Civil Revision Application No. 564 of 2008 · Bombay High Court · 2009

Judgment

3

1. This is a revision preferred by the applicants who are the original defendants in T.E.& R.Suit No.311/326 of 2001 (and who for the purpose of convenience will hereinafter referred to as (cid:28) the Defendants(cid:29) ). The present respondents were the plaintiffs in the said suit (and for the sake of convenience will be hereinafter referred to as (cid:28) the plaintiffs(cid:29) ). The plaintiffs are the trustees of (cid:28) Seth Harichand Rupchand Charities Trust(cid:29) which is entity registered as a public charitable trust under the Bombay Public Trust Act,1950. Based upon the evidence led in the said suit, the suit was decreed by the trial court by judgment and decree dated 5.7.2006. The decree was for eviction of the defendants from the suit property. The said decree came to be challenged by the defendants by filing an appeal being Appeal No.627 of 2006 before the Appellate bench of the Court of Small Causes. That appeal came to be dismissed by a judgment and order 4 dated 14.8.2008 and the Appellate Court was pleased to confirm the decree passed by the trial court. Being aggrieved, the present civil revision application came to be filed by the defendants.

2. The relevant facts of this case are as under. a) That the suit property which was running textile mill situated on the land admeasuring 12118-sq,yards, bearing Plot No.9 in Survey No.73 of Lower Parel Division, N.M. Joshi Marg, Chinchapokli, Mumbai was, prior to 22.7.1907, originally owned by one Shri.Damodardas Tapidas and Shri.Dayabhai Tapidas. b) By an Indenture of Lease dated 11.3.1893, Shri.Damodardas Tapidas and Shri. Dayabhai Tapidas demised the suit land in favour of a company by name (cid:28) Hope Mills Ltd.(cid:29) The demise was for a period of 99 years commencing from 22.10.1891. This lease was to expire by efflux of time on 21.10.1990. This 5 Indenture provided that if within a period of 99 years the said Hope Mills Ltd., their subsidiary, or assignee desired to assign their rights in the demised property, then the said Damodardas Tapidas and Dayabhai Tapidas, their heirs, executors, administrators and assigns would enter into an agreement with such intended assignee or new company, for the residue of the unexpired period for the term of 99 years at the same rent and subject to the same terms and conditions including convenant of renewal. c) Under an registered Indenture dated

22.2.1907 subject to the existing lease, the original owners sold, transferred and conveyed the said property in favour of one Harichand Rupchand

and Smt.Ratanbai. d) The ownership rights in respect of the suit property, after the demise of Shri. Harichand Rupchand, devolved in accordance with his will and it is not in serious dispute that the land is now 6 vested and owned by a public charitable trust by name Seth Harichand Rupchand Charities Trust (hereinafter referred to as the (cid:28) trust(cid:29) . Of which the plaintiffs are the trustees. The land is shown as property belonging to the trust in Schedule II as well as in the register of properties of the said trust. e) In so far as the lease hold rights are concerned, over a period of time, the lease hold rights passed on from Hope Mills Ltd. to Prospect Mills Ltd., the Diamond Spinning and Weaving Co. Pvt. Ltd. and ultimately under a registered Indenture of Lease dated 25.10.1926 to (cid:28) Toyo Poddar Cotton Mills(cid:29) for the residue of the unexpired term of 99 years beginning from

22.10.1891. The record indicates that a mill was constructed on the demised property some time prior to 1920 and the demised under the Indenture of lease dated 26.10.1926 was made not only in respect of the land but also along with the buildings, 7 structures standing thereon and subject to the conditions in the Indenture of Lease dated

11.3.1893. f) On 25.12.1983, the Parliament enacted the Textile Undertakings (Taking Over of Management ) Act, 1983, by which, it took over the management rights in respect of 13 textile undertakings including a (cid:28) Toyo Poddar Mills(cid:29) , the name of which had by then been changed to Poddar Mills. The management of Poddar Mills was vested in the custodian appointed under the Act. g) As mentioned herein before, the lease granted to Toyo Poddar Mills so expired by efflux of time on 22.10.1990 and the lessees thereafter continued as tenants holding over. h) On 2.12.1994, the trust issued an Advocate(cid:25) s notice to the defendant No.1 terminating its tenancy. 8 i) On 8.9.1995, Parliament enacted the Textile Undertaking (Nationalisation) Act 1995. The said Act was enacted for the acquisition and transfer of the textile undertakings and rights in respect of textile undertakings with a view to augumenting the production and distribution of different varieties of cloth and yarn so as to sub- serve the interests of the general public. The Scheme of the Act was that on the appointed day i.e. On 1.4.1994, the right, title and interest of the owners in respect of thirteen textile undertakings were to stand transferred and to vest absolutely in the Central Government. That, immediately after such vesting, the textile undertaking so vested in the Central Govt. were to stand transferred and vested in the National Textile Corporation which was defendant No.1 in the suit. The Act clarified that term (cid:28) Textile Undertaking(cid:29) would be deemed to include all assets, rights, lease holds, powers, authorities and privileges and all property, movable and 9 immovable which were, prior to the appointed day of the ownership and possession, power or control of the textile company in relation to the said undertakings. As compensation for the take over of their undertakings, the owners which were specified in the first Schedule were to be paid an amount specified in the said Schedule. The owners of the undertaking (cid:28) Poddar Mills(cid:29) were shown to be (cid:28) Poddar Mills Ltd.(cid:29) and they were paid a fixed statutory compensation of Rs.7,46,30,000/-. In lieu of making such payment by way of compensation, the Act provided that an amount equal to the valuation of the assets of the textile undertaking transferred and vested in the National Textile Corporation under Section 3(2) would be deemed to be the contribution made by the (cid:28) Central Government(cid:29) to the equity capital of the National Textile Corporation and the the National Textile Corporation was required to issue to the Central Government paid up shares in its equity capital having a face value equal to the amount specified 10 in Column-4 of the first Schedule. The Act further provided that, where any liability assumed by the Central Government under the Act was taken over by the National Textile Corporation under Section 27, the Central Government was required to surrender to that Corporation, shares issued to it, having face value equal to the amount to the extent to which the liability had been so taken over by the National Textile Corporation and there upon the share capital of the National Textile Corporation would to the extent of the face value of the share capital so surrendered stands reduced. The Act defined the term owner in wide terms and include the immediate proprietor, lessee or occupier of the textile undertaking taken over under the said Act. j) On 25.31996, there was a bifurcation of the vesting of the 13-mills between two subsidiaries of the National Textile Corporation i.e. NTC(SM) Ltd. and NTC(MN)Ltd. and Poddar Mills was allocated to NTC (MN) Ltd. 11 k) On 31.3.2000, the Bombay Rent Act, 1947 was repealed by the Maharashtra Rent Control, Act, 1999 and by virtue of Section 3(1), the Act was made inapplicable to various legal entities including (cid:28) Public Sector Undertakings(cid:29) and (cid:28) Public Limited Companies having paid up share capital of Rs.1.00 Croree or more(cid:29) . l) On 26.9.2000, the trust issued a notice terminating the statutory tenancy of the defendant No.1. There is no dispute that this notice was received by the defendant No.1 and though it was contended that it also ought to have been served upon the defendant No.2 which was a subsidiary of the company and in which Poddar Mills had been subsequently vested. m) That, ultimately, since the defendants did not handover the vacant possession on 6.12.2002, the plaintiffs filed suit No. T.E.& R. Suit No. 12 311/326/2001 inter-alia praying for a decree directing the defendant No.1 to hand over the peaceful and vacant possession of the said property and for an order and decree for payment of mesne profits. 3) In the suit, on 25.1.2002, the defendant No.1 filed its written statement contending inter alia that the suit property vested in NTC(NM). In the circumstances, notice was taken out in the suit for impleading NTC (MN) as defendant No.2 and this was allowed by order dated 3.12.2002. NTC (MN) filed a pursis that the written statement filed by the defendant No.1 be treated as its written statement. Ultimately, on the framing of the issues and leading of evidence, the trial court after appreciating the material on record, decreed the plaintiffs(cid:25) suit. The matter was then carried in appeal and as stated aforesaid the Appellate Bench of the Small Causes Court by its order dated

14.8.2008 dismissed the defendants appeal and 13 confirmed the decree dated 5.8.2006. In such circumstances, the present civil revision application came to be filed on 3.12.2008. Same was admitted and the decree of eviction came to be stayed on condition of deposit of compensation. 4) I have heard both the sides and perused the record. 5) On perusal of the civil revision application, it is seen that three grounds were taken in the revision application. The first ground was that the Rent Act was applicable because the lease hold interest in the suit land vested in the defendants, for and on behalf of the Central Government and that the Central Govt. was effectively the lessee of the premises and would therefore, get protection in view of what was contained in second part of Section 3(a) of the Bombay Rent Act. The second ground as raised in the revision application was that the suit must fail as 14 notice U/s.106 of the Transfer of Property Act had not been given to the defendant No.2 in which the suit property vested. The third ground was that the suit was bad for non joinder of the earlier lessee (cid:28) Poddar Mills Pvt. Limited(cid:29) . 6) At the stage of admission, the counsel stated that though it must be understood that he has not given up any ground he would mainly argue the first ground as raised in the revision. His argument is related to the first ground can be formulated as under. a) That, from the statement of object and reasons of the Textile Undertakings (Taking Over of Management) Act,1983 read with the statement of object and reasons for enacting the Textile Undertaking (Nationalization) Act, 1999 it was clear that 1983 Act was enacted because there was mis management of the affairs of the textile undertakings, their financial condition had become 15 wholly unsatisfactory even before the commencement, in January 1982, of the textile strike in Bombay and that after the textile strike their financial condition had further deteriorated. That certain public financial institutions had advanced large sums of money to the companies owning the said undertakings with a view to make the said undertakings viable. That, further investment of very large sums of money was necessary for reorganizing and rehabilitating the said undertakings and thereby to protect the interest of the workmen employed therein and to augment the production and distribution at fair price of different varieties of cloth and yarn so as to sub serve the interest of the general public. The nationalization was subsequently effected in 1995 to ensure the distribution of cloth and yarn to the public at fair price, to protect the interest of the workmen and for reorganizing rehabilitating the undertakings. It was contended that from these submissions the objects and reasons 16 read with the provisions of the Act it was clear that very large amount of public money was paid out to the owners as specified in 1995 Textile Undertakings (Nationalization) Act, 1995. It was contended that these monies were paid by the Central Government. The majority of shares in the National Textile Corporation were thereafter issued to and owned by the Central Government and thus, though the defendant-companies were Government Companies as well as public sector undertakings, yet they were class apart and of a nature akin to a Government Department. b) That, as the defendants were legal entities akin to a Government Department, they fall within the term (cid:24) Government(cid:29) as found in the second part of Section 3(1)(a) of the Maharashtra Rent Control Act. It may be stated here that the other points were not specifically argued but since it was not specifically given up for the purpose of attending completeness, the same will also be dealt with in later part in this judgment. 17 7) The reply of the Counsel on behalf of the plaintiffs can be summarized as under. a) That, it was an admitted position that the defendants were Government Companies as well as Public Sector Undertakings. That, it was also an admitted position that the defendants were public limited Companies with a paid up share capital of over 1.00 Crore. That, once this was taken to be the admitted position then the defendants were taken out of the purview of the Maharashtra Rent Control Act, 1999, in view of the provisions contained in Section 13(1)(b) of the said Act. b) That, the share holding of the company was distinct from the company and even assuming that the Central Government held a majority of the shares if not all shares in the defendants(cid:25) company, the company retained its separate 18 identity. In the circumstances, merely because the majority of shares of the defendants company was held by the Central Government, the company could not be said to be legal entity akin to a Government Department. c) That, the matter was no longer res integra and the issue was dealt with and decided by the Apex Court in the judgment of Smt. Leelabai Gajanan Pansare and ors. Vs. The Oriental Insurance Co. Ltd. and ors. reported in 2008(6) Supreme 89. In this regard, reliance was placed on the observations made by the Apex Court in Para-47 of the said judgment. d) That, the suit could not said to be bad for want of notice for three reasons which were rightly given by the lower court i.e. i) That it was settled law by the Apex Court that filing of the suit for ejection amounted to a notice for termination. ii) That, it was further well settled 19 law that notice U/s.106 of the Transfer of Property Act could be waived by the lessee and in the present case the defendant No.1 it its written statement had not contended that the notice was required to be given to the defendant No.2 and later, in point of time, when the defendant No.2 had appeared, it has chosen not to file a written statement but merely had adopted the written statement of the defendant No.1. It was thus, contended that the defendant No.2 must be deemed to have waived ground of the suit being bad for want of notice under Section 106 of the Transfer of Property Act. iii) That, on a reading of Section 111(a) of the said Act with Section 111(h) of the Transfer of Property Act, it was clear that no notice under Section 106 was required once a tenancy was terminated by efflux of time. 8) I have heard both the sides and perused the record. In my view the revision is required to be dismissed for the following reasons. 20 9) At the outset, for a proper understanding of the contentions, it is necessary to reproduce the Sections 3(1)(a) and 3(1)(b) of the Maharashtra Rent Control Act, 1999 (hereinafter referred to act the (cid:28) Rent Act(cid:29) ). The said sections are in the following terms. (cid:28) 3. Exemption-)1) This Act shall not apply- (a) To any premises belonging to the Government or a local authority or apply as against the Government to any tenancy, licence or other like relationship created by a grant from or a licence given by the Government in respect of premises requisitioned or taken on lease or on licence by the Government, including any premises taken on behalf of the Government on the basis of tenancy or of licence or other like relationship by, or in the name of any officer subordinate to the Government authorised in this behalf; but it shall apply in respect of the premises let, or 21 given on licence, to the Government or a local authority or taken on behalf of the Government on such basis by, or in the name of, such officer; 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 rupees one crore or more(cid:29) .

10. Since on behalf of the applicants the contention was that the aforesaid provisions of Section 3(1)(a) and 3(1)(b) of the Rent Act must be interpreted in the light of the statement and object and other provisions of the Textile Undertaking (Taking over of Management) Act of 1983 and the Textile Undertaking (Nationalization) Act, 1995, at this stage, it would be proper to outline the law relating to the use of Statements 22 and Objects of an enactment as a tool for interpreting the provisions of the said enactment or other enactment. In the case of Kanai Lal Sur Vs.Paramnidhi Sadhukhan reported in 1957 S.C. 907 the question before the Apex Court was whether a welfare legislation should receive a beneficent construction from the courts and should be given a hypothetical construction on the footing that such a construction was more consistent with the alleged object and policy of the Act and in Para-6 of the judgment the Apex Court observed as under. . (cid:28) Mr. N.C.Chatterjee, for the appellant, has contended that the object in enacting the relevant Thika Tenancy Act and Ordinances is absolutely clear. It is a piece of welfare legislation and as such its operative provisions should receive a beneficent construction from the courts. If the scheme of the Act and the object underlying it is to afford full protection to the thika tenants, says Mr.Chatterjee, courts should be slow to reach 23 the conclusion that any class of thika tenants are excluded from the benefit of the said Act. In support of his argument Mr.Chatterjee has naturally relied on the observations made by Barons of the Exchequer in Heydon Case. Indeed, these observations have been so frequently cited with aproval by courts administering provisions of welfare enactments that they have now attained the status of a classic on the subject and their validity cannot be challenged. However, in applying these observations to the provisions of any statute, it must always be borne in mind that the first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself. If the words used are capable of one construction only, then it would not be open to the courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act. The words used in the material provisions of the statute must 24 be interpreted in their plain grammatical meaning and it is only when such words are capable of two constructions that the question of giving effect to the policy or object of the Act can legitimately arise. When the material words are capable of two constructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the courts would prefer to adopt the latter construction. It is only in such cases that it becomes relevant to consider the mischief and defect which the Act purports to remedy and correct(cid:29) . . In the case of Gem Granites Vs, Commissioner of Income Tax T.N. Reported in (2005) 1 S.C.C. 289, the Apex Court considered the relevance of the (cid:28) intention of Parliament(cid:29) and the (cid:28) object of the (cid:28) Statute(cid:29) and observed in Para-15 as under. 25 (cid:28) An argument founded on what is claimed to be the intention of Parliament may have appeal but a court of law has to gather the object of the statue from the language used. What one may believe or think to be the intention of Parliament cannot prevail if the language of the statue does not support that view(cid:29) . . In the case of Rakesh Vij Vs. Dr.Raminder Pal Singh Sethi and others reported in (2005) 8 S.C.C. 504, the question considered by the Apex Court was the relevance of Statement of Objects and Reasons of another enactment while interpreting a different enactment. In this regard in Para Nos. 24 and 25, the Apex Court observed as under. . (cid:28) In our opinion it will not be proper to interpret the provisions of the Chandigarh Extension Act by taking into consideration the Objects and Reasons of another Act and the supposed intention or notions of the law makers. It will be 26 apt to quote here what S.R.Das, J. (as His Lordship then was) said while speaking for a Constitution Bench in Rananjaya Singh Vs. Baijnath Singh (SCR P. 676) . (cid:28) The spirit of the law may well be an elusive and unsafe guide and the supposed spirit can certainly not be given effect to in opposition to the plain language of the sections of the Act and the rules made thereunder. If all that can be said of these statutory provisions is that construed according to the ordinary, grammatical and natural meaning of their language they work injustice by placing the poorer candidates at a disadvantage the appeal must be to Parliament and not to this Court.(cid:29) . This being the position of law, it will not be proper to take into consideration the Statement of Objects and Reasons of the Amendment Act, 1956 for interpreting the provision of the Chandigarh Extension Act(cid:29) . 27

11. The contention of the applicant that the defendants must be held to be akin to a (cid:28) Government Department(cid:29) is raised on the footing that an overwhelming majority of the shares of the defendants were held by the Central Government and the defendants were controlled by the Central Government. Mr. Bharucha appearing on behalf of the respondents states that over 99% of the present shareholding of the defendants is by the Central Government. In this regard, the contention raised on behalf of the plaintiffs-respondents was that the company was a distinct entity other and different than its share holders. I must therefore proceed to deal with the law relating to the rival contentions raised.

12. In the case of S.L. Agarwal Vs. The General Manager, Hindustan Steel Ltd. reported in 1970(1) S.C.C. 177, it had been contended by the appellant before the Apex Court that Hindustan 28 Steel Ltd. which had terminated his services had done so in violation of Article 311 of the Constitution of India. It was contended that Hindustan Steel Ltd. was akin to a Department of Government because its share were held by the Union Government and its employees must be held to be holding a post of Government. Negativing this contention in Para-10 of this Judgment, after referring to several judgments cited , the Apex Court observed as under. . (cid:28) In our Judgment these differences rather accentuate than diminish the applicability of the principle laid down in the English case to our case. The existence of shareholders, of capital raised by the issuance of shares, the lack of connection between the finances of the corporation and the consolidated fund of the Union rather make out a greater independent existence than that of the corporation in the English case. We must, therefore, hold that the corporation which is 29 Hindustan Steel Limited in this case is not a department of the Government nor are the servants of it holding posts under the State. It has its independent existence and by law relating to Corporations it is distinct even from its members(cid:29) .

13. In the case of State of Punjab and others Vs.Raja Ram and others reported in (1981) 2 S.C.C. 66, the question before the Apex Court was as to whether a Corporation incorporated under the Companies Act which was a agency or instrumentality of the Central Government would be said to be a (cid:28) Government Department(cid:29) . In Para-10 of the said judgment, the Apex Court observed as under. . (cid:28) Even the conclusion, however, that the Corporation is an agency or instrumentality of the Central Government does not lead to the further inference that the Corporation is a Government department. The reason is that the F.C. Act has given the Corporation an individuality apart from 30 that of the Government. In any case the Corporation cannot be divested of its character as a (cid:24) company(cid:25) within the meaning of the definition in clause (e) of Section 3 of the L. A. Act, for it completely fulfils the requirements of that clause, as held by us above(cid:29) .

14. In the case of Western Coalfields Ltd. Vs. Special Area Development Authority, Korba and another reported in (1982) 1 S.C.C. 125, the question before the Apex Court was whether a company , the entire share capital of which has been subscribed by the Government of India could be said to be company owned by the Government of India. The question was answered by the Apex Court in Para-21,22 and 23 in the following words. . (cid:28) 21) The short answer to this contention is that even though the entire share capital of the appellant Company has been subscribed by the Government of India, it cannot be 31 predicated that the companies themselves are owned by the Government of India. The companies, which are incorporated under the Companies Act, have a corporate personality of their own, distinct from that of the Government of India. The lands and buildings are vested in and owned by the company. The Government of India only owns the share capital. In Rustom Cavasjee Cooper Vs. Union of India (the Banks Nationalisation case, it was held : )SCC P-273, Para-11) . A Company registered under the Companies Act is a legal person, separate and distinct from its individual members. Property of the company is not the property of the shareholders. A shareholder has merely an interest in the Company arising under its Articles of Association, measured by a sum of money for the purpose of liability, and by a share in the distributed profit. .

22. In Heavy Engineering Mazdoor Union V. 32 State of Bihar, the Heavy Engineering Corporation Limited was incorporated under the Companies Act and its entire share capital was contributed by the Central Government. It was therefore a Government Company under Section 617 of the Companies Act. On the question as to whether the Corporation carried on an industry under the authority of the Central Government within the meaning of Section 2(a) of the Industrial Disputes Act, 1947, it was held by this court that an incorporated company has a separate existence and the law recognises it as a juristic person, separate and distinct from its members. The mere fact that the entire share capital of the respondent company was contributed by the Central Government and the fact that all its shares were held by the President and certain officers of the Central Government did not make any difference to that position. .

23. The decision of this court in A.P.S.R.T.C. Vs. I.T.O. Puts the matter beyond all 33 doubt, In that case, the Andhara Pradesh Road Transport Corporation claimed exemption from taxation under Article 289 of the Constitution by which, the property and income of a State is exempt from union taxation. This court, while rejecting the Corporation(cid:25) s claim, held that though it was wholly controlled by the State Government it has a separate entity and its income was not the income of the State Government. Gajendragadkar, C.J., while speaking for the Court, referred to the judgment of Lord Denning in Tamlin Vs. Hannaford in which the learned Judge observed: . In the eye of the law, the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the Kind. It is, of course, a public authority and its 34 purposes, no doubt, are public purposes, but it is not a government department nor do its powers fall within the province of government. In Ponnington(cid:25) s Company Law, 4th edn. PP. 50-51, it is stated that there are only two decided cases where the court has disregarded the separate legal entity of a company and that was done because the company was formed or used to facilitate the evasion of legal obligations. The learned Author, after referring to English and American decisions, has summed up the position in the words of an American Judge, Sanborn, J. to the effect that as a general rule, a corporation will be looked upon as a legal entity and an exception can be made (cid:28) when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime(cid:29) , in which case, (cid:28) the law will regard the corporation as an association of persons(cid:29) . In cases such as those before us, there is no scope for applying the doctrine of lifting the veil in 35 order to have regard to the realities of the situation. The appellant Companies were incorporated under the Companies Act for a lawful purpose, Their property is their own and it vest in them. Under Section 5(1) of the Coal Mines (Nationalisation) Act, 26 of 1973, which applied in the instant case, the right, title and interest of a nationalised coal mine vest, by direction of the Central Government, in the Government Company. If the lands and building on which respondent -1 has imposed the property tax cannot be regarded as the property of the Central Government for several other purposes like attachment and sale, there is no reason why, for taxing purposes, the property can be treated as belonging to that Government as distinct from the company which has a juristic personality(cid:29) .

15. In the case of Steel Authority of India Ltd. Vs. Shri. Ambika Mills Ltd. and others reported in (1988) 1 S.C.C. 465, the contention on 36 behalf of the appellants before the court was that the Steel Authority of India Ltd. was the department of the Union of India. Relying upon Agarwal(cid:25) s case (supra) and the Western Coalfields Ltd. in Para Nos. 16,17 and 18 the Apex Court negatived the contentions in the following terms. . (cid:28) 16. Coming to the merits of the case, we accept the contention of the learned counsel for the appellant that the High Court went wrong in holding that SAIL was a department of the Union of India. In Agarwal case a Constitution Bench of this Court while considering a similar question held as follows :)SCC P,181 Para-10) . (cid:28) We must, therefore, hold that the Corporation which is Hindustan Steel Limited in this case is not a department of the Government nor are the servants of it holding posts under the State. It has its independent existence and by law relating to corporations, it is distinct even from its members.(cid:29) 37 .

17. In Western Coalfields Case this Court held as follows: (SCC P-136, Para-21) . (cid:28) It is contended by the Attorney General that since the appellant Companies are wholly owned by the Government of India, the lands and buildings owned by the Companies cannot be subjected to property tax. The short answer to this contention is that even though the entire share capital of the appellant Companies has been subscribed by the Government of India, it cannot be predicated that the Companies themselves are owned by the Government of India. The Companies which are incorporated under the Companies Act have a corporate personality of their own, distinct from that of the Government of India. The lands and buildings are vested in and owned by the Companies, the Government of India only owns the share capital. 38 .

18. In view of the above decisions of this Court, we have no hesitation to hold that the High Court erred in thinking that SAIL was a department of the Union of India and most the reasons given in the judgment are based on this wrong premise(cid:29) .

16. In the case of Electronics Corporation of India Ltd. and others Vs. Secretary, Revenue Department, Govt. of Andhara Pradesh and others reported in (1999) 4 S.C.C. 458, one of the questions before the Apex Court was whether the Electronics Corporation of India, which was company registered under the Companies Act and the licensee of the Union of India to the Department of Automic Energy, possessed a distinct legal entity, other than legal entity of the Central Government which held its share. In Para-15 of the judgment the question was answered by the Apex Court in the following words. 39 . (cid:28) 15)It is clear that a distinction must be drawn between a company and its shareholder, even though that shareholder may be only one and the Central or a State Government. In the eye of the law, a company registered under the Companies Act is a distinct legal entity other than the legal entity or entities that hold its shares(cid:29) .

17. From the ratio of the aforesaid judgments, it is clear that the status of a company incorporated under the Indian Companies Act remains separate and distinct from its share holders and merely because the Central Government holds an overwhelming majority in the share holding of the company, the company itself cannot be said to be akin to a Government Department. The contention of the applicant that they must be treated to be akin to a Government within the meaning of Section -3(1)(a) of the Bombay Rent Act is however, more directly dealt with by the Apex Court in the case of Smt. Leelabai Gajanan Pansare and ors. Vs. The 40 Oriental Insurance Co. Ltd. and ors. Reported in 2008(6) Supreme 89. In that case, a contention was raised by counsel appearing for the Government Company that under the second part of Section-3(1) (a) protection of the Rent Act was given to the premises let to the Government or the local authorities and to premises taken on behalf of the Government or in the name of the Designated Officer. It was contended that the Government Company gets protection from eviction under the second part of Section 3(1)(a) and since a Government Company is not one of the categories mentioned in Section 3(1)(b) of the Rent Act such companies which were tenants would get protection under second part of Section 3(1)(a). The Apex Court came to the conclusion that Government Companies fell within the ambit of the term (cid:28) Public Sector Undertakings(cid:29) which was term of wider amplitude and included statutory Public Sector Companies, Government Companies and companies in which the public were substantially interested. 41 However, in Para-47 of the judgment, the contention that such companies must be equated to the term Government within the meaning of Section 3(1)(a) was expressly negatived by the Apex Court in the following words. . (cid:28) 47)Public Sector Undertakings including Government Companies independent companies/corporations. They cannot be equated to the (cid:28) Government(cid:29) in Section 3(1)(a)(cid:29) .

18. On behalf of the applicants, counsel placed reliance on the judgment of the Apex Court in the case of M/s. Doypack Systems Pvt. Ltd. Vs. Union of India and ors. Reported in (1988) 2 S.C.C.

299. In the aforesaid case, a textile undertaking by name Swadeshi Cotton Mills Co. Ltd. vested in the Central Government under Section-3 and 4 of the Swadeshi Cotton Mills Co. Ltd. (Acquisition and Transfer of Undertakings )Act, 1986. That company had purchased certain shares of two other companies 42 by name Swadeshi Polytex Ltd. and Swadeshi Mining and Manufacturing Co. Ltd. The question was as to whether these shares could be said to have been acquired under the 1986 Act. Holding in the affirmative, the Apex Court held that these shares vested in the Central Government but further went on to hold that they were thereafter vested in the National Textile Corporation and it had a right over the said shares. Counsel for the applicant placed reliance on certain observations made in Para-68 of the judgment wherein the Apex Court held that it has been correctly high lighted that a large amount paid by way of compensation had come from the public exchequer and had invoked the principles of Article 39(b) and (c) of the Constitution. But in my view these observations do not carry the case of the applicant any further because the ultimate finding of the Apex Court in that case was that the shares did vest in the Central Government and ultimately vested in the National Textile Corporation. 43

19. The second case relied upon by the applicant is between Anil Kumar Neotia and others Vs. Union of India and others reported in (1988) 2 S.C.C. 587. This judgment is a sequiter to the judgment in Doypack Ststems Pvt. Ltd. (supra) wherein certain shareholders of respondent No.4 viz. Swadeshi Cotton Mills Co. Ltd. who were not parties to the earlier case of Doypack, aggrieved by the judgment in Doypack Systems Pvt. Ltd., filed a petition challenging the constitutional validity of the Swadeshi Cotton Mills Ltd. (Acquisition and Transfer of Undertakings) Act, 1986. The said petition was ultimately dismissed and it was held that the decision of the case in Doypack was binding on the petitioner. Since, I have not found the judgment in Doypack (supra) does not support the contention raised by the present applicant, no further comments on the second case cited are necessary as it merely affirms the correctness of the earlier judgment. 44

20. The Advocate for the applicant then relied upon the judgment of the Apex Court in the case of Centre for Public Interest Litigation Vs. Union of India and another reported in (2003) 7 S.C.C. 532. In that case the legality of the decision of the Central Government to sell its majority shares in HPCL and BPCL, which were Government Companies, without amending or repealing the ESSO (Acquisition of Undertakings in India ) Act, 1974 and the Burmah Shell (Acquisition of Undertaking in India) Act, 1976 was called in question. It was contended that under the two Acts of 1974 and 1976 under which undertakings of Esso and Burmah Shell were acquired, there was no express or implied limitation of the Government to divest the shares held by it. The Apex Court analysed the scheme of the Esso Undertaking of India Act 1974 and held that the purpose of the acquisition by the Central Government was to ensure that the ownership and control of the petroleum products distributed and 45 marketed in India by the said company were vested in the State and thereby so distributed as best to sub-serve the common good. Ultimately the finding of the Apex Court were that the method adopted by the Government to exercise its power to disinvest in HPCL and BPCL without repealing or amending the law was not proper. I fail to understand as to how the ratio of this judgment would render the applicant akin to a Government Department within the meaning of Section 3(1)(a) of the Bombay Rent Act.

21. In my view, the first contention raised by the applicant cannot be said to be res-integra in view of the observations of the Apex Court in the case of Leelabai Pansare and others (supra) which are directly on the point and hence, the first submission raised on behalf of the applicant is rejected.

22. As regards the second and third submissions 46 the counsel fairly conceded that they were covered by the judgments of the Apex Court against them. He however, stated that he would like to re-agitate these issues in the Apex Court and therefore, they were formally incorporated in the memo of the revision as well as in the written submissions. In view of this statement made by the counsel, it is not necessary for me to go into the second and third contentions which were not argued before me though formally raised. It is noticed that, in the written submissions which were submitted at the end of the submissions, there is yet another contention raised that the lease agreement must be deemed to be renewed by acquiesence on the part of the landlord who continued to receive and accept rent. It is fairly conceded that this issue was not raised in the lower courts and is not even raised in the memo of revision. It is fairly submitted by the counsel appearing of behalf of the applicant that this issue is covered by binding judgments of the Apex Court decided against the applicant. 47 In view of this statement, this aspect of the matter is also not required to be dealt with. The net result, civil revision application must fail and therefore, rule is discharged with no order as to costs.

23. At this stage, the counsel on behalf of the applicant states that pending disposal of this revision, this court had granted a stay of the decree subject to deposit of an amount of Rs.4.00 lacs per month. He prays that since he would like to approach the higher court, stay as operating may be continued for further period of 12 weeks. It is contended that normally such longer time would not have been asked for but there is a running mill in the premises in question and there are about 600 workmen working in the premises. This prayer for extension of conditional relief is opposed by the respondents on the ground that the period sought is too long. Taking into consideration that there is running business on the premises and that there is 48 no question of security involved as the shares of the NTC are almost entirely held by the Central Government, I continue the interim relief as operating for a further period of 12 weeks subject to the same terms and conditions. ( R.S.MOHITE, J.)