Supreme Court of India
THE NATIONAL TEXTILE CORPORATION LTD.versusNARESHKUMAR BADRIKUMAR JAGAD & ORS.
- Citation
- 2011 INSC 651
- Decided
- 5 September 2011
- Disposal
- Dismissed
- Bench
- P SATHASIVAM
Holding
NTC is not an agent of the Central Government and is not entitled to exemption under s.3(1)(a) or (b) of the Maharashtra Rent Control Act, 1999; the appeal is dismissed.
Summary
The National Textile Corporation Ltd. (NTC) occupied premises that were originally leased to Poddar Mills, a textile undertaking taken over by the Central Government under the Textile Undertakings (Nationalisation) Act, 1995. The owners of the premises filed an eviction suit under the Maharashtra Rent Control Act, 1999, and the trial courts decreed possession in their favour. NTC appealed, claiming exemption under s.3(1)(a) and (b) of the 1999 Act on the ground that the Central Government remained the tenant and NTC was merely its agent. The Supreme Court held that NTC is a separate legal entity—a government company—not a government department or agent, and that the rights vested in it under the 1995 Act do not confer the exemption claimed. The Court also emphasized that the issue was never pleaded and a new factual plea cannot be raised at this stage. Consequently, the appeal was dismissed, with the Court granting NTC time until 31‑12‑2013 to vacate the premises.
Issues considered
- Whether NTC is entitled to exemption under s.3(1)(a) or (b) of the Maharashtra Rent Control Act, 1999 by claiming it is an agent of the Central Government.
- Whether the statutory transfer of tenancy rights under the Textile Undertakings (Nationalisation) Act, 1995 makes NTC a 'government' tenant for the purposes of the 1999 Act.
- Interpretation of the term 'vesting' in the 1995 Act.
- Whether a party may raise a new factual plea (that it is an agent) when the issue was not pleaded in the lower courts.
- Whether NTC, as a government company, can be treated as a government department or agency under the Contract Act, 1872.
Legislation cited
- Code of Civil Procedure, 1908s. Order VIII Rule 2, s. Order VII Rule 2
- Indian Contract Act, 1872s. 182, s. 230
- Maharashtra Rent Control Act, 1999s. 3(1)(a), s. 3(1)(b)
- Textile Undertakings (Nationalisation) Act, 1995s. 3(1), s. 3(2), s. 4(6)
Subjects
rent controlexemptiongovernment companyagencyvestingpleadingsstatutory transfertextile nationalisationevictioncivil procedure
Judgment
[2011] 14 (ADDL.) S.C.R. 472
A THE NATIONAL TEXTILE CORPORATION LTD.
v.
NARESHKUMAR BADRIKUMAR JAGAD & ORS.
(Civil Appeal No. 7448 of 2011)
SEPTEMBER 05, 2011
B
[P. SATHASIVAM AND DR. B.S. ·CHAUHAN, JJ.]
Maharashtra Rent Control Act, 1999 - s.3(1J(a) & (b) -
Exemption from application of the Act 1999 - Claim for -
C Tenability - Status. of appellant- National Textile Corporation
- Textile Undertaking 'P' had tenancy rights in the premises
in question - Act 1995 came into effect leading to statutory
transfer of the tenancy rights of Textile undertaking 'P' to
Central Government and thereafter to appellant-NTC -
o Respondent-owner of the premises filed eviction suit against
the appellant - Appellant claimed protection under exemption
provisions in the Act 1999 on the ground that the Central
Government still remained tenant and appellant was merely
its agent - Held: The Central Government and the appellant
E are separate legal entities and not synonymous - Appellant
is being controlled by the provisions of the Act 1995 and not
by the Central Government - Appellant is a Government
Company and neither government nor government
department - Nor can it claim the status of an 'agent' of the
F Central Government for the simple reason that rights vested
in the appellant stood crystallised after being transferred by
the Centr~I Government - Appe!lant cannot be permitted to
say that though all the rights vested in it but it merely
remained the agent of the Central Government - Acceptance
of such a submission would require interpreting the
G expression 'vesting' as holding on behalf of some other
person - Such a meaning cannot be given to the expression
'vesting' - Appellant not entitled for exemption under s.3(1 )(a)
or 3(1}(b) of the Act 1999 - Appellant directed to file usual
H 472
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 473
BADRIKUMAR JAGAD
undertaking to hand over peaceful and vacant possession of A
the premises to respondent No. 1 - Textile Undertakings
(Nationalisation) Act, 1995 - Contract Act, 1872- ss.182 and
230.
Textile Undertakings (Nationalisation) Act, 1995 - s.3(1) 8
and (2) - Right, title and interest of textile undertaking vested
in Central Government and thereafter in appellant-National
Textile Corporation by statutory transfer - Meaning of the
expression 'vesting' - Held: 'Vesting' means having obtained
an absolute and indefeasible right - It refers to and is used C
for transfer or conveyance - 'Vesting' in the general sense,
means vesting in possession - However, 'vesting' does not
necessarily and always means possession but includes
vesting of interest as well - 'Vesting' may mean vesting in title,
vesting in possession or vesting in a limited sense, as
indicated in the context in which it is used in a particular D
provision of the Act- Word 'Vest' has different shades, taking
colour from the context in which it is used - It does not
necessarily mean absolute vesting in every situation and is
capable of bearing the meaning of a limited vesting, being
limited, in title as well as duration. E
Pleadings - Purpose and necessity of - Held: Pleadings
and particulars are necessary to enable the· court to decide
the rights of the parties in the trial -- A decision of a case
cannot be based on grounds outside the pleadings of the F
parties - A party.. has to take proper pleadings and prove the
same by adducing sufficient evidence - In view of the
'
provisions of Order-VII/ Rule 2 CPC, the appellant was under
an obligation to take a specific plea to show that the eviction
suit filed against it was not maintainable which it failed to do G
so - The appellant ought to have taken a plea in the written
statement that it was merely an 'agent' of the Central
Government, thus.the suit against it was not maintainable -
The appellant did not take such plea before either of the courts
below -'" More so, whether A is. an agent of B is a question of H
474 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A fact and has to be properly pleaded and proved by adducing
evidence - The appellant miserably failed to take the required,_
pleadings for the purpose - Code of Civil Procedure, 1908 - ·
Order VIII, Rule 2.
Pleadings - New plea - Held: A new plea cannot be
8
taken in respect of any factual controversy whatsoever,
however, a new ground raising a pure legal issue for which
no inquiry/proof is required can be permitted to be raised by
the court at any stage of the proceedings.
C Words and Phrases - vesting - Meaning of.
The textile undertaking- Poddar Mills had leasehold -
rights in the premises in question. The Textile
Undertakings (Taking over of Management) Act, 1983
0 came into force whereby the management of 13 textile
undertakings including the Poddar Mills was taken over
by the Central Government. The lease granted in favour
of Poddar Mills expired by efflux of time. The Poddar Mills
however con_tinued as a tenant by holding over the
E premises. The Textile Undertakings (Nationalisation) Act,
1995 came into force by virtue of which the tenancy rights
of Poddar Mills purportedly stood vested in the Central
Government and thereafter vested in the appellant-
National Textile Corporation (NTC). Meanwhile the
Maharashtra Rent Control Act, 1999 also came into force.
F The respondent-owner of suit premises filed eviction suit
against National Textile Corporation (NTC) which was
decreed. The decree was upheld by the appellate court
as well as the High Court in civil revision.
G In the instant appeal, the appellant submitted that the
tenancy rights of Poddar Mills stood vested absolutely in
the Central Government on commencement of the Act
1995 by operation of law; that the appellant stepped in
the shoes of the Central Government merely as an agent
H in the context of the Act 1999; that the Central
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 475
BADRIKUMAR JAGAD
Government continued to be a tenant in the suit premises A
.. and thus, the National Textile Corporation was entitled to
· protection of either S. 3(1 )(a) of the Maharashtra Rent
Control Act, 1999 being premises let out to the
Government; and that thus the suit filed by the
respondents was not maintainable.· B
Per contra, the respondents inter a/ia submitted that
the appellant had never raised the issue before the courts
below that the Central Government was the tenant and
that it was holding the premises merely as an agent; that C
even otherwise, the tenancy rights which had vested in
the Ce'ltral Government, stood vested immediately, by
operation of law, in the appellant,. a public sector
undertaking and thus the appellant had no protection of
the Act 1999. ·
D
Dismissing the appeal, the Court
HELD: 1.1. In the instant case, no reference had ever
been made by the appellant to the effect of the provisions
of the Textile Undertakings .(Nationalisation) Act, 1995 E
before the trial court while filing the written submissions;
neither any issue was framed; nor arguments had been
advanced in regard to the same; this issue was not
agitated either before the appellate court or revisional
court. Before this Court, an application was filed to urge
additional grounds regarding the application of the Act F
1995 without seeking amendm.ent to the pleadings (WS).
[Para 6] [489-G-H; 490-A]
1.2. Ple.adings and particulars are necessary to
enable the court to decide the rights of the parties in the G
trial. Therefore, the pleadings are more of help to the court
in narrowing the controversy involved and to inform the
parties concerned to the question in issue, so that the
parties may adduce appropriate evidence on the said
issue. It is a settled legal proposition that "as a rule relief H
476 SUPREME COURT .REPORTS [2011) 14 (ADDL) S.C.R.
A not founded on the. pleadings should not be granted". A
decision of a case cannot be based on grounds outside
the pleadings of the parties. The pleadings and issues are
to ascertain the real dispute between the parties to
narrow the area of conflict and to see just where the two
B sides differ. [Para 7) [490-B-C]
1.3. A party has to take proper pleadings and prove
the same by adducing sufficient evidence. No evidence
can be permitted to be adduced on a issue unless factual
foundation has been laid down in respect of the same. A
C new plea cannot be taken in respect of any factual
controversy whatsoever, however, a new ground raising
a pure legal issue for which no inquiry/proof is required
can be permitted to be raised by the court at any stage
of the proceedings. [Para 13, 14) [491-G-H; 492-A-B]
D
Mis. Trojan & Co. v. RM N.N. Nagappa Chettiar AIR 1953
SC 235:1953 SCR 780; State of Maharashtra v. Mis.
Hindustan Construction Company Ltd. AIR 2010 SC 1299:
2010 (4) SCR 46; Ka/yan Singh Chauhan v. C.P. Joshi AIR
E 2011 SC 1127: 2011 SCR 216; Ram Sarup Gupta (dead) by
L.Rs. v. Bishun Narain Inter College & Ors. AIR 1987 SC
1242: 1987 (2) SCR 805; Bachhaj Nahar v. Nilima Manda/
& Ors. AIR 2009 SC 1103: 2008 (14) SCR 621; Kashi Nath
(Dead) through L.Rs. V. Jaganath (2003) 8 sec 740: 2003
F (5) Suppl. SCR 202; Biswanath Agarwal/a v. Sabitri Bera &
Ors. (2009) 15 SCC 693: 2009 (12) SCR 459; Syed and
Company & Ors. v. State of Jammu &Kashmir & Ors. ·1995
Supp (4) SCC 422: Chinta Lingam & Ors. v. The Govt.· of
India & Ors. AIR 1971 SC 474: 1971 (2) SCR 871; J.
Jermons v. Aliammal & Ors (1999) 7 SCC 382: 1999 (1)
G Suppl. SCR 467; Mis Sanghvi Reconditioners Pvt. Ltd. v.
Union of India & Ors AIR 2010 SC 1089: 2010 (2) SCR 352
and Greater Mohali Area Development Autflority & Ors. v.
Manju Jain & Ors., AIR 2010 SC 3817: 2010 (10) SCR 134
- relied on.
H
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 477
BADRIKUMAR JAGAD
2.1. The Government loosely means the body of A
persons authorized to administer the affairs of, or to
govern, a State. It commands and its ~ecision becomes
binding upon the members of the society. Government
includes, both the Central Government as well as the
State Government. The government is impersonal in B
character having three independent functionaries as its
branches. It performs regal and sovereign functions,
which are not alienable to any other person, e:g. defence,
security, currency etc. Government means a group of
people responsible for governing the country. It consists c
of the activities, methods and principles involved in
governing a country or other political unit. [Para 15] [492-
D-F]
2.2. The Government is a body that governs and
exercises control by issuing directions and is not D
governed by any other agency. It is a body politic that
formulates policies and the laws by which a civil society
is controlled. It is a political concept formulated to rule
the nation. It is not a profit and loss establishment.
Government Department means something purely E
fundamental, i.e. relating to a particular government or t-o
the practice of governing a country. It has different Wings.
However, the expression 'Government' may be required
to be interpreted in the context used in a particular
Statute. The expression denotes the Executive and not F
the Legislature. [Para15] [492-G-H; 493-A-C]
2.3. To perform the functions, the Government has its
various departments and to facilitate its working, the
Government itself may be divided into various Sections. G
To carry out the commercial activities by the State, the
Corporations have been established by enactment of
Statutes and the "power to charter Corporations is
incidental to or in aid of Governmental functions." Such
Corporations would ex-hypothesis be agencies of the
H
478 SUPREME COURT REPORTS (2011) 14 (ADDL.) S.C.R.
A Government. [Para 16] (493-D-~]
2.4. Banks and Financial institutions carrying out
financial transactions, are independent to do business ··
subject to the regulatory laws made by the legislature.
They are not under the direct executive control of the
8
government. They are profit and loss earning
organisations coupled with all connected financial and
economic activities. They are a body corporate with a
limitect role to play and do not "govern" people as
C understood by governance. [Para 17] (493-G-H]
State of Rajasthan & Anr. v. Sripal Jain AIR 1963 SC
1323: 1964 SCR 742; Pashupati Nath Sukut v. Nern
Chandra Jain & Ors. AIR 1984 SC 399: 1984 (1) SCR 939;
R.S. Nayak v. A.R. Antulay AIR 1984 SC 684: 1984 (2) SCR
D 495; V. S. Mallimath v. Union of India & Anr. AIR 2001 SC
1455: 2001 (2) SCR 567; Sukhdev Singh & Ors. v. Bhagatram
Sardar Singh Raghuvanshi & Anr. AIR 1975 SC 1331: 1975
(3) SCR 619; Ramana Dayaram Sheffy v. The International
Airport Authority of India & Ors. AIR 1979 SC 1628: 1979 (3)
E SCR 1014 and Federal Bank Ltd. v. Sagar Thomas & Ors.
AIR 2003 SC 4325: 2003 (4) Suppl. SCR 121- relied on.
State of Punjab & Ors. v. Raja Ram & Ors. AIR 1981 SC
1694: 1981 (2) SCR 712; The State of Bihar v. The Union of
India & Anr., AIR 1970 SC 1446: 1970 (2) SCR 522; S.S.
F Dhanoa v. Municipal Corporation Delhi & Ors., AIR 1981 SC
1395: 1981 (3) SCR 864; K Jayamohan v. State of Kera/a
& Anr., (1997) 5 SCC 170: 1996 (7) Suppl. SCR 201;
Hindustan Steel Works Construction Ltd. v. State of Kera/a
& Ors., AIR 1997 SC 2275: 1997 (3) SCR 919; Mohd. Hadi
G Raja v. State of Bihar & Anr., AIR 1998 SC 1945: 1998 (3)
SCR 22; State through Narcotics Control Bureau v. Ku/want
Singh AIR 2003 SC 1599: 2003 (1) SCR 995 - referred to.
3.1. In view of the provisions of Section 230 of the
H Indian Contract Act 1872, an agent is not liable for the,
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 4 79
BADRIKUMAR JAGAD
acts of a disclosed principal subject to a contract to the A
contrary. Where the relationship of principal and agent is
established the agent cannot be sued when the principal
has. been disclosed. A suit does not lie against an agent
where the principal is known or has been disclosed.
[Para 21] [495-G-H; 496-A-B] B
3.2. The appellant may be called 'agency' or
'instrumentality' of the Central Government for a limited .
purpose, namely to label it to be the "State" within the
ambit of Article 12 of the Constitution. However, even by C
stretch of imagination, the appellant cannot be held to be
an 'agent' of the Central Government as defined under
Section 182 of the Contract Act. Evidently the appellant
is neither the government nor the department of the
government, but a Government Company. Appellant
cannot identify itself with the Central Government. It D
cannot be said that appellant is merely an agent of the
Central Government for the simple reason that rights
vested in the appellant stood crystallised after being
transferred by the Central Government. Appellant is being
controlled by the provisions of the Act 1995 and not by E
the C_entral Government. Whereas an agent is merely an
extended hand of the principal and cannot claim
independent rights. [Para 21, 22] [496-B-F]
Prem Nath Motors Ltd. v. Anurag Mittal AIR 2009 SC F
569; Vivek Automobiles Ltd. v. Indian Inc. (2009) 17 SCC
657; Pradeep Kumar Biswas v. Indian Institute of Chemical .
Biology & Ors. (2002) 5 SCC 111: 2002 (3) SCR 100; Food
Corporation of India v. Municipal Committee, Jalalabad &
Anr., AIR 1999 SC 2573; A.K. Bindal & Anr. v. Union of India G
& Ors. (2003) 5 SCC 163 and Southern Roadways Ltd.,
Madurai v. S.M. Krishnan AIR 1990 SC 673: 1989 (1) Sµppl.
SCR 410 - relied on~
Mis. Electronics Corporation of India Ltd., etc. etc. v.
Secretary, Revenue Department, Government of Andhra H
480 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A Pradesh & Ors., etc. etc. AIR 1999 SC 1734 and Smt.
Chandrakantaben v. Vadilal Bapalal Modi AIR 1989 SC
1269: 1989 (2) SCR 232 - referred to.
3. Section 3 (1) (a) & (b) of the Act 1999 provide for
exemption from the application of the Act 1999. It was
8
within the exclusive domain of the legislature to decide
which section of tenants should be afforded protection
on the basis of economic criteria. If a particular section
of tenants is not protected considering their economic
conditions it can be held to be a reasonable classification
c and making such distinction is valid. The exclusion of
premises let or sub-let to banks or any public sector
undertaking or any corporation established by or under
any Central or State Act or foreign missions, international
agencies, multinational companies and private and public
D limited companies having paid up share capital of rupees
one crore or more cannot be held to be arbitrary. [Para
23] [496-G-H; 497-A-B]
Saraswat Coop. Bank Ltd. & Anr. v. State of Maharashtra
E & Ors., (2006) 8 SCC 520: 2006 (4) Suppl. SCR 567;
Leelabai Gajanan Pansare & Ors. v. Oriental Insurance
Company Ltd. & Ors., (2008) 9 SCC 720: 2008 (12 ) SCR
248 - relied on.
F O.C. Bhatia & Ors. v. Union of India & Anr. (1995) 1 SCC
104: 1994 (4) Suppl. SCR 539 - referred to.
4. Section 3(1) and (2) of the Act, 1995 require
construction giving proper meaning to the expression
'vesting'. ·vesting' means having obtained an absolute
G and indefeasible right. It refers to and is used for transfer
or conveyance. 'Vesting' in the general sense, means
vesting in possession. However, 'Vesting' does not
necessarily and always means possession but includes
vesting of interest as well. 'Vesting' may mean vesting in
H title, vesting in possession or vesting in a limited sense,
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 481
BADRIKUMAR JAGAD
as indicated in the context in which it is used in a A
particular provision of the Act. Word 'Vest' has different
shades, taking colour from the context in which it is used.
It does not necessarily mean absolute vesting in every
situation and is capable of bearing the meaning of a
limited vesting, being limited,· in title as well as duration. B
Thus, the word 'vest' clothes varied colours from the
context and situation in which the word came to be used
in the statute. The expression 'vest' is a word of
ambiguous import since it i1as no fixed connotation and
the same has to be understood in a different context c
under different set of circumstances. [Paras 26, 27) [498-
G-H; 499-A-B]
Fruit & Vegetable Merchants Union v. Delhi
Improvement Trust, AIR 1957 SC 344: 1957 SCR 1; Maharaj
Singh v. State of Uttar Pradesh & brs. AIR 1976 SC 2602: D
1977 (1) SCR 1072; Municipal Corporation of Hyderabad v.
P.N. Murthy & Ors. AIR 1987 SC 802: 1987 (2) SCR 107;
Vatticherukuru Village Panchayat v. Nori Venkatarama
Deekshithulu & Ors., 1991 Supp. (2) SCC 228: 1991 (2) SCR
531; Dr. M. Ismail Faruqui etc. v. Union of India & Ors., AIR E
1995 SC 605: 1994 (5) Suppl. SCR 1; Government of A.P.
v. H.E.H. The Nizam, Hyderabad, {1996) 3 SCC 282: 1996
(3) SCR 772 ; K. V. Shivakumar & Anr. v. Appropriate
Authority & Ors. (2000) 3 SCC 485: 2000 (1) SCR 991;
Municipal Corporation of Greater Bombay & Ors. v. Hindustan F
Petroleum Corporation & Anr. AIR 2001 SC 3630: 2001 (2)
Suppl. SCR 50; Su/ochana Chandrakant Galande v. Pune
Municipal Transport & Ors. (2010) 8 SCC 467: 2010 (9) SCR
476 - relied on.
G
5. The Act 1995 has been brought for providing the
acquisition and transfer of the rights, title and interest of
the owners in respect of the textile undertakings.
Respondents had not been the owner of the textile
undertaking. They had rented out the premises to Poddar H
482 SUPREME COURT REPORTS (2011] 14 (ADDL.) S.C.R.
A Mills and what had vested in the Central Government was
only the right, title and interest of the Poddar Mills and
nothing else. The Poddar Mills was having only right in
tenancy in the suit premises. The owner had been defined
in clause (g) of Section 2 of the Act 1995, taking into
B consideration the expression in relation to textile
undertaking as a proprietor or iessee, or occupier of the
textile company undertaking. It included even the receiver
and liquidator where the companies had gone under
liquidation. Textile undertaking has been defined in
c .Section 2(m) which means undertaking specified in
column (2) of the First Schedule to the Act 1995 i.e., the
textile undertakings, management of which had been
taken over by the Central Government under the Act
1983. The First Schedule included Poddar Mills at SI. No.9
and Poddar Mills had been paid compensation to the tune
0
of Rs.7,46,30,000. Nothing has been paid so far as
respondent No.1 is concerned. Sub-section (6) of Section
4 of the Act 1995 provides that any suit, appeal or other
proceedings of .whatever nature in relation to any
property which had vested in the Central Government
E under Section 3 on the appointed day, instituted or
preferred by or against !he textile company is pending,
the same shall not abate or adversely affect the rights of
the parties by reason of the transfer of textile undertaking.
Thus, the commencement of the Act 1995 does not really
F affect even the pending cases. In view thereof, it cannot
be said that the Act 1995 would prejudice the cause of
the respondents in the proceedings which arose
subsequent to the commencement of this Act. [Para 28]
[499-E-H; 500-A-D]
G
6. It is not permissible for the appellant to canvass
that the Central Government has any concern so far as
the tenancy. rights are concerned. Right vested in the.,
Central Government stood transferred and vested in the
H
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 483
BADRIKUMAR JAGAD
appellant. Both are separate legal entities and are not A
synonymous. The appellant being neither the
- government nor government department cannot agitate
that as it has been substituted in place of the Central
Government, and acts merely as an agent of the Central
Government, thus protection of the Act 1999 is available B
to it. Appellant cannot be permitted to say that though all
the rights vested in it but it merely remained the agent of
the Central Government. Acceptance of such a
submission would require interpreting the expression
'vesting' as holding on behalf of some other person. Such c
a meaning cannot be given to the expression 'vesting'.
[Para 29] (500-F-G]
7. It is a settled legal" proposition that an agent cannot
be sued where the principal is known. In the instant case,
the appellant has not taken plea before either of the D
courts below. In view of the provisions of Order VIII Rule
2 CPC, the appellant was under an obligation to take a
specific plea to show that the suit was not maintainable
which it failed to do so. The vague plea to the extent that
the suit was bad for non-joinder and, thus, was not E
maintainable, did not meet the requirement of law. The
appellant OUQht to have taken a plea in the written
statement that it was merely an 'agent' of the Central
Government, thus the suit against it was not maintainable.
More so, whether A is an agent of B is a question of fact F
and has to be properly pleaded and proved by adducing
evidence. The appellant miserably failed to take the
required pleadings for the purpose. [Para 29] [500-H; 501-
A-C] .
G
8. The inescapable conclusion is that appellant is not
entitled for exemption under Section 3(1)(a) or 3(1)(b) of
the Act 1999. Nor can it claim the status of an 'agent' of
the Central Government. However, considering the nature
of business of the appellant, it is in the interest of justice H.
484 SUPREME COURT REPORTS (2011) 14 (ADDL.) S.C.R.
A that appellant be given time upto 31.12.2013, to vacate the
premises. Appellant shall file a usual undertaking within
four weeks to hand over peaceful and vacant possession
to respondent No.1. [Para 30] [501-0-E]
Case Law Reference:
B
1953 SCR 780 relied on Para 6
2010 (4) SCR 46 relied on Para 7
2011 SCR 216 relied on Para 7
c
1987 (2) SCR 805 relied on Para 8
2008 (14) SCR 621 relied on Para 8
2003 (5)-Suppl. SCR 202 relied on Para 9
D 2009 (12) SCR 459 relied on Para 9
1995 supp (4) sec 422 relied on Para 10
1971 (2) SCR 871 relied on Para 11
E 1999 (1) Suppl. SCR 467 relied on Para 12
2010 (2) SCR 352 relied on Para 14
2010 (10) SCR 134 relied on Para 14
1964 SCR 742 relied on Para 15
F
1984 (1) SCR 939 relied on Para 15
1984 (2) SCR 495 relied on Para 15
2001 (2) SCR 567 relied on Para 15
G 1975 (3) SCR 619 relied on Para 16
1979 (3) SCR 1014 relied on Para 16
2003 (4) Suppl. SCR 121 relied on Para 17
H
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 485
BADRIKUMAR JAGAD
1981 (2) SCR 712 referred to Para 18 A
1970 (2) SCR 522 referred to Para 18
1981 (3) SCR 864 referred to Para 18
1996 (7) Suppl. SCR 201 referred to Para 18 B
1997 (3) SCR 919 referred to Para 18
1998 (3) SCR 22 referred to Para 18
2003 (1) SCR 995 referred to Para 18
c
AIR 1999 SC 2573 relied on Para 19
AIR 1999 SC 1734 referred to Para 19
(2003) 5 sec 163 relied on Para 20
1989 (1) Suppl. SCR 410 relied on Para 20 D
1989 (2) SCR 232 referred to Para 21
AIR 2009 SC 569 relied on Para 21
(2009) 11 sec 657 relied on Para 21 E
2002 (3) SCR 100 relied on Para 22
'2006 (4) Suppl. SCR 567 relied on Para 23
2008 (12) SCR 248 relied on Para 24
F
1994 (4) Suppl. SCR 539 referred to Para 24
1957 SCR 1 relied on Para 27
1977 (1) SCR 1072 relied on Para 27
G
1987 (2) SCR 107 relied on Para 27
1991 (2) SCR 531 relied on Para 27
1994 (5) Suppl. SCR 1 relied on . Para 27
'
H
486 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A 1996 (3) SCR 772 relied on Para 27
2000 (1) SCR 991 relied on Para 27
2001 (2) Suppl. SCR relied on Para 27
2010 (9) SCR 476 relied on Para 27
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7448 of 2011.,
From the Judgment & Order dated 03.08.2009 of the High
c Court of Judicature of Bombay in Civil Revision Application No.
564 of 2008.
Prag P. Tripathi, ASG, Mukul Rohatgi, Shyam Divan,
Ramesh P. Bhatt, Sanjoy Ghose, Mayuri Raguvanshi, Kunal
Bahri, Anitha Shenoy, Gautam Narayan, Mahesh Agarwal, Rishi
D Agarwal, Ranjit Shetty, Gaurav Goel, E.C. Agrawala, Rakesh
Sinha, Abhijat P. Medh for the appearing paties.
The Judgment of the Court was delivered by
E DR. B.S. CHAUHAN, J. 1. This appeal has been preferred
against the judgment and order dated 3.8.2009 in Civil Revision
Application No. 564 of 2008 passed by the High Court of
Judicature at Bombay affirming the judgment and order of the
Small Causes Appellate Court dated 14.8.2008 in Appeal No.
627 of 2006 by which the appellate court has affirmed the
F judgment and decree dated 5.8.2006 in TE & R Suit No. 311/
326/2001 passed by the Court of Small Causes at Bombay.
2. FACTS:
G A. The suit premises belongs to the trust run by the
respondents - Nareshkumar Badrikumar Jagad & Ors. Sh.
Damodar Dass Tapi Dass and Sh. Daya Bhai Tapidas
executed a lease deed dated 11.3.1893 in respect of the suit
premises admeasuring 12118 sq. yds. bearing plot no. 9 in
H Survey No. 73 of Lower Pare! Division, N.M. Joshi Marg,
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 487
BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.]
Chinchpokli, Mumbai-400 011, in favour of a company named A
Hope Mills Limited for a period of 99 years commencing from
22.10.1891. The lease so executed was to expire on
21.10.1990.
B. The original owners transferred and conveyed the suit
8
property in favour of one Harichand Roopchand and Ratan Bai
on 22.2.1907. Thereafter, the suit property came to be vested
in and owned by a public charitable trust, namely, Harichand
Roopchand Charity Trust (hereinafter called as 'Trust').
C. The leasehold rights in respect of suit property stood C
transferred to Prospect Mills Ltd. and, thereafter to Diamond
Spinning & Weaving Co. Pvt. Ltd. and, ultimately, vide a lease
indenture dated 25.10. 1926 to Toyo Poddar Cotton Mills Ltd.
(hereinafter called the 'Poddar Mills').
D
D. The Textile Undertakings (Taking over of Management)
Act, 1983 (hereinafter called 'the Act 1983') was enacted by
the Parliament in order to take over the management of 13
textile undertakings including the Poddar Mills pending
I
their
nationalisation. The lease granted in favour of Poddar Mills E
expired by efflux of time on 22.10.1990. Thus, the said Poddar
Mills continued as a tenant by holding over the suit premises.
The Trust issued a legal notice dated 2.12.1994 to the National
Textile Corporation (hereinafter called as the appellant),
terminating its tenancy qua the suit premises. The Parliament F
enacted the Textile Undertakings (Nationalisation) Act, 1995
(hereinafter called 'the Act 1995'). The Trust filed an eviction
suit against the appellant under the provisions of the Bombay
Rents, Hotel and Lodging House Rates Control Act, 1947
(hereinafter called 'the Act 1947'). The Act 1947 stood repealed
by the Maharashtra Rent Control Act, 1999 (hereinafter called G
'the Act 1999'). The respondent-Trust issued a notice for
terminating the tenancy of the appellant vide notice dated
26.9.2000. The respondents/plaintiffs after withdrawal of the suit
filed under the Act 1947, filed a fresh suit in the Small Causes
Court at Bombay seeking ~viction of appellant and for a decree H
488 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A of mesne profits on 20.4.2001. The appellant filed the written
statement denying the pleas taken by the respondents/plaintiffs.
The suit was decreed in favour of the respondents/plaintiffs vide
judgment and decree dated 5.8.2006 by which the appellant
was directed to hand over vacant and peaceful possession of
B the suit premises to the respondents within four n:ionths.
E. Being aggrieved, the appellant preferred Appeal No.
627 of 2006 to the Division Bench of the Small Causes Court
at Bombay on 13.11.2006 which was dismissed by the
appellate court by affirming the judgment and decree of the trial
C court vide judgment and decree dated 14.8.2008. The appellant
preferred civil revision before the High Court of Bombay, which
has been dismissed vide impugned judgment and order dated
3.8.2009.
D Hence, this appeal.
3. Shri Prag P. Tripathi, learned Additional Solicitor
General, appearing for the appellant has submitted that the
judgments and decrees of the courts below have to be set aside
as none of the courts below has taken into consideration the
E effect of the provisions of the Act 1995 by virtue of which the
textile undertaking stood absolutely vested in the Central
Government and further vested in the appellant. As on the
expiry of the lease of 99 years on 22.10.1990, the Act 1947
was in force, the then tenant, Poddar Mills became the statutory
F tenant. Such tenancy rights stood vested absolutely in the
Central Government on commencement of the Act 1995 by
operation of law. The appellant stepped in the ·shoes of the
Central Government merely as an agent, thus, the Central
Government remained the tenant. The Central Government
G continued to be a tenant in the suit premises and thus, would
be protected in terms of Section 3(1) (a) of the Act 1999 being
premises let out to the Government. The courts below failed to
consider this vital legal issue. The suit filed by the respondents
was not maintainable. The judgments and decrees of the courts
H below are liable to be set aside.
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 489
BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.]
4. Per contra, Shri Mukul Rohatgi, learned senior counsel A
appearing for the respondents, submitted that it is not
permissible for the court to travel beyond the pleadings. No
evidence can be led on an issue in respect of which proper
pleadings have not been taken. Findings of fact cannot be
recorded on a issue on facts in respect of which no factual B
foundation has been laid. The appellant had never raised the
issue before the courts below that the Central Government was
the tenant and it was holding the premises merely as an agent.
In the written statement filed by the appellants, no reference
was made to the provisions of Act 1995. Even otherwise, the c
tenancy rights which had vested in the Central Government,
stood vested immediately, by operation of law, in the appellant,
a public sector undertaking as well as the public limited
company having a paid up share capital of more than rupees
one crore, thus the appellant' has no protection of the Act 1999.
0
As the said provisions of Act 1999 are not attracted in the
instant case, the suit for eviction was filed before the Small
Causes Court at Bombay. All issues raised in the plaint have
been adjudicated by three courts. The power of the revisional
court, in view of the provisions of Section 115 of Code of Civil E
Procedure, 1908 (hereinafter called as 'CPC'), remains very
limited after the amendment Act 2002, w.e.f. 1. 7.2002. Being
the fourth court, in exercise of its power under Article 136 of
the Constitution, this Court should not entertain the appeal. The
appeal lacks merit and is liable to be dismissed.
F
5. We have considered the rival submissions made by the
learned counsel for the parties and perused the record.
6. In the instant case, no reference had ever been made
by the appellant to the effect of the provisions of the Act 1995 G
before the trial court while filing the written submissions; neither
any issue has been framed; nor arguments had been advanced
in regard to the same; this issue has not been agitated either
before the appellate court or revisional court. Before us, an
application has been filed to urge additional grounds regarding H
490 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A the application of the Act 1995 without seeking amendment to
the pleadings (WS).
7. Pleadings and particulars are necessary to enable the
court to decide the rights of the parties in the trial. Therefore,
the pleadings are more of help to the court in narrowing the
8
controversy involved and to inform the parties concerned to the
question in issue, so that the parties may adduce appropriate
evidence on the said issue. It is a settled legal proposition that
"as a rule relief not founded on the pleadings should not be
granted". A decision of a case cannot be based on grounds
C outside the pleadings of the parties. The pleadings and issues
are to ascertain the real dispute between the parties to narrow
the area of conflict and to see just where the two sides differ.
(Vide: Mis. Trojan & Co. v. RM N.N. Nagappa Chettiar, AIR
1953 SC 235; State of Maharashtra v. Mis. Hindustan
D Construction Company Ltd., AIR 2010 SC 1299; and Ka/yan
Singh Chauhan v. C.P. Joshi, AIR 2011 SC 1127).
8.ln Ram Sarup Gupta (dead) by L.Rs. v. Bishun Narain
Inter College & Ors., AIR 1987 SC 1242, this Court held as
E under:
" ...... in the absence of pleadings, evidence if any,
produced by the parties cannot be considered ...... no party
should be permitted to travel beyond its pleading and that
all necessary and material facts should be pleaded by the
F party in support of the case set up by it."
Similar view has been reiterated in Bachhaj Nahar v.
Nilima Manda/ & Ors., AIR 2009 SC 1103.
G 9. In Kashi Nath (Dead) through L.Rs. v. Jaganath, (2003)
8 SCC 740, this Court held that "where the evidence is not in
line of the pleadings and is at variance with it, the said evidence
cannot be looked into or relied upon."
Same remain the object for framing the issues under Order
H
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 491
BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.]
XIV CPC and the. court should not decide a suit on a matter/ A
point on which no issue has been framed. (Vide: Biswanath
Agarwal/a v. Sabitri Bera & Ors., (2009) 15 SCC 693; and
Kalyan Singh Chouhan (supra).
10. In Syed and Company & Ors. v. State of Jammu &
8
Kashmir & Ors., 1995 Supp (4) SCC 422, this Court held as
under:
"Without specific pleadings in that regard, evidence could
not be led in since it is settled principle of law that no
amount of evidence can pe looked unless there is a C
pleading. Therefore, without amendment of the pleadings
merely trying to lead evidence is not permissible."
11. In Chinta Lingam & Ors. v. The Govt. oflndia & Ors.,
AIR 1971 SC 474, this Court held that unless factual foundation 0
has been laid in the pleadings no argument is permissible to
be raised on that particular point.
12. In J. Jermons v. Aliammal & Ors, (1999) 7 SCC 382,
. while dealing with a similar issue, this Court held as under:
E
"...... there is a fundamental difference between a case
of raising additional grounds based on the pleadings and
the material available on record and a case of taking a new
plea not borne out of the pleadings. In the former case no
amendment of pleading is required, whereas in the latter F
it is necessary to amend the pleadings ... The respondents
cannot be permitted to make out a new case by seeking
permission to raise additional grounds in re.vision."
13. In view of the above, the law on the issue stands G
crystallised to the effect that a party has to take proper
pleadings and prove the same by adducing sufficient evidence.
No evidence can be permitted to be adduced on a issue unless
factual foundation has been laid down in respect of the same.
H
492 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A 14. There is no quarrel to the settled legal proposition that
a new plea cannot be taken in respect of any factual
controversy whatsoever, however, a new ground raising a pure
legal issue for which no inquiry/proof is required can be
permitted to be raised by the court at any stage of the
B proceedings. (See : Mis Sanghvi Reconditioners Pvt. Ltd. v.
Union of India & Ors., AIR 2010 SC 1089; and Greater Mohali
Area Development Authority & Ors. v. Manju Jain & Ors., AIR
2010 SC 3817).
15. The questions do arise as to whether in the facts and
C circumstances of this case the Government is a tenant or the
appellant can be termed as "Government" or "Government
Department" or "agent" of the Central Government in thE? context
of the Act 1999.
D The Government loosely means the body of persons
authorized to administer the affairs of, or to govern, a State. It
commands and its decision becomes binding upon the
members of the society. Government includes, both the Central
Government as well as the State Government. The government
E is impersonal in character having three independent
functionaries as its branches. It performs regal and sovereign
functions, which are not alienable to any other person, e.g.
defence, security, currency etc. Government means a group of
people responsible for governing the country. It consists of the
F activities, methods and principles involved in governing a
country or other political unit.
The Government is a body that governs and exercises
control by issuing directions and is not governed by any other
agency. It is a body politic that formulates policies and the laws
G by which a civil society is controlled. It is a political concept
formulated to rule the nation. It is not a profit and loss
establishment. "From the legal point of view, government may
be described as the exercise of certain powers and the
performance of certain duties by public authorities or officers,
H
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 493
BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.)
together with certain private persons or corporations exercising A
public functions."
Thus, Government Department means something purely
fundamental, i.e. relating to a particular government or to the
practice of governing a country. It has different Wings.
8
However, the expression 'Government' may be required
to be interpreted in the context used in a particular Statute. The
expression denotes the Executive and not the Legislature.
(Vide: State of Rajasthan & Anr. v. Sripal Jain, AIR 1963 SC
1323; P<Ishupati Nath Sukut v. Nern Chandra Jain & Ors., AIR C
1984 SC 399; R.S. Nayak v. A.R. Antulay, AIR 1984 SC 684;
and V.S. Mallimath v. Union of India & Anr., AIR 2001 SC
1455)
16. To perform the functions, the Government has its D
various departments and to facilitate its working, the
Government itself may be divided into various Sections. To
carry out the commercial activities by the State, the
Corporations have been established by enactment of Statutes
and the "p'ower to charter Corporations is incidental to or in aid E
of Governmental functions." Such Corporations would ex-
hypothesis be agencies of the Government. (Vide : Sukhdev
Singh & Ors. v. Bhagatram Sardar Singh Raghuvanshi &
Anr., AIR 1975 SC 1331; and Ramana Dayaram Shettyv. The
International Airport Authority of India & Ors., AIR 1979 SC
F
1628).
17. Banks and Financial institutions carrying out financial
transactions, are independent to do business subject to the
regulatory laws made by the legislature. They are not under the
direct executive control of the government. They are profit and G
loss earning organisations coupled with all connected financial
and economic activities. They are a body corporate with a
limited role to play and do not "govern~· people as understood
by governance. (See: Federal Bank Ltd. v. Sagar Thomas &
Ors., AIR 2003 SC 4325). H
494 SUPREME COURT REPORTS [2011) 14 (ADDL.) S.C.R.
A 18. In State of Punjab & Ors. v. Raja Ram & Ors., AIR
1981 SC 1694, this Court considered the provisions of the
Food Corporation Act, 1964 and held that Food Corporation
of India was not a Government department but a Government
Company. The Court observed :
B
"A Government department has to be an organisation
which is not only completely controlled and financed by the
Government but has also no identity of its own. The money
earned by such a department goes to the exchequer of the
Government and losses incurred by the department are
c losses of the Government. The Corporation, on the other
hand, is an autonomous body capable of acquiring, holding
and disposing of property and having the power to contract.
It may also sue or be sued by its own name and the
Government does not figure in any litigation to which it is
D a party."
(See also: The State of Bihar v. The Union of India & Anr.,
AIR 1970 SC 1446; S.S. Dhanoa v. Municipal Corporation
Delhi & Ors., AIR 1981 SC 1395; K. Jayamohan v. State of
E Kera/a & Anr., (1997) 5 SCC 170; Hindustan Steel Works
Construction Ltd. v. State of Kera/a & Ors., AIR 1997 SC 2275;
Mohd. Hadi Raja v. State of Bihar & Anr., AIR 1998 SC 1945;
and State through Narcotics Control Bureau v. Ku/want Singh,
AIR 2003 SC 1599).
F 19. In Food Corporation of India v. Municipal Committee,
Ja/a/abad & Anr., AIR 1999 SC 2573, this Court considered
the case of imposition of house tax under the provisions of the
Punjab Municipalities Act, 1911 and held that Food Gorporation
of India was a Government Company and not a Government
G Department - a distinct entity from Central Gov~mment. Thus,
was not entitled to exemption from tax under !.rticle 285 of the
Constitution. While deciding the said case, reliance had been
placed by the Court on its earlier judgment in Mis. Electronics
Corporation of India Ltd., etc. etc. v. Secretary, Revenue
H
NATIONAL TEXTILE CORPORATION LTD. v. 1-JARESHKUMAR 495
BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.]
Department, Government of Andhra Pradesh & Ors., etc. etc., A
AIR 1999 SC 1734.
20. In AK. Binda/ & Anr. v. Union of India & Ors., (2003)
5 SCC 163, this Court clarified:
"The legal position is that identity of the government B
company remains distinct from the Government. The
government company is not identified with the Union but
has been placed under a special system of control and
conferred certain privileges by virtue of the provisions
contained in Sections 619 and 620 of the Companies Act. C
Merely because the entire shareholding is owned by the
Central Government will not make the incorporated
company as Central Government. .... "
(Emphasis added) o
21. In Southern Roadways Ltd., Madurai v. S.M. Krishnan,
AIR 1990 SC 673, this Court examined an issue whether the
possession of the agent can be termed to be the possession
of the principal for all purposes including the acquisition of title
and held that agent who receives property from or for his E
principal, obtains no interest for himself in the property for the
reason that possession of the agent is the possession of the
principal and in view of the fiduciary relationship the agent
cannot claim his own possession. While deciding the said case
reliance was placed on various earlier judgments including Smt. F
Chandrakantaben v. Vadi/al Bapalal Modi, AIR 1989 SC
1269.
In Prem Nath Motors Ltd. v. Anurag Mittal, AIR 2009 SC
569, this Court dealt with the relationship of agent and principal G
and held that in view of the provisions of Section 230 of the
Indian Contract Act 1872 (hereinafter called the 'Contract Act'),
an agent is not liable for the acts of a disclosed principal Sl!bject
to a contract to the contrary. Where the relationship of principal
and agent is established the agent cannot be sued when the H
496 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A principal has been disclosed. (See also: Vivek Automobiles
Ltd. v. Indian Inc., (2009) 17 SCC 657).
Thus, it was made clear that suit does not lie against an
. agent where the principal is known or has .been disclosed.
B The appellant may be called 'agency' or 'instrumentality'
of the Central Government for a limited purpose, namely to label
it to be the "State" within the ambit of Article 12 of the
Constitution. (See: Pradeep Kumar Biswas v. Indian Institute
of Chemical Biology & Ors., (2002) 5 SCC 111).
c
However, even by stretch of imagination, the appellant
cannot be held to be an 'agent' of the Central Government as
defined under Section 182 of the Contract Act.
22. Thus, if the aforesaid settled legal principles are
0
applied to the appellant, it becomes evident that appellant is
neither the government nor the department of the government,
but a Government Company. Appellant cannot identify itself with
the Central Government. The submission made by Mr. Tripathi
that appellant is merely an agent of the Central Government is
E not worth consideration at all for the simple reason that rights
vested in the appellant stood crystallised after being
transferred by the Central Government. Appellant is being
controlled by the provisions of the Act 1995 and not by the
Central Government. Whereas an agent is merely an extended
F hand of the principal and cannot claim independent rights.
23. Section 3 (1) (a) & (b) provide for exemption from the
application of the Act 1999. This Court examined the validity
of provisions of Section 3(1) (a) and (b) of the Act 1999 in
G Saraswat Coop. Bank Ltd. & Anr. v. State of Maharashtra &
Ors., (2006) 8 sec 520 and came to the conclusion that it was
within the exclusive domain of the legislature to decide which
section of tenants should be afforded protection on the basis
of economic criteria. If a particular section of tenants is not
H protected considering their economic conditions it can be held
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 497
BADRIKUMAR JAGAD [DR. 8.S. CHAUHAN, J.)
to be a reasonable classification and making such distinction A
-.is valid. The exclusion of premises let or sub-let to banks or any
public sector undertaking or any corporation established by or
under any Central or State Act or foreign missions, international
agencies, multinational companies and private and public
limited companies having paid up share capital of rupees one 8
crore or more could not be held to be arbitrary. The Court further
held that the provisions of Section 3(1 )(b) are applicable to all
premises whether let out before or after commencement of the
Act 1999.
24. In Leelabai Gajanan Pansare & Ors. v. Oriental
c
Insurance Company Ltd. & Ors., (2008) 9 SCC 720, this Court
dealt with the same issue as which of the categories of tenants
have been excluded from the operation of the Act 1999 and held
as under:
D
"Therefore, we are of the view that on a plain meaning of
the word "PSUs" as understood by the legislature, it is clear
that, India's PS Us are in the form of statutory corporations,
public sector companies, government companies and
companies in which the public are substantially interested E
(see the Income Tax Act, 1961). When the word PSU is
mentioned in Section 3(1 )(b), the State Legislature is
presumed to know the recommendations of the various
Parliamentary Committees on PSUs. These entities are
basically cash-rich entities. They have positive net asset F
value. They have positive net worths. They can afford to pay
rents at the market rate ........ vw'e r.:ild tr,c;t Section 3(1)(b)
clearly applies to different categories of tenants, all of
whom are capable of paying rent at market rates.
Multinational companies, international agencies, statutory G
corporations, government companies, public sector
companies can certainly afford to pay rent at the market
rates. This thought is further highlighted by the last category
in Section 3(1){b). Private limited companies and public
limited companies having a paid-up share capital of more
H
498 SUPREME COURT REPORTS (2011] 14 (ADDL.) S.C.R.
A than Rs 1,00,00,000 are excluded from the protection of
the Rent Act. This further supports the view which we have
taken that each and every entity mentioned in Section
3(1)(b) can afford to pay rent at the market rates."
(Emphasis added)
B
(See also: D.C. Bhatia & Ors. v. Union of India & Anr.,
(1995) 1 sec 104).
25. The case stands squarely covered by the judgment of
c this Court in Leelabai Gajanan Pansare (supra) so far as the
issue of exemption to the Act 1999 is coricerned.
26. Section 3(1) and (2) of the Act 1995 reads as under:
"3(1) On the appointed day, the right, title and interest of
D the owner in relation to every textile undertaking shall stand
transferred to and shall vest absolutely in, the Central
Government.
(2) Every textile undertaking which stands vested in the
E Central Government by virtue of sub-section (1 ), shall
immediately after it has so vested, stand transferred to,
and vested in, the National Textile Corporation." (Emphasis
added)
The aforesaid provisions require construction giving proper
F meaning to the expression 'vesting'.
27. 'Vesting' means having obtained an absolute and
indefeasible right. It refers to and is used for transfer or
conveyance. 'Vesting' in the general sense, means vesting in
G possession. However, 'Vesting' does not necessarily and
always means possession but includes vesting of interest as
well. 'Vesting' may mean vesting in title, vesting in possession
or vesting in a limited sense, as indicated in the context in which
it is used in a particular provision of the Act. Word 'Vest' has
H different shades, taking colour from the context in which it is
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 499
BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.]
used. It does not necessarily mean absolute vesting in every A
situation and is capable of bearing the meaning of a limited
vesting, being limited, in title as well as duration. Thus, the word
'vest' clothes varied colours from the context and situation in
which the word came to be used in the statute. The expression
'vest' is a word of ambiguous import since it has no fixed B
connotation and the same has to be understood in a different
context under different set of circumstances. (Vide: Fruit &
Vegetable Merchants Union v. Delhi Improvement Trust, AIR
1957 SC 344 ; Maharaj Singh v. State of Uttar Pradesh & Ors.,
AIR 1976 SC 2602; Municipal Corporation of Hyderabad v. c
P.N. Murthy & Ors., AIR 1987 SC 802; Vatticherukuru Village
Panchayat v. Nori Venkatarama Deekshithulu & Ors., 1991
Supp. (2) SCC 228; Dr. M. Ismail Faruqui etc. v. Union of India
& Ors., AIR 1995 SC 605; Government of A.P. v. H.E.H. The
Nizam, Hyderabad, (1996) 3 SCC 282; K. V. Shivakumar & D
Anr. v. Appropriate Authority & Ors., (2000) 3 SCC 485 ;
Municipal Corporation of Greater Bombay & Ors. v. Hindustan
Petroleum Corporation & Anr., AIR 2001 SC 3630 ; and
Sulochana Chandrakant Galande v. Pune Municipal
Transport & Ors., (2010) 8 SCC 467).
E
28. The Act 1995 has been brought for providing the
acquisition and transfer of the rights, title and interest of the
owners in respect of the textile undertakings. Respondents had
not been the owner of the textile undertaking. They had rented
out the premises to Poddar Mills and what had vested in the F
Central Government was only the right, title and interest of the
Poddar Mills and nothing else. The Poddar Mills was having only
right in tenancy in the suit premises. The owner had been
defined in clause (g) of Section 2 of the Act 1995, taking into
consideration the expression in relation to textile undertaking G
as a proprietor or lessee, or occupier of the textile company
undertaking. It included even the receiver and liquidator where
the companies had gone under liquidation. Textile undertaking
has been defined in Section 2(m) which means undertaking
specified in column (2) of the First Schedule to the Act 1995 H
500 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R.
A i.e., the textile undertakings, management of which had been
taken over by the Central Government under the Act 1983. The
First Schedule included Poddar Mills at SI. No.9 and Poddar
Mills had been paid compensation to the tune of
Rs.7,46,30,000. Nothing has been paid so far as respondent
B No.1 is concerned. Sub-section (6) of Section 4 of the Act 1995
provides that any suit, appeal or other proceedings of whatever
nature in relation to any property which had vested in the Central
Government under Section 3 on the appointed day, instituted
or preferred by or against the textile company is pending, the
c same shall not abate or adversely affect the rights of the parties
by reason of the transfer of textile undertaking. Thus, the
commencement of the Act 1995 does not really affect even the
pending cases. In view thereof, it is beyond our imagination as
how the Act 1995 would prejudice the cause of the respondents
in the proceedings which arose subsequent to the
0
commencement of this Act.
29. It is not permissible for the appellant to canvass that
the Central Government has any concern so far as the tenancy
rights are concerned. Right vested in the Central Government
E stood transferred and vested in the appellant. Both are separate
legal entities and are not synonymous. The appellant being
neither the government nor government department cannot
agitate that as it has been substituted in place of the Central
Government, and acts merely as an agent of the Central
F Government, thus protection of the Act 1999 is available to it.
Appellant cannot be permitted to say that though a// the rights
vested in it but it merely remained the agent of the Central
Government. Acceptance of such a submission would require
interpreting the expression 'vesting' as holding on behalf of
G some other person. Such a meaning cannot be given to the
expression 'vesting'.
It is a settled legal proposition that an agent cannot be
sued where the principal is known. In the instant case, the
H appellant has not taken plea before either of the courts below.
NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 501
BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.]
In view of the provisions of Order VIII Rule 2 CPC, the appellant A
was under an obligation to take a specific plea to show that
the suit was not maintainable which it failed to do so. The vague
plea to the extent that the suit was bad for non-joinder and, thus,
was not maintainable, did not meet the requirement of law. The
appellant ought to have taken a plea in the written statement B
that it was merely an 'agent' of the Central Government, thus
the suit against it was not maintainable. More so, whether A is
an agent of B is a question of fact and has to be properly
pleaded and proved by adducing evidence. The appellant
miserably failed to take the required pleadings for the purpose. c
30. Thus, in view of the above, we reach the inescapable
conclusion that appellant is not entitled for exemption under
Section 3(1 )(a) or 3(1 )(b) of the Act 1999. Nor can it claim the
status of an 'agent' of the Central Government. Submissions
advanced on behalf of the appellant are preposterous. Facts D
and circumstances of the case do not warrant review of the
impugned judgment.
However, considering the nature of business pf the
appellant, it is in the interest of justice that appellant be given E
time upto 31.12.2013, to vacate the premises. Appellant shall
file a usual undertaking within four weeks from today to hand
over peaceful and vacant possession to .the respondent No.1.
With the aforesaid observation, appeal stands dismissed.
F
B.B.B. Apppeal dismissed.
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