UNION OF INDIA versus NARESHKUMAR BADRIKUMAR JAGAD & ORS. on 28 November 2018

[2018] 14 S.C.R. 239

UNION OF INDIA

v.

NARESHKUMAR BADRIKUMAR JAGAD & ORS.

(Review Petition (C) Diary No. 40966 of 2013)

IN

Civil Appeal No. 7448 of 2011

NOVEMBER 28, 2018

[KURIAN JOSEPH AND A. M. KHANWILKAR, JJ.]

Textile Undertakings (Nationalisation) Laws (Amendment andValidation) Act, 2014 – ss.5,6,7,8 – Effect of – Original suit landowners executed lease deed for 99 years which was to expire on21.10.1990 – A structure was erected to house a cotton mill on theproperty – Thereafter, property was vested in a public charitabletrust and the respondents are the present trustees of the said Trust –Suit land was leased to ‘P’ Mills for the residue of the unexpiredperiod of lease – Textile Undertakings Act, 1983 was enacted totake over the management of textile undertakings including ‘P’ Mills,pending their nationalization – Lease granted in favour of ‘P’ Millsexpired by efflux of time, however, it continued to occupy the suitproperty as a protected or statutory tenant in terms of Bombay Rents,Hotels and Lodging House Rates Control Act, 1947 – Trust issued alegal notice to appellant-National Textile Corporation Ltd. (NTC)terminating its tenancy qua the suit property – Textile Undertaking(Nationalisation) Act, 1995 came into force on 01.04.1994 – The1947 Act stood repealed by the Maharashtra Rent Control Act, 1999– Trust filed a suit under the Transfer of Property Act, 1882 onlyagainst the appellant-NTC, which was decreed in favour of Trustand appellant-NTC was directed to hand over the vacant andpeaceful possession of the suit premises – Appellate Court affirmedthe judgment and decree of the trial Court – Appeal was dismissedby the Supreme Court – Review Petition by Union of India – Duringthe pendency of review petition, the Validation Act 2014 came intoeffect – Review Petitioner contended that subsequent legislationhas completely altered the status of the parties retrospectively quathe suit property with effect from 01.04.1994 by legal fiction, as aresult of which the cause of action against NTC as referred to in the

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240 SUPREME COURT REPORTS [2018] 14 S.C.R.

Asubject suit had become non-existent – Held: S.3 of the 1995 Actstands amended by virtue of the 2014 Act – Now, as per the amendeds.3 of the 1995 Act w.e.f. 01.04.1994, by operation of law thestatutory or protected tenancy rights of ‘P’ Mills in respect of thesuit property stood transferred to and vested in the CentralGovernment and it continues to so vest in it and that the decreeBagainst NTC including the undertaking given by NTC has beenrendered unenforceable by a legal fiction – As a result, the Trustbeing the landlord is obliged to take recourse to remedy against theCentral Government (Union of India) to get back possession of thesuit property, as per the dispensation specified in the concernedCRent Legislation – Textile Undertakings Act, 1983 – Bombay Rents,Hotels and Lodging House Rates Control Act, 1947 – TextileUndertaking (Nationalisation) Act, 1995 – s.3 – Maharashtra RentControl Act, 1999 – Transfer of Property Act, 1882 – s.111.

Review – Remedy of – Third party to the proceeding – Held:Ds.114 and Or.XLVII of CPC states that any person considering himselfaggrieved can file a review petition – Further, neither Or.XLVII ofCPC nor Or.XLVII of the Supreme Court Rules limits the remedy ofreview only to the parties to the judgment under review – Therefore,even a third party to the proceedings, if he considers himself anaggrieved person, may take recourse to the remedy of review petitionE– Code of Civil Procedure, 1908 – s.114 and Or.XLVII – SupremeCourt Rules – Or.XLVII.

National Textile Corporation Ltd. v. NareshkumarBadrikumar Jagad & Ors. (2011) 12 SCC 695 : [2012]14 SCR 472 ; Raja Shatrunji v. Mohammad Azmal AzimFKhan and Ors. (1971) 2 SCC 200 : [1971] Suppl. SCR433 ; S. Bagirathi Ammal v. Palani Roman CatholicMission (2009) 10 SCC 464 : [2007] 12 SCR 1050Union of India v. Sandur Manganese and Iron OresLimited and Ors. (2013) 8 SCC 337 : [2013] 2 SCRG1045 ; Champsey Bhara and Company v. Jivraj BallooSpinning and Weaving Company Limited (1923) Vol. L(IA) 324 ; B. Arvind Kumar v. Govt. of India and Others(2007) 5 SCC 745 ; Shree Chamundi Mopeds Ltd. v.Church of South India Trust Association CSI CinodSecretariat, Madras (1992) 3 SCC 1 : [1992] 2 SCRH999 ; Bhoolchand and Another v. Kay Pee Cee Investments and Another (1991) 1 SCC 343 : [1990] 2Suppl. SCR 251 ; State of Tamil Nadu v. State of Keralaand Another (2014) 12 SCC 696 : [2014] 12 SCR 875; Madan Mohan Pathak and Ors. v. Union of India(UOI) and Ors. (1978) 2 SCC 50 : [1978] 3 SCR 334 ;Shri Prithvi Cotton Mills Ltd. and Ors. v. BroachBorough Municipality and Ors. (1969) 2 SCC 283 :[1970] 1 SCR 388 ; T. Sudhakar Prasad v. Govt. ofA.P. and Ors.(Paragraph Nos. 9 to 22.) (2001) 1 SCC516 : [2000] 5 Suppl. SCR 610 ; Firm Ganpat RamRajkumar v. Kalu Ram and Ors. (Paragraph Nos. 5 and6) (1989) Supp. (2) SCC 418 : [1989] Suppl. SCR 223 ;Noorali Babul Thanewala v. K.M.M. Shetty and Ors.(1990) 1 SCC 259 : [1989] 2 Suppl. SCR 561 ; Officeof The Chief Post Master General and Ors.v. LivingMedia India Ltd. and Ors.(2012) 3 SCC 563 : [2012] 1SCR1045 – referred to.

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Case Law Reference

[2012] 14 SCR 472[1971] Suppl. SCR 433[2007] 12 SCR 1050[2013] 2 SCR1045(1923) Vol. L (IA) 324(2007) 5 SCC 745[1992] 2 SCR 999[1990] 2 Suppl. SCR 251[2014] 12 SCR 875[1978] 3 SCR 334[1970] 1 SCR 388[2000] 5 Suppl. SCR 610[1989] 1Suppl. SCR 2231989] 2 Suppl. SCR 561[2012] 1 SCR1045

ACIVIL APPELLATE JURISDICTION : Review Petition (C)Diary No. 40966 of 2013.

From the Judgment and Order dated 05.09.2011 of the SupremeCourt of India in Civil Appeal No. 7448 of 2011.

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M.A. No.2714 of 2018 in Civil Appeal No.7448 of 2011 and Contempt Petition (C) No.550 of 2014 in Civil Appeal No.7448 of 2011.

Ms. Pinky Anand, ASG, Shekhar Naphade, Maninder Singh, MukulRohatgi, Ranjit Kumar, Shyam Divan, Sr. Advs., Sanjay Ghose, KaustubhCAnshuraj, Abhikalp Pratap Singh, Prateek Rusia, Ms. Ashita Chawla,Sanjay Ghose, Kaustubh Anshuraj, Mahesh Agarwal, Ms. Heena Chheda,Gaurav Mehta, Rishabh Vora, Abhinav Agarwal, Anshuman Srivastava,E. C. Agrawala, Ms. B. Sunita Rao, Anurag, Shreekant N. Terdal,A. K. Kaul, Raj Bahadur, Ms. Anil Katiyar, Ms. Arunima Dwivedi,Hemant Arya, Chakitan Vikram Shekhar Papta, Ms. Sushma Verma,DAdvs. for the appearing parties.

The following Order of the Court was passed:

O R D E R

The following Order of the Court was passed:

O R D E R

1. Union of India has filed this review petition seeking review ofEthe judgment and order passed by this Court on September 5, 2011 inCivil Appeal No.7448 of 2011: National Textile Corporation Ltd. VersusNareshkumar Badrikumar Jagad & Ors.[1] At the same time, theappellant National Textile Corporation Ltd. (for short “NTC”) has filedan application for directions including for extension of time. Whereas,respondent Nos.1 to 6 in the review petition (for short “respondents”)Fwho were respondent Nos.1 to 6 in the aforementioned civil appeal,have filed contempt petition for initiating appropriate action against theappellant NTC. During the pendency of the review petition, an Ordinancewas promulgated titled as the Textile Undertakings (Nationalisation) Laws(Amendment and Validation) Ordinance, 2014 which later on becameGThe Textile Undertakings (Nationalisation) Laws (Amendment andValidation) Act, 2014 (for short “Validation Act 2014”), as a result ofwhich the Union of India has filed an application for urging additionalgrounds in the Review Petition. As the issues to be decided in theseproceedings are overlapping, we propose to deal with the same by thiscommon order.H1(2011) 12 SCC 695

2. Briefly stated, the property in question admeasuring 12118square yards of land, bearing Plot No.9 in Survey No.73 of Lower ParelDivision, N.M. Joshi Marg, Chinchpokli, Mumbai, originally belonged toone Damodar Tapidas and Dayabhai Tapidas. They executed a leasedeed on 11[th] March, 1893 in favour of one Hope Mills Ltd. The demisewas for 99 years to expire on 21[st] October, 1990. A structure was erectedto house a cotton mill on the property. The original suit land owners soldand conveyed the said land to one Harichand Rupchand by a sale deeddated 22[nd] February, 1907. As per the Will of Harichand Rupchand, theproperty vested in a public charitable trust by the name of Seth HarichandRupchand Charitable Trust (for short “the Trust”). The respondentsare the present trustees of the said Trust. The leasehold rights thenstood transferred from Hope Mills Ltd. to Prospect Mills Ltd. andthereafter to Diamond Spinning and Weaving Co. Pvt. Ltd. By anindenture of Lease dated 25[th] October, 1926, the property, namely, thesaid land and structures thereon, were demised to Toyo Podar CottonMills Ltd. (whose name was subsequently changed to Podar Mills Ltd.)for the residue of the unexpired period of lease of 99 years commencingfrom 22[nd] October, 1891, subject to the same terms and conditions as inthe original lease deed dated 11[th] March, 1893.

3. The Textile Undertakings (Taking over of Management) Act,1983 (for short “1983 Act”) was enacted by Parliament in order to takeover the management of 13 textile undertakings, including Podar Mills,pending their nationalisation. The lease granted in favour of Podar MillsLtd. expired by efflux of time on 21[st] October, 1990. However, itcontinued to occupy the suit property as a protected or statutory tenantin terms of the Bombay Rents, Hotel and Lodging House Rates ControlAct, 1947 (for short “1947 Act”). The Trust issued a legal notice dated2[nd] December, 1994 to the NTC terminating its tenancy qua the suitproperty. The Parliament enacted the Textile Undertakings(Nationalisation) Act, 1995 (for short “1995 Act”), which was deemedto have come into force on 1[st] April, 1994.

4. On 18[th] July, 1995, the Trust (through respondents/trustees)filed a suit for eviction being TER Suit 680/1568/1995, against PodarMills Ltd. (defendant No.1), NTC (defendant No.2) and Union of India(defendant No.3) under the provisions of the 1947 Act. The reliefsclaimed in the said suit read thus:

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A“The Plaintiffs, therefore, pray that :-

(a) the Defendants No.2&3 be ordered and decree to quit, vacateand hand over quiet, vacant and peaceful possession of the suitPlot No.9, Cadastral Survey No.73 of Lower Parel Divisionsituated at Delisle Road, (Now known as N.M. Joshi Marg),Bombay-400011 to the Plaintiffs; B

(b) that the Defendants No.2 be ordered and decreed to pay themesne profit to the Plaintiffs from the date of the suit till the Decreeat the rate of Rs.128.75 per month, and after passing of the Decreea direction be given to make inquiry in the matter and such otherrate 170, at the rate prevailing in the market be fixed as the mesneprofit payable till possession is handed over to the plaintiffs; C

(c) that pending the hearing and final disposal of the suit theDefendants No.2 their servants, agents and representatives berestrained by an order and injunction of this Hon’ble Court fromcarrying out any further work of additions, alterations and/orerections of a permanent nature or committing acts of waste intoor upon the suit lands viz., Plot No.9, Cadastral Survey No.73 ofLower Parel Division situated at Delisle Road, (Now known asN.M. Joshi Marg), Bombay-400011; D

E(d) that pending the hearing and final disposal of the suit that thedefendants No.2 their servants, agents and representatives berestrained by an order and a permanent injunction of this Hon’bleCourt from sub-letting and/or transferring their interest in the suitpremises or from creating a leave and licence in respect thereofor from inducting a third party therein or from in any other mannerFparting with the possession of the suit lands; E

(e) that interim and ad-interim injunctions be granted in terms ofprayer (c) and (d) above during the pendency and final disposalof this suit; (f) that a fit and proper person be appointed as a Commissioner tovisit and inspect the suit premises being Plot No.9, CadastralSurvey No.73 of Lower Parel Division situated at Delisle Road,(Now known as N.M. Joshi Marg), Bombay-400011 and to makeand give his report regarding the present position and condition ofthe suit lands and structures standing thereon; G

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(g) that the status quo in respect of the suit premises be maintained; (h) for costs of this suit; for such other and further order as may be just and proper andnecessary;”

This suit was dismissed for non-prosecution on 26[th] August, 2002.

5. The Trust (through respondents/trustees) filed another suit on6[th] May, 1997, being RAD Suit No.955/97, against the same parties(Union of India, Ministry of Textile (defendant No.1), NTC (defendantNo.2) and Podar Mills Ltd. (defendant No.3) for the following reliefs:

“THE PLAINTIFFS THEREFORE PRAY:-

A. It be declared that upon expiry of the Lease period by offluxof time on 22.10.1990 the Defendants No.3 were holding overpremises and/or by operation of law become the statutory tenantof the Plaintiffs in respect of suit property being Plot No.9,Cadastral Survey No.73 Land admeasuring about 12,118 Sq. yardswith all buildings standing thereon, situated at Delisle Road, nowknown as N.M. Joshi Marg, Bombay-400011.

B. that it be declared that on the appointed day i.e. 1[st] April, 1995.The Defendants No.1, had acquired tenancy rights of theDefendants No.3, and what has vested in Defendants No.2 is thestatutory tenancy of Defendants No.3, and as such DefendantNo.2, is the statutory tenant of the Plaintiffs, protected underBombay Rent Act, in respect of the suit premises being Plot No.9,Cadastral Survey No.73, land admeasuring about 12,118 Sq. yardswith all buildings standing thereon, situated at Delisle Road, nowknown as N.M. Joshi Marg, Bombay-400011.

C. that it be also declared that Defendants No.3, as the statutorytenants of the Plaintiffs in respect of suit premises being PlotNo.9, Cadastral Survey No.73, land admeasuring about 12,118Sq. yards with all buildings standing thereon, situated at DelisleRoad, now known as N.M. Joshi Marg, Bombay-400011, had noright to claim and/or receive any compensation from theDefendants No.1 and/or Defendant No.2, for the acquirementand/or vesting of their statutory tenancy right, in the DefendantsNo.1.

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D. that the Defendants No.1 and 2 be directed to furnish thedetail bifurcation of the payment mentioned in Schedule I itemNo.4 of the said Ordinance 6 of 1995.

E. that the Defendants No.1 be also restrained from making anypayment to the extent of Defendants No.3, allege lease right, title,Band interest in the suit property being Plot No.9, Cadastral SurveyNo.73, land admeasuring about 12,118 sq. yards with all buildingsstanding thereon, situated at Delisle Road, now known as N.M.Joshi Marg, Bombay-400011, fixed by the Defendants No.1, and/or No.2, as the Defendants No.1 had only acquired statutorytenancy rights thereon.

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F. that it be declared that the Defendants No.1 and 2 as thestatutory tenant of the Plaintiffs have no right to deal with transfer,mortgage, sell and/or otherwise disposed off and/or induct anythird party in the suit promises, being Plot No.9, Cadastral SurveyNo.73, land admeasuring about 12,118 sq. yards with all buildingsDstanding thereon, situated at Delisle Road, now known as N.M.Joshi Marg, Bombay-400011.

G. Interim and ad-interim reliefs in terms of prayers (d) to (f) begranted.

EH. Costs and any other and such reliefs be granted as this Hon’bleCourt may deem fit and proper.”

This suit was eventually withdrawn on 22[nd] December, 2004.

6. The 1947 Act stood repealed by the Maharashtra Rent ControlAct, 1999 (for short “1999 Act”). The Trust issued a notice forFterminating the tenancy of NTC vide notice dated 26[th] September, 2000.The Trust (through respondents/ trustees) filed a fresh suit on 20[th] April,2001 under the Transfer of Property Act, 1882 only against the appellantNTC, in the Small Causes Court at Bombay being TER 311/326/01 forthe following reliefs:

G“The Plaintiffs, therefore, pray:

(a) that the Defendants be ordered and decree to vacate andhand over to the Plaintiffs vacant peaceful possession of the suitpremises i.e. premises being land with the building admeasuringabout 12,118 sq. yards (equivalent to 10131.85 sq. mtrs.) bearingHPlot No.9, Cadastral Survey No.73 of Lower Parel Division situated at Delisle Road, now known as N.M. Joshi Marg,Chinchpokli, Bombay-400011;

(b) the Defendants be ordered and decree to pay to the Plaintiffsmesne profits at the market rate and at some other rate fixed bythis Hon’ble Court for the use and occupation of the said land andbuilding having area of about 12,118 sq. yards (equivalent to10131.85 sq. mtrs.) from November 2000 till the Defendants hand over peaceful possession of the said premises viz. land with buildingadmeasuring about 12118 sq. yards, bearing Plot No.9, CadastralSurvey No.73 of Lower Parel Division situated at Delisle Road,now known as N.M. Joshi Marg, Chinchpokli, Bombay-400011 tothe Plaintiffs or at such amount as this Hon’ble Court may deemfit and proper, after due inquiry under Order XX Rule 12 (c) ofthe Civil Procedure Code;

(c) pending hearing and final disposal of the suit Defendants bythemselves, their agents, officers, servants be restrained by orderand injunction of this Hon’ble Court from parting with possessionor occupation of the suit premises under any assignment or part inwhatsoever manner of induct any third party therein; (d) pending the hearing and final disposal of the suit some fit andproper person be appointed Receiver with all power under Order40 Rule 4 of the Code of Civil Procedure to take charge of thesuit premises; (e) pending the hearing and final disposal of the suit Defendantsbe ordered to pay to the Plaintiffs damages/equally profit at Rs.7lacs per month subject to adjustment of said amount whendamages/mesne profit is finally determined by the Hon’ble Court; (f) interim and ad-interim reliefs in terms of prayers (c), (d) and(e) above; (g) cost of this suit be provided for; and (h) for such other and further reliefs as the nature andcircumstances of the case may required be granted.”

7. The appellant NTC filed its written statement denying the pleastaken by the plaintiffs. The suit was decreed in favour of the plaintiffs(Trust) vide judgment and decree dated 5[th] August, 2006 by virtue ofwhich the NTC was directed to hand over vacant and peaceful possessionof the suit premises to the plaintiffs within four months.

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A8. Being aggrieved, the appellant NTC preferred Appeal No. 627of 2006 before the Division Bench of the Small Causes Court at Bombayon 13[th] November, 2006 which was dismissed by the appellate court byaffirming the judgment and decree of the trial court vide judgment anddecree dated 14[th] August, 2008. The appellant preferred civil revisionbefore the High Court of Bombay, which came to be dismissed videBjudgment and order dated 3[rd] August, 2009.

9. Being aggrieved, NTC assailed the aforementioned decision ofthe High Court before this Court by way of a Special Leave Petitionconverted to Civil Appeal No.7448 of 2011, which came to be dismissedon 5[th] September, 2011. That decision is the subject matter of the reviewCpetition filed on 20[th] December, 2013 by the Union of India as a thirdparty. The principal ground urged by the Union of India is that the right,title and interest in the suit property had vested absolutely in the CentralGovernment by virtue of Section 3(1) of the 1995 Act. Nevertheless, inthe subject suit for possession filed by the Trust, Union of India had notDbeen impleaded as a party-defendant. Notably, the Trust had impleadedUnion of India as a party defendant in both the previous suits filed includingfor eviction under the provisions of the 1947 Act. That pre-supposesthat the respondents were cognizant of the effect of the statutory vestingof the tenancy absolutely in favour of the Central Government.

10. As aforementioned, during the pendency of the review petition,the Validation Act 2014 came into effect, necessitating Union of India totake out an application for urging additional grounds in the pending reviewpetition, in light of the provisions contained in the said enactment.

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11. This Court while dismissing the appeal preferred by NTC,Fgave time to vacate upto 31[st] December, 2013 subject to filing of usualundertaking within four weeks, to hand over peaceful and vacantpossession to the Trust. The General Manager of NTC filed an affidavitof undertaking on behalf of NTC on 3[rd] October, 2011, with the approvalof the Union of India, in compliance of the order dated 5[th] September,2011 passed by this Court.G

12. Before the expiry of the time to vacate, NTC filed an applicationfor extension of time to hand over possession of the suit premises on23[rd] December, 2013, for reasons stated in the application. This Courtacceded to that request vide order dated 31[st] January, 2014 and extendedthe time to vacate until 30[th] June, 2014. NTC filed a fresh undertakingHon 24[th] March, 2014, with the approval of the Union of India, incompliance of the order dated 31[st] January, 2014.

13. NTC has filed a fresh application on 27[th] June, 2014 before theexpiry of the time to vacate, being I.A. No.6 of 2014 for directions andpraying for the following reliefs:

“PRAYERS:

(a) To grant time to the Applicants herein to comply with all thelaws, rules, regulations as required for sub-division of the saidland so that the land of the Respondent as well as Applicant couldbe demarcated and sub-divided; (b) That this Hon’ble Court may be pleased to declare the Orderdated 5.8.2006 of the Hon’ble Small Causes Court as regards thehandling over of the building structure standing on the said suitland does not imply that the buildings are to be handed over freeof cost or that the Respondent Trust is the owner therein;

(c) That in any event this Hon’ble Court may be pleased to varythe said order of the Small Cases Court dated 05.8.2006 in-as-much-as it directs handing over of building in-as-much-as the saidorder is impossible of compliance since in the process of sub-division, the structures on the land of the Respondent as also theland of the Applicant will stand demolished; (d) That this Hon’ble Court may be pleased to direct theRespondent Trust to pay to the Applicants the salvage value atthe market rate/value of the demolished structure standing on thelease hold land to be handed over to the Respondent.

(e) That this Hon’ble Court may be pleased to permit and alsoissue a direction permitting the Applicant to hand over juridicalpossession to the Respondent Trust without handling over thephysical possession until such time as the land has been demarcatedand the structure demolished.

(f) Pass any such other order/s as may be deemed fit and proper.”

14. The respondents have filed a contempt petition on 20[th]November, 2014 including for enforcement of the directions given toNTC to vacate the suit premises and to hand over peaceful and vacantpossession thereof to them. They allege that it is a case of willfuldisobedience and more particularly, breach of the undertaking given tothis Court by the party concerned warranting appropriate action againstNTC and its officials.

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A15. The respondents would contend that Union of India has nolocus to file a review petition against the judgment of this Court dated 5[th]September, 2011. It is then contended that the grounds urged by theUnion of India in the review petition regarding the purport of the 1995Act were specifically raised and have been answered appropriately.Secondly, the fact now asserted by the Union of India by way of reviewBpetition and which contention is supported by NTC, namely, that thetenancy rights in the suit property of the erstwhile Podar Mills Ltd. vestedabsolutely in the Union of India after the taking over of the managementof the subject Textile Undertaking by operation of the provisions of the1983 Act and followed by acquisition by virtue of the 1995 Act, was notCspecifically raised in the written statement filed by NTC. It is too late inthe day to permit Union of India or NTC to raise that plea. It is not openfor the review court to travel beyond the pleadings in the written statementfiled by NTC. No evidence can be led either by Union of India or NTCin respect of any factual matter which has not been pleaded in the writtenstatement. The plea taken by NTC in the written statement has beenDduly considered right up to this Court, which culminated into the decisionof this Court. In fact, the review petition by Union of India is a subterfugeso as to circumvent the decree of possession passed against NTC inrespect of the suit premises, and moreso, in defiance of the undertakingalready given to this Court, with the approval of the Union of India, toEhand over peaceful and vacant possession. According to the respondents,the review petition by Union of India as well as the application forextension of time by NTC are nothing but an abuse of the process of theCourt and must be dismissed. The respondents have also invited ourattention to the interim orders passed by this Court in the presentproceedings and would contend that the Commission’s Report exposesFthe stand taken by NTC that the suit premises are still being used for itsactivities.

16. We have heard Ms. Pinky Anand, learned Additional SolicitorGeneral appearing for the review petitioner, Mr. Shekhar Naphade &Mr. Maninder Singh, learned senior counsel appearing for NTC and Mr.GMukul Rohatgi, Mr. Ranjit Kumar & Mr. Shyam Divan, learned seniorcounsel appearing for the respondents.

17. From the judgment under review, it is seen that the main groundurged by Union of India in the review petition was pressed into serviceby NTC. In paragraph 7 of the judgment, the argument canvassed onHbehalf of NTC has been noted as under:

“7. Shri Parag P. Tripathi, learned Additional Solicitor General,appearing for the appellant has submitted that the judgments anddecrees of the courts below have to be set aside as none of thecourts below has taken into consideration the effect of theprovisions of the 1995 Act by virtue of which the textile undertakingstood absolutely vested in the Central Government and furthervested in the appellant. As on the expiry of the lease of 99 yearson 22-10-1990, the 1947 Act was in force, the then tenant, PodarMills became the statutory tenant. Such tenancy rights stoodvested absolutely in the Central Government on thecommencement of the 1995 Act by operation of law. Theappellant stepped in the shoes of the Central Governmentmerely as an agent, thus, the Central Government remainedthe tenant. The Central Government continued to be atenant in the suit premises and thus, would be protected interms of Section 3(1)(a) of the 1999 Act being premises letout to the Government. The courts below failed to considerthis vital legal issue. The suit filed by the respondents was notmaintainable. The judgments and decrees of the courts below areliable to be set aside.”

(emphasis supplied)

(emphasis supplied)

18. This Court, after considering the rival submissions, held thatNTC had not specifically pleaded in the written statement that thetenancy stood vested absolutely in the Central Government and resultantly,no issue in that behalf was framed nor any argument was advancedbefore the Trial Court, Appellate Court or the Revisional Court. Thatcontention was taken for the first time in the appeal before the SupremeCourt by way of an application to urge additional grounds regarding theapplication of the 1995 Act, without seeking amendment to the pleadings(written statement). The Court then considered the question as to whetherthe Government is a tenant or whether NTC can be termed as“Government” or “Government Department” or “Agent” of the CentralGovernment in the context of the 1999 Act. The Court, in unambiguousterms held that NTC could neither be treated as “Government” or“Government Department” nor could it be treated as an “Agent” of theCentral Government. Whereas, NTC was controlled by the provisionsof the 1995 Act and not by the Central Government. The Court alsoconsidered the purport of the expression “vesting” and noted that the A

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ATrust had rented out the suit premises to Podar Mills and what hadvested was that right, title and interest of the Podar Mills and nothingelse. It will be apposite to reproduce paragraphs 42 and 43 of the judgmentunder review, which rejects the claim of NTC in the following words:

“42. It is not permissible for the appellant to canvass that theBCentral Government has any concern so far as the tenancy rightsare concerned. Right vested in the Central Government stoodtransferred and vested in the appellant. Both are separate legalentities and are not synonymous. The appellant being neither theGovernment nor the government department cannot agitate thatas it has been substituted in place of the Central Government, andCacts merely as an agent of the Central Government, thus protectionof the 1999 Act is available to it. The appellant cannot be permittedto say that though all the rights vested in it but it merely remainedthe agent of the Central Government. Acceptance of such asubmission would require interpreting the expression “vesting” asDholding on behalf of some other person. Such a meaning cannotbe given to the expression “vesting”.

43. It is a settled legal proposition that an agent cannot be suedwhere the principal is known. In the instant case, the appellanthas not taken the plea before either of the courts below. In viewEof the provisions of Order 8 Rule 2 CPC, the appellant was underan obligation to take a specific plea to show that the suit was notmaintainable which it failed to do so. The vague plea to the extentthat the suit was bad for non-joinder and, thus, was notmaintainable, did not meet the requirement of law. The appellantought to have taken a plea in the written statement that it wasFmerely an “agent” of the Central Government, thus the suit againstit was not maintainable. More so, whether A is an agent of B is aquestion of fact and has to be properly pleaded and proved byadducing evidence. The appellant miserably failed to take therequired pleadings for the purpose.”

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19. Reverting to the question of whether Union of India has locusto file the review petition, we must immediately advert to Section 114 ofthe Code of Civil Procedure (“CPC”) which, inter alia, postulates that“any person considering himself aggrieved” would have locus to file areview petition. Order XLVII of CPC restates the position that any personHconsidering himself aggrieved can file a review petition. Be that as it

may, the Supreme Court exercises review jurisdiction by virtue of Article137 of the Constitution which predicates that the Supreme Court shallhave the power to review any judgment pronounced or order made by it.Besides, the Supreme Court has framed Rules to govern review petitions.Notably, neither Order XLVII of CPC nor Order XLVII of the SupremeCourt Rules limits the remedy of review only to the parties to thejudgment under review. Therefore, we have no hesitation in enunciatingthat even a third party to the proceedings, if he considers himself anaggrieved person, may take recourse to the remedy of review petition.The quintessence is that the person should be aggrieved by the judgmentand order passed by this Court in some respect.

20. The next question is whether Union of India can be consideredas an aggrieved person so as to pursue the remedy of review petition. Itis indisputable that the management of Podar Mills-Textile Undertakingwas taken over by the Central Government after the commencement ofthe 1983 Act. The scope of management would obviously includepossession and permissible use of the suit property of the TextileUndertaking so taken over. In due course, the 1995 Act came into force.As a consequence of Section 3 of this Act, the right, title and interest ofthe owners of the subject Textile Undertaking (Podar Mills Ltd.) includingthe statutory tenancy rights in relation to the suit property stood transferredto and vested absolutely in the Central Government. By the sameprovision, vide sub-section (2) thereof, the Textile Undertaking whichstood vested in the Central Government immediately thereafter stoodtransferred to and vested in the National Textile Corporation. Thatincluded subsisting statutory tenancy rights in respect of the suit propertyenjoyed by the concerned Textile Undertaking. However, Section 3stands amended by virtue of the 2014 Act. That amendment by a legalfiction is deemed to have been inserted into the 1995 Act w.e.f. 1[st] January,1994. The purport of the amended sub-sections (3) and (4), inserted insection 3 is that the leasehold rights of the Textile Undertaking wouldcontinue to remain vested in the Central Government and no Court couldexercise jurisdiction to order divestment from the NTC of the propertyvested in it by the Central Government. In addition, the Amendment Actof 2014 has introduced Section 39 in the 1995 Act, titled as ‘Validation’.We shall dilate on the efficacy of these provisions a little later.

21. Suffice it to observe that since Union of India is asseveratingthat the suit property had vested absolutely in the Central Government A

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Aand continues to so vest in it by virtue of a legal fiction in the ValidationAct 2014, would be justified in contending that it is a person aggrievedand has locus to point out that the decree for possession of the suitpremises against NTC could not have been passed and in any case, thesame could not be enforced in law. It is an inexecutable decree andincluding the undertaking given by NTC, assuming that the concernedBcourt had jurisdiction to pass such a decree.

22. Having said this, we may now turn to the question of scope ofreview jurisdiction to be exercised by this Court in civil proceedings.The power to review any judgment pronounced or order made by thisCourt flows from Article 137 of the Constitution of India, which readsCthus:

“137. Review of judgments or orders by the Supreme CourtSubject to the provisions of any law made by Parliament or anyrules made under Article 145, the Supreme Court shall havepower to review any judgment pronounced or order made byDit.”

23. The power to frame rules is posited in Article 145 of theConstitution. As per Rule 1 of Order XLVII of the Supreme Court Rulesframed under Article 145, the Court can review its judgment or order onthe grounds mentioned in Order XLVII, Rule 1 of the CPC. It will be,Etherefore, apposite to advert to Rule 1 of Order XLVII of CPC. Thesame reads thus:

“ORDER XLVIIREVIEW

F1. Application for review of judgement.-

(1) Any person considering himself aggrieved- (a) by a decree or order from which an appeal is allowed,but from no appeal has been preferred, (b) by a decree or order from which no appeal is allowed, or G

(c) by a decision on a reference from a Court of SmallCauses, and who, from the discovery of new and important matter orevidence which, after the exercise of due diligence, was not within H

his knowledge or could not be produced by him at the time whenthe decree was passed or order made, or on account of somemistake or error apparent on the face of the record or for anyother sufficient reason, desires to obtain a review of the decreepassed or order made against him, may apply for a review ofjudgement to the Court which passed the decree or made theorder.

(2) A party who is not appealing from a decree or order mayapply for a review of judgement notwithstanding the pendency ofan appeal by some other party except where the ground of suchappeal is common to the applicant and the appellant, or when,being respondent, he can present to the Appellate Court the caseon which he applies for the review.”

24. The grounds for review are specified in clause (1) noted above.The factual scenario in the present case is certainly not ascribable todiscovery of new or important matters or evidence which was “availableor existing” at the time of the decree but could not be produced despiteexercise of due diligence. In the present case, the asseveration of thereview petitioner is about the mistake or error apparent on the face ofthe record committed by the Court and more particularly founded on theeffect of the subsequent enactment of Validation Act 2014 whichcompletely changes the status of the parties, namely, Union of India andNTC qua the suit property and bars the enforcement of any decree andincluding the undertaking given to the Court by NTC.

25. Ordinarily, enactment of a subsequent legislation by itselfcannot be the basis to review the judgment already rendered by theCourt. But the argument of the review petitioner proceeds on the premisethat the subsequent legislation has completely altered the status of theparties retrospectively qua the suit property with effect from 1[st] April,1994 by a legal fiction, as a result of which the cause of action againstNTC as referred to in the subject suit had become non-existent; andincluding any decree or order passed against NTC or for that matter, anundertaking filed by NTC in any court or tribunal or authority has beenrendered unenforceable by operation of law and cannot be continued ortaken forward. In other words, even if a valid decree has been passedagainst NTC, the same had become inexecutable by operation of law.

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256 SUPREME COURT REPORTS [2018] 14 S.C.R.

A26. This Court in Raja Shatrunji Vs. Mohammad Azmal AzimKhan and Ors.[2] had an occasion to consider the impact of AmendmentAct having retrospective effect on the decree already passed. Thediscussion in paragraphs 11 to 13 of this decision is quite instructive. Itaccepts the argument that the Court must give full effect to the statutoryfiction, which should be carried to its logical conclusion - no matter inBreview jurisdiction. The said paragraphs read thus:

“11. The Amendment Act therefore provided that theamendment took effect as if the Amendment Act had beenin force on all material dates. The effect of such a deemingclause was stated by this Court in State of Bombay v. PandurangCVinayak Chaphalkar[3] as follows:

‘When a statute enacts that something shall be deemed tohave been done, which in fact and truth was not done, thecourt is entitled to ascertain for what purposes and betweenwhat persons the statutory fiction is to be resorted to andDfull effect must be given to the statutory fiction and it shouldbe carried to its logical conclusion.’

The statutory fiction was introduced to give full effect to Section4 of the 1952 Act by conferring on the debtors and creditors theright to apply to the court for calculation and reduction of debt. Itwas realised that courts always passed simple decrees. It wasnoticed that mortgaged property was not and could not be chargedunder the decree. It was therefore appreciated that unless thewords “charged under the decree” were deleted the section couldnever give any relief to any landlord whose estate had beenacquired.

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12. This Court in the Bombay case referred to the observationsof Lord Asquith in East End Dwellings Co. Ltd. v. FinsburyBorough Council, 1952 AC 109 that “If you are bidden to treatan imaginary state of affairs as real, you must surely, unlessprohibited from doing so, also imagine as real the consequencesand incidents which, if the putative state of affairs had in factexisted, must inevitably have flowed from or accompanied it....The statute says that you must imagine a certain state of affairs;it does not say that having done so, you must cause or permit your G

2(1971) 2 SCC 200

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3AIR 1953 SC 244 = 1953 SCR 773

imagination to boggle when it comes to the inevitable corollariesof that state of affairs”. These observations indicate that the words“charged under the decree” in Section 4(2) of the 1952 Act werenever there with the inevitable consequence that the only statutoryrequirement is whether the mortgaged property consists of estatewhich has been acquired under the provisions of the U.P. ZamindariAbolition and Land Reforms Act, 1950.

13. On November 27, 1962 when the matter was heard by theHigh Court, this amendment did not come into the statute-book.That is why the judgment-debtor made an application to bring it tothe notice of the High Court that the law was that the words“charged under the decree” were always deemed to have beendeleted and this law was effective from the date of coming intoforce of the 1952 Act on May 25, 1953. The High Court by amajority opinion was of the view that the judgment-debtors shouldbe given relief under Order 47 of the Code of Civil Procedure theprinciples of review are defined by the Code and the words “anyother sufficient reason” in Order 47 of the Code would mean areason sufficient on grounds analogous to those specifiedimmediately previously in that order. The grounds for review arethe discovery of new matters or evidence which, after the exerciseof due diligence, was not within his knowledge or could not beproduced by him at the time when the decree was passed ororder made, or the review is asked for on account of some mistakeor error apparent on the face of the record. In Rajah KotagiriVenkata Subbamma Rao v. Rajah Vellanki Venkatrama Rao,Lord Davey at p. 205 of the Report said that “the section does notauthorise the review of a decree which was right when it wasmade on the ground of the happening of some subsequent event”.Counsel for the appellant submitted that when the HighCourt decided the matter, the High Court applied the lawas it stood and a subsequent change of law could not be aground for review. The appellant’s contention is notacceptable in the present case for two principal reasons;first, it is not a subsequent law. It is the law which all alongwas there from 1952. The deeming provision is fullyeffective and operative as from May 25, 1953 when the 1952Act came into force. The result is that the court is to applythe legal provision as it always stood. It would, therefore, AB

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Abe error on the face of the record. The error would be thatthe law that was applied was not the law which is applicable.Secondly, Section 4 of the 1952 Act confers power on the court toapply the law notwithstanding any provision contained in the Codeof Civil Procedure. Therefore the application though intituledan application for review was not so. The substance and notBthe form of the application will be decisive.”

(emphasis supplied)

27. Applying the underlying principle and as jurisdictional issueshave been raised which are essentially founded on the law enacted byCthe Parliament with retrospective effect containing a legal fiction andfor doing complete justice to the parties, besides the power of reviewunder Article 137 of the Constitution, it is open to this Court to exerciseits plenary power under Article 142 of the Constitution.

28. Reverting to the judgment under review, it is noticed that theDprovisions of the 1983 Act and 1995 Act have been generally advertedto while dealing with the plea taken by the appellant NTC that it was inpossession of the suit property merely as an agent of the CentralGovernment. However, the Court declined to entertain that plea of NTCas it was not so specifically pleaded in the written statement. The Courtthen concluded that the appellant NTC was neither the “Government”Enor “Government Department” nor “Agent” of the Central Governmentin the context of the Maharashtra Rent Control Act, 1999. That viewhas been taken in reference to the 1983 Act and the “un-amended”provisions of 1995 Act. Indeed, the review petitioners would argue thaton a fair reading of the un-amended provisions contained in 1995 ActFand juxtaposed with the provisions of 1983 Act, the inescapable conclusionis that the leasehold rights continued to vest in the Central Government.However, we are not inclined to countenance this argument.

29. The review petitioners may be justified in pointing out that thisCourt committed an error apparent on the face of the record in observingGthat the appellant had never raised the issue before the courts belowthat the Central Government was the tenant and the appellant was holdingthe premises merely as an agent; and that a vague plea was taken about-the non-joinder of the parties which plea was not even pursued beforethe Trial Court. Those errors, in our opinion, would not affect the finalconclusion recorded by this Court in the judgment under review,H

considering the effect of the provisions as were applicable at the relevanttime in the form of “un-amended” Section 3 of the 1995 Act. For, byvirtue of sub-section (2) of Section 3 of that Act, the rights which hadvested absolutely in the Central Government including in respect of thesuit property, stood transferred to and vested in the appellant NTC oncoming into force of the 1995 Act w.e.f. 1[st] April, 1994. That view takenby this Court does not merit any review. Resultantly, it is not necessaryto dilate on the decisions in S. Bagirathi Ammal Vs. Palani RomanCatholic Mission[4], Union of India Vs. Sandur Manganese and IronOres Limited and Ors.[5] and Champsey Bhara and Company Vs.Jivraj Balloo Spinning and Weaving Company Limited[6], on theprinciple of the purport of expression “error apparent” postulated in therules governing the scope of review jurisdiction.

30. However, the legal situation has undergone a sea-changeretrospectively after the coming into force of the Validation Act 2014.The Validation Act makes it explicit that the amendment to the 1995 Actspecified therein shall be deemed to have been inserted on or from thedate of commencement of the 1995 Act i.e. 1[st] April, 1994. The preambleof the Validation Act and the relevant chapter applicable to the case onhand, being Chapter III of that Act, read thus:

“THE TEXTILE UNDERTAKINGS (NATIONALISATION)LAWS (AMENDMENT AND VALIDATION) ACT, 2014

NO.36 OF 2014

[17th December, 2014.]

An Act further to amend the Sick Textile Undertakings(Nationalisation) Act, 1974 and the Textile Undertakings(Nationalisation) Act, 1995, in order to continue with the lease-hold rights vested in the National Textile Corporation oncompletion of the lease-hold tenure.

WHEREAS the National Textile Corporation subserves theinterests of the general public and the land continue to be inpossession of the said Corporation; AND WHEREAS various other textile undertakings havebeen nationalised from time to time and their assets vested 4(2009) 10 SCC 464

5(2013) 8 SCC 337

6(1923) Vol. L (IA) 324

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absolutely in the Central Government and thereaftertransferred to the National Textile Corporation Limited bythe Central Government free from all encumbrances; AND WHEREAS after the nationalisation of the textileundertakings, a large sum of money have been invested witha view to making the said textile undertakings viable; AND WHEREAS the Central Government has taken initiativeto revive certain sick undertakings including the NationalTextile Corporation under a revival scheme sanctioned by theBoard for Industrial and Financial Reconstruction under the SickIndustrial Companies (Special Provisions) Act, 1985; AND WHEREAS it is necessary for the proper andeffective implementation of the revival scheme and toprotect the public investment in the acquired textileundertakings and to explicitly clarify the status of suchvesting of the lease-hold rights in the Central Government.

BE it enacted by Parliament in the Sixty-fifth Year of theRepublic of India as follows:—

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Textile Undertakings(Nationalisation) Laws (Amendment and Validation) Act, 2014.

(2) It shall be deemed to have come into force with effect fromthe 24th October, 2014.

CHAPTER II

AMENDMENTS TO THE SICK TEXTILE UNDERTAKINGS(NATIONALISATION) ACT, 1974

CHAPTER III

AMENDMENTS TO THE TEXTILE UNDERTAKINGS(NATIONALISATION) ACT, 1995

5. On and from the date of commencement of the TextileUndertakings (Nationalisation) Act, 1995 (hereafter in this Chapterreferred to as the principal Act), in section 3, after sub-section(2), the following sub-sections shall be inserted and shallbe deemed to have been inserted, namely:—

“(3) Notwithstanding the transfer and vesting of any textileundertaking to the National Textile Corporation by virtue ofsub-section (2), the lease-hold rights of the textileundertakings shall continue to remain vested in theCentral Government on payment of lease-hold rents andshall be discharged, for and on behalf of that Government, bythe National Textile Corporation as and when payment of suchlease-hold rents or any amount becomes due and payable.

(4) Subject to sub-section (3), no court shall have jurisdictionto order divestment from the National TextileCorporation of the property vested in it by the CentralGovernment.”.

6. On and from the date of commencement of the principalAct, in section 4, after sub-section (7), the following sub-sectionsshall be inserted and shall be deemed to have been inserted,namely:—

“(8) Notwithstanding the fact that the textile operationshave been discontinued in any textile undertaking beingrevived, shall for all effects and purposes be deemedthat the textile operations are being continued and nosuit or proceeding shall be instituted or if instituted bemaintainable against the National Textile Corporationon the ground that it has discontinued such activity inthe textile undertaking.

(9) For the removal of doubts, it is hereby declared that thecontinued deemed vesting of the lease-hold land in the CentralGovernment shall not affect, impair or in any manner prejudicethe rights of the National Textile Corporation to prosecute ordefend any proceedings as a subsequent vestee in respect ofany such lease-hold rights and no such proceedings shall failonly on account of the non-impleadment of that Government.”.

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7. After section 38 of the principal Act, the following section shallbe inserted, namely:—

“39. Notwithstanding anything contained in any judgment,decree or order of any court, tribunal or other authority,—

(a) the provisions of this Act, as amended by the TextileUndertakings (Nationalisation) Laws (Amendment andValidation) Act, 2014, shall have and shall be deemed alwaysto have effect for all purposes as if the provisions of thisAct, as amended by the said Act, had been in force at allmaterial times; (b) any lease-hold property divested from the National TextileCorporation to any person under the provisions of this Act, as itstood immediately before the commencement of the TextileUndertakings (Nationalisation) Laws (Amendment and Validation)Act, 2014, shall stand transferred to and vest or continue to vest,free from all encumbrances, in the National Textile Corporationin the same manner as it was vested in the National TextileCorporation before such divesting of that property under theprovisions of this Act as if the provisions of this Act, as amendedby the aforesaid Act, were in force at all material times;

(c) no suit or other proceedings shall, without prejudice tothe generality of the foregoing provisions, be maintainedor continued in any court or tribunal or authority for theenforcement of any decree or order or direction given bysuch court or tribunal or authority, notwithstanding anyundertaking filed by the National Textile Corporation inany court or tribunal or authority, directing divestment of suchlease-hold property from the National Textile Corporation vestedin it under section 3 of this Act, as it stood before thecommencement of the Textile Undertakings (Nationalisation)Laws (Amendment and Validation) Act, 2014, and such lease-hold property shall continue to vest in the National TextileCorporation under section 3 of this Act, as amended by theaforesaid Act, as if the said section was in force at allmaterial times; (d) any transfer of any property, vested in the National TextileCorporation, by virtue of any order of attachment, seizure or sale in execution of a decree of a civil court or orders of any tribunalor other authority in respect of lease-hold property vested in theNational Textile Corporation which is contrary to the provisionsof this Act, as amended by the Textile Undertakings(Nationalisation) Laws (Amendment and Validation) Act, 2014,shall be deemed to be null and void and notwithstanding suchtransfer, continue to vest in the National Textile Corporation underthis Act.”.

8. (1) The Textile Undertakings (Nationalisation) Laws(Amendment and Validation) Ordinance, 2014 is hereby repealed.

(2) Notwithstanding the repeal of the Textile Undertakings(Nationalisation) Laws (Amendment and Validation) Ordinance,2014, anything done or any action taken under the principal Actsas amended by the said Ordinance shall be deemed to have beendone or taken under the principal Acts, as amended by this Act.”

(emphasis supplied)

31. We may hasten to add that the validity of the provisions ofValidation Act 2014 is not put in issue in these proceedings. As is noticed,the effect of the Validation Act 2014 is to incorporate sub-sections (3) &(4) in Section 3 and sub-sections (8) & (9) in Section 4 of the PrincipalAct i.e. 1995 Act, with retrospective effect for all purposes, by a deemingprovision, as if it had always been in force at all material times w.e.f. 1[st]April, 1994. In addition, Section 39 has been inserted in the PrincipalAct.

32. The effect of insertion of sub-sections (3) & (4) in Section 3of the Principal Act is that Section 3, as on 1[st] April, 1994, would read asfollows:

“3. (1) On the appointed day, the right, title and interest of theowner in relation to every textile undertaking shall stand transferredto and shall and shall vest absolutely in, the Central Government.

(2) Every textile undertaking which stands vested in the CentralGovernment by virtue of sub-section (1) shall immediately after ithas so vested, stand transferred to, and vested in, the NationalTextile Corporation.

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A(3) Notwithstanding the transfer and vesting of any textileundertaking to the National Textile Corporation by virtue ofsub-section (2), the lease-hold rights of the textileundertakings shall continue to remain vested in the CentralGovernment on payment of lease-hold rents and shall bedischarged, for and on behalf of that Government, by the NationalBTextile Corporation as and when payment of such lease-hold rentsor any amount becomes due and payable.

(4) Subject to sub-section (3), no court shall have jurisdictionto order divestment from the National Textile Corporationof the property vested in it by the Central Government.”

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(emphasis supplied)

Similarly, in light of the amendment of 2014, Section 4, as on 1[st]April, 1994, would read as follows:

“4. (1) The textile undertakings referred to in section 3 shall beDdeemed to include all assets, rights, lease-holds, powers, authoritiesand privileges and all property, movable and immovable, includinglands, buildings, workshops, stores, instruments machinery andequipment, cash balances, cash on hand, reserve funds, investmentand book debts pertaining to the textile undertakings and all otherErights and interests in, or arising out -of, such property as wereimmediately before the appointed day in the ownership, possession,power or control of the textile company in relation to the saidundertakings, whether within or outside India, and all books ofaccount, registers and all other documents of whatever naturerelating thereto and shall also be deemed to include the liabilitiesFand obligations specified in sub-section (2) of section 5.

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(2) All property as aforesaid which have vested in the CentralGovernment under sub-section (1) of section 3 shall, by force ofsuch vesting, be freed and discharged from any trust, obligationmortgage, charge, lien and all other incumbrances affecting it,Gand any attachment, injunction or decree or order of any court orother authority restricting the use of such property in any mannershall be deemed to have been withdrawn.

(3) Where any licence or other instrument in relation to a textileundertaking had been granted at any time before the appointedday to the owner by the Central Government or a State Government H

or any other authority, the National Textile Corporation shall, onand from such date, be deemed to be substituted in such licenceor other instrument in place of the owner referred to therein as ifsuch licence or such other instrument had been granted to it andshall hold such licence or the textile undertaking specified in suchother instrument for the remainder of the period for which theowner would have held such licence or the textile undertakingunder such other instrument.

(4) Every mortgagee of any property which has vested under thisact in the Central Government and every person holding any charge,lien or other interest in, or in relation to, any such property shallgive, within such time and in such manner as may be prescribed,an intimation to the Commissioner of such mortgage, charge, lienor other interest.

(5) For the removal of doubts, it is hereby declared that themortgagee of any property referred to in sub-section (2) or anyother person holding any charge, lien or other interest in, or in -relation to, any such property’ shall be entitled” to claim, inaccordance with his-rights and interests, payment of the mortgagemaps or other-dues, in whole or in part, out of the amounts specifiedin relation to such property in the First Schedule, but no suchmortgage, charge, lien or other interest shall be enforceable againstany property which has vested in the Central Government.

(6) If, on the appointed day, any suit, appeal or other proceedingof whatever nature in relation to any property which has vested inthe Central Government under section 3, instituted or preferredby or against the textile company is pending, the same shall notabate, be discontinued or be, in any way, prejudicially affected byreason of the transfer of the textile undertakings or of anythingcontained in this act, but the suit, appeal or other proceeding maybe continued, prosecuted or enforced by or against the NationalTextile Corporation.

(7) Any person who, on the date on which the Textile Undertakings(Nationalisation) Ordinance, 1995 was promulgated, was inpossession of, or had under his custody or control, the whole orany part of any textile undertaking referred to in section 3, themanagement of which could not be taken over by the CentralGovernment by reason of any decree, order or injunction of any AB

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court or otherwise, shall deliver forthwith the possession of suchundertaking or part and all books of account, registers and allother documents of whatever nature relating to such undertakingor part to the Central Government or the National TextileCorporation, as the case may be, may specify in this behalf.

B(8) Notwithstanding the fact that the textile operations havebeen discontinued in any textile undertaking being revived,shall for all effects and purposes be deemed that the textileoperations are being continued and no suit or proceedingshall be instituted or if instituted be maintainable againstthe National Textile Corporation on the ground that it hasCdiscontinued such activity in the textile undertaking.

(9) For the removal of doubts, it is hereby declared that thecontinued deemed vesting of the lease-hold land in the CentralGovernment shall not affect, impair or in any manner prejudicethe rights of the National Textile Corporation to prosecute or defendDany proceedings as a subsequent vestee in respect of any suchlease-hold rights and no such proceedings shall fail only on accountof the non-impleadment of that Government.”

(emphasis supplied)

E 33. Reverting to Section 3 as “amended” and which by operationof law had come into force with effect from 1[st] April, 1994, the right, titleand interest of Podar Mills Ltd. in relation to the Textile Undertakingincluding in respect of the suit property, stood transferred to and vestedabsolutely in the Central Government. By virtue of sub-section (2), allsuch right, title and interest of Podar Mills as vested in the CentralFGovernment under sub-section (1), immediately stood transferred to andvested in the appellant NTC “except the leasehold rights in the suitproperty” which continued to remain vested in the Central Government.For, the amended Section 3(3) explicitly postulates that the leaseholdrights of the Textile Undertaking (Podar Mills) in respect of the suitGproperty as on 1[st] April, 1994, continued to remain vested in the CentralGovernment. That right was never transferred to NTC by operation oflaw. It pre-supposes that “only the other rights” of the Textile Undertakingas vested in the Central Government in terms of sub-section (1), stoodtransferred to and vested in the NTC under sub-section (2).

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34. In the present case, the management of Podar Mills was takenover by the Central Government in exercise of powers under 1983 Actwhereafter the lease in respect of the suit property expired on 21[st] October,1990. On expiry of the lease term, indisputably, Podar Mills became theprotected tenant or statutory tenant within the purview of the BombayRents, Hotel and Lodging House Rates Control Act, 1947 (for short“1947 Act”). Section 5(11) of the said Act defines the term “tenant”,as under:

(11) “tenant” means any person by whom or any whose accountrent is payable for any premises and includes,- (a) such sub-tenants and other persons as have derived title undera tenant before the 1[st] day of February 1973; (aa) any person to whom interest in premises, has been assignedor transferred as permitted or deemed to be permitted, undersection 15; (b) any person remaining after the determination of the lease, inpossession, with or without the assent of the landlord, of the title[before the first day of February 1973;]

[(bb) such licensees as share deemed to be tenants for the purposesof this Act by section 15A]

[(bba) the State Government, or as the case may be, theGovernment allottee, referred to in sub-clause (b) of clause (1A),deemed to be a tenant, for the purposes of this Act by section15B;].

[(c) (i) in relation to any premises let for residence, when thetenant dies, whether the death has occurred before or after thecommencement of the Bombay Rents, Hotel and Lodging HouseRates Control (Amendment) Act, 1978, any member of the tenant’sfamily residing with the tenant at the time of his death or, in theabsence of such member, any heir of the deceased tenant, asmay be decided in default of agreement by the Court;

(ii) in relation to any permission let for the purposes of education,business, trade or storage, when the tenant dies, whether the deathhas occurred before or after the commencement of the said Act,any member of the tenant’s family using the premises for thepurposes of education of carrying on business, trade or storage in A

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Athe premises, with the tenant at the time of his death, or, in theabsence of such member, any heir of the deceased tenant, asmay be decided in default of agreement by the Court.

Explanation.- the provisions of this clause for transmission oftenancy, shall not be restricted to the death of the original tenant,Bbut shall apply, and shall be deemed always to have applied, evenon the death of any subsequent tenant, who becomes tenant underthese provisions on the death of the last preceding tenant.]”

In the 1999 Act the expression “tenant” has been defined in Section7(15) as follows:

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“(15) “tenant” means any person by whom or on whose accountrent is payable for any premises and includes,- (a)such person,-

(i) who is a tenant, or

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(ii) who is a deemed tenant, or

(iii) who is a sub-tenant as permitted under a contract or by the permission or consent of the landlord, or

(iv) who has derived title under a tenant, or

(v) to whom interest in premises has been assigned ortransferred as permitted, E

by virtue of, or under the provisions of, any of the repealed Acts; (b)a person who is deemed to be a tenant undersection 25; F

(c) a person to whom interest in premises has been assignedor transferred as permitted under section 26; (d) in relation to any premises, when the tenant dies, whetherthe death occurred before or after the commencement of thisAct, any member of the tenant’s family, who,- G

(i) where they are let for residence, is residing, or

(ii) where they are let for education, business, trade orstorage, is using the premises for any such purpose, with the tenant at the time of his death, or, in the absence of suchmember, any heir of the deceased tenant, as may be decided inthe absence of agreement, by the court.

Explanation.- The provisions of this clause for transmission oftenancy shall not be restricted to the death of the original tenant,but shall apply even on the death of any subsequent tenant, whobecomes tenant under these provisions on the death of the last preceding tenant.”

35. Being a protected or statutory tenant, Podar Mills could bedispossessed from the suit premises by the Trust only on the groundspermissible under that Act by instituting eviction proceedings before thecompetent Rent Court having exclusive jurisdiction to entertain the disputebetween the landlord and tenant, who in turn would then have to recordits satisfaction about the entitlement of the landlord to recover possessionof the suit property. The right so enjoyed by the Podar Mills Ltd. stoodtransferred to and vested in the Central Government with effect from1[st] April, 1994. Further, by virtue of “amended” Section 3 of the 1995Act, by operation of law, the rights of the Textile Undertaking, in respectof the suit property, of being a statutory or protected tenant, continued tovest in the Central Government even after the coming into force of the1999 Act and repeal of the 1947 Act. Resultantly, the provisions of the1999 Act would squarely apply to the suit property in terms of Sections2 & 3 of the said Act. The said provisions read thus:

“2. Application. (1) This Act shall, in the first instance, apply topremises let for the purposes of residence, education, business,trade or storage in the areas specified in Schedule I and ScheduleII.

(2) Notwithstanding anything contained in sub-section (1), it shallalso apply to the premises or, as the case may be, houses let out inthe areas to which the Bombay Rents, Hotel and Lodging HouseRates Control Act, 1947 or the Central Provinces and Berar Lettingof Houses and Rent Control Order, 1949 issued under die CentralProvinces and Berar Regulation of Letting of AccommodationAct, 1946 and The Hyderabad Houses (Rent, Eviction and Lease)Control Act, 1954 were extended and applied before the date ofcommencement of this Act and such premises or houses continueto be so let on that date in such areas which are specified inSchedule 1 to this Act, notwithstanding that the area ceases to beof the description therein specified.

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(3) It shall also apply to the premises let for the purposes specifiedin sub-section (1) in such of the cities or towns as specified inSchedule II.

(4) Notwithstanding anything contained hereinabove, the StateGovernment may, by notification in the Official Gazette, directthat –

(a) this Act shall not apply to any of the areas specified inSchedule I or Schedule II or that it shall not apply to any one orall purposes specified in sub-section (1); (b) this Act shall apply to any premises let for any or all purposesspecified in sub-section (1) in the areas other than thosespecified in Schedule 1 and Schedule II.

3. Exemption. (1) This Act shall not apply –

(a) to any premises belonging to the Government or a local authorityor apply as against the Government to any tenancy, licence orother like relationship created by a grant from or a licence givenby the Government in respect of premises requisitioned or takenon lease or on licence by the Government, including any premisestaken on behalf of the Government on the basis of tenancy or oflicence or other like relationship by, or in the name of any officersubordinate to the Government authorised in this behalf, but itshall apply in respect of premises let, or given on licence,to the Government or a local authority or taken on behalfof 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 SectorUndertakings or any Corporation established by or under anyCentral or State Act, or foreign missions, international agencies,multinational companies, and private limited companies and publiclimited companies having a paid up share capital of more thanrupee one crore or more.

Explanation. - For the purpose of this clause the expression “bank”means,- (i) the State Bank of India constituted under the StateBank of India Act, 1955; (ii) a subsidiary bank as defined in theState Bank of India (Subsidiary Banks) Act, 1959; (iii) a corresponding new bank constituted under section 3 of the BankingCompanies (Acquisition and Transfer of Undertakings) Act, 1970or under section 3 of the Banking Companies (Acquisition andTransfer of Undertaking) Act, 1980; or (iv) any other bank, beinga scheduled bank as defined in clause (e) of section 2 of theReserve Bank of India Act, 1934.

(2) The State Government may direct that all or any of theprovisions of this Act shall, subject to such conditions and termsas it may specify, not apply-

(i) to premises used for public purposes of a charitable nature orto any class of premises used for such purposes; (ii) to premisesheld by a public trust for a religious or charitable purpose and letat a nominal or concessional rent; (iii) to premises held by a publictrust for a religious or charitable purpose and administered by alocal authority; or (iv) to premises belonging to or vested in anuniversity established by any law for the time being in force.

Provided that, before issuing any direction under this sub-section,the State Government shall ensure that the tenancy rights of theexisting tenants are not adversely affected.

(3) The expression “premises belonging to the Government or alocal authority” in subsection (1) shall, notwithstanding anythingcontained in the said sub-section or in any judgment, decree ororder of a court, not include a building erected on any land held byany person from the Government or a local authority under anagreement, lease, licence or other grant, although having regardto the provisions of such agreement, lease, licence or grant thebuilding so erected may belong or continue to belong to theGovernment or the local authority, as the case may be, and suchperson shall be entitled to create a tenancy in respect of suchbuilding or a part thereof.”

The latter part of clause (a) of sub-section (1) of Section 3 of the1999 Act makes it amply clear that the Act shall apply in respect of thepremises let or given on licence to Government or a local authority ortaken on behalf of the Government on such basis by, or in the name of,such officer.

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A36. As aforementioned, since the Central Government continuedto remain as the protected or statutory tenant in respect of the suitproperty w.e.f. 1[st] April, 1994, the fact that the appellant NTC wascarrying on its activities therein would not extricate the landlord (Trust)from initiating eviction proceedings against the real tenant, namely, theCentral Government or Union of India; and such eviction proceedingsBcould be maintained only before the jurisdictional Rent Court havingexclusive jurisdiction to decide any dispute between the landlord andtenant. The present suit, however, came to be filed only against theappellant NTC and that too before the jurisdictional civil court under theTransfer of Property Act. It is obvious that the Trust acted on the legalCadvice and instituted the present suit, despite having filed two suits(namely, TER Suit 680/1568 of 1995 and RAD Suit 955/1997) in earlierpoint of time, for possession of the suit property, in both of which Unionof India was made party-defendant. But those suits were eventuallydismissed for non-prosecution and withdrawn, respectively, during thependency of the subject suit, for reasons best known to the Trust.D

37. To put it differently, the present suit instituted by the Trustunder the provisions of the Transfer of Property Act, which culminatedwith the decree of eviction, affirmed up to this Court vide judgmentunder review, has been rendered without jurisdiction, by operation oflaw. This being the position after coming into force of the Validation ActE2014 and in particular, the purport of Section 39 as inserted, the decreeso passed or undertaking given by NTC cannot be continued or enforced.

38. According to the learned counsel for the respondents, theamended provision introduced by the Validation Act 2014 has noapplication to the present case. This contention is founded on theFinterpretation of the expression “leasehold rights” of the TextileUndertaking. It is argued that this expression pre-supposes that theremust be an existing or subsisting leasehold rights. Only such right wouldbe governed by the amended provision. To buttress this submission,reliance is placed on Section 4 of the 1995 Act which explicitly advertsGto different types of rights enjoyed by the Textile Undertaking.“Leaseholds” is one such right separately noted. Since there was no“subsisting” leasehold right enuring in favour of Podar Mills, inevitablyno such right vested in the Central Government. Whereas, the righttransferred to and vested in the Central Government under sub-section(1) is only that of a protected or statutory tenant enjoyed by Podar MillsH

at the relevant time i.e. 1[st] April, 1994. That right vested in the CentralGovernment is not saved in terms of sub-section (3). Resultantly, theright of a protected or statutory tenant vested in Central Governmentstood transferred to and vested in NTC in terms of sub-section (2) andcontinued to remain so vested in the NTC. If so, the relief of eviction orpossession could be pursued by the Trust only against NTC. Further,admittedly, NTC did not enjoy the status of a statutory or protectedtenant after coming into force of the 1999 Act and repeal of the 1947Act. In that situation, the subject suit for possession against the appellantNTC came to be justly filed before the civil court under the provisions ofthe Transfer of Property Act.

39. This argument, in our opinion, is an attempt to over-simplifythe purport of Section 3(3), if not indulging in hair-splitting of the contextualmeaning of the expression “leasehold rights” therein and in Section 4(1)or elsewhere in the 1995 Act. Section 3(1) refers to right, title and interestof the owner of the Textile Undertaking generally. That encompasses allthe rights as are spelt out in Section 4(1) of the Act. One such right canbe leasehold rights. Concededly, the expression “leasehold rights”mentioned in the 1995 Act must be construed as referring to the rightsunder the Transfer of Property Act, 1882 as well as under the applicableRent Act recognizing “tenancy rights” without exception. The expression“leasehold rights” has not been defined in the 1983 Act or in the 1995Act or for that matter, in the concerned Rent Act. That expression canbe discerned from the Transfer of Property Act, 1882. The expression“lease” is defined in Section 105 thereof which reads thus:

“105. Lease defined.- A lease of immoveable property is atransfer of a right to enjoy such property, made for a certain time,express or implied, or in perpetuity, in consideration of a pricepaid or promised, or of money, a share of crops, service or anyother thing of value, to be rendered periodically or on specifiedoccasions to the transferor by the transferee, who accepts thetransfer on such terms.

Lessor, lessee, premium and rent defined.- the transferor iscalled the lessor, the transferee is called the lessee, the price iscalled the premium, and the money, share, service or other thingto be so rendered is called the rent.”

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AChapter V of the Transfer of Property Act deals with mattersconcerning Leases of Immovable Property. The rights and liabilities of alessor and lessee are specified in Section 108. The provision regardingdetermination of a lease can be culled out from Section 111 and theeffect of holding over in the event of a lessee or under-lessee of a propertyremaining in possession thereof after the determination of the leaseBgranted to the lessee, is provided in Section 116, which reads thus:

“116. Effect of holding over.- if a lessee or under-lessee ofproperty remains in possession thereof after the determination ofthe lease granted to the lessee, and the lessor or his legalrepresentative accepts rent from the lessee or under-lessee, orClessor or his legal representative accepts rent from the lessee orunder-lessee, or otherwise assents to his continuing in possession,the lease is, in the absence of an agreement to the contrary,renewed from year to year, or from month to month, according tothe purpose for which the property is leased, as specified in sectionD106.

Illustrations

(a) A lets a house to B for five years. B underlets the house to Cat a monthly rent of Rs.100. The five years expire, but C continuesin possession of the house and pays the rent to A. C’s lease isErenewed from month to month.

(b) A lets a farm to B for the life of C. C dies, but B continues inpossession with A’s assent. B’s lease is renewed from year toyear.”

40. We must quote with profit the meaning of the expression ‘lease’,‘leasehold’, ‘leasehold interest’, ‘tenancy’, and ‘tenancy at sufferance’;as predicated in Black’s Law Dictionary (9[th] Edn.). The same read asfollows:

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Lease, n. (14c) 1- A contract by which a rightful possessor ofreal property conveys the right to use and occupy the property inexchange for consideration, usu.rent. – The lease can be for afixed period, or for a period terminable at will. [Cases: Landlordand Tenant-20.] 2- Such a conveyance plus all covenants attachedto it. 3- The written instrument memorializing such a conveyanceand its covenants. – all termed lease agreement; lease contract.

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4- The price of real property so conveyed. 5- A contact by whichthe rightful possessor of personal property conveysthe right to use that property in exchange for consideration.[Cases: Bailment-1.]

Leasehold, n. (18c) A tenant’s possessory estate in landor premises, the four types being the tenancy for years, the periodictenancy, the tenancy at will, and the tenancy at sufferance.• Although a leasehold has some of the characteristics of realproperty, it has historically been classified as a chattel real. – Alsotermed leasehold estate; leasehold interest. See TENANCY. Cf.FREEHOLD. [Cases: Landlord and Tenant-70, 113, 117.]

Leasehold interest. (18c) 1- LEASEHOLD; esp. for purposesof eminent domain, the lessee’s interest in the lease itself, measuredby difference between the total remaining rent and the rent thelessee would pay for similar space for the same period. [Cases:Eminent Domain -147] 2- Lessor’s or lessee’s interest under alease contract.[Cases: Bailment-7] 3. WORKING INTEREST.[Cases: Landlord and Tenant-20.]

Tenancy. (16c) 1. The possession or occupancy of land under alease; a leasehold interest in real estate. 2. The period of suchpossession or occupancy. See ESTATE (1). [Cases: Landlord andTenant-20] 3. The possession of real or personal property by rightor title, esp. under a conveying instrument such as a deed or will.

Tenancy at sufferance. (18c) A tenancy arising when a personwho has been in lawful possession of property wrongfully remainsas a holdover after his or her interest has expired. • A tenancy atsufferance takes the form of either a tenancy at will or a periodictenancy.- Also termed holdover tenancy; estate at sufferance.See HOLDING OVER (1). [Cases: Landlord and Tenant-117,119.]

“A tenancy at sufferance arises where a tenant, havingentered upon land under a valid tenancy, holds overwithout the landlord’s assent or dissent. Such a tenantdiffers from a trespasser in that his original entry waslawful, and from a tenant at will in that his tenancy existswithout the landlord’s assent. No rent, as such, is payable,but the tenant is liable to pay compensation for his use A

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Aand occupation of the land. The tenancy may be determined[i.e., terminated] at any time, and may be converted into ayearly or other periodic tenancy in the usual way, e.g., ifrent is paid and accepted with reference to a year incircumstances where the parties intended there to be atenancy.” Robert E. Megarry & M.P. Thompson, A ManualBof the Law of Real Property 319 (6[th] ed. 1993).

It will be useful to also advert to the expression ‘Tenant’ and‘Holdover Tenant’ in Black’s Law Dictionary which are as follows:

Tenant, n. (14c) 1. One who holds or possesses lands or tenementsCby any kind of right or title. See TENANCY. [Cases: Landlordand Tenant-1]

Holdover tenant: A person who remains in possession of realproperty after a previous tenancy (esp. one under a lease) expires,thus giving rise to a tenancy at sufferance.- Sometimes shortenedDto holdover. See tenancy at sufferance under TENANCY. [Cases:Landlord and Tenant-119(2).]

41. Indeed, if the matter in issue is to be decided dehors theprovisions of the applicable Rent Act, then it is possible to say that theexpression “leasehold rights” would be limited to a subsisting lease.EHowever, in the present case, we are required to reckon the status ofthe Union of India and NTC qua the suit property in the context of therights accrued in terms of the provision of the Rent Act of 1947 and1999, respectively. The expression “leasehold rights” in 1995 Act,obviously, must receive wider meaning so as to encompass “tenancyrights” flowing from the applicable Rent Act. For, the expression “tenancyFrights” accruing under the Rent Act is analogous to and interchangeablewith the expression “leasehold rights”. There is no reason to exclude theexpression “statutory right” so enjoyed by the owners of the TextileUndertaking from the expression “leasehold rights” referred to in sub-section (3), so long as it has not been so expressly excluded.

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G42. Considering the legislative intent for enacting the 1995 Actand the Validation Act 2014 also, it is not possible to give a restrictedmeaning to the expression “leasehold rights” occurring in sub-section(3) of Section 3, as amended, or elsewhere in the said enactment. Thus,the expression leasehold rights in 1995 Act must include “tenancy rights”flowing from the provisions of the applicable rent legislation. Any otherH

interpretation would be doing violence to the legislative intent and be apedantic approach.

43. According to the respondents, the status of Podar Mills andresultantly, of the Union of India is that of a tenant at sufferance. Wehave already adverted to the provisions of the concerned Rent Act.From the scheme of the 1947 Act as also in the 1999 Act, it is indisputablethat after determination of the lease period, the status of Podar Mills hadbecome that of a protected or statutory tenant under the Rent Act. Thus,it would continue to enjoy tenancy rights stipulated under the concernedRent Act. Once that status has been acquired by the Central Governmentby operation of law, the action of eviction, could be only as per theprescribed dispensation under the concerned Rent Act.

44. Our attention was invited to paragraph 9 in B. Arvind KumarVs. Govt. of India and Others[7], wherein the essential ingredients oflease have been delineated as under:

“9. Section 105 of the Transfer of Property Act, 1882 defineslease as follows:

“105. ……….

Thus, the essential ingredients of a lease are: (a) there shouldbe a transfer of a right to enjoy an immovable property; (b)such transfer may be for a certain term or in perpetuity; (c)the transfer should be in consideration of a premium or rent;(d) the transfer should be a bilateral transaction, the transfereeaccepting the terms of transfer.”

Relying on these ingredients, it was argued that the leasehold rightsof Podar Mills had expired by efflux of time on 21[st] October, 1990.Since, Podar Mills had no subsisting leasehold rights, the vesting of right,title and interest of Podar Mills in the suit property as on 1[st] April, 1994by virtue of 1995 Act was of other than leasehold rights. Whereas, Section3 including the amended provision sub-section (3) could be invoked onlyin respect of a subsisting leasehold rights acquired under the 1995 Act.We have already observed that even though the leasehold rights of PodarMills had expired on 21[st] October, 1990, it continued to enjoy the rightsof a protected or statutory tenant in terms of the 1947 Act and ascribableto “leasehold rights” referred to in Section 3(3) of 1995 Act. Therefore,the argument of holding over or tenant at sufferance, will be inapplicable 7(2007) 5 SCC 745

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Aas the rights of a protected or statutory tenant under the 1947 Act wouldbe governed by that Act and such a tenant could be evicted only on thegrounds postulated under the Rent Act upon an order passed by thejurisdictional Rent Court in that regard.

45. In the present case, admittedly, the Trust proceeded on a clearBunderstanding that the rights enjoyed by Podar Mills Ltd. afterdetermination of lease period was that of a protected or statutory tenantwithin the meaning of the rent legislation (1947 Act). That right hadbeen transferred to and vested in the Central Government by virtue ofSection 3(1) of the 1995 Act and continues to so vest in it in terms ofSection 3(3) which had come into force w.e.f. 1[st] April, 1994 and deemedCalways to have effect for all purposes as if it had been in force at allmaterial times.

46. Relying on the dictum in Shree Chamundi Mopeds Ltd. Vs.Church of South India Trust Association CSI Cinod Secretariat,Madras[8], it was contended that Podar Mills having continued inDoccupation of the suit property only by virtue of the protection of thethen applicable Rent Act, namely, the 1947 Act, even after 21[st] October,1990, it had no subsisting right whatsoever. Reliance is placed onparagraph Nos. 13 and 15 of the said decision, which read thus:

“13. We are also unable to agree with the contention of the learnedEcounsel for the appellant-company that the leasehold interest ofthe appellant-company in premises leased out to it is property forthe purpose of Section 22(1). It is no doubt true that leaseholdinterest of the lessee in the premises leased out to him is propertywhich can be transferred and the said interest can also be attachedFand sold by way of execution in satisfaction of a decree against alessee. In that sense, it can be said that the leasehold interest of acompany is its property. But the question is whether the same istrue in respect of the interest of a company which is in occupationof the premises as a statutory tenant by virtue of the protectionconferred by the relevant rent law because in the instant case onGthe date of reference to the Board the proceedings for eviction ofthe appellant-company were pending and the appellant-companywas in occupation of the premises only as a statutory tenantgoverned by the provisions of the Karnataka Rent Control Act. InGian Devi Anand v. Jeevan Kumar1this Court has laid down H8(1992) 3 SCC 1

that the termination of a contractual tenancy does not bring abouta change in the status and legal position of the tenant unless thereare contrary provision in the relevant Rent Act and the tenant,notwithstanding the termination of tenancy, does enjoy an estateor interest in the tenanted premises. It is further laid down thatthis interest or estate which the tenant continues to enjoy despitetermination of the contractual tenancy creates a heritable interestin the absence of any provision to the contrary. This Court hasalso held that the legislature which by the Rent Act seeks to conferthe benefit on the tenants and to afford protection against eviction,is perfectly competent to make appropriate provision regulatingthe nature of protection and the manner and extent of enjoymentof such tenancy rights after the termination of contractual tenancyof the tenant including the rights and the nature of protection ofthe heirs on the death of the tenant.”

“15. From these provisions, it would appear that except in casescovered by the two provisos to sub-section (1) of Section 23,there is a prohibition for a tenant to sublet whole or any part of thepremises let to him or to assign or transfer in any other mannerhis interest therein. This prohibition is, however, subject to acontract to the contrary. A tenant who sublets or assigns ortransfers the premises in contravention of this prohibition loses the protection of law and can be evicted by the landlord underSection 21(1)(f). In the case of a statutory tenant, the relationshipis not governed by contract. The prohibition against assignmentand transfer is, therefore, absolute and the interest of a statutorytenant can neither be assigned nor transferred. This means that

the interest of the statutory tenant in the premises in his occupation,as governed by the Karnataka Rent Control Act is a limited interestwhich enables the surviving spouse or any son or daughter orfather or mother of a deceased tenant who had been living withthe tenant in the premises as a member of the tenant’s family upto the death of the tenant and a person continuing in possessionafter the termination of the tenancy in his favour, to inherit theinterest of the tenant on his death. The said interest of the tenantis, however, not assignable or transferable and, therefore, theinterest of a company which is continuing in occupation of thepremises as a statutory tenant by virtue of the protection conferredby the Karnataka Rent Control Act, cannot be regarded as propertyof the company for the purpose of sub-section (1) of Section 22

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Aof the Act and for that reason also the provisions of Section 22(1)were not attracted to the eviction proceedings instituted by therespondents against the appellant-company. The provisions ofSection 22(1) did not, therefore, bar the prosecution of the saidproceedings by the respondents and the order dated September30, 1989 passed by the XII Additional Small Causes Judge,BBangalore allowing the eviction petition cannot be held to havebeen passed in contravention of the provisions of Section 22(1) ofthe Act. Civil Appeal No. 2553 of 1991 also, therefore, fails and isliable to be dismissed.”

The issue examined in this part of the reported judgment is in theCcontext of the provisions of the Karnataka Rent Control Act, 1961,stipulating absolute prohibition against assignment and transfer of interestof a statutory tenant and in particular, the purport of Section 22 of theSick Industrial Companies (Special Provisions) Act, 1985 regardingsuspension of legal proceedings etc. In the present case, it is not anDassignment or transfer of interest by the statutory tenant but a case ofinvoluntary transfer and vesting of the right, title and interest of thestatutory tenant in respect of the suit premises in the Central Governmentby operation of law made by the Parliament. The purpose of retrospectiveinsertion of sub-section(3) of Section 3 of the 1995 Act is intended totake away the basis of the status acquired by the appellant-NTC qua theEsuit property or the rights to be enjoyed in relation thereto. So long asthe amended provisions of the 1995 Act or of the Validation Act 2014are in force by operation of law, interest of Podar Mills as that of astatutory tenant stood transferred to and vested absolutely in the CentralGovernment and would continue to so vest in it. The concomitant of this Findisputable factual position is that the Trust could and ought to seekeviction of the Union of India from the suit property if it intends to do so,on grounds permissible under and in the manner prescribed for in themunicipal Rent Legislation as applicable at the relevant time.

47. Reliance was then placed on the exposition in paragraph Nos.G14 to 18 in Bhoolchand and Another Vs. Kay Pee Cee Investmentsand Another[9]. The Court noted the factual position of that case and thesubmissions of the counsel in paragraphs 14 to 16; and then proceededto consider the same in paragraphs 17 and 18, which read as follow:-

“17. The decision in Damadilal case and others in the same linerelated primarily to the question of heritable interest in the premisesof the legal representatives of the deceased tenant who was inoccupation as statutory tenant. Pointing out that the concept ofstatutory tenancy under the English Rent Acts and under Indianstatutes like the one with which we are concerned rests on differentfoundations, it was held that the statutory tenant had a heritableinterest in the premises which was not merely a personal interestbut an interest in the estate like that of a contractual tenant. Onthis conclusion, the right of legal representatives of the statutorytenant to protect the possession and prosecute the appeal againsteviction order was upheld. The main question for decision inDamadilal case was the heritable nature of the statutory tenancyand it was in this context that the terms and conditions of a statutorytenancy were held to be the same as those of the contractualtenancy preceding it. No question arose in Damadilal case ofthe right of a statutory tenant to create a sub-tenancy afterreplacement of the contractual tenancy with the statutory tenancy.The observations made and the decision rendered in Damadilalcase cannot, therefore, be construed as holding that a statutorytenant has a right to create a sub-tenancy during subsistence ofstatutory tenancy after expiry of the contractual tenancy whenthe Rent Acts give the same protection against eviction to thetenant except on one or more of the specified grounds. Obviously,the protection to the statutory tenant and the heritable nature ofthe statutory tenancy providing the same protection against evictionto the tenant’s heirs does not further require conferral of the rightof inducting a sub-tenant which is not necessary for enjoyment ofthe tenancy and the protection against eviction given by the RentActs. There is no rationale for inferring or extending the landlord’swritten consent for sub-letting beyond the period of contractualtenancy for which alone it is given. No separate discussion forthe later decisions in the same line is necessary because of thesame distinction in all of them.

18. One decision which requires specific mention and is obviouslynearest on facts to the present case is Mahabir Prasad Vermav. Surinder Kaur. In that case, the contractual tenancy was for aperiod of one month from April 1, 1974 to April 30, 1974 with thelandlord’s consent for sub-letting. The tenant continued to occupy ABCDEF

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the premises even after expiry of the contractual tenancy on April30, 1974 and inducted therein a sub-tenant. The landlord sued foreviction of the tenant on the ground of unlawful sub-letting of thepremises which was a ground for eviction under the relevant RentAct. There was some dispute about the time of induction of thesub-tenant, it being claimed by the tenant that the induction of thesub-tenant was in the month of April 1974 during subsistence ofthe contractual tenancy while the landlord contended that the sub-letting was after the month of April 1974. It was found as a factthat the tenant had sublet in the month of April 1974 when thewritten consent of the landlord subsisted and not subsequent to itin May as claimed by the landlord. The crux of the question fordecision therein was stated thus: (SCC p. 269, para 24)

“The crux of the question, therefore, is whether the sub-lettingby the tenant with the written consent of landlord during thecurrency of the tenancy becomes unlawful and illegal on thedetermination of the tenancy and furnishes a ground for evictionwithin the meaning of Section 13(2)(ii)(a) of the Act.”

On the finding that the sub-tenant had been inducted during theperiod of contractual tenancy on the basis of the written consentfor sub-letting given by the landlord, the sub-letting did not becomeunlawful merely because the contractual tenancy of the tenantcame to an end and the protection against eviction to the tenantas a statutory tenant also enured to the benefit of the lawful sub-tenant recognised by the statute. It was held as under: (SCC p.271, paras 26 & 27)

“Sub-letting lawfully done with the written consent of thelandlord does not become unlawful merely on the ground thatthe contractual tenancy has come to an end. Sub-letting toconstitute a valid ground for eviction must be without the consentin writing of the landlord at the time when the tenant subletsany portion to the sub-tenant.

A sub-letting by the tenant with the consent in writing of thelandlord does not become unlawful on the expiry of thecontractual tenancy of the tenant, unless there is any freshsub-letting by the tenant without the written consent of thelandlord. Mere continuance in possession of a sub-tenantlawfully inducted does not amount to any fresh or further sub-letting. We are, therefore, satisfied that in the instant casethe tenant has not sublet any portion without the written consentof the landlady after the commencement of the Act…. Merecontinuance of possession by the sub-tenants lawfully inductedby the tenant with the written consent of the landlady containedin rent note does not afford any ground to the landlady foreviction of the tenant on the ground of sub-letting, as the tenanthas not sublet after the commencement of the Act anyportion without the consent in writing of the landlady.”

(emphasis supplied)

Of all the decisions cited at the bar, this decision is, admittedly,nearest on facts to the present case with the only difference thatthe sub-letting in the present case was after expiry of thecontractual tenancy and after the commencement of the Actprohibiting sub-letting without the written consent of the landlordwhen it was made on April 1, 1948, while the sub-letting inMahabir Prasad case was during the period of contractualtenancy when the express written consent of the landlord for sub-letting was available. The principle for application, however, isthe same with the only difference in the result since in MahabirPrasad case the sub-letting was made during subsistence of thecontractual tenancy with the written consent of the landlord. It issignificant that the judgment in Mahabir Prasad casewas byA.N. Sen, J. who also wrote the opinion in Gian Devi case reliedon by Dr Chitale as one of the decisions in line with Damadilalcase. It is clear that A.N. Sen, J., who wrote the opinion of thebench in Mahabir Prasad case as well as in Gian Devi case didnot construe the earlier decisions starting with Damadilal case inthe manner read by Dr Chitale. If Dr Chitale is correct in hissubmission on this point, then the entire emphasis in MahabirPrasad case on the sub-letting being made during the period ofcontractual tenancy in April 1974 and not thereafter being decisiveof the validity of sub-letting was misplaced and a futile exercise.In our opinion this was not so and the correct premise is thatlandlord’s written consent for sub-letting during the period ofcontractual tenancy cannot be construed as his consent subsistingafter expiry of the contractual tenancy. The submission of learnedcounsel for the appellants runs counter to the clear decision inMahabir Prasad case which, in our opinion, is in no way contrary A

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Ato the decisions starting with Damadilal case, the observationswherein are in the context of heritability of the statutory tenancy.In fact, it is rightly not even contended by Dr Chitale that thedecision in Mahabir Prasad case runs counter to Damadilalcase and other decisions following them. This is sufficient toindicate that the appellants’ contention is untenable.”B

We fail to understand as to how the principle expounded in thereported decision will be of any avail to the respondents (Trust). Asalready noted, it is not a case of subletting by the statutory tenant (PodarMills Ltd.) but instead a case of involuntary transfer and vesting of rightsand interest of the statutory or protected tenant in respect of the suitCproperty in the Central Government by operation of law. In any case, ifthe Trust intends to proceed against the statutory tenant on the groundof unlawful subletting or such other ground, it will be obliged to initiateeviction proceedings against the Union of India before the competentjurisdictional Rent Court on that count. In the present case, the subjectDsuit for eviction has been instituted against NTC only. Suffice it to observethat the subject suit not having been filed against the Union of India, thestatutory tenant as on the date of filing of the suit; and not invoking thejurisdiction of the Rent Court for seeking eviction of the statutory tenant,the decree as passed by the civil court is rendered unenforceable againstthe Union of India and, in any case, inexecutable due to legal fiction.E

48. The respondents (Trust) may be justified in pointing out thatthe judgment and decree rendered by this Court has not been nullified bythe Validation Act 2014 as such. However, the said decree is not againstthe real tenant in whom the rights of the statutory tenant had vested andcontinue to vest. That right could be snapped only by resorting to theFdispensation prescribed for in the rent legislation, as the concerned RentAct continued to apply to the suit property – consequent to vesting ofthe rights and interest therein in the Central Government.

49. That takes us to the next argument of the respondents that Section39 inserted in the 1995 Act operates prospectively and would not impactGthe judgment delivered by this Court on 5[th] September, 2011. Second,the said provision applies to only subsisting leasehold rights. Taking thelast argument first, the same needs to be rejected on the basis of theview already taken by us that the expression “leasehold rights” or“leasehold property” would include tenancy rights or tenanted propertyHin occupation of a statutory or protected tenant as per the applicable

municipal rent legislation at the relevant time. Be that as it may, Section39 opens with a non obstante clause and makes it more explicit thatthe provisions of the Amendment Act, 2014 shall have and shall bedeemed always to have effect for all purposes as if the provisions of theAct have been amended by the said Act, had been in force at all materialtimes. It then predicates that no suit or “other proceedings” shall bemaintained or continued in any court for the enforcement of any decreeor order or direction notwithstanding any undertaking filed by the NTCin any court. Having observed that Section 3 has been amended w.e.f.1[st] April, 1994 and upon giving full effect to the amendment, it mustnecessarily follow that the Central Government had acquired the statusof protected or statutory tenant qua the suit property from that date andcontinue to remain so, and could be evicted only in the manner prescribedby the concerned rent legislation. The decree passed against NTC is onthe assumption that the 1999 Act had no application to the suit propertyas the right had vested in NTC – which did not enjoy the protection ofthe 1999 Act. Resultantly, it must follow that the subject suit and theproceedings arising from or in relation thereto cannot proceed in lawand moreso because NTC is not the real tenant. Further, as the tenancyrights in relation to the suit property continue to vest in the CentralGovernment by operation of law, the provisions of the 1999 Act will beattracted, warranting suit for eviction to be filed against the Union ofIndia before the jurisdictional Rent Court having exclusive jurisdiction todecide the dispute between the landlord and tenant. We must hasten toadd that the validity of the provisions of the Validation Act 2014 is notput in issue in the present proceedings and we do not intend to deal withthe same. All questions in that behalf are kept open.

50. Reliance was placed on State of Tamil Nadu Vs. State ofKerala and Another[10], (in paragraph Nos. 127, 148 and 149) to buttressthe argument that a judicial decision rendered by recording a finding offact cannot be made ineffective by enacting a validating law, therebyfundamentally altering or changing its character retrospectively. On abare perusal of relevant paragraphs of this decision, the Courtunambiguously found that the judgment was given by this Court in thecontext of disputed factual position between the two States in respect ofthe safety of a Dam for raising the water level. The Court went on toobserve that such decision must be binding upon the parties andenforceable according to the decision being a plain and simple decision10(2014) 12 SCC 696

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Aon the fact which cannot be altered by the legislative decision. In thatcase, the validity of the amended Act was put in issue. In the presentcase, however, we are not called upon to examine the validity of theprovisions of the Validation Act 2014.Whether such a legislation is validor in excess of legislative competence can be examined in an appropriateproceeding. It is open to the respondents (Trust) to challenge the validityBof the Validation Act 2014, if they so desire. For the same reason, thedecisions in Madan Mohan Pathak and Ors. Vs. Union of India (UOI)and Ors.[11](in paragraph Nos. 9, 20, 21 and 31) and Shri Prithvi CottonMills Ltd. and Ors. Vs. Broach Borough Municipality and Ors.[12],will be of no avail to the respondents.C

51. In view of the above, we have no hesitation in concluding thatit is not a case for taking contempt action for non-compliance of thedirection of this Court inasmuch as the basis for issuing such directionhas become non-existent in law. Similarly, the fact that NTC has alreadyfiled two undertakings with the approval of the Union of India, assuringDto vacate the suit property, will be of no effect and cannot be enforcedby operation of law. Further, the decree though validly passed at therelevant time by the concerned Court, would be of no avail nor could itbe enforced against the Union of India in whom the rights of the protectedor statutory tenant stood transferred to and vested in w.e.f 1[st] April,1994. The Trust may have to take recourse to appropriate remedy underEthe provisions of the applicable rent legislation to evict the real tenant,the Central Government. Those proceedings will have to be decided ontheir own merits in accordance with law, without being influenced byany observation made in the proceedings which have culminated in thejudgment under review.

F52. Considering the above, we are not inclined to continue with thecontempt proceeding or for that matter application for extension of timefiled by NTC. As a result, the dictum of this Court in T. SudhakarPrasad Vs. Govt. of A.P. and Ors.[13],(Paragraph Nos. 9 to 22.), FirmGanpat Ram Rajkumar Vs. Kalu Ram and Ors.[14](Paragraph Nos. 5Gand 6) and Noorali Babul Thanewala Vs. K.M.M. Shetty and Ors.[15](Paragraph 11), will be of no avail.

11(1978) 2 SCC 5012(1969) 2 SCC 28313(2001) 1 SCC 51614(1989) Supp. (2) SCC 418H15(1990) 1 SCC 259

53. The respondents are seriously opposed to showing any indulgence toNTC in the garb of Review Petition by the Union of India. For, thereview petition is hopelessly time barred as there is delay of 837 dayscoupled with conduct of Union of India in according approval to NTCfor filing two successive undertakings in compliance of the direction ofthis Court. The objection appears to be attractive at the first blush but itcannot be taken forward, because of the legal fiction introduced by theamendment Act and giving retrospective effect to the event of vestingof the rights of the statutory tenant in respect of the suit property in theCentral Government and also rendering the decree and order includingthe undertaking given by NTC unenforceable. As a result, the decisionin the case of Office of The Chief Post Master General and Ors.Vs.Living Media India Ltd. and Ors.[16](Paragraph Nos.27 to 29), neednot detain us.

54. Considering the above, we do not deem it necessary to dilateon other submissions urged by the parties as it would not have any bearingon the conclusion that we have already reached.

55. To sum up, we hold that as per the amended Section 3 of the1995 Act w.e.f. 1[st] April, 1994, by operation of law the statutory orprotected tenancy rights of Podar Mills Ltd. in respect of the suitproperty stood transferred to and vested in the Central Governmentand it continues to so vest in it and that the decree against NTC includingthe undertaking given by NTC has been rendered unenforceable by alegal fiction. As a result, the Trust being the landlord is obliged to takerecourse to remedy against the Central Government (Union of India)to get back possession of the suit property, as per the dispensationspecified in the concerned Rent Legislation, if it so desires. It is open tothe respondents (Trust) to challenge the validity of the Validation Act2014, if they so desire.

56. We further deem it appropriate to grant liberty to the Trust torevive the contempt action in the event the challenge to the validity ofthe provisions of the Validation Act 2014 is upheld and as a result whereofthat Act is struck down. We say so because, it is common ground thatthe challenge to that Act is pending consideration before the BombayHigh Court at the instance of a third party in Writ Petition No.526 of2015 (Byramjee Jeejeebhoy Pvt. Ltd. & Ors. Vs. Union of India &Ors.) If that challenge succeeds, the position as it stood before the coming AB

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Ainto force of the Validation Act 2014 would get revived and then thejudgment of this Court dated September 5, 2011 in Civil Appeal No.7448of 2011 can be taken to its logical end against the NTC. For the samereason, it is not necessary to continue with the application for extensionof time filed by the NTC.

B57. Accordingly, we dispose of these proceedings in the followingterms:

(i) Application for condonation of delay in filing review petition isallowed;

(ii) Application for urging additional grounds in the review petitionCis allowed;

(iii) The review petition is disposed of with liberty to the respondents (Trust) to pursue other appropriate legal remedy as per law;

(iv) Contempt petition stands disposed of with liberty to therespondents as aforementioned;D

(v) Application for direction filed by the NTC is also disposed ofin the above terms;

(vi) All applications are disposed of in the above terms.

There shall be no order as to costs.E

Ankit Gyan

Petitions and applications disposed of.

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