Golden Legend Leasing and Finance Ltd. v. Dilip Manohar Amladi

13. On the other hand, Mr.Godbole, learned Senior Counsel, assisted by Mr.Raj Patel opposed the submissions made on behalf of the Petitioners. The learned Senior Counsel would submit that the Petitioners are against the concurrent findings of the Trial Court and the Revisional Court. He would submit that the Petition deserves to be dismissed as the Revisional Court has, vide order dated 23rd December 2021 (i) rejected the Application filed by the Petitioners and (ii) Confirmed the order of the Competent Authority dated 20th 2021 which directed as follows:

(i) handover vacant and peaceful possession of the License Premises to the Respondents

(ii) directed the Petitioners to pay the arrears of license fees of

(iii) a further payment of license fees at double the rate i.e. Rs.

2,48,100/- x 2 = Rs. 4,96,200/- per month from 6th February, 2021 till handing over of the possession of the premises in question (in terms of section 24 (2) of Maharashtra Rent Control Act 1999).

14. Learned Counsel for the Respondents would submit that the contention of the Petitioners/Licensee with regard to the applicability of the Act and/or lack of jurisdiction of the Competent Authority is completely erroneous and is misplaced. He would submit that a perusal of section 3(1)(b) of the Rent Control Act suggests that the exemption under section 3(1)(b) is applicable to the premises which are ‘let’ to avk 10/40 companies having paid up share capital of more than Rs.[1] crore and not in the event where the premises are granted on ‘license basis’.

15. The word ‘let’ has not been defined, however, as per Dictionary meaning ‘let’ means “to offer (property) for lease; to rent out”. Thus, the exemption under 3(1)(b) is applicable to the premises which have been let out and/or given on tenancy. In the present case in hand, it is an admitted position, that a mere ‘License’ was granted to the Petitioner/Licensee to use the Licensee Premises for a fixed tenure under the License Agreement. It is submitted that in the case of License, the judicial possession of the premises always continues to remain with the Licensor.

16. That, therefore, the question non-applicability of the Rent Control Act does not and cannot arise. The legislature, was clear in its language in the section that the exemption is applicable to companies (having paid up capital of more than one crore) in the event premises are ‘let out’ and/or leased only and has carefully excluded the applicability of the exemption in the case of grant of a ‘license’. avk 11/40

17. Learned Counsel submits that the definition of the word ‘licensee’ under the Rent Control Act provides that the expression “premises given on license” shall be construed accordingly. The entire definition means premises under a subsisting agreement for license given for a license fee. This definition also indicates a clear distinction, that premises given on license is different and distinct from premises which are let out. It is further submitted, that the above position, i.e. the premises were granted to the Petitioner by the Respondent/Licensor on a ‘license basis’ has not been disputed by the Licensee/Petitioners at any stage of the proceeding.

18. Without prejudice to the above, it is submitted on behalf of the Respondents that section 24 of the Rent Control Act provides for an exclusive jurisdiction of the Competent Authority for the recovery of the possession in the cases where the premises are granted on ‘license basis’ and that Section 24 of the said Act also starts with a non-obstante clause.

19. That the legislature has provided that provisions of the Rent Control Act would apply to the premises given on license for residential purposes and also that an agreement of license in writing shall be avk 12/40 conclusive evidence of the fact stated therein. That, in the present case, the License Agreement executed between the parties is registered document and therefore is conclusive evidence of the facts stated therein.

20. Learned Counsel for the Respondents also refer to the definition of Section 7(5) which defines ‘licensee’ as well as Chapter VII of the Rent Control Act which provides for Summary Disposal of the Certain Applications including Section 41. That Section 41(c) provides that for the purposes of summary disposal of Applications under section 24 of the Act, a Landlord would mean to include, a person who has given premises on license for residence or successor-in-interest referred to in section 24 of the Act. It is also submitted that Section 47 bars the jurisdiction of a Civil Court with respect to the matter which the Competent Authority or the State or an Officer is empowered by or under the Rent Control Act.

21. Learned Senior Counsel would submit that, therefore, from a harmonious construction of sections 7(5), 24, 41(c) and 47 of the Rent Control Act, it would indicate that in the present case the Petitioner No.1 is a licensee, the licensed premises is the premises given on avk 13/40 license and the Respondents are the landlord/licensor. Since the licensor/landlord provided their flat/license Premises on license basis for residential use, the only remedy available to the Respondents herein for recovery of the possession of their premises lies under section 24 of the Rent Control Act and that as per Section 47 of the Act, no civil court would have jurisdiction in respect of any matter (recovery of possession of the premises granted on license) in which the Competent Authority is solely empowered to try matters of this nature.

22. Learned Counsel also refer to Sections 42 and 43 of the Rent Control Act which provide for the procedure for the disposal of Applications under Sections 22, 23 and 24 of the Act and submit that Section 43(4)(b) is of a summary nature and a jurisdiction is vested with the Competent Authority, to dispose of Applications under Sections 22, 23 & 24 of the Act, summarily.

23. It is also submitted on behalf of the Respondents that Section 24 is pari-materia of section 13A-2 of the erstwhile Bombay Rents, Hotels & Lodging Houses Rates Control Act, 1947 (the “earlier Act/erstwhile Rent Act”). That, this Section was introduced by way of Bombay Rent Control Amendment Act, 1986. The object in incorporating this Section avk 14/40 in the earlier Act was to encourage the system of giving premises by the landlords on license basis and on failure of the licensee to deliver premises of the licensed premises to the landlord on expiry of period of license to enable the landlord to get possession of licensed premises speedily. That, the entire object of Section 24 of the said Act would be frustrated and defeated if it is held that the said premises are exempted under the said Act by virtue of Section 3(1)(b) and the Respondents should exercise its remedy of recovering possession by way of a regular suit before a Civil Court or before a Small Causes Court under Section 41 of the Presidency Small Causes Court Act (like in the case of a premises given on license for non-residential purpose).

24. Learned Counsel for the Respondents have placed reliance on the decision of Afsar Shaikh Vs. P.N. Kaul & Anr.[4] to submit that the object of Section 13(A)(2) of the earlier Act which is pari-materia with Section 24 of the Rent Control Act has been explained by this Hon’ble Court in that matter.

25. In view of the aforesaid, learned Senior counsel submits that the

(i) Exemption under section 3(1)(b) is not available to the Petitioners,

4 1997 (2) BOM.C.R. 456 avk 15/40 being a licensee (ii) Section 24 of the Act is the only recourse available to the Respondent/licensor for recovery of the possession of the license Premises granted under license for residential use.

26. It is submitted on behalf of the Respondents that, therefore, the Petitioners have failed to make out any ground whatsoever for the interference of this Hon’ble Court in its writ Jurisdiction against the concurrent findings of the lower Authorities and that the Writ Petition be dismissed with costs.

27. This court in the case of EEPC India Vs. Additional Commissioner, Konkan Division, Mumbai and others (supra) had the occasion to consider the submissions very similar to the ones made on behalf of the Respondents in this Petition. It was argued on behalf of the Petitioner thereof that the Petitioner being exempt from the provisions of the Rent Control Act, the Competent Authority had committed jurisdictional error by entertaining the application for eviction by the Respondents under section 24. On the other hand, learned counsel for the Respondents therein had argued that the provisions of section 24 of the Act would operate notwithstanding anything contained in the Act. This Court (Gupte J.) after considering avk 16/40 Section 3 of the Rent Control Act as well as section 24 of the said Act, observed that section 3(1)(b), which exempts premises as opposed to the relationships from the provisions of the Act, is a fundamental provision of the Act which operates vis-a-vis each and every provision of the Act and there is no reason why it should not operate even as regards section 24 of the Rent Control Act. It was further held that if any premises are exempt from the application of the Rent Control Act, there is no reason why such exemption shall not extend to section 24. A non-obstante clause usually appended to a provision of law as an opening, is designed to give the enacting part of the provision in case of a conflict with either with other provisions of the same enactment or other enactments, an overriding effect over these later provisions. It is by its very nature premised on a conflict; if there is no conflict between the other provisions contained within the ambit of the non-obstante clause and the enacting part of the clause, there is no question of overriding these provisions or other provisions or otherwise giving effect to the non-obstante clause. Once it is clear that each and every premises covered by section 3(1)(b) are excluded from the operation of the Act, there is no possibility of any conflict as between the application of section 24 and any other provision of the Rent Control Act to such premises. The provisions of the Rent Control Act (including section 24) avk 17/40 are uniformally inapplicable to such premises. The non-obstante clause within section 24 merely implies that as for premises to which the Act applies whenever there is any conflict between the other provisions of the Act and section 24, it is the latter that would prevail. There is thus no question of section 24 taking precedence over section 3(1)(b). Paragraph 5 of the said decision is, therefore, usefully quoted as under:- “5. Before we come to the deemed tenancy of the Petitioner, which is the real nub of the controversy, since both submissions of the Petitioner turn on it, we may dispose of a couple of subsidiary points. The first is the submission of Mr.Vachasundar that the non-obstante clause of Section 24 takes precedence over the exempting clause contained in Section 3(1) (b) of the Act. Sections 3(1)(b) and 24 are quoted below: "3. Exemption. (1) This Act shall not apply ---- (b) to any premises let or sub-let to banks, or any Public Sector Undertakings or any Corporation established by or under any Central or State Act, or foreign missions, international agencies, multinational companies, and private limited companies and public limited companies having a paid up share capital of more than rupee one crore or more. Explanation. - For the purpose of this clause the expression "bank" means,-

(i) the State Bank of India constituted under the State

(ii) a subsidiary bank as defined in the State Bank of India

(iii) a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 or under section 3 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1980; or

(iv) any other bank, being a scheduled bank as defined in clause

24. Landlord entitled to recover possession of premises given on license on expiry. (1) Notwithstanding anything contained in this Act, a licensee in possession or occupation of premises given to him on license for residence shall deliver possession of such premises to the landlord on expiry of the period of license; and on the failure of the licensee to so deliver the possession of the licensed premises, a landlord shall be entitled to recover possession of such premises from a licensee, on the expiry of the period of license, by making an application to the Competent Authority, and, the Competent Authority, on being satisfied that the period of license has expired, shall pass an order for eviction of a licensee. (2) Any licensee who does not deliver possession of the premises to the landlord on expiry of the period of license and continues to be in possession of the licensed premises till he is dispossessed by the Competent Authority shall be liable to pay damages at double the rate of the license fee or charge of the premises fxed under the agreement of license. (3) The Competent Authority shall not entertain any claim of whatever nature from any other person who is not a licensee according to the agreement of license. Explanation- For the purposes of this section,- (a) the expression "landlord" includes a successor-in-interest who becomes the landlord of the premises as a result of death of such landlord; but does not include a tenant or a sub-tenant who has given premises on license; avk 19/40 (b) an agreement of license in writing shall be conclusive evidence of the fact stated therein." As is obvious, Section 3(1)(b), which exempts premises, as opposed to relationships, from the provisions of the Act where a government company or a public sector undertaking is a tenant, is a fundamental provision of the Act, which operates vis-a-vis each and every provision of the Act and there is no reason why it should not operate even as regards Section 24 of the Act. If any premises are exempt from the application of the Act, there is no reason why such exemption shall not extend to Section 24. A non-obstante clause, usually appended to a provision of law as an opening, is designed to give the enacting part of the provision, in case of a conflict with either other provisions of the same enactment or other enactments, an overriding effect over these latter provisions. It is, by its very nature, premised on a conflict; if there is no conflict between the other provisions contained within the ambit of the non-obstante clause and the enacting part of the clause, there is no question of overriding these other provisions or, in other words, giving effect to the nonobstante clause. Once it is clear that each and every premises, covered by Section 3(1)(b), are excluded from the operation of the Act, there is no possibility of any conflict as between the application of Section 24 and any other provision of the Act to such premises. The provisions of the Act (including Section 24) are uniformly inapplicable to such premises. The non-obstante clause within Section 24 merely implies that as for premises to which the Act applies, whenever there is any conflict between the other provisions of the Act and Section 24, it is the latter that would prevail. There is, thus, no question of Section 24 taking precedence over Section 3(1)(b).”

28. Observing thus, this court in the said decision in the case of EEPC India Vs. Additional Commissioner, Konkan Division, Mumbai and others (supra) held that there is no way the competent authority could entertain an application in respect of such premises. avk 20/40

29. In Bhatia Co-operative Housing Society Limited Vs. D.C.Patel (supra), the Hon’ble Supreme Court had the occasion to consider the jurisdiction of the Small Causes Court vis-a-vis the City Civil Court in respect of a premises which belonged to the Government as section 4 (1) of the erstwhile Bombay Rents Hotel and Lodging House Rates Control Act, 1947 provided that the said Act would not apply to any premises belonging to the Government or the local authority or apply as against the Government to any tenancy or other like relationship created by a grant from the Government in respect of premises taken on lease or recognition by the Government but it shall apply in respect of premises let to the Government or local authority. In that case the contention of the appellant society was that the demised premises belonged to the trustees for the improvement of the City of Bombay and therefore, belonged to Bombay Municipality both of which bodies were local authorities and therefore, the erstwhile Bombay Rent Act did not apply to the demised premises. There the Respondent urged that the object of the said Act as recited in the preamble was inter-alia to control rent and therefore, the object of the legislation was that the provisions of the Act would be applicable only as between the landlord and tenant. That section 4(1) provided for an exemption or exception to the general object. The purpose of the first two parts of section 4(1) avk 21/40 was to exempt two cases of relationship of landlord and tenant from the operation of the Act namley (1) where the government or local authority lets out premises belonging to it and (2) where the government lets out premises taken out on lease or requisitioned by it. That the second part of section 4(1) quite clearly exempted “any tenancy or other like relationship” created by the Government but the first part made no reference to “any tenancy or any like relationship” at all but exempted the premises belonging to the Government or local authority. The intention of the first part were as formulated in item (1) then the first part of section 4(1) like the second part would have been different. The Hon’ble Apex Court in paragraph 13 concluded that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer on the premises belonging to the Government and the immunity from the operation of the Act. Repelling the contentions made on behalf the Respondent in the said decision the Hon’ble Supreme Court opined that the consideration of the protection of the interest of the sub-tenants in premises belonging to the Government or local authority can not override the plain meaning of the preamble of the first part of section 4(1) of the erstwhile Rent Act and frustrate the real purpose of protecting and furthering the interests of the Government and the local avk 22/40 authority by conferring on its property an immunity from the operation of the Act. Paragraphs 10 to 13 of the said decision is usefully quoted as under:

13. The Legislature was familiar with this form of expression, for it adopted it in the second part and yet it did not use that form in the first. The conclusion is, therefore, irresistible that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer the premises belonging to Government an immunity from the operation of the Act.”

30. This Court in the case of Da’cunha Associated Pvt. Ltd., Mumbai Vs. Dilip Jhangiani and Others[5] (R.C.Chavan, J) had the occassion to consider the provisions of Section 3(1)(b) of the Rent Control Act, and to compare it with Section 4 of the erstwhile Bombay Rent Act. After comparing and considering both the provisions, this Court observed that since premises are subject matter of any tenancy to which rent legislation applies, both Section 4 of the erstwhile Bombay Rent Act and Section 3(1)(b) of the Rent Control Act, stipulate that the Acts will 5 2010 (6) Mh. L. J. avk 24/40 not apply to the premises. But these premises are not identified by criteria like geographical location or historical importance but the criteria of the owners’ occupants’ status. Though “premises” are exempted, such premises have to be identified with entities having a defined status. It has been held in the case of Leelabai Gajanan Pansare and Others vs. Oriental Insurance Company Limited and Others[6] that as to why premises tenanted by particular class of entities were sought to be excluded. The question whether the tenant belongs to that class decides whether the premises are exempted. Relying upon and reiterating the principles laid down by the Hon’ble Supreme Court in the case of Bhatia Co-operative Housing Society Ltd. vs. D.C.Patel (supra) it was held in that case that, the premises in that case would be excluded from the applicability of the provisions of the Rent Act, since the tenant, the Respondent No. 5 in the matter was having a paid up capital of more than 1 crore. The exclusion from protection, it was held, applies to the premises tenanted by Respondent No.5 and not just to the relationship of Respondent No. 1 with Respondent No.5. In short, the said decision of this Court has also reiterated the law on the point that Section 3 of the Rent Control Act would have precedence over all other provisions of the Rent Control Act. And if the Act does not apply avk 25/40 to a particular premises, then the applicability of the other provisions of the said Act cannot be considered. Paragraphs 20 to 34 are relevant and are usefully quoted as under:

31. Further, the reliance by the learned Counsel for the Respondents on the decision of this Court in the case of Afsar Shaikh Vs. P.N. Kaul (supra), in my view is misplaced. No doubt Section 13A(2) of the earlier Act is pari-materia with Section 24 of the Rent Control Act, however, the said case was not considering the applicability of Section 3(1)(b) or the erstwhile section 4(1) which is the issue in question in this case. This Court in the case EEPC India vs. Additional Commissioner, Konkan Division, Mumbai & Ors. (supra) has clearly observed that once the premises covered by Section 3(1)(b) are excluded from the operation of the Rent Control Act there is no possibility of any conflict as between Section 24 and other provisions of avk 37/40 the Rent Control Act to such premises. That, therefore, there would be no question of section 24 taking precedence over Section 3(1)(b). Clearly that was not the question which the Court was called upon to be answered in Afsar Shaikh Vs. P.N. Kaul(supra). Moreover, in that decision this Court was considering the case of a license which had come to an end on 1st July 1986 and was not subsisting on 1st 1987 when the Act introducing section 13A(2) was brought into effect. Hence, the said decision does not assist Respondents’ case.

32. Therefore, the contention of the Respondents that if it is held that the said premises are exempted under the Act by virtue of Section 3(1)(b) and the Respondents should exercise its remedies available by way of a Regular Suit before the Civil Court, the entire object of Section 24 would be frustrated, cannot be countenanced, as that is neither in line with the basic principles of interpretation of statues, nor the scheme of the Rent Control Act.

33. Ergo, applying the principles settled by the Hon'ble Supreme Court as well as the law enunciated by this Court in the decisions discussed above, to the case of the Petitioner, whose paid up capital admittedly is more than one crore, in my view, the provisions of the avk 38/40 Maharashtra Rent Control Act, 1999, would not apply, thereby meaning that the application filed by the Respondents under Section 24(1) of the Rent Control Act is not maintainable. The Competent Authority had no jurisdiction to entertain the application filed by the Respondents in view of the clear provisions of Section 3(1)(b) of the Rent Control Act and consequentially the Revisional Authority also lacked jurisdiction. Therefore, the order of the Revisional Authority confirming the decision of the Competent Authority must also go. The impugned order of the Revisional Court as well as the Competent Authority thus deserve to be quashed and set aside. The order dated 23rd December 2021 of the Revisional Authority as well the order dated 20th October 2021 of the Competent Authority are hereby quashed and set aside. In view of the above, the other arguments on behalf of the Respondents do not merit any consideration.

34. The Petition is allowed as above.

35. It is made clear that if Respondent No.2/3 have any other remedy in law to evict the Petitioners, this order shall not prejudice such remedy and the Respondents are at liberty to pursue such remedy, as may be available to them in law. avk 39/40

36. It is observed that pursuant to an order of this court dated 20th December 2022, the Petitioners have deposited an amount of Rs.25,00,000/- in this Court and the Petitioners through Counsel during the arguments have expressed their no objection if the said amount, with interest if any, is allowed to be withdrawn by the Respondents.

37. Accordingly, let the amount of Rs.25,00,000/- with interest, if any, be withdrawn by the Respondents.

38. Interim Application No.4733 of 2023 to accordingly stand disposed. Parties to bear their own costs. (ABHAY AHUJA, J.) avk 40/40