STATE OF WEST BENGAL AND ORS. v. VISHNUNARAYAN AND ASSOCIATES (P) LTD. AND ANR

Citation: [2002] 2 S.C.R. 557

Court: Supreme Court of India

Bench: S.S.M. QUADRI, S.N. PHUKAN

Judgment text

STATE OF WEST BENGAL AND ORS. v. VISHNUNARAYAN AND ASSOCIATES (P) LTD. AND ANR. MARCH 19, 2002 [SYED SHAH MOHAMMED QUADRI AND S. N. PHUKAN, JJ. ] Rent Control and Eviction: Great Eastern Hotel (Acquisition of Undertaking) Act, 1980-Section 3(1), 3(2), 4(1), 4(2), 4(7), and 4(8), Acquisition of Hotel Premises by the State Government-Effect of- . Relationship ofLandlords and Tenants-Held, relationship oflandlords and tenants between State Government and occupants/tenants of the premises continues. Eviction ofoccupants/tenants-Use offorce-Whether permissible-Held, State Government cannot use force to remove occupants/tenants from the premises-Such action is destructive of the basic principle of rule of law-- Great Eastern Hotel Taking over of Management Act, 1975. West Bengal Government Premises (Tenancy Regulation) Act, 1976.

Section 6-A-Eviction ofunauthorised tenants-Invoking of-Cannot be invoked by the Authority as the relationship of Tenants-Landlords continues even after thebcquisition ofpremises by the State Government. Appellant-State had taken over the management ofthe Undertaking of Great Eastern Hotel Ltd. , a Company, under the provisions of the Great Eastern. Hotel (Taking over of Management) Act, 1975. Subsequently, as per provisions ofthe Great Eastern Hotei (Acquisition of Undertaking) Act, 1980 the Undertaking of the said Hotel was taken over by the Appellant-State and transferred to Great Eastern Authority set up under the Act. The Authority as per direction of the State issued a Circular to occupants of the premises of the Hotel to provide them opportunity to establish their rights, if any, to remain in possession/occupation of the premises but Respondents-occupants· neither responded nor delivered the possession. The State, after oral warning, removed the occupants by force.

Respondent-occupants tnoved the High Court by filing Writ Petitions challenging the action of the Government in dispossessing them by force and prayed for restoratiorr-of ppssession as they were tenants even after the Act of 1980 came into force. While disposing of the Writ Petition, High Court held that there was no element of public interest involved which would justify forcible dispossession of the respondents occupants from the Hotel premises, which was a commercial venture and the Act of 1980 does not provide for use of force eviction of tenants. Aggrieved, State preferred appeals before this • Court. It was contended for the appellant-State that there was no transfer of the lands and buildings to the Hotel Authority.

Hence any action by the Authority against the respondents would not be binding on the Government, and that as per provisions contained in Section 3(1) of the Act of 1980, on the appointed day the vesting of Undertaking was absolute and complete; thus the tenancy between the respondents and the erstwhile Company came to an end; and that respondents were in default of their legal liability to hand over the possession of the premises; and· that State Government, under the circumstances, could take necessary steps which include eviction by force to secure possession; and that the respondents were trespassers, therefore, the Government could evict them as per provisions of the West Bengal Government Premises (Tenancy Regulation) Act of 1976. Dismissing the appeals, the Court HELD: 1. 1. It is the settled position of law that the State or its executive officers cannot interfere with the rights ofothers unless they can point to some specific provision of law, which authorises their acts.

The ~overnment can p resume possession only in a manner known to or recognised by law. (564-H; 565-A) Bishan Das and Ors. v. The State ofPunjab and Ors. , (1962) 2 SCR 69, followed. State ofUP. and Ors. v. Maharaja Dharamander Prasad Singh and Ors... (1989) 2 sec 505, relied on. 2. 1. The State Government may, for the reasons stated in sub-section 2 ofSection 3, transfer the undertaking of the Company to the Hotel Authority except the lands and buildings vested in the State Government absolutely with effect from the date of the notification issued un (1) and (2) of Section (3) and sub-sections (I), (2), (7) and (8) of Section 4 of the Act of 1980 are relevant for the present purpose. Sub-section (I) of Section 3 of the Act of 1980 provides that the undertaking of the company shall stand transferred to and vested absolutely in the State Government on the appointed day.

From the definition of the underta)<ing as contained in clause (f) of Section 2 of the Act of 1980, the undertaking of the company also includes lands, buildings, etc. By sub-section (2) of Section 3, the State Government may for reasons stated in the said sub-section transfer the undertaking of the company to the Hotel Authority except the lands and buildings forming part thereof. Clause (a) of sub-section (2) defines 'appointed day' to mean the date on which the Act came into force. Therefore, on the date the notification under sub-section (I) of Section 3 of the Act of 1980 was issued, the undertaking land and buildings vested in the State Government ' absolutely. Sub-section (I) of Section 4 provides that the undertaking which vested in the State Government shall be freed and discharged from any trust, obligation, mortgage, changes, lien and all other encumbrances affecting it.

We are not concerned with the second part of the said sub-section which relates to any attachment, injunction or decree or order passed by any court or tribunal. According to sub-section (2) of Section 4 any contract, whether express or implied, or other arrangement, whether under any statute or otherwise, in so far as it relates to the affairs of the erstwhile company in relation to the undertaking and in force immediately before the appointed day shall be deemed to have terminated on the date of vesting. Under sub-section (7) of Section 4 any person in possession or custody or control of the whole or any part of the undertakings on the date immediately before the appointed day shall 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.

Sub-section (8) of Section 4 empowers the State Government to take or cause to be taken such steps as it considers necessary for securing the possession of the undertaking of the company which vested in the State Government under sub-section (1) of Section 3. By a notification issued under sub-section (2) of Secion 3, the State Government for efficient management and administration, transferred the undertaking (save lands and buildings) to the Hotel Authority constituted under Section 5 of the Act of 1980. Mr. Mukul Rohtagi, learned Additional Section General has submitted that as there was no transfer of the lands and buildings to the Hotel Authority, in view of the specific bar in sub-section (2) of Section 3 of the Act of 1980, ~-any action of the Hotel Authority vis-a-vis the respondents would not be binding on the government. We shall deal with this submission at a subsequent stage. Mr.

Mukul Rohtagi, learned Additional Solicitor General has further submitted that as in terms of sub-section (l) of Section 3 of the Act of 1980, the vesting of undertaking absolutely was complete on the appointed day and on such vesting it be freed and discharged from any trust, obligation, mortgage, change, lien and all other encumbrances affecting it, the tenancy between the respondents and the erstwhile company came to an end. It was further . l submitted that the word 'contract' occurring in sub-section (2) includes tenancy right and by virtue of the said sub-section (2), the tenancy between the respondents with the erstwhile . company came to and end. According to the learned Additional Solicitor General as the tenancy had come to an end, the respondents were in default of there legal liability to hand over the possession of premises in question as per sub-section ('. ].

) of Section 4 of the Act of 1980 so the State Government by invoking the provision of sub-section (8) of the said Section could take such steps as it considered necessary for securing possession and such steps would include eviction by force. It is not disputed that there was a relationship of landlord and tenants STATE v. VISHUNARAYAN AND ASSOC. (P) LTD. [PHUKAN, J. ] 567 . , ·between the erstwhile company and the respondents. The rights and obligation of the landlord and tenant would be governed either by the Transfer of Property Act or by rent law in force and the tenancy of the demised premises could be terminated by taking action under the provisions of either of these two Acts and possession thereof could be recovered in accordance with law.

Though under sub-section (I) of Section 4 of the Act of 1980, the undertaking vested in the State Government free from any trust, obligation, mortgage, change, lien and all other encumbrances, we are unable to agree with the learned Additional Solicitor General that under the said sub-section (1) the relationship of landlord and tenant in the case in hand was put to an end inasmuch as the tenancy could not be treated as trust, obligation, mortgage "" and change, etc, as stated in the said sub-section. In regard to sub-section (2) which provides that any 'contract' in relation to the undertaking shall be deemed to have terminated on the appointed day, on the same analogy, we hold that by this deeming provision does not relate to the relationship of landlord and tenant which could not be said to have come to an end. Consequently, we find no force in the submission of Mr.

Mukul Rohtagi and we hold that even after taking over the undertaking by virtue of the Act of 1980, the relationship of the landlord and the tenant continued and in place of the erstwhile company, the State Government stepped into the shoes of ~ landlord. The Management of the hotel was handed over to the Hotel Authority. The said Authority also accepted rents from the respondents and on December 12, 1994 on a direction by the State Government, the said Authority issued. a circular to the respondents asking them to establish their rights, if any. As mentioned earlier, Mr. Mukul Rohtagi has submitted that as there was no transfer of lands and buildings to the Hotel Authority, the acceptance of rent . "' by the said Authority would not bind the Government. We are unable to accept the coritention as in our opinion the Authority acted on behalf of the government both while accepting rent and also issuing notices to the respondents.

The premises in question are located within the hotel premises ~ and on handing over the Management to the Authority, it acted on behalf of the Government. Let us examine the scope and ambit of sub-section (7) and (8) of " - Section 4 of the Act of 1980 assuming that the tenancy came to an end as urged by Mr. Mukul Rohtagi. Under sub-section (7) any person in possession or custody or control of the whole or any part of the undertaking of the company before the appointed day, shall deliver such possession to the State Government or any person as may be specified by the State Government and in view of this statutory obligation, the respondents were bound under the law to hand over the possession and on failure to do so, the State Government could take steps for securing possession by use of force. Under sub-section (8) of Section 4 ofthe Act of 1980, such steps as may be considered necessary, may be taken for securing possession.

In our considered view such steps cannot and would not include use of force. As laid down by this court in ,_' ~ Bishan Das and Ors. , (supra) and Maharaja Dharamander Prasad Singh and Ors. , (supra) possession can be resumed by the State Government only in a manner known to or recognised by law and it cannot resume possession otherwise than in due course of law. In view of the ratio laid down in the aforementioned case, such legal steps would mean action by the State Government under any relevant law for obtaining possession and not by using police power. We make it clear that we are not expressing any opinion whether such steps may include action under the Act of 1976 or any other law in force in the State of West Bengal. We are of the opinion that the action of the appellants by removing the respondents from the premises in question with the help of police is destructive of the basic principle of rule of law. Mr.

Mu~ul Rohtagi has further tried to defend the action ofthe appellants on the ground of public interest. We may quote below long title of the Act of 1980 which runs as follows :- · "Whereas it is expedient to provide for the acquisition of the undertaking of the Great Eastern Hotel Limited for the purpose of ensuring better facilities for boarding and lodging to the members of the public and for matters connected therewith. Or incidental thereto. " By the long title the legislature made it clear that the Great Eastern Hotel was acquired by the Act of 1980 for purpose of ensuring better facilities for boarding and lodging to the members ofthe public and for matter connected therewith. As held by the High Court the hotel, which is a star hotel is meant for use by the affluent section of the society and not for general public. The term 'members of the public' would mean occupants of the hotel, who can use he hotel on payment and not general public.

Therefore, this is purely commercial venture and there was no element of public purpose or public interest. Therefore, the contention of Mr. Rohtagi is rejected. In the absence of specific statutory provision can a person, on the ground of public interest, be evicted by force by the State or its executive officers without following due course of law? _ In view of the ratio laid down STATEv. VISHUNARAYAN AND ASSOC. (P) LTD. [PHUKAN,J. ] 569 in Bishan Das and Ors. , (supra) and Maharaja Dharamander Prasad Singh and Ors. , (supra), we hold that such an action of eviction by force cannot be justified in Jaw and for taking possession, action has to be taken in accordance with the law. A stand has been taken by Mr. Rohtagi that powers given to the government and its officials by sub-section (8) of Section 4 of the Act of 1980 is akin to Section 47 of the Land Acquisition Act of 1894.

Under Section 16, collector can take possession after the award is made and under Section 17, possession can be taken after notice under sub-section (I) of Section 9 of the Act of 1980 is issued. For taking the possession of the land from the landowner, in our view Section 47 cannot be invoked. As on June 28, 1997, the representative of the government gave oral notice to the respondents to deliver possession, Mr. Mukul Rohtagi has contended that the respondents had sufficient notice. We are unable to accept the contention inasmuch as direction was given to vacate the premises in question without any opportunity to show cause. Lastly, it was contended by Mr. Mukul Rohtagi that as the respondents were trespassers, the government could evict them by invoking Section 6A of the Act of 1976. The said sub-section runs as follows :- "6A. Eviction of unauthorised occupants and penalty for such occupation.

Where any person, not being a tenant, occupies, or remains in occupation of, any Government premises without the written order of the prescribed authority,- (a) the prescribed authority, or any officer authorised by it in this behalf, may take such steps and use such force as may be necessary to take possession of the premises and may also enter into the premises for the said purpose; and (b) such person shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. " Section 6A can be invoked against any person, who is not a tenant or who remains in occupation of any government premises without written order of the prescribed authority. The respondents were tenants under the erstwhile company and continued to do so as held by us. Therefore, they cannot be evicted by invoking powers conferred on the Authority under Section 6A of the Act of 1976.

However, we are not deciding the controversy as to whether A this Act would apply only to. residential premises, as held by the High Court. For what has been stated above we hold that the action of the State Government cannot be justified in law and accordingly we uphold the impugned judgment of the High Court. In the result appeals are dismissed. Cost on the parties. B S. K. S. Appeals dismissed. · •