M/S. ECONOMY ENGINEERING CO. AND ORS.versusM/S. THE ORIENTAL INSURANCE CO. LTD. AND ANR

                                                                                WP-1158-2002(1).docx


        Digitally
        signed by
                            2IN THE HIGH COURT OF JUDICATURE AT BOMBAY
        KANCHAN
KANCHAN VINOD
VINOD   MAYEKAR
MAYEKAR Date:
                                    CIVIL APPELLATE JURISDICTION
        2026.09.28
        19:50:06
        +0530

                                           WRIT PETITION NO. 1158 OF 2002
                                                    ALONGWITH
                                         INTERIM APPLICATION NO. 15385/2024
                                                         IN
                                           WRIT PETITION NO. 1158 OF 2002

                     1)     M/s. Economy Engineering Co.
                     2)     M/s. Economy Refrigeration Pvt. Ltd.
                     3)     The heirs of Y. D. Ahuja
                     all occupying Room Nos. 1 and 2, Indian
                     Mercantile Insurance Building, otherwise
                     known as Kirti Building, 31, Forbes Street,
                     Mumbai – 400 001                                  … Petitioners
                                                                           (Org. Appellants/
                                                                           Opposite Parties)
                                  V/s.
                     1)     M/s. The Oriental Insurance Co. Ltd.
                     Regional office No.1, Oriental House,
                     7, J. Tata Road, Mumbai – 400 020
                     2)     Estate Officer,
                     having office at the Oriental Insurance
                     Company Limited, Oriental House,
                     2nd floor, 7, J. Tata Road, Mumbai – 20           … ….. Respondents

                                     ________________________
                     Adv. Sunny Shah a/w. Adv. Ashwin Ankhad, Adv.Akshay Suresh and
                     Adv. Surya Das i/b. Adv. R. R. Sharma for the Petitioners/Appellants.

                     Adv. V. Y. Sanglikar a/w. Adv. Archana D. Gaware for the
                     Respondents.
                                    _________________________

                                           CORAM                   : RAJESH S. PATIL, J.
                                           RESERVED ON               4 MAY 2026
                                           PRONOUNCED ON             28 SEPTEMBER 2026
                     JUDGMENT :

                     1.           The present petition has been filed under Article 226

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and 227 of the Constitution of India by three petitioners

challenging the impugned        judgment and order dated 30

September 1998 passed by the Estate Officer in Notice No. 17 and

17 (a) of 1994 and as confirmed by judgment and order dated 31

January 2002 passed in Miscellaneous Appeal No. 120 of 1998 by

the Principal Judge of the Bombay City Civil Court at Bombay.

2.         Mr. Sunny Shah appeared on behalf of the petitioner

and Mr.Sanglikar on behalf of the respondent – Oriental Insurance.

3.         Mr. Shah submitted that the premises was given on the

tenancy basis to a proprietorship firm and the said proprietorship

firm of Mr.Ahuja was thereafter converted into a partnership firm

and from partnership it got converted into a private limited

company of which Mr. Ahuja and his wife were the directors.

4.         In the year 1957, the private limited company got

dissolved and Mr.Ahuja again started running business in the name

of the proprietorship firm. Subsequently from proprietorship firm,

it got converted into partnership firm where Mr.Ahuja alongwith

his son started doing the business.         Thereafter from the

partnership firm, in the year 1971, the business was transferred to

a private limited company.

5.         Mr. Shah submitted that there is no reason whatsoever

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for termination. He submitted that in the notice at page no. 32,

the only reason for termination is subletting of the premises.

6.         Mr.Shah referred to the judgment of Supreme Court

passed in case of Madras Bangalore Transport Co. (West) vs. Inder

Singh & Ors., 1986 (3) SCC 62 .        In the said judgment, while

referring to subletting, the court held that though the company is a

separate legal entity, actually it was only as an alter ego or

corporate reflection of the tenant-firm and the two were one, for

all practical purpose having substantial identity. This can’t be said

as subletting, assignment or parting with possession of the

premises by the firm.

7.         Mr.Shah submitted that the business was conducted

always only by the family members. Mr.Shah further submitted

that the evidence was not led by the insurance company. However,

the respondent led evidence by examining their witness who was

cross examined by the learned counsel appearing for the Oriental

Insurance Company.

8.         He submitted that under the Companies Act, for the

partnership firm to convert into a private limited company, there

has to be a deed of assignment. The petitioner followed the

procedure of law. Before the Public Premises Act (for short P.P. Act)

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came into force, the deed of assignment from the partnership firm

to a private limited company was already executed.        Therefore

there cannot be a retrospective effect of subletting as pleaded by

Respondent-Insurance Company.

9.         Mr. V. Y.   Sanglikar, appearing for the Respondents-

Insurance Company submitted that the original opponent no.1 had

subletted the premises to the opponent no.2. The respondents had

granted tenancy rights of the suit premises to a proprietary firm by

the name was M/s. Economy Engineering Co. of one Mr.Y.D.Ahuja

before 1947. As per the case of the opponents, in the year 1948,

the proprietary firm was converted into a partnership firm by

name M/s. Economy Refrigeration and Engineering Company

wherein initially son of Mr.Y.D.Ahuja, Ravish was added as a

partner. And in the year 1957, second son of Mr.Y.D.Ahuja was

also added as a partner and subsequently in the year 1964, third

son of Mr. Y.D.Ahuja by name Suresh was added as a partner.

Later in the year 1971, the partnership firm by way of Deed of

Assignment was converted into a private limited company by name

M/s. Economy Refrigeration Pvt. Ltd.

10.        On 13 May 1971, the General Insurance (Emergency

Provisions) Act, 1971 came into force. The deed of assignment as

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per the petitioners’ case was on 26 July 1971. Therefore, after the

General Insurance (Emergency Provisions) Act, 1971 had come

into force without permission of the custodian and/or the

Insurance Company, the deed of assignment was executed.

Therefore, it is a clear case of subletting.

11.         He further submitted that there is an amendment to

the P. P. Act in the year 2015 and for the present proceeding,

relevant is Section 5 of the PP Act. The word ‘may’ which was in

the old Act, has been replaced with the word ‘shall’ by the 2015

Amendment. The amendment to the Section 5 is retrospective.

Therefore, there is no option now left for the Estate officer but to

pass an eviction decree. Though in the present proceeding, the

eviction application was decided before the year 2015 and the

present writ petition has been filed in the year 2002, still the

amendment would be applicable to the present proceedings and

one has to read ‘shall’ in section 5. He relied upon few authorities

in support of his submission.

12.         Before dealing with facts of the present proceedings,

the relevant judgments of Supreme Court and of various High

Court needs to be considered.

13.          A Five-Judge Bench of the Supreme Court, in Ashoka

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Marketing Limited vs. Punjab National Bank, reported in AIR 1991

SC 855, held that the P. P. Act prevails over the Rent Act. The

objects and purpose of the P. P. Act would give it an overriding

effect over the provisions of the Rent Control Act, even though

both the P. P. Act and the Rent Act contained non-obstante clauses.

The scope of the provisions of the P. P. Act cannot be whittled down

on the basis of the apprehension that corporations like

nationalised banks or LIC are trading corporations interested in

earning profits. They cannot be precluded from buying the

properties in question which are in possession of tenants at a low

price and thereafter vacating the tenants after terminating the

tenancy and subsequently selling the property at a higher price.

14.   In the case of Akbarali A. Premji & Another V/s. LIC &

Another, Writ Petition No. 4992 of 2008, Single Judge of this

Court, while considering a petition filed by a tenant challenging

the judgment passed under PP Act, held that the application of

principles of rent control legislation, the same cannot be used in a

strict sense in favour of the petitioners. With regard to the

guidelines and applicability of Articles 12 and 14 of the

Constitution of India, it is necessary for the authority to make out

at least some ground for eviction. Strict interpretation of various

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terms made under rent legislation cannot be used, though the

grounds can be used by the authority for eviction purposes. In

other words, in a strict sense, the grounds available under the Rent

Act for terminating tenancy are also the grounds available in the

PP Act for terminating tenancy and eviction of the tenant. It will be

sufficient for the authority to prove that the original tenant had

committed an act not permitted by the contract of tenancy. With

this view, the Single Judge dismissed the petition filed by the

tenant.

15.        The Division Bench of this Court, in the judgment of

Subhash Phophale V/s. Oriental Insurance Company, reported in

2010 (5) AIR Bom R 44, held that the Rent Act would not be

applicable to the Public Premises Eviction Act. Oriental Insurance

Company became a public company with effect from 13 May 1971.

The leave and licence agreement dated 20 December 1972 could

not confer any higher rights upon the petitioner, who claimed to be

a licensee from the original tenant. Once the original tenant had

suffered a notice of termination issued as far back as 12 July 1980,

at least from that date, the occupation of the original tenant and

consequently, that of the petitioner, who claimed to be a licensee

from the original tenant by virtue of the leave and licence

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agreement, became “unauthorised Occupant” and was amenable to

action for eviction as well as payment of damages. The order of

eviction passed by the City Civil Court against the opposite parties

was confirmed, and the petition filed by the licensee claiming

rights under the leave and licence agreement was rejected.

15.1.      The Supreme Court, in an appeal filed by the tenant,

Suhas Pophale, challenging the judgment passed by the Division

Bench of this Court, while allowing the appeal filed by the tenant

Suhas Pophale, held that the Bombay Rent Act was exempted from

its application to the premises belonging to the Government or a

local authority from 16 September 1958, when the Public Premises

Act, 1958 came into force. The said position has been reiterated

under the P.P. Act, 1971, which replaced the 1958 Act. It was

further held that the P. P. Act would not be applicable to premises

where the tenancies were created before 16 September 1958, or

such later date when the premises concerned became public

premises upon the landlord becoming a Government company or

public corporation.

16.        A three-Judge Bench of the Supreme Court, in LIC vs.

Vita, reported in 2025 SCC OnLine SC 2772, was dealing with a

reference concerning the ratio laid down by the two-Judge Bench

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of the Supreme Court in Suhas Pophale vs. Oriental Insurance

Company and the contrary decision of the Constitution Bench in

Ashoka Marketing vs. Punjab National Bank.

16.1.      The principal question which arose for consideration

was whether, for the purpose of application of the P. P. Act, a valid

distinction can be made between tenants who were in occupation

of the premises prior to the enforcement of the Public Premises Act

and those who entered into occupation subsequently thereto, but

before such premises were taken over by the Government or by a

Corporation, as the case may be, and whether, in such cases, the

operation of the Public Premises Act is intended to be only

prospective in nature.

16.2.      The three-Judge Bench held that the view taken in

Suhas Pophale by the Division Bench was palpably incorrect and

unjustified. It further held that the provisions of the Public

Premises Act shall override the provisions contained in the Rent

Control Legislations.

16.3.      The Public Premises Act, 1971 will apply to tenancies

which may have been created and were in existence either before

coming into force of the Act or which may have been created

subsequent to the coming into force of the Public Premises Act.

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16.4.       Two conditions must be satisfied for the applicability of

the Public Premises Act. Firstly, the tenanted premises must fall

within the definition contained in Section 2(e) of the Public

Premises Act and, secondly, the premises should have been in

unauthorised occupation.

16.5.       Termination of tenancy of public premises by issuing

notice under Section 106 of the Transfer of Property Act is one of

the modes which would render the occupation of the tenant

unauthorised after the date specified in such notice. This would

hold true in respect of tenancies created either before or after the

coming into force of the Public Premises Act, 1971.

17.         A Division Bench of the Supreme Court, in the

judgment of Jiwan Dass vs. LIC of India, reported in 1994 Supp

(3) SCC 694, was dealing with facts where the appellant was

inducted in the year 1949 as a tenant of premises admeasuring

408 sq. ft. in the city of Delhi, on a monthly rent of Rs.15/-. Notice

was issued under Section 106 of the Transfer of Property Act and

action was initiated under the Public Premises Act. An argument

was advanced on behalf of the appellant that, before initiating

action under the Public Premises Act, reasons should be assigned

which must be just and germane for the purpose of exercise of

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such power and that the reasonableness thereof must be tested on

the touchstone of Article 14 of the Constitution of India.

17.1.      The Bench held that Section 106 of the Transfer of

Property Act indicates that the landlord is entitled to terminate the

tenancy by giving 15 days' notice. It does not contemplate giving

any reasons for terminating the tenancy. Equally, the definition of

public premises under the Public Premises Act postulates that the

tenancy has been determined for any reason whatsoever.

Therefore, the powers are wide. The statute has advisedly

empowered the authority to act in the public interest and

determine the tenancy or lease or licence before taking action

under Section 5 of the Act. If the rent is unrealistically low, the

owner would be entitled to deal with his property in his own way

and, with a view to revise the rent to an adequate market rate, the

tenant becomes liable to be ejected.

18.        The Supreme Court, in the judgment of Singer India

Ltd. V/s. Chander Mohan Chadha & Ors., reported in (2004) 7

SCC 1, was dealing with facts where Section 14(1) of the Delhi

Rent Control Act, in relation to subletting, was considered. It was a

case where the subject premises was let to a company called M/s.

Singer Sewing Machine Company. The said company was

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incorporated under the laws of USA. It was a case where the

landlord alleged that there was parting with possession by the said

company in favour of Indian Sewing Machine Company Limited,

and the said company was then in exclusive possession of the

premises and, therefore, was liable to be evicted. The eviction

petition was contested on the ground that, as a direction was

issued to the American company to reduce its share capital to 40%

in order to carry on business in India in view of Section 29 of

FERA, accordingly, a company petition for amalgamation was filed

before the Bombay High Court under the provisions of Sections

391 and 394 of the Companies Act. In view of the said petition

being allowed, there was amalgamation, and thereafter, the name

of Indian Sewing Machine Company was changed to Singer India

Limited.

18.1.       The Supreme Court further held that it was not open to

Singer India Limited to contend that, for the purpose of FERA, the

American company had ceased to exist, but, for the purpose of the

Delhi Rent Control Act, it was still in existence. It was the Indian

company which was in occupation and carrying on business, hence

the appellant was liable for eviction.

19.         In the judgment of Madras Bangalore Transport

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Company v. Inder Singh and Others , reported in (1986) 3 SCC 62,

the Supreme Court was dealing with proceedings under the Delhi

Rent Control Act. Where the Supreme Court held that Madras

Bangalore Transport Company, a partnership firm, became a tenant

of the suit premises in July 1962. In 1967, disputes arose between

the partners of the said partnership firm, pursuant to which a

settlement was arrived at between them through arbitration. They

thereafter formed two different partnership firms, namely, Madras

Bangalore Transport Company (West) and Madras Bangalore

Transport Company (East). Thus, the business was divided

between the same partners into two partnership firms on the basis

of their respective territories, namely, West and East.

19.1.         As the West company could not operate in the territory

allotted to the East company, the partners of the West company

founded a limited company styled as Caravan Goods Carrier

Private Limited, in order to secure business in the territory where

they were otherwise not permitted to operate. The West company

appointed the newly incorporated private limited company as its

agent. The landlord alleged that this arrangement amounted to

subletting.

19.2.         Considering the various authorities on the issue, the

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Supreme Court held that there was substantial identity between

the limited company and the partnership firm and that there was

no subletting, assignment or parting with possession by the West

company in favour of Caravan Goods Carrier Private Limited.

Hence, the eviction decree was set aside.

20.           In the latest judgment of the Supreme Court delivered

in the matter of Sri M.V. Ramachandrasa v. Mahendra Watch

Company, reported in 2024 SCC OnLine SC 582, the Supreme

Court, while considering, the Karnataka Rent Act, dealt with

amongst other judgments, the judgment passed in Associated

Hotels of India Limited v. S.B. Sardar Ranjit Singh , reported in

1967 SCC OnLine SC 93, wherein the Supreme Court held that the

landlord must first prove parting with possession. However,

recognizing     the   inherent   clandestine   nature   of    subletting

arrangements, courts have evolved a rule of evidence that once

exclusive possession of a third party is established, the burden

shifts to the tenant to explain the nature of such possession.

20.1.         It further considered the judgment of Celina Coelho

Pereira v. Ulhas Mahabaleshwar Kholkar, reported in (2010) 1 SCC

217, which considered the earlier judgment of Helper Girdharbhai

v. Saiyed Mohammad Mirasaheb Kadri, reported in (1987) 3 SCC

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538, and thereafter the Division Bench laid down the legal position

that emerges from all the earlier precedent decisions and

summarized it in paragraph No. 25, which stated that:

       "(i) In order to prove mischief of sub-letting as a ground for eviction
       under rent control laws, two ingredients have to be established, (one)
       parting with possession of tenancy or part of it by the tenant in favour
       of a third party with exclusive right of possession, and (two) that such
       parting with possession has been done without the consent of the
       landlord and in lieu of compensation or rent.

       (ii) Inducting a partner or partners in the business or profession of a
       tenant by itself does not amount to sub-letting. However, if the purpose
       of such partnership is ostensible and a deed of partnership is drawn to
       conceal the real transaction of sub-letting, the court may tear the veil
       of partnership to find out the real nature of transaction entered into by
       the tenant."


21.            The Division Bench of this Court, in the matter

between LIC v. Kuldeep Singh (Writ Petition No. 1564 of 2001), by

its order dated 5 June 2006, held in paragraphs 3 and 4 that the

requirement under the Bombay Rent Act for eviction cannot be

applied to eviction proceedings under the Public Premises Eviction

Act.

22.            A Single Judge of this Court, in Smt. Indira Chetan Puri

vs. LIC, reported in 2008 (6) AIR Bom R 229, held that, for the

purpose of evicting a tenant under the provisions of the Public

Premises Act, it is necessary for the authority to make out at least

grounds for eviction. Strict interpretation of various terms

contained in the Rent Legislation cannot be used, though such

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grounds can be relied upon by the authority for the purpose of

eviction.

22.1.       In the said case, the tenant had constructed a shed

without the permission of the authority. Though the tenant was

asked to remove the said construction, he ignored the same and

virtually constructed a shed of a larger size. The Court held that

sufficient grounds were available to the authority to terminate the

tenancy.

23.         The Division Bench of this High Court, while deciding

an LPA in the case of Nandini J. Shah vs. LIC, reported in 2013 (2)

All MR 729, held that, in a proceeding arising out of the Public

Premises Act, if the tenant incorporated a private limited company

with his close family members and was able to demonstrate that

he had a controlling interest in the said company and had not

parted with possession, then he could not be evicted from the

premises merely on the ground of registration of the company.

23.1.       In the changing commercial scenario, if the tenant

found formation of a partnership firm and private limited company

to be a more effective way of conducting tax and financial services,

that was nothing but an extension of the existing business

activities to remain in tune with the changing financial

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environment. Thus, by employing the principle of lifting the

corporate veil and looking at the true nature of the companies, the

tenant had not relinquished control of the business by creating

these three companies and there was no subletting.

23.2.        The tenanted premises were in occupation of the

appellant for several decades. Therefore, it was concluded that

there was no subletting and, hence, there was no question of the

appellant paying any amount of compensation. Accordingly, the

impugned order passed by the Estate Officer, the Bombay City Civil

Court and the learned Single Judge of this Court was quashed and

set aside.

23.3.        The order passed by the Division Bench was carried in

an SLP before the Supreme Court. A three-Judge Bench of the

Supreme Court, while answering the question as to whether an

LPA was maintainable before the Division Bench of the Bombay

High Court, held that judicial orders of the City Civil Court are not

amenable to writ jurisdiction under Article 226 of the Constitution.

The jurisdiction under Article 227 of the Constitution is distinct

from the jurisdiction under Article 226.

23.4.        Hence, while allowing the SLP, the Supreme Court held

that the preliminary issue regarding maintainability of the LPA had

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been answered in favour of LIC. However, it clarified that it was

not expressing any opinion, either way, on the merits of the

eviction order passed by the Estate Officer, the Bombay City Civil

Court or the learned Single Judge of the Bombay High Court. The

Supreme Court granted liberty to the tenant to challenge the

decision of the learned Single Judge of the High Court, which was

to be done within a period of six weeks.

24.        In M/s. Pankaj Industries and Another v. Oriental

Insurance Company Limited, reported in (2012) 1 AIR Bom R 766,

the Division Bench was dealing with facts in PP Act proceedings,

where the subject premises was let to M/s. Pankaj Industries, of

which Mr. P.L. Shah was the sole proprietor, as was evident from

the original lease deed. It was the case of Mr. P.L. Shah that the

proprietorship concern was converted into a partnership firm with

Mr. P.L. Shah and a new partner, namely Atul Desai being inducted.

Thereafter, Mr. P.L. Shah resigned from the partnership firm and

there was a retirement deed. Mr. P.L. Shah, as per the retirement

deed, had mentioned that he had relinquished all his rights in the

firm property as well as tenancy in respect of the subject premises,

and Mr. Shah relinquished tenancy rights in favour of Mrs. Desai

wife of Atul Desai. Further, Mrs. Desai inducted her sons as

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partners in the firm and continued the business in the same name,

i.e., M/s. Pankaj Industries. In such kind of facts, the Court held

that there was sub-tenancy, and there was no contractual

relationship between Atul Desai and P.L. Shah.

24.1.      Therefore in Pankaj Industries, a third party was

inducted by original tenant in the suit premises.

25.        A Division Bench of the Delhi High Court in Prem Lata

Bhatia v. Union of India and Others, reported in 2006 SCC OnLine

Del 136, while dealing with a case under the P. P. Act, considered a

case where the appellant was allotted a shop in 1975 at a monthly

rent and, hence, the appellant came into exclusive possession of

the said shop.

25.1.      In the month of November 1976, the appellant

incorporated a company called “Romika World Travel Private

Limited”, wherein the appellant, along with her husband, was

holding more than 97.93% of the shares in the company. It was

alleged that the shop continued to be managed by the appellant

through the aforesaid company, which was running its business

from the said shop right from 1976 onwards, to the knowledge of

everyone, including the respondent, without any objection being

raised. There was no change in the shareholding of the appellant,

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and the appellant continued to hold more than 97% of the shares

along with her husband. After a lapse of about seven years, by a

letter dated 22 August 1983, the respondent called upon the

appellant to show the documents relating to the business being run

from the premises. It was alleged that there was a violation of the

terms and conditions of the tenancy. Thereafter, the respondent

initiated proceedings under the PP Act against the petitioner.

25.2.       The Estate Officer passed an eviction order on the

ground of subletting. An appeal filed against the said eviction

order was dismissed. Aggrieved by the orders passed by both the

authorities, a Writ Petition was filed before the Delhi High Court,

which was dismissed by the learned Single Judge. Hence, a Writ

Appeal was filed before the Division Bench of the Delhi High

Court. The Division Bench held that (1) it very often happens in

the business world that when a person starts a business as a sole

proprietor, he later on converts it into a partnership firm along

with some family members, and thereafter the business further

expands, it is incorporated as a private limited company, and

thereafter on further expansion, it may also be made a public

limited company. This is a very common feature in the business

world. (2) In such cases, the doctrine of piercing the veil of

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corporate personality should be utilized. When the partnership

firm converts into a private limited company with the said partners

becoming shareholders and directors, it will not be a case of

transfer of the property of the firm to the company. In fact, it is

well settled that there is no transfer in such cases because in

substance, the owner remains the same, though technically it

becomes a different legal entity. Hence, the prayers in the Writ

Petition was allowed by the Division Bench.

26.        In the present proceedings, eviction is sought on the

ground of tenant having sublet the suit premises. As per the case

of the Respondent-Insurance Company, the premises was initially

given in tenancy to a proprietary firm of Mr. Y.D.Ahuja by the

name of M/s. Economic Engineering Company, which got

subsequently converted into M/s. Economic Refrigeration and

Engineering Company as a partnership firm whereas periodically,

the sons of Mr.Y.D.Ahuja became the partners. The partnership

firm by way of deed of assignment got converted into a M/s.

Economic Refrigeration Private Limited. There is no doubt that

apart from Mr. Y. D. Ahuja, himself, only his sons and wife had

been added as partners to the partnership firm of Economy

Engineering Company and thereafter the partnership firm was

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converted into a private limited company wherein the father and

the sons are the shareholders and the directors. Subsequently, the

sons retired from the company as a shareholder and also as a

director.   Hence, the father went back, and from company to

become a proprietary concern. Therefore, admittedly there is no

third person who has been brought in the company. In my view,

the concept of sub-tenancy has not been specifically mentioned in

the P. P. Act. The said ground of sub-tenancy is available under the

Maharashtra Rent Control Act or the erstwhile the Bombay Rent

Control Act amongst the other grounds mentioned for eviction of

the tenant.   The law as    laid down by the Supreme Court             in

Mahendra Watch Co. (Supra) as far as sub-tenancy is concerned,

two things has to be mentioned by the landlord in the plaint, viz.,

that there is parting of the tenancy premises either fully or in part.

Second, the tenant is profiteering after parting with the possession.

As discussed above under the P. P. Act, the ground of sub-tenancy

is not mentioned, but since in the present proceeding, that ground

has been taken in order to end the tenancy of the Petitioner under

the PP Act. One would have to look into the judgment of the

Supreme Court passed in Mahendra Watch Co., (supra) which

admittedly is under the Karnataka Rent Control Act. However, the

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law as laid down in the said judgment in my view can be applied

even in the PP Act. In the present proceedings there is no third

person who is brought in the partnership firm and/or in the

private limited company by the original tenant. Therefore, the

intention of original tenant was clear. He did not wanted a third

person to be inducted for whatsoever reasons, hence did not

intend to create a sub-tenancy. Neither there is an submission

made in the eviction Application before the Estate Officer that the

petitioner-tenant was profiteering after parting possession of the

suit premises. Therefore in my view, the said judgment Mahendra

Watch Co., (supra) would be squarely applicable to the present

proceedings and hence the eviction decree passed against the

petitioner needs to be quashed and set aside.

26.1.      The law as laid down in Madras Bangalore (supra) by

Supreme Court, will be applicable to the facts of present

proceedings. So also the view taken in Prem Bhatia (Supra) by

Delhi High Court is the correct view.

26.2.      In Pankaj (supra) Delhi High Court, was dealing with

the facts where a third person was inducted as partner. In Singer

(supra) Supreme court was dealing with Delhi Rent Act, where

there was amalgamation of a foreign firm with Indian Company.

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Therefore, the ratio laid down in both these judgments will not be

applicable to the present proceeding.

26.3.       Supreme Court in Ashoka Marketing (supra) while

dealing with group of petitions held that P. P. Act had overriding

effect over the Rent Act. In the judgment of Vita (supra) while

dealing with reference concerning ratio laid down in Suha Pophale

and Ashoka Marketing held that there is no distinction of tenancies

created and in existence before the enforcement of P. P. Act or

created after enforcement of P. P. Act. The ratio laid down in both

these judgments does not affect the merits of the present

proceedings

27.         As far as retrospective effect of any Act or section is

concerned, in my view the same has to be specifically mention in

the Act itself. In the PP Act, there is no such mention.             It is

presumed that the said amendment of 2015 has a prospective

effect. Hence, As far as the provisions of Section 5 amendment of

2015 is considered, in my view, the same cannot be said to have an

retrospective effect.

28.         Therefore, as there was no sub-letting, the petitioners

can't be called as “Unauthorised Occupants” under the provision of

P. P. Act. Hence, the petitioners succeed in the present Writ Petition.

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29.         ‘Rule’ is made absolute and the impugned judgment

and decree passed by the Estate Officer on 30 September 1998

and as confirmed by the City Civil Court by the judgment and

order passed dated 31 January 2002 passed              in Misc. Appeal

No.120 of 1998, both stand quashed and set aside.

30.         Since the petitioner has succeeded in the present writ

petition, in sequel, the Interim Application No. 15385 of 2024 filed

by the petitioner, seeking direction to the Registrar of the High

Court to return back the bank guarantee/58/2001-2002 filed in

writ petition by the petitioner to comply with the direction given

by this Court in its order dated 4 March 2002, stands allowed in

terms of prayer clause (a).So also, any other bank guarantee filed

by the petitioners before the Registry of the High Court of Bombay

shall also be returned back to the petitioners.



                                                  (RAJESH S. PATIL, J.)

31.   Mr. Sanglikar, learned counsel for the respondents, at this

stage seeks stay to the execution of this judgment.


32.   Mr. Sunny Shah, learned counsel appearing for the

petitioners, has opposed the request made by Mr. Sanglikar on the



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ground that the eviction decree passed against the petitioners has

been set aside, and there will no prejudice which would be caused

to the respondents in case they want to challenge the present

judgment before the Hon’ble Supreme Court.


33.   Hence, the request made by Mr. Sanglikar stands rejected.


                                             (RAJESH S. PATIL, J.)




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