KESRI COMMISSARIAT & OTHERSversusMINISTRY OF FOOD AND CIVIL SUPPLIES, GOVT. OF MAHARASHTRA, MUMBAI & ANR.

                      (2012] 3 S.C.R. 1010


A              KESRI COMMISSARIAT & OTHERS
                                 v.
     MINISTRY OF FOOD AND CIVIL SUPPLIES, GOVT. OF
              MAHARASHTRA, MUMBAI & ANR.
             (Civil Appeal Nos. 3356-3357/2012)
B
                         APRIL 03, 2012.
        [DALVEER BHANDARI AND DIPAK MISRA, JJ.]

        Bombay Rents, Hotel and Lodging House Rates Control
C Act, 1947:
        s.4(1) - Exemption - Held: The provision applies to
    premises and not to parties or their relationship.

        Maharashtra Rent Control Act, 1999:
D
        s.3(1)(b) - Exemption - Premises belonging to trust- Let
  out to New India Assurance Company in 1954 - Tenant
  subletting the premises to State Government in 1959 - Suit
  for recovery of possession - Tenant and sub-tenant claiming
E exemption - Held: Clause (b) of sub-s.(1) of s.3 makes it clear
  that the Act does not apply to any premises let or sub-let to a
  bank, public sector undertaking or certain other categories of
  tenants - Insurance Company is covered u/s 3{1)(b) -
  Therefore, the Act does not apply to the tenant, New India
F Assurance Company - Thus, the tenant is not protected -
  When the Act does not cover the tenant, as basically, the
  exemption applies only to premises and not to any
  relationship, the sub-tenant cannot enjoy better protection -
  Order passed by High Court set aside and the judgment and
G decree of eviction against both the defendants passed by the
  appellate court restored - Bombay Rents, Hotel and Lodging
  House Rates Control Act, 1947 - ss.4(1) and 15.

        The plaintiffs-appellants, being the trustees of the

H                              1010
  KESRI COMMISSARIAT v. MIN. OF FOOD & CIVIL 1011
         SUP., GOVT. OF MAH., MUMBAI

Parsee Girls' School Association, filed a suit against the A
defendants-respondents for recovery of the suit
properties and for mesne profits. The case of the plaintiffs
was that the Parsee Girls' School Association was a
public trust and was running a Girls High School in its
building. In the year 1954, the plaintiffs let out two floors s
of the said building to defendant No. 1, the New India
Assurance Company Ltd. The said company, in the year
1959, without thy knowledge and consent of the
plaintiffs, inducted defendant no. 2, the Ministry of Food
and Civil Supplies, Government of Maharashtra, as a sub- c
tenant. It was the stance of the plaintiffs that they, being
in need of the suit property for the School, asked the
defendants to deliver the possession and on their failure
to do so issued notice on 19.11.2001 terminating the
tenancy of defendant No. 1. The trial court decreed the
                                                              0
suit against defendant no. 1 but held that defendant no.
2 was proved as a lawful sub-tenant and, as such, was
protected under the provisions of Maharashtra Rent
Control Act, 1999 and, therefore, decree for possession
in respect of the said defendant could not be granted. E
However, the appellate court decreed the suit for
recovery of possession against both the defendants and
directed for mesne profits. The writ petition filed by
defendant no. 2 was allowed by the High Court holding
that it enjoyed the protection of the 1999 Act.
                                                              F
    Allowing the appeals, the Court

     HELD: 1.1. The provision of s.4(1) of The Bombay
Rents, Hotel and Lodging House Rates Control Act, 1947
applies to premises and not to parties or their G
relationship. [Para 22] [1029-G]

    Bhatia Co-operative Housing Society Ltd. v. D. C. Patel
(1953) 4 SCR 185; Nagji Va/labhji and Company v. Meghji
Vijpar and Company and Another 1988 (3) SCR 906 =
(1988) 3 SCC 68; and Parwati Bai v. Radhika 2003 (3) H
    1012    SUPREME COURT REPORTS                [2012] 3 S.C.R.


A   SCR 1073 =AIR 2003 SC 3995- relied on

         Rudlerv. Franks (1947) 1 K.B. 530; and Percy G. Moore,
    Ltd. v. Stretch (1951) 1 All ER 228; and Cow v. Casey (1949)
    1 K.B. 474 - referred to

B     1.2. Section 3 of the 1999 Act uses the term
  'premises'. The provision commences with the non-
  obstante clause that the Act does not apply to any
  premises belonging to the Government or a local
  authority. Clause (b) of sub-s. (1) of s.3 makes it clear that
C the Act does not apply to any premises let or sub-let to a
  bank, public sector undertaking or certain other
  categories of tenants. The Insurance Company is
  covered u/s 3(1)(b). Thus, as a logical corollary, the Act
  does not apply to the premises held by the New India
D Assurance Company, who is a tenant. When the Act does
  not cover the tenant, as basically the exemption applies
  only to premises and not to any relationship, the sub-
  tenant who becomes a deemed tenant cannot enjoy a
  better protection or privilege by ostracizing the concept
E of premises which is the spine of the provision. The order
  passed by the High Court is set aside and that of the
  appellate court restored. [para 22-24) [1029-G-H; 1030-A-
  B-D]

         Leelabai Gajanan Pansare and Others v. Oriental
F   Insurance Company Limited and Others 2008 (12) SCR 248
     = (2008) 9 SCC 720; and Malpe Vishwanath Acharya & ors.
    v. State of Maharashtra & Anr 1997 (6) Suppl. SCR 717 =
    (1998) 2 sec 1 - relied on.

G                        Case Law Reference:
        (1953) 4 SCR 185             relied on    para 11
        (1947) 1 K.B. 530            referred to para 13
        (1951) 1 All ER 228          referred to para 14
H
  KESRI COMMISSARIAT v. MIN. OF FOOD & CIVIL 1013
         SUP., GOVT. OF MAH., MUMBAI

    (1949) 1 K.B. 474             referred to para 15             A

    1988 (3) SCR 906              relied on    para 16

    2003 (3) SCR 1073             relied on    para 17

    2008 (12) SCR 248             relied on    para 20            B
    1997 (6) Suppl. SCR 717 relied on          para 21

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3356-3357 of 2012.

     From the Judgment & Order dated 05.03.2010 of the High       C
Court of Judicature at Bombay in Writ Petition No. 1171 of
2009 and order dated 17.09.2010 in Review Petition No. 160
of 2010 in Writ Petition No. 1171 of 2009.

   T.R. Andhiyarujina, Shiv Kumar Suri, Saswat Patnaik,           D
Soumik Ghosal for the Appellants.

     Chinmoy A. Khaladkar, Sanjay V. Kharde, Asha Gopalan
Nair, A. K. Raina, A.K. Kaul, Dr. Kailash Chand for the
Respondent.
                                                                  E
    The Judgment of the Court was delivered by

    DIPAK MISRA, J. 1. Leave granted.

     2. The plaintiffs, trustees of the Parsee Girls' School
                                                                  F
Association, being aggrieved by the judgment and order dated
5th March, 2010 in Writ Petition No. 1171 of 2009 and the order
dated 17.9.2010 in Review Petition No. 160 of 2010 passed
by the High Court of Judicature at Bombay whereby the Writ
Court has overturned the judgment and order dated 29.8.2008       G
of the Appellate Court of Small Causes at Bombay in Appeal
No. 123 of 2005 wherein the Appellate Court had reversed the
judgment and decree passed by the Court of Small Causes at
Bombay in T.E. & R. Suit No. 241 of 2002 wherein the said
court had decreed the suit against defendant No. 1 and
dismissed the suit against defendant No. 2 for recovery of        H
    1014    SUPREME COURT REPORTS                   [2012] 3 S.C.R.


A possession, and decreed the suit in toto and directed recovery
  of possession with a further direction of an enquiry as regards
  the future mesne profits under Order 20 Rule 12(1 )(c) of the
  Code of Civil Procedure (for short 'the Code'); have preferred
  the present appeals by special leave under Article 136 of the
B Constitution.

          3. Shorn of unnecessary details, the facts which are
    essential to be exposited are that the appellants/plaintiffs
    (hereinafter referred to as 'the plaintiffs') filed a suit against
    defendant Nos. 1 and 2 for recovery of the suit properties
C   situate at 4th and 5th Floor of Bengallee Girls High School, 42,
    Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai and
    for other reliefs. The case of the plaintiffs before the court of
    first instance was that the Parsee Girls' School Association is
    a public trust and owns the suit building where the B.S.
D   Bengallee Girls High School is run. In the year 1954, the
    plaintiffs had permitted defendant No. 1, the New India
    Assurance Company Ltd., to occupy the 4th and 5th floors of
    the suit building on payment of rent of Rs.6114/- per month. The
    said company, in the year 1959, without the knowledge and
E   consent of the plaintiffs, inducted defendant No. 2, the Ministry
    of Food and Civil Supplies, Government of Maharashtra, as a
    subtenant. It was pleaded that the plaintiffs had the privity of
    contract only with defendant No. 1 and had no relationship
    whatsoever with defendant No. 2 and, therefore, defendant No.
F   2 was in unlawful possession of the premises in question. It was
    the stance of the plaintiffs that they, being in need of the suit
    property for the School, requested the defendants to deliver the
    possession but as sphinx like silence was maintained to the
    request, being compelled, they issued notice on 19.11.2001
G   terminating the tenancy of defendant No. 1 and instituted the
    suit for recovery of possession. It was contended by the
     plaintiffs that the defendants were not protected under the
     provisions of Section 3(1 )(b) of the Maharashtra Rent Control
     Act, 1999 (for brevity 'the 1999 Act') and were liable for
H   eviction. A claim for mesne profit was put forth and the same
  KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1015
  SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

was assessed by the plaintiffs at Rs.11,45,583/- per month as          A
per the market value.

      4. Defendant No. 1, the New India Assurance Company,
filed its written statement setting forth the stance that the suit
was misconceived and not maintainable as the proper remedy             B
on the part of the plaintiffs was to take recourse to Section 16
of the 1999 Act. It was also asserted that there was no cause
of action for eviction. The further stand of defendant No. 1 was
that the plaintiffs had not obtained permission from the Charity
Commissioner under the Bombay Public Trust Act, 1950. It was           c
asseverated that defendant No. 1 being a Government
Company was not exempted under the provisions of the 1999
Act. It was the further stand that with the knowledge and consent
of the trustees, the predecessors of the plaintiffs, had given the
suit premises to defendant No. 2 in the year 1959 and the              D
present trustees were aware about these facts. The allegation
that defendant No. 2 was in unlawful occupation was strongly
refuted. The bona fide requirement of the plaintiffs was
vehemently controverted. The claim of mesne profits was
seriously resisted by the said defendant.
                                                                       E
      5. Defendant No. 2 filed a separate written statement
stating, inter alia, that the suit was not maintainable; that it was
barred by limitation; that no notice under Section 80 of the Code
was served on it; that the Insurance Company had already
shifted its premises to its own building and sublet the suit           F
premises to defendant No. 2 and they are in peaceful
occupation of the same with the knowledge of the plaintiffs; and
that it being a protected tenant under the 1999 Act, the relief
of eviction was untenable.
                                                                       G
     6. The learned trial Judge framed number of issues and
came to hold that the tenancy of defendant No. 1 had been
validly and legally terminated; that the suit is not flawed for want
of permission of the Charity Commissioner or want of notice
under Section 80 of the Code; that the plaintiffs are the validly      H
    1016    SUPREME COURT REPORTS                   [2012] 3 S.C.R.


A   appointed trustees; that the plaintiffs are entitled to a decree
    for possession in respect of the suit premises as far as
    defendant No. 1 is concerned; and that defendant No. 2 had
    prov1~d that being a lawful subtenant, it is protected under the
    provisions of the 1999 Act and, therefore, decree for
B   possession in respect of the said defendant could not be
    granted. The learned trial Judge, to arrive at the conclusion that
    the provisions of the 1999 Act would not apply to the Insurance
    Company, relied on the evidence on record, namely, the
    manner in which it has come into existence and the paid-up
C   capital is more than rupees one crore and that it is not a
    Government Company. As far as defendant No. 2 is concerned,
    an opinion was expressed that the 1999 Act is applicable as
    the premises in question has been given on licence to a
    Government Department. After so holding, as is perceptible,
    the learned trial Judge proceeded to state that defendant No.
0
    2 is in exclusive possession of the suit property since 1959 and,
    therefore, it had acquired the status of a deemed tenant by
    virtue of Section 15(a) of the Bombay Rents, Hotel and Lodging
    House Rates Control Act, 1947 as amended in 1987 (for short
    'the 1947 Act'). He also recorded a finding that after coming
E   into force of the 1999 Act, the status of deemed tenant of
    defendant No. 2 is not affected and, therefore, it would get
    protection as provided under the 1999 Act. Being of this view,
    he decreed the suit in part as has been indicated hereinabove.

F      7. On an appeal being preferred, the Appellate Court, after
  concurring with the findings recorded by the learned trial Judge
  and analysing the ambit, purpose and scope of Section 3 (1)
  (b) of the 1999 Act, came to hold that Section 3(1 )(b) of the
  1999 Act is applicable to both the defendants in respect of the
G suit premises and, therefore, defendant No. 2 could not become
  a lawful tenant of the landlord and claim protection under the
  provisions of the 1999 Act. On the basis of the aforesaid
  reasoning, the Appellate Court decreed the suit for recovery of
  possession against both the defendants and directed for mesne
H profits.
  KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1017
  SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

     8. The reversal of the decree led defendant No. 2, the          A
Ministry of Food and Civil Supplies, Government of
Maharashtra, to prefer a writ petition under Article 227 of the
Constitution of India in the High Court at Bombay. It was
contended before the learned Single Judge that the second
defendant was inducted as a subtenant in the year 1959 and           B
by virtue of the provisions of the 1947 Act, it had acquired the
status of deemed tenant with effect from 1st February, 1973 in
view of the language employed in sub-section (2) of Section
15 of the said Act and, therefore, it was entitled to protection.
The said submission was combatted by the respondents therein         c
contending that the suit was governed under the provisions of
Transfer of Property Act and the conclusion arrived at by the
Appellate Court was absolutely impeccable. The Writ Court,
analysing the evidence and findings recorded by the courts
below, came to hold that the writ petitioner was inducted by the     D
Insurance Company in the year 1959 as a subtenant and if the
amendment brought in Section 15 of the 1947 Act by
Maharashtra Act No. VIII of 1987 is conjointly read with sub-
section (11) of Section 5 of the 1947 Act, it would be clear that
a subtenant who is inducted by the tenant before 1st February,
                                                                     E
1973 becomes the tenant within the meaning of Section 5(11)
of the 1947 Act and hence, the irresistible conclusion would be
that the second defendant became a tenant. The Writ Court
further opined that the 1999 Act came into force on 1st April,
2000 and by that time, by virtue of sub-section (1) of Section 4
of the 194 7 'Act, defendant No. 2, bei11g a Government              F
Department, had become a tenant and, as a logical corollary,
Clause (a) of Section 3(1) of the 1999 Act would apply to the
premises in question and, therefore, defendant No. 2 enjoyed
the protection of the 1999 Act. Being of this view, the Writ Court
unsettled the judgment and decree for eviction.                      G

    9. We have heard Mr. T.R. Andhiyarujina, learned senior
counsel for the appellants, Mr. Chinmoy A. Khaladkar, learned
counsel for respondent No. 1, and Mr. A.K. Raina, learned
counsel for respondent No. 2.                                        H
    1018    SUPREME COURT REPORTS                  (2012] 3 S.C.R.


A       ·10. The singular seminal issue that has emanated for
  consideration is whether defendant No. 2, which is respondent
  No. 2 herein, would be a protected tenant under the provisions
  of the 1999 Act. The learned Single Judge has treated
  defendant No. 2 as a deemed t2riant and thereby opined that
B he is entitled to protection under the 1999 Act. He has placed
  reliance on the amended definition of 'tenant' and the language
  employed in Section 15 of the 194 7 Act to come to the
  conclusion that defendant No. 2 is a protected tenant under the
  1999 Act. To understand the scheme of the 194 7 Act, it is
c apposite to refer to Section 4 of the said enactment. It deals
  with exemptions. Section 4(1), being relevant, is reproduced
  below: -

        "4. Exemptions. - (1) This Act shall not apply to any
        premises belonging to the Government or a local authority
D       or apply as against the Government to any tenancy, licence
        or other like relationship created by a grant from or a
        licence given by the Government in respect of premises
        requisitioned or taken on lease or on licence by the
        Government, including any premises taken on behalf of the
E       Government on the basis of tenancy or of licence or other
        like relationship by, or in the name of any officer
        subordinate to the Government authorised in this behalf;
        but it shall apply in respect of premises let, or given on
        lic1:mce, to the Government or a local authority or taken on
F       behalf of the Government on such basis by, or in the name
        of such officer."

        11. At this juncture, it is apt to state that Section 4(1) of
  the 1947 Act in its original frame had come up for consideration
G before this Court in Bhatia Co-operative Housing Society Ltd.
  v. D. C. Pate/1. This Court was considering the applicability of
  the 194 7 Act to a local authority, regard being had to the
  provisions contained in Section 4 of the Act. The crucial point
  that arose before the Court was to determine the question of
H 1. (1953) 4 SCR 185.
 KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1019
 SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

jurisdiction of the city civil court to entertain the suit keeping in   A
view the language in which Section 4 of the 1947 Act was
couched. The applicability of the provision was the core issue.
It was observed, if it applied, the city civil court had no
jurisdiction but if it did not, then it had such jurisdiction. After
so observing, the four-Judge Bench proceeded to deal with the           B
fact whether the Act applied to the demised premises and,
accordingly, proceeded as to what would be the true
construction of Section 4( 1) of the 1947 Act. This Court scanned
the anatomy of the provisions of Section 4 ( 1) into three parts,
namely, (i) the Act shall not apply to premises belonging to the        C
Government or a local authority, (ii) the Act shall not apply as
against the Government to any tenancy or other like relationship
created by grant from the Government in respect of premises
taken on lease or requisitioned by the Government, and (iii) the
Act shall apply in respect of premises let out to the Government
or a local authority. After reproducing the contentions, the Court      D
proceeded to state as follows: -

     "Section 4(1) provides for an exemption from or exception
     to that general object. The purpose of the first two parts of
     section 4(1) is to exempt two cases of relationship of             E
     landlord and tenant from the operation of the Act, namely,
     (1) where the Government or a local authority lets out
     premises belonging to it, and (2) where the Government
     lets out premises taken on lease or requisitioned by it. It
     will be observed that the second part of section 4(1) quite        F
     clearly exempts "any tenancy or other like relationship"
     created by the Government but the first part makes no
     reference to any tenancy or other like relationship at all but
     exempts the premises belonging to the Government or a
     local authority. If the intention of the first part were as        G
     formulated in item (1 ), then the first part of section 4(1 ),
     like the second part, would have run thus :-

            This Act shall not apply to any tenancy or other like
            relationship created by Government or local
                                                                        H
    1020    SUPREME COURT REPORTS                  [2012] 3 S.C.R.


A              authority in respect of premises belonging to it.

             The Legislature was familiar with this form of
        expression, for it adopted it in the second part and yet it
        did not use that form in the first. The conclusion is,
        therefore, irresistible that the Legislature did not by the
B       first part intend to exempt the relationship of landlord and
        tenant but intended to confer on the premises belonging
        to Government an immunity from the operation of the
        Act."

c                                                [Emphasis added]

    Thereafter, the Bench proceeded to state as follows: -

               "It is said that if the first part of the section is so
        construed as to exempt the premises from the operation
D       of the Act, not only as between the Government or a local
        authority on the one hand and its lessee on the other, but
        also as between that lessee and his sub-tenant, then the
        whole purpose of the Act will be frustrated, for it is well
        known that most of the lands in Greater Bombay belong
E       to the Government or one or other local authority, e.g.,
        Bombay Port Trust and Bombay Municipality and the
        greater number of tenants will not be able to avail
        themselves of the benefit and protection of the Act. In the
        first place, the preamble to the Act clearly shows that the
F       object of the Act was to consolidate the law relating to the
        control of rents and repairs of certain premises and not
        of all premises. The Legislature may well have thought that
        an immunity given to premises belonging to the
        Government or a local authority will facilitate the speedy
G       development of its lands by inducing lessees to take up
        building leases on terms advantageous to the Government
        or a local authority. Further, as pointed out by Romer L.J.
        in Clark v. Downes [1931] 145 L.T. 20, which case was
        approved by Lord Goddard C.J. in Rudlerv. Franks [1947]
        1 K.B. 530 such immunity will increase the value of the right
H
 KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1021
 SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

    of reversion belonging to the Government or a local A
    authority. The fact that the Government or a local authority
    may be trusted to act fairly and reasonably may have
    induced the Legislature all the more readily to give such
    immunity to premises belonging to the Government or a
    local authority but it cannot be overlooked that the primary B
    object of giving this immunity was to protect the interests
    of the Government or a local authority. This protection
    requires that the immunity should be held to attach to the
    premises itself and the benefit of it should be available not
    only to the Government or a local authority but also to the c
    lessee deriving title from it. If the benefit of the immunity
    was given only to the Government or a local authority and
    not to its lessee as suggested by learned counsel for the
    respondent and the Act applied to the premises as against
    the lessee, then it must follow that under section 15 of the 0
    Act it will not be lawful for the lessee to sublet the premises
    or any part of it. If such were the consequences, nobody
    will take a building lease from the Government or a local
    authority and the immunity given to the Government or a
    local authority will, for all practical purposes and in so far E
    at any rate as the building leases are concerned, be wholly
    illusory and worthless and the underlying purpose for
    bestowing such immunity will be rendered wholly
    ineffective. In our opinion, therefore, the consideration of
    the protection of the interests of the subtenants in
    premises belonging to the Government or a local F
    authority cannot override the plain meaning of the
    preamble or the first part of section 4(1) and frustrate the
    real purpose of protecting and furthering the interests of
    the Government or a local authority by conferring on its
    property an immunity from the operation of the Act."            G

                                           [Underlining is ours]

Eventually, this Court opined that the demised premises,
including the building, belonged to the local authority and are    H
outside the operation of the Act. The Act being out of the way
    1022      SUPREME COURT REPORTS                 [2012] 3 S.C.R.


A   the appellants were well within their rights to file the suit in
    ejectrnent in the City Civil Court and that Court had jurisdiction
    to entertain the suit and to pass the decree.

          12. We have referred to the aforesaid dictum in extenso
    to highlight that the provision exempted the premises let out
8
    and a subtenant cannot claim protection in the premises
    belonging to the Government or a local authority as that would
    frustrate the real purpose of affording an immunity from the
    operation of the Act.

C        13. In a similar situation, the Court of Appeal in England
    in the case of Rud/er v. Franks 2 , speaking through Lord
    Goddard, C.J., has opined thus: -

          "The reason why the Acts do not apply when the tenants
0         of the Crown creates a sub-tenancy is first because, as I
          have just said, the Acts operate in rem and not in
          personam and so are never attached to the house at a!I."

         14. In Percy G. Moore, Ltd. v. Stretch 3, it has been held
    that the Rent Act applies to property and not to a person or to
E   a tenant or a subtenant. It is worth noting, in the said cases,
    the deliberation pertained to rent restriction.

       15. Similarly, in Cow v. Casey, it has been laid down that
  a tenant of premises which are not protected by the Acts cannot
F create a sub-tenancy, of part of those premises which would
  be protected against the landlord.

       16. In this regard, we may refer with profit to the decision
  in Nagji Vallabhji and Company v. Meghji Vijpar and
  Company and Another° wherein the question arose as regards
G the interpretation of Section 4(1) of the 1947 Act. Be it noted

    2.   (1947) 1 K.B. 530.
    3.   (19510 1 All ER 228.
    4.   (1949) 1 K.B. 474.
H 5.     (1988) 3 sec 68.
 KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1023
 SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

that sub-section (4)(a) to Section 4 was introduced by the            A
Bombay Rent Act by the Act 4 of 1953. It was urged that they
were lawful subtenants of the firm and were, therefore, entitled
to protection under Section 4(1) of the 1947 Act. The Bombay
City Civil Court decreed the suit for eviction. In appeal, the
learned Single Judge of the High Court of Bombay remanded             B
the matter on two issues. On remand, the City Civil Court
recorded a finding that the tenancy of the appellant was not
validly terminated. In appeal, the learned Single Judge came
to hold that there was a valid notice and the provisions of the
Rent Act did not apply to the premises in question. On a further      C
appeal being preferred, the Division Bench dismissed the
same. The Bench referred to the legislative history of the 1947
Act and the decision in Bhatia Co-operative Housing Society
Ltd. (supra) and referred to Section 4(1) and sub-section (4)(a)
to Section 4 and eventually came to hold as follows: -
                                                                      D
    "It is significant that the exemption granted under the earlier
    part of sub-section (1) of Section 4 is in respect of the
    premises and not in respect of the relationship. In order
    to confer the protection of the provisions of the Bombay
    Rent Act to the sub-lessees occupying the premises in any         E
    building erected on Government land or on land belonging
    to a local authority irrespective of the question who has put
    up the building as against the lessees of the land but
    without affecting the immunity conferred to the Government
    or local authorities as contemplated by sub-section (1) of        F
    Section 4 of the Bombay Rent Act, we would have
    practically rewritten the provisions of Section 4 and it is
    not open to us to do that."

Thereafter, the Bench proceeded to state as follows: -
                                                                      G
    "We can only observe that if the intention of the Legislature
    is that the protection should be given to the sub-lessee
    against the lessee in a building taken on lease by the
    lessee from the Government or a local authority, it is for
    the Legislature concerned to make appropriate                     H
    1024      SUPREME COURT REPORTS                   (2012] 3 S.C.R.


A         amendments in the Bombay Rent Act and it is not open
          for us to re-write the provisions of Sub-section (4)(a) of
          Section 4 of the Bombay Rent Act."

        17. In this regard, we may fruitfully refer to the decision in
  Parwati Bai v. Radhika 6 • In the said case, the appellant had
B filed a suit for eviction in the Civil Court. A plea was advanced
  by the defendants that the suit premises are governed by the
  provisions of the Madhya Pradesh Accomodation Control Act,
  1961. The courts below accepted the stand of the defendant
  and dismissed the suit. The second appeal preferred by the
C plaintiff/landlord was dismissed. This Court referred to Section
  3(1) of the 1961 Act and held as follows: -

          "It is well settled by a decision of this Court in Bhatia Co-
          operative Housing Society Ltd. v. D. C. Patel [(1953) 4
D         SCR 185), wherein pari materia provisions contained in
          the Bombay Rents, Hotel and Lodging House Rates
          Control Act, 1947 came up for consideration of this Court.
          It was held that the exemption is not conferred on the
          relationship of landlord and tenant but on the premises
E         itself making it immune from the operation of the Act. In
          identical facts, as the present case is, the decision of this
          Court was followed by the High Court of Madhya Pradesh
          in Radheylal Somsingh v. Ratansingh Kishansingh
          [1977 MPLJ 335] and it was held that the immunity from
          operation of the Madhya Pradesh Accommodation Control
F
          Act, 1961 is in respect of the premises and not with
          respect to the parties. If a tenant in municipal premises lets
          out the premises to another, a suit by the tenant for
          ejectment of his tenant and arrears of rent would not be
          governed by the Act as the premises are exempt under
G         Section 3(1 )(b) of Act though the suit is not between the
          municipality as landlord and against its tenant. We find
          ourselves in agreement with the view taken by the High
          Court of Madhya Pradesh in Radheylal's case. It is
H   6.   AIR 2003 SC 3995.
 KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1025
 SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

     this decision binding in the State of Madhya Pradesh was         A
     not taken note of by the courts below as also by the High
     Court."

From the aforesaid pronouncements, it is luminescent that the
provision applies to premises and not to parties or persons.          8
The learned Single Judge has referred to the definition of
'tenant' which means 'any person or by whom or in whose
account rent is payable and includes a tenant or subtenant as
derived under a tenant before the first day of February, 1973'
and has held that the Government becomes a protected tenant.          C

      18. The thrust of the matter is whether the original tenant
is a protected tenant or not and if not, what benefit would enure
to a subtenant.

      19. At this stage we think it appropriate to refer to Section   o
3 of the 1999 Act. The said provision also deals with exemption.
For our purpose Clauses (a) and (b) of sub-Section (1) of
Section 3, being relevant, are reproduced below: -

    "3. Exemption. - (1) This Act shall not apply -
                                                                      E
      (a)   to any premises belonging to the Government or a
            local authority or apply as against the Government
            to any tenancy, licence or other like relationship
            created by a grant from or a licence given by the
            Government in respect of premises requisitioned or        F
            taken on lease or on licence by the Government,
            including any premises taken on behalf of the
            Government on the basis of tenancy or of licence
            or other like relationship by, or in the name of any
            officer subordinate to the Government authorised in       G
            this behalf; but it shall apply in respect of premises
            let, or given on licence, to the Government or a local
            authority or taken on behalf of the Government on
            such basis by, or in the name of, such officer;

     (b)    to any premises let or sub-let to banks, or any           H
    1026      SUPREME COURT REPORTS                [2012) 3 S.C.R.


A                Public Sector Undertakings or any Corporation
                 established by or under any Central or State Act,
                 or foreign missions, international agencies,
                 multinational companies, and private limited
                 companies and public limited companies having a
B                paid up share capital of rupees one crore or more."

  From the aforesaid provisions, it is quite plain that the Act does
  not apply to Government or a local authority or to any premises
  let or sub-let to a bank or any public sector undertaking or any
C corporation established by or under any Central or State Act,
  public limited companies and some other categories. The
  exception that has been carved out is that it shall apply in
  respect of premises let or given in licence to the Government
  or a local authority or taken on behalf of the Government on
  such basis by or in the name of such officer. In the case on hand,
D the trust has let out the premises to the Insurance Company.

          20. In Leelabai Gajanan Pansare and Others v. Oriental
  Insurance Company Limited and Others 7, question arose
  whether a Government Company falls within the compendious
E expression 'any public sector undertaking' or 'corporation'
  established by or under any Central or State Act enshrined
  under Section 7 (1) of the 1999 Act. The respondent in the said
  case who was noticed was Oriental Insurance Company
  Limited. It was contended before the two-Judge Bench that the
F concept of a Government Company is not a part of Section 3
  (1) (a) and in the absence of the word 'Government' and the
  presence of other expressions in Section 3(1 )(b), it is to be
  construed that the Government Companies are not entitled to
  receive the protection of the Rent Act. It was contended on
G behalf of the respondent company that a Government Company
  is sui generis in structure and in statutory treatment thereof and,
  therefore, it does not fall within the compendious expression
  and the exclusion clause which applies to public sector
  undertakings established by or under any Central or State Act
H   7.   (200B) 9 sec no.
 KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1027
 SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

does not apply to a Government Company like Oriental                  A
Insurance Company.

     21. After dealing with various contentions, the two-Judge
Bench referred to the various provisions of the 1999 Act, the
Companies Act and dealt with Section 4(1) of the 1947 Act and,        B
placing reliance on Malpe Vishwanath Acharya & ors. v. State
of Maharashtra & Anr8, came to hold as follows: -

      'The above discussion is relevant because we must
      understand the reason why Section 3(1 )(b) came to be
      enacted. As stated above, in our view, with the offer of an     C
      economic package to the landlords, the legislature has
      tried to maintain a balance. The provisions of the earlier
      Rent Act, as stated above, have become vulnerable,
      unreasonable and arbitrary with the passage of time as
      held by this Court in the above judgment. The legislature       D
      was aware of the said judgment. It is reflected in the report
      of the Joint Committee. In our view, the changes made in
      the present Rent Act by which landlords are permitted to
      charge premium, the provisions by which cash-rich entities
      are excluded from the protection of the Rent Act and the        E
      provision providing for annual increase at a nominal rate
      of 5% are structural changes brought about by the present
      Rent Act, 1999 vis-a-vis the 1947 Act. The Rent Act of
      1999 is the sequel to the judgment of this Court in Malpe
      Vishwanath Acharya.                                             F

            The entire discussion hereinabove is, therefore, not
      only to go behind Section 3(1 )(b) and ascertain the
      reasons for enactment of the said clause but also to enable
      this Court to give purposive interpretation to the said
      clause."                                                        G

After so stating, the two-Judge Bench speaking, through S.H.
Kapadia, J. (as His Lordship then was), observed as follows: -

8.   (1998) 2 sec 1.                                                  H
    1028   SUPREME COURT REPORTS                    [2012) 3 S.C.R.


A      "73. Moreover, if we are to hold that PSUs do not include
       government companies, as held by the High Court, we
       would be disturbing the package offered by the legislature
       of allowing increase of rent annually at 5%, allowing the
       landlords to accept premium and exclusion of certain
B      entities from the protection of the Rent Act under Section
       3 (1) (b). On the other hand, acceptance of the arguments
       advanced on behalf of the respondents on the
       interpretation of Section 3(1 )(b) would make the Act
       vulnerable to challenge as violative of Article 14 of the
c      Constitution. 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 PSUs are in the form of
       statutory corporations, public sector companies,
       government companies and companies in which the public
       are substantially interested (see the Income Tax Act, 1961).
D
       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 value. They have
E      positive net worths. They can afford to pay rents at the
       market rate.

       74. Thirdly, we are of the view that, in this case, the
       principle of noscitur a sociis is clearly applicable.
F      According to this principle, when two or more words which
       are susceptible to analogous meanings are coupled
       together, the words can take their colour from each other.
       Applying this test, we hold that Section 3(1)(b) clearly
       applies to different categories of tenants, all of whom are
G      capable of paying rent at market rates. Multinational
       companies, international agencies, statutory 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).
H      Private limited companies and public limited companies
 KESRI COMMISSARIAT v. MINI. OF FOOD & CIVIL 1029
 SUP., GOVT. OF MAH., MUMBAI [DIPAK MISRA, J.]

    having a paid-up share capital of more than Rs.1,00,00,000     A
    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.
                                                                   B
    xxx xxx                      xxx
    76. As stated above, Section 3(1 )(b) strikes a balance
    between the interest of the landlords and the tenants; it is
    neither pro-landlords nor anti-tenants. It is pro-public
    interest. In this connection, one must keep in mind the fact   C
    that the said Rent Act, 1999 involves a structural change
    vis-?-vis the Bombay Rent Act, 1947. As stated above, with
    the passage of time, the 1947 Act became vulnerable to
    challenge as violative of Article 14. As stated above, the
    legislature has to strive to balance the twin objectives of    D
    Rent Act protection and rent restriCtion for those who
    cannot afford to pay rents at the market rates.

    77. To accept the interpretation advanced on behalf of the
    respondents for excluding government companies from the        E
    meaning of the word "PSUs" in Section 3(1 )(b} would
    amount to disturbing the neat balance struck by the
    legislature."

      22. From the aforesaid it is graphically clear that an
Insurance Company is not protected under the 1999 Act. Once        F
it is held that defendant No. 1, the New India Assurance
Company, the original tenant, is not protected, the question
would be whether a subtenant can be protected under the Act.
In the case of Bhatia Co-operative Housing Society Ltd.
(supra), it has been clearly laid down that Section 4(1) of the    G
194 7 Act applies to premises and not to parties or their
relationship. Section 3 uses the term 'premises'. The provision
commences with the non-obstante clause that the Act does not
apply to any premises belonging to the Government or a local
authority. Sub-section 3(1 )(b) makes it clear that the Act does   H
    1030    SUPREME COURT REPORTS                   [2012] 3 S.C.R.


A   not apply to any bank, public sector undertaking or certain other
    categories of tenants. The Insurance Company is covered
    under Section 3(1)(b). Thus, as a logical corollary, the Act does
    not apply to the premises held by the Insurance Company who
    is a tenant.
B
       23. The learned Single Judge has allowed protection to
  the Government Department on the foundation that it has
  become a tenant. We are disposed to think that the analysis
  is fundamentally erroneous. When the Act does not cover the
  tenant, namely, the Insurance Company as basically the
C exemption applies only to premises and not to any relationship,
  the subtenant who becomes a deemed tenant cannot enjoy a
  better protection or privilege by ostracizing the concept of
  premises which is the spine of the provision.

D        22. In the ultimate analysis, we are obliged to allow the
    appeals, set aside the order passed by the High Court and
    restore that of the Appellate Court and, accordingly, it is so
    directed. The parties shall bear their respective costs.

    R.P.                                          Appeals allowed.