14 (ADDL.) S.C.R. 533
BANATWALA & COMPANY
V.
L.l.C. OF INDIA & ANR.
(Civil Appeal No. 7171 of 2010)
SEPTEMBER 19, 2011
[R.V. RAVEENDRAN AND H.L. GOKHALE, JJ.]
Rent Control and eviction:
A
B
Maharashtra Rent Control Act, 1999 - s. 2(14), 8 and 29 C
- Provisions for fixation of standard rent and maintenance of
essential services under the Maharashtra Rent Control Act -
Applicability of, to public premises owned by public
corporations/undertakings - Held: The subjects of fixation of
Standard Rent and restoration of essential services by the o
lan(Jlord are covered under the Maharashtra Rent Control Act
and not under the Public Premises Act - Application of the
tenants for the said matters when necessary, are maintainable
under the Maharashtra Rent Control Act - Eviction and
recovery of arrears of rent are alone covered under the Public
E
Premises Act - Thus, the provisions of the Maharastra Rent
Control Act with respect to fixation of Standard Rent for
premises, and requiring the landlord not to cut off or withhold
essential supply or service, and to restore the same when
necessary, are not in conflict with or repugnant to any of the
provisions of the Public Premises Act - Provisions of the
Public Premises Act govern the relationship between the
public undertakings covered under the Act and their
occupants to the extent they provide for eviction of
unauthorised occupants from public premises, recovery of
arrears of rent or damages for such unauthorised occupation,
G
and other incidental matters specified under the Act -
Provisions of the Maharashtra Rent Control Act govern the
relationship between the public undertakings and their
occupants to the extent it covers the other aspects of the
F
533
H
534
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A relationship between the landlord and tenants, not covered
under the Public Premises Act - Public Premises (Eviction
of Unauthorised Occupants) Act, 1971 - ss. 2(e), 5, 7 and 15.
Public Premises (Eviction of Unauthorised Occupants)
B Act, 1971:
ss. 2(e), 5, 7, 15 - Eviction of unauthorised occupants
from Public Premises and recovery of arrears of rent from
them - Initiation of proceedings under the Public Premises
Act - Held: Proceedings initiated by the landlord would be fully
C competent under the Public Premises Act - Occupants would
not be entitled to seek any remedy under the Bombay Rent
Act or the subsequent Maharashtra Rent Control Act since
the jurisdiction of the civil court has been ousted uls. 15 -
Bombay Rents, Hotel and Lodging House Rates (Control) Act,
D 1947 - Maharashtra Rent Control Act, 1999.
ss. 10 and 15 - Jurisdiction of civil courts for the remedies
of fixation of rent or maintenance of essential services, if
ousted - Held: Jurisdiction of the civil court for these remedies
E is not ousted - Actions covered under the Public Premises
Act are concerning eviction of unauthorised occupants and
recovery of arrears of rent - Act does not speak anything
about the fixation of Standard Rent or maintenance of
essential services and no remedy is provided thereunder -
F The fact that proceeding for one purpose is provided under
one statute cannot lead to an automatic conclusion that the
remedy for a different purpose provided under another
competent statute becomes unavailable.
G
Constitution of India, 1950:
Article 254(2) - Repugnancy between the law made by
the Parliament and the law made by the State Legislature -
When arises - Held: When both the legislation occupy the
same field with respect to one of the matters enumerated in
H List Ill and where a direct conflict is seen between the two - It
!
-
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 535
·is. to be examined as to whether the two legislations occupy
A
the same field - There is no repugnancy when legislations
do not occupy the same field - Provisions of Maharashtra
Rent Control Act with respect to fixation of Standard Rent and
requiring the landlord to maintain the essential services and
supplies not in conflict or repugnant to any of the provisions
B
under the Public Premises Act - Public Premises (Eviction
of Unauthorised Occupants) Act, 1971 - Maharashtra Rent
Control Act, 1999 - ss. 2(14), 8 and 29.
Two Acts when governing the common field, whether both
C
can apply for different purpose - Held: There could be
provisions for certain purposes in one statute and for another
purpose in another statute though both govern the common
field.
Life Insurance Corporation Act, 1956 -
s. 21 -
D
Corporation to be guided by directions of Central Government
- Guidelines dated 30.5.2002 laid down by the Central
Government that the provisions of the Public Premises Act,
1971 should be used primarily to evict totally unauthorised
occupants and to secure periodic revision of rent in terms of E
the provisions of the Rent Control Act in each State, or to
move under genuine grounds under the Rent Control Act for
resuming possession, whether directions uls. 21 - Held:
Guidelines dated 30.5.2002 are not directions u/s. 21 -
Purpose of these guidelines is to prevent arbitrary use of F
powers under the Public Premises Act - Relevance of the
guidelines would depend upon the nature of guidelines and
the source of power to issue such guidelines - Source of the
right to apply for determination of standard rent is the Rent
Control Act, and not the guidelines - Also, by subsequent G
clarificatory order, the Central Government made it clear that
the guidelines dated 30. 5. 2002 would not apply to affluent
tenants -
Public Premises (Eviction of Unauthorised
Occupants) Act, 1971.
Rent Control and eviction:
H
536 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A
Exemption from operation of Rent Act - Legislative ·
expectations from public bodies as landlords -
Held:
Exercise of discretion of public authorities must be tested on
the assumption that they would act for public benefit and would
not act as private landlords - However, these principles not
B relevant while considering a dispute between a statutory body
as landlord and an affluent tenant in regard to a commercial
or non-residential premises.
Relationship between landlord and tenant in general -
Changes brought about by the Rent Control Acts - Explained
C and di'scussed.
First respondent-Life Insurance Corporation of India
(L.1.C.) a statutory corporation leased out a floor of a
building to appellant firm in the year 1988 under an
D agreement of lease. At tha't time, the Public Premises
(Eviction of Unauthorised Occupants) Act, 1971 as well
as the Bombay Rents, Hotel and Lodging House Rates
(Control) Act, 1947 were in force. The Bombay Rent Act
was replaced by the Maharashtra Rent Control Act, 1999
E with effect from 31.03.2000. The said lease agreement was
extended from time to time. In the year 2004, the monthly
rent of the premises was revised and the same was
challenged in a writ petition which was subsequently
withdrawn and the rent was reduced. Thereafter, the lift
F of the said building was not working properly and an
application was filed in the Small Causes Court, for
restoration of the lift services under Section 29 of the
Maharashtra Rent Control Act, 1999. The court directed
the respondents to repair the lift. Aggrieved, the
G respondents filed a revision petition on the ground that
the Maharashtra Rent Act was not applicable and the
same was dismissed. Subsequently, the rent was
increased and also demand was raised for arrears of rent.
Aggrieved, the appellant asked for the break up of rent
but they did not receive any reply. The appellant filed an
H application under Section 8(3) of the MRC Act in the Court
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 537
of Small Causes for fixation of standard rent, and cilso
A
filed an application for. fixing interim rent. The
respondents contended that the suit premises were
public premises covered under the Public Premises Act
and the MR~ Act was not applicable to them. The
responden"ts also filed an interim application. The Small
B
Causes Court rejected the said application holding that
the Standard Rent Application was maintainable under
the provisions of the MRC Act. The respondents then
filed a writ petition. The High Court set aside the order
passed by the Small Causes Court and dismissed the c
Standard Rent Application. Therefore, the appellants filed
the instant appeals.
The question which arose for consideration in the
instant appeal was whether the provisions for fixation of
standard rent, and provisions prescribing other D
obligations for the landlord such as maintenance of
essential services under the Maharashtra Rent Control
Act, 1999 are applicable in respect of public premises
owned by a Corporation such as the first respondent-Life
Insurance Corporation of India which is otherwise
E
covered by the provisions of the Public Premises
(Evict~n of Unauthorized Occupants) Act, 1971.
Allowing the appeal, the Court
HELD: 1. {a) The provisions of the Maharastra Rent
· Control Act, 1999 with respect to fixation of Standard
Rent for premises, and requiring the landlord not to
cut off or withhold essential supply or service, and
F
to restore the same when necessary, are not in
conflict with or repugnant to any of the provisions of G
the Public Premises (Eviction of Unauthorised
Occupants) Act, 1971.
(b) The provisions of the Public Premises Act, 1971.
H
A
8
c
D
E
538
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
shall govern the relationship between the public
undertakings covered under the Act and their
occupants to the extent they provide for eviction of
unauthorised occupants from public premises,
recovery of arrears of rent or damages for such
unauthorised occupation, and other incidental
matters specified under the Act.
{c) The provisions of the Maharashtra Rent Control
Act, 1999 shall govern the relationship between the
public undertakings and their occupants to the
extent this Act covers the other aspects of the
relationship between the landlord and tenants, not
covered under the Public Premises Act, 1971.
{d) The application of appellant and similar
applications of the tenants for fixation of Standard
Rent or for restoration of essential supplies and
services when necessary, shall be maintainable
under the Maharashtra Rent Control Act, 1999. [Para
72] [615-F-H; 616-A-C]
Relationship of landlord and tenant in general:
2.1. A tenancy is created as a result of an agreement
between the landlord and a tenant. Since the premises
owned by the landlord are leased out to the tenant by
F virtue of the agreement between the parties, the
agreement is normally called a 'lease deed'. Although, the
lease deed is also a contract between the parties, the
provisions of T.P. Act relating_ to contracts, shall be taken
as part of the Indian Contract Act, 1872 {Section 4 of T.P.
G Act). As a 'lease deed' is a contract relating to 'leases'
governed by T.P. Act, the relationship between the
landlord and the tenant would be governed by the terms
of the lease deed and subject to its terms, by Section 108
relating to the rights and liabilities of leasor and leasee,
H
BANATWALA & COMPANY v.· L.1.C. OF INDIA & ANR. 539
and other statutory provisions controlling leases under A
the T.P. Act. [Para 10] [557-F-H; 558-A-B]
The Law of Landlord and Tenant by Prof. P.F. Smith
Fourth Edn, p 9 - referred to.
2.2. Generally, the terms of the agreement between
8
the landlord and the tenant would require the landlord to
maintain the premises in tenantable condition, and he will
get the premises repaired when necessary. The tenant
will be required to vacate the premises at the end of the
· period of lease. During the lease period, it will be the C
· responsibility of the tenant to pay the rent regularly and
'keep the premises in good condition subject only to
changes caused by reasonable wear and tear or
irresistible force' and 'when such defect has been caused
by any act or default on the part of the lessee, his servants D
or agents, he is bound to make it good within three
months after such notice has been given or left'. If the
tenant commits breach of the lease agreement by not
paying the rent regularly or remaining in arrears thereof,
or causing damage to the premises, the landlord may E
terminate the lease earlier, even before the expiry of the
agreed term as per the provisions concerning .the
termination provided in the agreement and the Transfer
of Property Act. If the tenant does not vacate the premises
after the termination of lease, the landlord will have to file
F
a suit for evicting him in the Civil Court: On the other hand
'if the lessor neglects to make, within a reasonable time
after notice, any repairs which he is bound to make to the
property, the lessee may make the same himself, and
deduct the expense of such repairs with interest from the G
rent, or otherwise recover It from the lessor'. Section 108
(I) of the T.P. Act lays down that 'the lessee is bound to
pay or tender, at the proper time and place, the premium
or rent to the lessor or his agent in this behalf'. This
implies that the amount of rent that the landlord will
H
540 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
- A require shall be a certain definite amount. [Paras 11 and
12] [558-C-H; 559-A]
The changes brought about by the Rent Control Acts -
3.1. Due to the problems of the scarcity of
B accommodation following the Second World War, special
protection was made available to the tenants against
unjustified increases in rent and ejectment from the
tenancies. This protection was reflected in the provisions
of various Rent Control Acts such as the Bombay Rents,
C Hotel and Lodging House Rates (Control) Act, 1947
which governed the premises of the appellant for all
purposes prior to the coming into force of the Public
Premises Act, 1971. The Bombay Rents, Hotel and
Lodging House Rates (Control) Act, 1947, is one such
D legislation which is an advancement over the Transfer of
Property Act. This Act laid down that a tenant will not be
evicted unless the landlord establishes that the tenant
has committed breaches as laid down under that Act, and
the burden will be on the landlord to establish that the
E tenant has committed the particular breach, such as
being in arrears of standard rent over a specified period,
erecting permanent structures on the premises without
landlord's permission, sub-letting the premises and
causing nuisance to the neighbours etc. />. reasonable
F and bonafide requirement of the landlord was also
provided as a ground for eviction. If the landlord was
charging rent excessively, a right was given to the tenant
to have the standard rent fixed under Section 11 of that
Act. A further right was given to the tenant to approach
G
H
the Court under Section 24 of that Act for maintenance
and restoration of essential services in case the landlord
neglected. the same. [Para 13] [559-A-H; 560-A]
The Law of Rent Control by R.B. Andhyarujina, Second
Edn p 12 - referred to.
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 541
3.2. Earlier, the relationship between L.l.C as the
A
landlord and its tenants was governed under the Bombay
Rent Act 1947. The Public Premises (Eviction of
Unauthorised Occupants) Act, 1971, provides only for
eviction of unauthorized occupants, and recovery of
arrears of rent from the tenant and those subjects no
B
longer remained covered under the Bombay Rent Act.
The Bombay Rent Act came to be replaced by the
Maharashtra Rent Control Act, 1999. The MRC Act is
subsequent to the Public Premises Act, 1971, and has
come into force with effect from 31.3.2000 after receiving c
the assent of the President of India. Therefore, the
subjects which were covered under the Bombay Rent Act
came to be covered under the MRC Act as appropriately
modified including the concept of standard rent. [Paras
14, .15 and 16] [560-C, G-H]
The impugned judgment of the High Court and its reliance
on the Constitution Bench judgment in Ashoka
Marketing Ltd.:
D
4. The impugned judgment in the instant case relied
E
upon the observations in Ashoka Marketing's case-"the
provisions of the Public Premises Act, to the extent they
cover premises falling within the ambit of the Rent
Control Act, override the provisions of the Rent Control
Act and a person in unauthorized occupation of public
F
premises under Section 2(e) of the Act cannot invoke the
protection of the Rent Control Act", to hold that once the
premises were covered under the Public Premises Act,
that Act will override the Rent Control Act and therefore,
in the instant case, standard rent application was not G
maintainable. On the other hand, it was submitted on
behalf of the appellant that the statement in Ashoka
Marketing judgment, when it speaks of 'provisions to the
extent they cover', it means the 'subject matter' covered
by the provisions under the two acts. It must be noted
that the controversy in the case of Ashoka Marketing was
H
542
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A with respect to the subject of eviction of the
unauthorized occupants from the public premises.
Eviction of tenants in general was a subject covered by
both the statutes under considerations before the Court.
However, the Public Premises Act contains the special
B provisions for the eviction of unauthorized occupants
from the public premises, but for which they would fall
within the ambit of the Rent Control Act. Consequently,
in view of the dicta, the proceedings under the Public
Premises Act were held to be valid and legal, and not
c those under the Delhi Rent Control Act. The subject
matter of controversy in the instant case is with respect
to the fixation of standard rent, which is not covered
under the provision in the Public Premises Act. On the
other hand the same is very much covered under the
0 Maharastra Rent Control Act, 1999. The overriding effect
given to Public Premises Act cannot mean overriding with
reference to a matter which was not dealt with by that Act,
since the Public Premises Act did not claim to cover the
subject other than eviction of unauthorized occupants
E from public premises and recovery of arrears of rent.
[Para 31] [583-H; 584-A-F]
Ashoka Marketing Ltd. and Anr. Vs. Punjab National
Bank and Others 1990 (4) SCC 406: 1990 (3) SCR 649; New
Delhi Municipal Committee Vs. Kalu Ram & Anr. AIR 1976
F SC 1637 : 1976 Suppl. SCR 87; Shri Sarwan Singh and
another Vs. Shri Kasturi Lal 1977 (1) SCC 750: 1977 (2) SCR
421 - referred to.
Public Premises Act vis-a-vis the Bombay Rent Act and
G the MRC Act on the issue of eviction of unauthorised
occupants from Public Premises:
5. For the purposes of eviction of unauthorised
occupants, and for the recovery arrears of rent from
them, the proceedings to be initiated by the respondents
H would be fully competent under the Public Premises Act,
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 543
and that in such an eventuality the occupants would not A
-c be entitled to seek any remedy under the Bombay Rent
Act or the subsequent MRC Act, since the jurisdiction of
the Civil Court has been ousted under Section 15 -of the
Public Premises Act in this behalf. [Paras 32, 58] [584-GH; 585-A; 606-D]
B
Kaiser-I-Hind Pvt. Ltd. & Anr. vs. National Textile Corpn.
(Maharashtra North) Ltd. & Ors. 2002 (8) SCC 182: 2002 (2)
Suppl. SCR 555; Crawford Bayley & Co. & Ors. v. Union of
India & Ors. 2006 (6) SCC 25: 2006 (3) Suppl. SCR 240 -
C
relied on .
. The question of Repugnancy:
6.1. The distribution of legislative powers between the
Union of India and the States has been provided in the o
Seventh Schedule of the Constitution. It consists of List
I which is the Union List, List II which is the State List and
List Ill which is the Concurrent List: The question of
repugnancy can arise only in connection with the
subjects which are enumerated in the Concurrent List
E
with respect to which both the Union and the State
Legislatures have the concurrent power to legislate, and
when the State Legislature makes a law on a subject on
which the Parliament has already made a law. It is to deal
which such a conflict that Article 254 has been enacted.
F
Article 254 of the Constitution deals with the question of
inconsistency between the laws made by the Parliament
and laws made by the Legislatures of States. [Para 34]
[589-A-C]
6.2. The question of repugnancy between the law G
made by the Parliament and the law made by the State
Legislature may arise in cases when both the legislation
occupy the same field with respect to one of the matters
enumerated in List Ill and where a direct conflict is seen
between the two. The question therefore to be examined
H
544
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A is as to whether the two legislations occupy the same
field. If they do not, then there is no repugnancy. Unless
the provisions are irreconcilable, there will be a
presumption in favour of the constitutionality. [Paras 35
and 36] [590-B; 591-B]
B
6.3. The MRC Act which is a State Act, is an Act
subsequent to the Public Premises Act, and has been
assented by the President, notwithstanding the existence
of the Public Premises Act, the situation, therefore, would
C be governed by Sub-article (2) of Article 254 of the
Constitution. [Paras 60, 61]
Hoechst Pharmaceuticals Ltd. Vs. State of Bihar 1983 (4)
SCC 45: 1983 (3) SCR 130; State of West Bengal Vs.
Kesoram Industries Ltd. And Ors. 2004 (10) SCC 201: 2004
D (1) SCR 564; Ch. Tika Ramji and Ors. etc. v. The State of
Uttar Pradesh and Ors. AIR 1956 SC 676: 1956 SCR 393;
M. Karunanidhi vs. Union of India and Anr. 1979 (3) SCC
431: 1979 (3) SCR 254; Deep Chand vs .. State of UP. AIR
1959 SC 648: 1959 (2) Suppl. SCR 8; Vijay Kumar Sharma
E and Ors. vs. State of Kamataka and Ors. 1990 (2) SCC 562:
1990 (1) SCR 614 - referred to.
In the event of two Acts governing a common field,
whether both can apply for different purposes:
F
7. There could be provisions for certain purposes in
one statute, and for another purpose in another statute,
though both govern the common field. [Para 39] [593-D]
Krishna Distt. Coop. Mktg. Society Ltd. Vij"ayawada vs.
G N. V. Pumachandra Rao & Ors. 1987 (4) SCC 99: 1987 (3)
SCR 728; National Engineering ·Industries Ltd. v.s. Shri Kishan.
Bhageria & Ors. 1988 Supp. SCC 82; Bhart.~ Hydro Power
Corpn. Ltd. & Ors. y. State of Assam & Anr. 2004 (2) SCC.
553: 2004 (1) SCR 284; State of Maharashtra v. Bharat
H Shanti Lal Shah and Ors. 2008 (13) SCC 5: 2008 (12) SCR
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 545
1083; Zameer Ahmed Latifur Rehman Sheikh vs. State of A
- Maharashtra & Ors. 2010 (5) SCC 246: 2010 (4) SCR 1042
- referred to.
Fixation of Standard Rent in the context of exemptions
from the Rent Control Laws - The question of remedy:
8. Whatever be the object of granting exemption,
where the object is to see that the properties of the State
B
or semi-state bodies should not suffer by the rigours of
the Rent Control Laws or the possession of the public
premises. be recovered expeditiously, "the Courts have
C
expressed their views that these authorities being public
bodies should so behave as not to act contrary to the
policies laid down in the Rent Control Laws namely not
to increase the rent unreasonably or excessively, nor to
evict their tenant unreasonably or arbitrarily, save and
D
except in public interest." [Para 42] [595-G-H; 596-A-B]
Rampratap Jaidayal Vs. Dominion of India AIR 1953
Born 170; State of Bombay Vs. F.N. Balsara 19~1 SCR 682:
53 Born. LR 982 (SC); Chiranjitlal v. Union of India' AIR 1951
E
SC 41: 1950 SCR; Baburao Shanta ram More Vs. The
Bombay Housing Board AIR 1954 SC 153: 1954 SCR 572;
Mis Dwarkadas Marfatia V. Bombay Porl Trust 1989 (3) SCC
293 - referred to.
J.H. Dalal in his Commentary on the Bombay Rent Act
F
Fifth Edn, p 65 - referred to.
The issue with respect to maintainability of the Standard
Rent application and the question of conflict with the
provisions of the Public Premises Act:
G
9. In the instant case, the subjects of fixation of
Standard Rent and restoration of essential services by
· the landlord are covered under the MRC Act, but in no
way under the Public Premises Act. The Public Premises
H
546
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A Act, in fact does not claim to cover these subjects. The
Court has to look at the substance of the matter. Regard
must be had to the enactment as a whole, to its main
objects and scope of its provisions. Incidental and
superficial encroachments are to be disregarded.
B Eviction and recovery of arrears of rent are alone covered
under the Public Premises Act. The subject of fixation of
rent is different and independent from eviction. That being
the position, there is no conflict between the MRC Act and
the Public Premises Act when it comes to the provisions
C in the MRC Act with respect to fixation of Standard Rent
and requiring the landlord to maintain the essential
services and supplies. Therefore, the provisions of MRC
Act in that behalf cannot in any way be said to be
repugnant to those under the Public Premises Act. The
0 presumption is in favour of constitutionality, and the
Court is not expected to strike down a· provision unless
the conflict is a real one. In the instant matter there is no
such real conflict. [Para 62] [608-C-H]
Bharath Gold MinGs Ltd. vs. Kannappa ILR 1988 KAR
E 3092 - approved.
Jain Ink Mfg. Co. vs. UC Prithipal Singh v. Satpal Singh
(Dead) thr. its Lrs. 2010 (2) SCC 15: 2009 (16) SCR 736;
State of West Bengal vs. Kesoram Industries Ltd. And Ors.
F 2004 (10) sec 201: 2004 (1) SCR 564 - relied on.
On ouster of the jurisdiction of the civil courts:
10.1. Section 10 of the Public Premises Act does give
a finality to the orders passed by the Estate Officers or
G the Appellate Officers, and states that 'the same shall not
be called in question in any original suit, application or
execution proceeding, and no injunction shall be granted
by any court or other authority in respect of any action
taken or to be taken in pursuance of any power conferred
H
BANATWALA & _COMPANY v. L.l.C. OF INDIA & ANR. 547
by or under: this Act'. Section 15 of the Act specifically
A .
- states that no court shall have jurisdiction to entertain
any suit or proceeding in respect of the subjects,
amongst others concerning, '(a) the eviction of any
person who is in unauthorised occupation of any public
premises, and (d) the arrears of rent payable under subB
section (1) of Section 7 or damages payable under subsection (2), or interest payable under sub-section· (2A), of
that section'. Therefore, to that extent the jurisdiction of ·
the Civil Court is ousted. The actions which are covered
under the Public Premises Act are concerning eviction of c
unauthorised occupants and recovery of arrears of rent.
The Act however, does not claim to speak anything about
the fixation of Standard Rent or maintenance of essential
services. For these purposes no remedy is provided
under the Public Premises Act. Therefore, the jurisdiction
0
of the Civil Court for these remedies cannot be held to
be ousted. [Para 63] [609-G-H; A-C]
Church of North India vs. Lavajibhai Ratanjibhai 2005
(10) SCC 760; Dhulabhai Vs. State of MP. AIR 1969 SC 78:
1968 SCR 662 - referred to.
E
10.2. It was submitted that if the submission of the
appellant is accepted it would mean permitting
proceedings before the Court of Estate Officer for
recovery of arrears of rent, and before the Rent Controller
F
for fixation of standard rent, and the same is not desirable.
This by itself can be no reason to hold the Standard Rent
Application to be not maintainable before the Court of
Small Causes. [Para 64] [610-E]
Church of North India vs. Lavajibhai Ratanjibhai 2005
G
(10) SCC 760; National Engineering Industries Ltd. vs. Shri
Kishan Bhageria & Ors. 1988 Supp. SCC 82 - refe_rred to.
10.3. The MRC Act being a welfare statute like the
labour laws is enacted a~er considering the requirements
H
548
SUPREME COURT REPORTS (2011] 14 (ADDL.) S.C.R.
A of the tenants, and contains the provisions f~r fixation of
standard rent and for restoring essential services and
supplies when necessary. The public premises are not
specifically exempted from the applicability of the MRC
Act. That being so, there is no reason to hold that these
s remedies would not be available to the tenants of the
public premises, though for the purposes of eviction of
unauthorised occupants and recovery of arrears of rent,
the proceedings would lie only under the Public Premises
Act. The proceedings for the recovery of arrears of rent
c are at the instance of landlord, whereas those for fixation
of standard rent are at the instance of the tenant. Both
these proceedings are quite different in their prayers and
scope of consideration. The fact that the proceeding for
one purpose is provided under one statute cannot lead
0 to an automatic conclusion that the remedy for a different
purpose provided under another competent statute
becomes unavailable. [Para 65] [611-E-H; 612-A]
Expectations from Public Bodies:
E
11. The exercise of discretion of public authorities
must be tested on the assumption that they would act for
public benefit and would not act as private landlords and
they must be judged by that standard. However, these
principles would have no relevance while considering a
F dispute between a statutory body as landlord and an
affluent tenant in regard to a commercial or nonresidential premises. [Para 66] [612-H; 613-A]
Rampratap Jaidayal Vs. Dominion of India AIR 1953
Born 170; Baburao Shantaram More Vs. The Bombay
G Housing Board AIR 1954 SC 153:1954 SCR 572; Mis
Dwarkadas Marfatia V. Bombay Port Trust 1989 (3) SCC
293 - relied on.
On the relevance of Guidelines:
H
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 549
12.1. In the instal)t case, the activities of the
A
respondent/L.l.C are controlled by the UC Act. Section 21
of the LIC Act lays down tha~ the Corpor<1tion shall be
guided by- the directio·ns is.su.ed by .the Central
Government. The guidelines. dated 30.5.2002 laid down
by the· Central Government are not direcUons under
B
Section 21 of the .LIC Act .. Guideline no .. 2 (I) states that
the provisions of the Public Premises Act, 1971 should
be- used primarily· to evict totally unauthorised
occupants. Guideline No.· 2 (iii) specifically states that it
will be open to the public_ authority to secure periodic c
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. Thus,
the~e guidelines specifically
recognize _the relevance of certain provisions of Rent 0
Control Acts-for their application to the properties
covered under'the Public Premises Act. It is stated' in the
guidelines that the public authoriti_es would have rigtits
similar to private landlords under the Rent Control Acts
in dealing with genuine legal tenants. It follows that the
E
public authorities would have the obligations of the
private landlord~ also. The purpose of these guidelines
is to prevent arbitrary use of powers under the Public
Premises Act. The relevance of the guidelines would
depend upon the nature of guidelines and the source of
power to issue such guidelines. The source of the right
F
to apply for determination of standard rent is the Rent
Control Act, and not the guidelines. By subsequent
clarificatory order, the Central Government has made it
clear that the guidelines dated 30,5.2002 would not apply
to affluent tenants. [Paras 67, 68 and 69] [613-B-E; 613G
F-H; 614"A~C]
12.2. The respondents submitted that if the appellant
or the tenants are aggrieved by the fixation of the rent,
their remedy is to invoke the writ jurisdiction of the High
H
550
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A Court. The respondents ignored that the writ jurisdiction
is a discretionary jurisdiction. Besides, normally oral
evidence is not recorded w.hile exercising the writ
jurisdiction. Although part of the ev.idence to be examined
in the process of rent fixation would be documentary,
B such as the provisions of the contract between the
parties, there would also be many other factors which
may require oral evidence, particularly with respect to the
comparable properties. An appropriate remedy, forum
and procedure are therefore, necessary in the interest of
C fairness and proper adjudication. That apart, there is no
reason to insist upon s1.1ch an interpretation which would
deny to the tena;nts of the public premises, a remedy and
a forum which are otherwise available to the tenants
under the MRC Act. [Para 70] [614-F-H; 615-A]
D
12.3. The interpretation as canvassed by the
respondents would deny the appropriate remedy to the
petitioner and the like tenants, to have the rent of their
premises being fixed by filing a Standard Rent
Application, and also to get the essential services
E restored in the event of any difficulty. There is no reason
to accept any such interpretation because there is no
conflict between the provisions of the MRC Act with those
under the Public Premises Act, when it comes to fixation
of standard rent and restoring the essential supplies.
F Otherwise it would expose the provisions of Public
Premises Act to the vires of unreasonableness also. The
interpretation canvassed by the respondents is not in
consonance with the welfare state that is contemplated
under the Constitution. [Para 71) [615-B-D]
G
Bharath Gold Mines Ltd. vs. Kannappa ILR 1988 KAR
3092 - approved.
13. The order passed by the Single Judge of the High
Court in writ petition filed by the respondents is set aside
H and the writ petition is dismissed. The order passed by
BANATWALA & COMPANY v. L.l.C. OF INDIA-~ ANR. 551.
the Court of Small Causes rejecting respondents'
A
application objecting to the maintainability of appellant's
application for fixation of Standard Rent is upheld. [Para
73] [616-D-E]
Persis Kothawala vs. UC 2004 (4) BCR 610; Shangrila
B
Food Products Ltd. and Anr. Vs. L./.C. and Anr. 1996 (5) SCC
54: 1996 (3) Suppl. SCR 279: New India Assurance Co. Ltd.
Vs. Nus/i Neville Wadia 2008 (3) SCC 279: 2007 (13) SCR
598 - referred to.
Case Law Reference:
c
1990 (3) SCR 649
Referred to
Para 26, 28, 30,
31, 60
1976 Suppl. SCR 87
Referred to
Para 27
1977 (2) SCR 421
Referred to
Para 29
D
2002 (2) Suppl. SCR 555 Relied on.
Para 32
2006 (3) Suppl. SCR 240 Relied on.
Para 32
1983 (3) SCR 130
Referred to
Para 35
E
2004 (1) SCR 564
Referred to
Para 35 .
1956 SCR 393
Referred to
Para 36
1979 (3) SCR 254
Referred to
Para 37
F
1959 (2) Suppl. SCR 8
Referred to
Para 37
1990 (1) SCR 614
Referred· to
Para 38
1987 (3) SCR 728
Referred to
·Para 39
1988 Supp. sec 82
Referred to
Para 40, 64
G
2004 (1) SCR 284
Relied on.
Para 40, 62
2008 (12) SCR 1083
Referred to
Para 41
2010 (4) SCR 1042
Referred to
Para 41
H
552 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A
1951 SCR 682
Referred to
Para 43
1950 SCR 869
Referred to
Para 43
2004 (4) BCR 61
Referred to
Para 46
B
AIR 1992 Born 375
Referred to
Para 47
ILR 1988 KAR 3092
Approved
Para 48, 62 and
71
1996 (3) Suppl. SCR 279 Referred to
Para 49
c
2009 (16) SCR 736
Referred to
Para 54
2005 (3) SCR 1037
Referred to
Para 55, 63
1968 SCR 662
Referred to
Para 55
D
2007 (13) SCR 598
Referred to
Para 57
1981 (1) SCR 498
·Relied on
Para 62
AIR 1953 Born 170
Relied on
Para 66
1954 SCR 572
Relied on.
Para 66
E
1989 (2) SCR 751
Relied on.
Para 66
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7171 of 2010.
F
From the Judgment & Order dated 8.9.2009 of the High
Court of Bombay in WP No. 5023 of 2009.
Vijay Hansaria, Sanjay Sarin, Manoj 8. Dalvi, Rehana A.
Kesuri, Senha Gagandeep Kaur and Manjusha Wadhwa for the
G Appellant.
H.P. Raval, ASG, Indra Sawhaney for the Respondent.
The Judgment of the Court was delivered by
H
H.L. GOKHALE J. 1. This appeal, by Special leave raises
BANATWALA & COMPANY v. L.l.C. OF INDIA & ANR. 553
[H.L. GOKHALE, J.]
a question as to whether the provisions for fixation of standard
A
rent, and provisions prescribing other obligations for the landlord
such as maintenance of essential services under the concerned
Rent Control Act viz. Maharashtra Rent Control Act, 1999 as in
the present case (hereinafter referred to as the MRC Act}, are
applicable in respect of public premises owned by a corporation
8
such as the first respondent Life Insurance Corporation of India
(L.l.C in short) which is otherwise covered by the provisions of
the Public Premises (Eviction of Unauthorized Occupants) Act,
1971 (hereinafter referred to as the Public Premises Act).
Short facts leading to this appeal are as follows -
C
2. The appellant is a firm of Advocates and Solicitors, and .
is a tenant in possession of 5th floor of a seven storey building,
situated at 269 D.N. Road, Fort Mumbai owned by the first
Respondent, L.l.C. L.l.C. is a statutory corporation constituted 0
under the Life Insurance Corporation Act, 1956. The area under
occupation of the appellant is 1289.16 sq. feet (equivalent to
113 sq. metres). The petitioner is a tenant of these premises
since 1st August, 1988 under an agreement of lease which has
been extended from time to time. It is relevant to note that there
E
are no proceedings of eviction filed by the respondent No, 1
against the appellant. The second respondent is the Regional
Manager (estates) of L.l.C.
3. The respondent No. ? revised the monthly rent of these
premises suddenly by his letter of 14th July, 2004 from Rs.
F
6,891/- to Rs. 39,069/-, including Municipal taxes and
miscellaneous charges. The appellant filed a Writ Petition in the
Bombay High Court being Writ Petition No. 2266 of 2004 to
·challenge the increasing of rent as arbi~rary. The respondents
made a statement in the High Court that if the petitioner abides
G
by clause IV (e) of the lease agreement between the parties and
pays increased rent as provided therein, the respondents will
not enforce the increase in the rent that was proposed through
letter dated 14.7.2001. Thereupon the writ petition was
withdrawn. Subsequently, the respondents sent a reduced bill
H
554
SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A of Rs. 9144/- per month which included basic rent of Rs. 6181/
- plus municipal taxes and water charges of Rs. 355/- and misc.
charges of Rs. 100/-. We place the above clause IV (e) on
record. It reads as follows:-
B
c
"(e) The Lessor doth hereby convenant with the Lessee
that upon the Lessee paying the rent hereby reserved
. regularly and observing and performing all the convenants
and conditions herein contained, the Lessor shall on
Lessee's request extend the period of the lease on the
same terms and conditions not exceeding five years from
the expiration of the terms hereby granted subject however
that there will be an escalation/increase in the rent hereby
reserved by 35% of the rate mentioned hereinabove."
4. It so transpired that the lift of the building (wherein these
o premises are situated) was not working properly, and hence,
sometime in 2007, the appellant, alongwith two other tenants,
filed an application bearing R.E.S. Application No.48/Res of
2007 in the Small Causes Court, Mumbai for restoration of the
lift services under Section 29 of the MRC Act. A Single Judge
E of that Court who heard an Interim application therein, directed
the respondents by his order dated 3.10.2007 to repair the lift.
A revision petition bearing Revision Application No.308/2007
was filed by the respondents to challenge that order. The
submission of the respondents, that the MRC Act was not
F applicable, was turned down by a Division Bench of that Court,
which dismissed that petition by its order dated 11.1.2008. In
the meanwhile, in April, 2007 the respondents further decreased
the rent from Rs. 9144/- to Rs. 6891/- per month.
5. The monthly rent for the premises, however continued
G to be uncertain. The respondents increased the rent for the
premises once again in March, 2008 to Rs. 8689/-. In April,
2008 they demanded rent of Rs.