NATIONAL TEXTILE CORPORATION (MN) LTD.versusM/S DURGA TRADING CO. AND ORS.

                            [2015] 3 S.C.R. 162


    A        NATIONAL TEXTILE CORPORATION (MN) LTD.

                                    v.
                                     •
                 M/S DURGA TRADING CO. AND ORS.
    B                (Civil Appeal No. 2788 of 2005)

                          FEBRUARY 17, 2015

              [SUDHANSU JYOTI MUKHOPADHAYA AND
    c                PRAFULLA C.PANT, JJ.]

             Public Premises (Eviction of unauthorized Occupants)
        Act, 1971: ss. 4 and 7 - Agreement to sell entered into
        between respondent no. 1 and erstwhile owner of Textile
         Undertaking in 1975 -Agreement contained clauses which
    D
        mandated the execution of registered sale-deed or
        conveyance deed within three years - However, the same
•       was never done - In 1983, management of textile
        undertaking of erstwhile owner taken over by the central
    E   Government under the 1983 Act and thereafter vested in
        Central Government under the 1995 Act - Subject premises
        declared Public Premises and notices issued to respondent
        no. 1 to evict the premises - Challenge against - Held: The
        subject land got vested with the Government and was
    F   deemed to have been transferred in favour of the appellant
        in view of provisions of 1983 Act and 1995 Act- In view of
        such vesting, respondent no. 1 cannot claim to be an
        authorized occupant within the meaning of s.2(g) of the
        1971 Act- Textile Undertakings (Nationalization) Act, 1995
    G   - s.3 - Textile Undertakings (taking over of Management)
        Act, 1983.

            Allowing the appeal, the Court
                             •
    H                              162
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 163
                  TRADING CO.

     HELD: 1. Section 3(1) of the Textile Undertakings       A
(Nationalization) Act, 1995 provides that on the
appointed date, the right, title and interest of the owner
in relation to every textile undertaking shall stand
transferred to and shall vest absolutely in the Central
Government Sub-section.(2) thereof provides that every       B
textile undertaking which stands vested in the Central
Government by virtue of sub-section (1) shall
immediately after it has so vested, stand transferred to
and vested in the appellant-Corporation. Liability if any
of the owner of a textile undertaking i.e. SSML of any       C
period prior to the appointed day is liability of such
owner (SSML) and can be enforceable against him and
not against the Central Government or the appellant in
view of Section 5(1) of 1995 Act. Therefore respondent
n9.1 cannot derive any advantage against the Central         D
Government or the appellant on the ground of pendency
of a suit against the owner (SSML). [Paras 7, 14 and 15]
[172-G-H; 173-A; 179-A, Band DJ

    2. The agreement to sell relied upon by respondent E
no.1 itself contained clauses which mandated the
execution of registered sale-deed or conveyance deed
within three years. However, the same was never done.
Even if it is admitted that respondent no.1 has acted
on the agreement to sell and has paid the entire F
consideration, it cannot be a ground to hold that
respondent no.1 is authorized occupant within the
meaning of Section 2(g) of the Public Premises
(Eviction of unauthorized Occupants) Act, 1971. [Paras
13, 17] [177-B, 181-G]                                ' G,
     Govt. of AP. v. Thumma/a Krishna Rao and Anr. (1982)
2 SCC 134:1982 (3) SCR 500; State of U.P v. Zia Khan
(1998) 8 SCC 483; National Textile Corporation Ltd. v.
Sitaram Mills Ltd. & Ors. 1986 (Supp.) SCC 117: 1986 SCR H
164         SUPREME COURT REPORTS                  [2015] 3 S.C.R.


A     .187; Mis. Doypack §ystems Pvt. Ltd. v. Union of India &
      Ors. (1988) 2 SCC 299: 1988 (2) SCR 962 - referred to.

                        Case Law Reference

          1982 (3) SCR 500          Referred to.       Para 6.8
B
          (1998) 8   sec 483        Referred to.       Para 6.8

          1986 SCR 187              Referred to.       Para 9

c        1988 (2) SCR 962           Referred to.       Para 16
             ••
          CIVIL APPELLATE JURISDICTION: Civil Appeal No.
      2788 of 2005.

      From the Judgment and Order dated 06.02.2003 of the
D High Court of Judicature at Bombay in Writ Petition No.
  1552 of 2000.

          Ranjeet Kumar, S. G., Sidharth Luthra, B. Sunita Rao,
      Anurag for the Appellant.
E
          Shyam Divan, Sumit Goel, Kumar Shashank, Aayush
      Agarwal, Abhishek Vinod Deshmukh (for Parekh & Co.) for
      the Respondents.

          The ::Judgment of the Court was delivered by
F
        SUDHANl:!U JYOTI MUKHOPADHAYA, J. 1. This
    appeal has been preferred by the appellant against
    judgment dated 61h February, 2003 passed by the High Court
    of Judicat\Jre at Bombay in Writ Petition No.1552 of 2000.
G By the impugned judgment, the Division Bench of the High
    Court allowed the writ petition filed by respondent no.1 and
  · held as follows:

          "11. In the facts and circumstances of the present case,
H         the petitioner having acted on the agreement of sale
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 165
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    and having paid the entire consideration was clearly not     A
    an unauthorized occupant within the meaning of
    Section 2(g) of the Public Premises Act. That being
    so, there is no justification for applying the summary
    procedure under the Public Premises Act, nor has the
    Estate Officer any authority or jurisdiction to evict the    B
    petitioner under Section 5(2) of the Public Premises Act.
    There seems to be serious dispute about the title which
    dispute cannot be resolved under Public Premises Act.
    In our opinion, the invocation of the provisions of the
    Public Premises Act in the present case was wholly           C
    improper. The Estate Officer without any application of
    mind issued directions for putting locks and seals on
    the premises .. In our opinion, due process of law in a
    case like the present necessarily implies the filing of
                                                                 0
    suit by the respondents for the enforcement of their
    alleged rights in respect of the subject premises."

     2. While holding so the Division Bench of the High
Court also set aside the order dated 23rd June, 2000 and
notices dated 171h November, 2000 issued under Sections          E
4 and 7 of the Public Premises (Eviction of Unauthorized
Occupants) Act 1971 (hereinafter referred to as the '1971
Act') by Estate Officer, National Textile Corporation(MN) Ltd.

    3. The factual matrix of the case is as follows:-            F

     3.1. The respondent no.1 filed a petition being Writ
Petition No.1552 of 2000 before the Bombay High Court
challenging the proceedings initiated by the appellant
against it (respondent no. 1) u/s 5A (for removal of movable G
structures/fixtures) and u/s 4(2) (b) read with Section 7(1)
and (3) (for damages and eviction) of the 1971 Act, in
respect of subject premises i.e. land admeasuring 2921
sq. yards with structures thereon bearing Nos.96 and 97
situated at the premises of Shri Sitaram Mills Ltd. H
166         SUPREME COURT REPORTS                 [2015] 3 S.C.R.


A     (hereinafter ref\:!rred to as 'SSML' for short) at N.M. Joshi
      Marg, Mumbai.

       3.2. In the said writ petition, respondent no. 1 submitted
  that the subject premises belonged to the erstwhile owner,
B SSML. On 25'h March, 1975 an agreement to sell the
  subject premises was entered into between respondent no.1
  and SSML and the full consideration of RS.25 Lakhs was
  paid by respondent no.1 to SSML. On 1st April, 1975
  possession of the subject property was handed over to
C respondent no.1 and has since then remained with
  respondent no.1.

       3.3 The management of the textile undertaking of SSML
  was taken over by the Central Government w.e.f. 18th
o October, 1983 under the Textile Undertakings (Taking over
  of Managemeni) Act, 1983 (hereinafter referred to as the,
  '1983 Act') and t~e appellant corporation was appointed as
  its Custodian. Later, the right, title and interest in relation
  to the textile undertakings got transferred and vested in
E Central Government under .the Textile Undertakings
  (Nationalization) Act, 1995 (hereinafter referred to as the,
  '1995 Act') w.e.f. 1' 1 April, 1995.

       3.4. On 23'd June, 2000, the Estate Officer of the
F appellant Corporation passed an order under Sub Section
  (3) of Section 5A of the 1971 Act treating the subject
  premises as 'public premises' and directed respondent no.1
  to remove the movable structures and fixtures from the said
  premises. Thereafter, on 17th November, 2000 the said
G authority issued. two show cause notices to respondent no.1
  u/s 4(1) and 7(3) of the 1971 Act calling upon respondent
  no.1 to show cause why it should not be evicted from the
  subject premises and why it should not be made liable to
  pay damages. The appellant Corporation initiated the
H aforesaid action against respondent no.1 on the ground that
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 167
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

the premises were required for bona fide use. Moreover, A
the appellant Corporation urged before the High Court that
since conveyance deed was not executed between the
erstwhile owner SSML and respondent no. 1, it was merely
an agreement to sell and hence, the subject premises got
vested in the Central Government under the 1995 Act.       B

    3.5 The High Court allowed the said writ petition by the
impugned judgment and order dated 61h February, 2003.

    4. The issue involved in the present appeal is:-           c
       "Whether in the facts and circumstances, the
proceedings initiated by the appellant before the Estate
Officer against respondent no.1 under the 1971 Act should
continue or the appellant should be relegated to prefer a D
suit before the civil court as held by the High Court?"

   5. Learned Solicitor General of India appearing on
behalf of the appellant made the following submissions:

     5.1 The claim of respondent no.1 is based on E
unregistered agreement to sell which never fructified into a
registered sale deed. Moreover, respondent no. 1 is neither
the owner of the land nor can it claim authorized occupancy
pursuant to unregistered agreement.
                                                               F
     5.2 The land in question got vested with the State and
it is deemed to have been transferred in favour of the
appellant in view of provisions of 1983 Act and 1995 Act.
In view of such vesting, respondent no.1 cannot claim to
be an authorized occupant within the meaning of Section G
2(g) of 1971 Act.
   6. Per contra," according to the learned senior counsel
appearing on behalf of the respondent:-
    6.1 The subject premises did not form part of the textile H
168          SUPREME COURT REPORTS                 [2015] 3 S.C.R.


A undertaking of SSML on the appointed day under the 1983
  Act i.e. on 18th October, 1983 and for that reason the
  management of the subject premises never got vested in
  the Central Government under the 1983 Act and for the
  same reason the right, title and interest over the subject
B premises never got vested in the Central Government and
  the appellant under the 1995 Act. Thus both the Acts have
  no applicability to the subject premises.

            It was further submitted that there are two
C     independent preconditions for vesting under 1995 Act.

      (i)   what is acquired is the right, title and interest of the
            owner specified in column 3 of the first schedule and

      (ii) such right title and interest must relate· to the textile
0
           undertaking specified in column 2 of the first schedule.

       6.2. Apart from the factual issue with respect to the
  second requirement, the first requirement involves a mixed
  question of fact and Jaw. This is because whether or not a
E particular owner had "right, title and interest" on the
  appointed day involves a factual enquiry apart from vesting
  by operation of law. The expression "the right, title and
  interest of the owner" is a compenditious expression
F covering 3 distinct aspects. Since this is an expropriatory
  legislation it ought to read strictly and all three elements
  must subsist together before any vesting takes place. In
  this case, the appellant has no right, title and interest.
                                      '
       6.3. Jn any event, more than 12 years after respondent
G no.1 was put in possession and enjoyed the property fully,
  openly, continuously and in a manner hostile to SSML (and
  its successor in interest), respondent no.1 obtained rights
  in Jaw and any ,residuary/vestige of a title that remained in
  SSML was rendered ineffective or unenforceable in Jaw.
H
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 169
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    6.4. The overwhelming material available on the record          A
suggests the following:

 (i)      Respondent no.1 and SSML had entered into an
          agreement to sell dated 251h March, 1975
                                                                    B
 (ii)    Respondent no.1 was put in possession of the
         subject premises on 1st April, 1975 pursuant to the
         agreement to sell.

 (iii)     Respondent no.1 had paid the full consideration of
          Rs.25 lakhs to SSML (Rs.21,85,000/-, Rs.1, 15,000/-       c
          ,Rs.20,000/- and Rs.1,80,000/-).

 (iv)     The sale took place pursuant to a Special Resolution
          passed at the Extra Ordinary General Meeting of the
          Company held on 2nd March, 1975.                          D

 (v)      The sale of subject premises was reflected in the
          Balance Sheet. and in Schedule of Fixed Assets of
          SSML for the year ended 31•1 March, 1975.
                                                                    E
 (vi)     SSML accepted tenancy under respondent no.1 over
          an area of 5802 sq. ft. of the subject premises and
          was paying rent to respondent no.1

 (vii)     SSML paid capital gains tax on the sale of the subject
                                                                    F
          property which is clear from the letter dated
          28.01.1980 written by SSML to the Commissioner of
          Income Tax.

 (viii) Various Government authorities have since
        recognized that it is the respondent no.1 to whom the G
        said premises belongs. This is clear, inter alia, from
        the following

         (a)Order dated 23'd March, 1977 passed by the
         Competent Authority under the Urban Land Ceiling Act       H
170   SUPREME COURT REPORTS                  [2015] 3 S.C.R.


A     granting permission to SSML to transfer the subject
      premises to respondent no.1 by way of sale.

      (b) the agreements dated 5th May, 1976 and 1•t
      September, 1976 whereby respondent no.1 had let out
B     a portion of the property on the first and second floor
      to the Collector of Customs through President of India.
      Even after the 1983 Act and the 1995 Act, the
      President of India through the Collector of Customs
      continued the agreements with respondent no.1. At
C     no stage did the Collector of Customs approached the
      Central Government or appellant;

      (c) BMC made separate property tax assessment in
      the name of respondent no.1
D
      (d) the property tax assessed and paid by respondent
      no.1 to the Bombay Municipal Corporation

      (e) BMC granted separate water connection in the
      name of respondent no.1 vide its letter dated 20th July,
E     1981.

      (f) NOC dated 5th February, 1982 issued u/s 230A(1)
      by the Income Tax Authorities in respect of the sale
      of the subject premises.
F
      (g) The order of the Recovery Officer, Provident Fund
      and Labour Dues dated 5th February, 1983 inter alia
      stating that the attachment on Plot No.9 (part) was
      raised and vacated as t~e building on Plot No.9 (part)
G     was agreed to be sold by SSML to respondent no.1

      (h) Though the 1983 Act had come into force, the
      Customs Department in 1993 surrendered 12571 sq.ft
      out of 15805 sq.ft. in its possession on the 1st floor of
H     the subject premises to respondent no.1.
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 171
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

     (i) Though the 1995 Act had come into force, the A
     Customs Department surrendered the remaining 3234
     sq.ft in its possession on the first floor and the entire
     8667 sq.ft in its possession on the 2"d floor to
     respondent no.1 on 26'h February, 1997.
                                                               B
     G) Letter dated 23'd February, 1985 from Valuation
     Officer, Income Tax Department to respondent no.1
     regarding assessment of rent of the premises of
     respondent' no.1 occupied by the Customs
     admeasuring 8667 sq.ft and 15305 sq.ft.                   C

     (k) Various letters from Building Department, New
     Customs House, Bombay to respondent no.1
     regarding reassessment of rent of premises occupied
     by Customs Department.                              D

    6.5. The Correspondence between the parties also
shows that the subject premises were never considered as
a part of the textile undertaking after the same was sold to
respondent no.1 in the year 1975.                            E

    6.6. It was submitted that the subject premises herein
were not part of the assets or rights or leaseholds or powers
or authorities or privileges or property of the textile company
(SSML) immediately before 1•1 April, 1994. Since the F
subject premises and all rights in respect of these premises
stood excluded from the textile undertaking of SSML in
1975, SSML had no "ownership, possession, power or
control" in relation to the said premises and hence the
subject premises stand excluded from the first part of G
Section 4( 1) of 1995 Act.

     6.7. It was further submitted that there is a serious
dispute about title that cannot be resolved under the 1971
Act. The appellant cannot be permitted to take a unilateral H
172       SUPREME COURT REPORTS                    [2015] 3 S.C.R.


A decision in its own favour that the property belongs to it,
  and on the basis of such decision take recourse to the
  summary remedy. Due process of law in a case like the
  present necessarily implies the filing of a suit by the
  appellant for enforcement of their alleged rights in respect
B of the subject premises.

        6.8. Learned Senior Counsel for the respondent no. 1,
  also relied upon decisions of this Court in Govt. of A.P. v.
  Thummala Krishna Rao and Anr. (1982) 2 SCC 134
C wherein the Court held that having regard to the bona fide
  title dispute, the respondents cannot be evicted summarily;
  and State of U.P. v. Zia Khan, (1998).8 SCC 483 wherein
  this Court held that the question of title cannot be decided
  under U.P. Public Premises (Eviction of Unauthorised
D Occupants) Act, 1972 and the decision on the subject had
  to be made by either revenue court or civil court.

         7. Before adverting to the rival submissions made by
  the learned counsels for the parties, it would be necessary
E to make a brief reference to the provisions of the 1983 Act
  and the 1995 Act.

         Section 2(d) of the 1983 Act defines "textile
      undertaking" as follows:
F
           "(2)(d) "textile undertaking" or "the textile undertaking"
          means an undertaking specified in the second column
          of the first Schedule;"

       Section 3(1) of the 1995 Act provides that on the
G appointed date, the right, title and interest of the owner in
  relation to every textile undertaking shall stand transferred
  to and shall vest absolutely in the Central Government. Sub-
  section (2) thereof provides that every textile undertaking
H which stands vested in the Central Government by virtue
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 173
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

of sub-section (1) shall immediately after it has so vested,      A
stand transferred to and vested in the National Textile
Corporation.

    Section 3 of the 1995 Act reads:
                                                                  B
    "3( 1) On the appointed day, the right, title and interest
    of the owner in relation to every textile undertakings
    shall stand transferred to, and shall vest absolutely in,
    the Central Government.

    (2) Every textile undertaking which stands vested in the      C
    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."

     The key expression in sub-section (3) for the purposes       D
of this case is:

     "the right, title and interest of the owner in relation to
     every textile undertaking"
                                                                  E
    8. The real issue in the present case is whether the
subject premises can be said to be an asset of the SSML
vested with the State.

    9. In National Textile Corporation Ltd. v. Sitaram
Mills Ltd. & Ors. 1986 (Supp.) SCC 117, this Court noticed F
the stand taken .by parties with regard to property in
question. The said case related to the very same mill
SSML. The Division Bench of the High Court' of Bombay
on a petition under Article 226 of the Constitution of India G
filed by SSML while upholding the constitutional validity of
Section 3(1) of the Textile Undertakings (Taking Over of
Management) Act, 1983 held that the surplus land
appurtenant to the mill was not an 'asset in relation to the
textile undertaking' within the meaning of sub-section (2) of H
174       SUPRl;:ME COURT REPORTS                 [2015] 3 S.C.R.


A Section 3 of the Act and directed the Central Government
  to restore the possession of the said land to the Company.
  Being aggrieved by the said decision the appellant
  corporation approached this Court. In the said case this
  Court held:
B
       "40 ....... The legislature in enacting the law for the
       taking over of the management of the textile
       undertakings therefore clearly had the intention of
       taking over the surplus lands of the Company. In our
c      opinion, the High Court ought to have interpreted sub-
       section (2) of Section 3 of the Act in the context of sub-
       section (1) thereof and the other provisions of the Act
       in consonance with the intention of the legislature. It
       was the intention of the legislature to take over all the
D      assets belonging to the Company held in relation to the
       textile undertaking. The note attached to the report of
       the Task Force includes the total lands belonging to the
       petitioners' Company for the purpose of determining the
       value of the assets of the Company and does not
E      exclude the Real Estate Division. Even for determining
      the total compensation to be paid on nationalisation,
      the Task Force takes into account the total surplus
      lands of the Company and does not exclude any land
      belonging to the so-called Real Estate Division. The
F
      viability study of the IDBI also heavily relied on the
      surplus lands held by the petitioners' Company.

       41. In the premises, the High Court has manifestly erred
       in holding that the said Real Estate Division was
G      separate and distinct from the textile undertaking.
       Surplus lands of the texUle mills taken over under sub-
       section ( 1) of Section 3 of the Act are but a vital physical
       resource capable of generating and sustaining
       economic growth of the textile mills. There can be no
H
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 175
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

    doubt that the legislative intent and object of the         A
    impugned Act was to secure the socialisation of such
    surplus lands with a view to sustain the sick textile
    undertakings so that they could be properly utilised by
    the Government for social good i.e. in resuscitating the
    dying textile undertakings. Hence, a paradoxical            B
    situation should have been avoided by adding a narrow
    and pedantic construction of a provision like sub-section
    (2) of Section 3 of the Act which provides for the
    consequences that ensue upon the taking over in public
    interest of the management of a textile undertaking         C
    under sub-section (1) thereof as a step towards
    nationalisation of such undertakings, which was clearly
    against the national interest. In dealing with similar
    legislation, this Court has always adopted a broad and      D
    liberal approach ....... "

     10. Learned Senior Counsel appearing on behalf of
respondent no.1 placed reliance on the aforesaid decision
in Sitaram Mills Ltd. to suggest that the execution of the
agreement dated 251h March, 1975 was not disputed in the E
said case.

    11. While giving the impugned judgment, the Division
Bench of the High Court also proceeded on such
presumption that the property in question has been sold by      F
the Textile Undertaking and observed as follows:

       "9 ...... ....... It would not be out of place to mention
    that in an appeal arising out of the judgment of the
    Division Bench of this Court in respect of this very Mill, G
    the Supreme Court has recorded in its judgment that
    the property in question has been sold by the textile
    undertaking prior to the commencement of the 1983
    Act. There seems to be hardly any dispute about the
    factual position. The execution of the agreement dated H
176       SUPREME COURT REPORTS                   [2015] 3 S.C.R.


A        251h March, 1975 is not disputed. There is also no
         serious dispute that the entire consideration has been
         paid. Further the transaction is duly substantiated by
         the contemporaneous records like the balance sheet,
         profit and loss account, the resolution passed by the
B        Board of Directors, etc. During the period 1975 to 1998
         the property has been dealt with by the petitioner as
         its own property. It has been let out to various
         Government bodies from time to time. The rent in
         respect of the subject premises has been collected by
c        the petitioner and the tax has always been paid by the
         petitioner. Section 53-A of the Transfer of Property Act
         furnishes a statutory defence to a person who has no
         registered title deed in his favour to maintain his
       · possession if he can prove a written and signed
D
         contract in his favour and some action on his part in
         part performance of that contract."

          12. From bare perusal of paragraph 35 of decision in
    Sitaram Mills Ltd. it is apparent that in the said case the
E learned counsel for the Maharashtra Girni Kamgar Union
    filed a detailed tabular chart before the Court to demonstrate
  · that the Real Estate Division was part and parcel of the
    textile undertaking. In the said chart it was mentioned that
F 'of the remaining plots, on plot no.4 admeasuring 9765
    square yards there were certain old godowns of the textile
    mill and they were sold by the petitioners (i.e. SSML) to a
    charitable trust of the tantias in 1974-75 for setting off loans
    taken from the trust for the textile business.'
G     The aforesaid chart produced by one of the parties
  before this Coart was though noticed but no finding has
  been given by this Court that the property in question was
  sold by the textile undertaking prior to commencement of
H 1983 Act. On the other hand if show that the land in
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 177
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

question was point of the textile mills.                       A

     13. The agreement to sell relied upon by respondent
ho.1 itself contain~ clause 1(d), 2, 3, 6 etc. which mandates
the execution of registered sale-deed or conveyance deed
within three years. However, the same was never done. A        a
suit for specific performance was filed by respondent no.1
before Bombay High Court against SSML 25 years after
unregistered agreement to sell dated 25'h March, 1975,
th·ereby, acknowledging that there was no registered
document of title with respondent no.1. The said suit is still C
pending.

     14. Section 4 of 1995 Act relates to general effect of
vesting. Relevant parts of which read as follows:-
                                                              D
    "4(1).The textile undertakings referred to in Section 3
    shall be deemed to include all assets, rights,
    leaseholds, P.owers, authorities and privilege and all
    property, moveable and immovable including lands,
    buildings, workshops, stores, instruments, machinery E
    and equipment, cash balances, cash on hand, reserve
    funds, investments and book debts pertaining to the
    textile undertakings and all other rights· and interests
    in, or arising out of, such property as were immediately
    before the appointed day in the ownership, possession, F
    power or control of the textile company in relation to
    the said undertakings, whether within or outside India,
    and all books of account, registers and all other
    documents of whatever nature relating thereto and shall
    also be deemed to include the liabilities and obligations G
    specified in sub-section (2) of Section 5."

    "4(2) All property as aforesaid which have vested in the
    Central Government under sub-section (1) of Section
    3 shall, by force of such vestin~. be freed and            H
    178       SUPREME COURT REPORTS                  [2015] 3 S.C.R.

                                        •
    A       discharged from any trust, obligation, mortgage, charge,
            lien and all other incumbrances affecting it, and any
            attachment, injunction or decree or order of any court
            or other authority restricting the use of such property
            in any manner shall be deemed to have been
    B       withdrawn."

             "4(5)For the removal of doubts, ij is hereby declared
             that the mortgage of any property referred in sub-
           . section (2) or any other person holding any charge, lien
    c        or other interest in, or in relation to, any such property
             shall be entitled to claim, in accordance with his rights
             and interests, payment of the mortgage money or other
             dues, in whole or in part, out of the amounts specified
             in relation to such property in the First Schedule, but
    D        no such mortgage, charge, lien or other interest shall
             be enforceable against any property which has vested
             in the Central Government."

            "4(6) If, on the appointed day, any suit, appeal or other
    E       proceeding of whatever nature in relation to any              0
•           property which has vested in the Central Government
            under section 3, instituted or preferred by or against the
            textile company is pending, the same shall not abate,
            be discontinued or be, in any way, prejudicially affected
    F       by reason of the transfer of the textile undertakings or
            of anything contained in this Act, but the suit, appeal
            or other proceeding may be continued, prosecuted or
            enforced by or against the National Textile Corporation."

    G      Thus, it is clear that all other rights and interests in or
      arising out of such property as were existing immediately
      before the ap1;>ointed day in the ownership, possession,
      power or control of the textile company in relation to the
      said undertaking vested with the Central Government and
    H by virtue of sub~section (2) of Section (3) stood transferred
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 179
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

to, and vested in, the National Textile Corporation. Liability A
if any of the owner of a textile undertaking i.e. SSML of any
period to the appointed day is liability of such owner (SSML)
and can be enforceable against him and not against the
Central Government or the National Textile Corporation in
view of Section 5(1) of 1995 Act, which reads as follows:      B

       "5(1) Every liability, other than the liability specified
    in sub-section (2), of the owner of a textile· undertaking,
    in relation to the textile undertakings in respect of any
    period prior to the appointed day, shall be the liability      C
    of such owner and shall be enforceable against him and
    not against the Central Government or the National
    Textile Corporation."

    15. Therefore respondent no.1 cannot derive any                D
advantage against the Central Government or the National
Textile Corporation on the ground of pendency of a suit
against the owner (SSML).

    16. In M/s Doypack Systems Pvt. Ltd. v. Union of E
India & Ors, (1988) 2 SCC 299, while dealing with a case
involving National ,Textile Corporation-appellant herein, the
Court noticed the meaning of the expressions "arising out
of, pertaining to and in relation to" and observed:

    "49. The words "arising out or have been used in the           F
    sense that it comprises purchase of shares and lands
    from income arising out of the Kanpur undertaking. We
    are of the opinion that the words "pertaining to" and "in
    relation to" have the same wide meaning and have G
    been used interchangeably for among other reasons,
    which may include avoidance of repetition of the same
    phrase in the same clause or sentence, a method
    followed in good drafting. The word "pertain" is
    synonymous with the word "relate'', see Corpus Juris H
180       SUPREME COURT REPORTS                 [2015] 3 S.C.R.


A       Secundum, Volume 17, page 693.
        50. The expression "in relation to" (so also "pertaining
        to"), is a very broad expression which presupposes
        another subject matter. These are words of
        comprehensiveness which might have both a direct
B
        significance as well as an indirect significance
        depending on the context, see State Wakf Board v.
        Abdul Azeez29, following and approving Nita Charan
        Bagchi v. Suresh Chandra Paul30, Shyam Lal v. M.
c       Shyamlal3"1 and 76 Corpus Juris Secundum 621.
        Assuming that the investments in shares and in lands
        do not form part of the undertakings but are different
        subject matters, even then these would be brought
        within the purview of the vesting by reason of the above
D       expressions. In this connection reference may be made
        to 76 Corpus Juris Secundum at pages 620 and 621
        where it is stated that the term "relate" is also defined
        as meaning to bring into association or connection with.
        It has been clearly mentioned that "relating to" has been
E       held to be equivalent to or synonymous with as to
        "concerning with" and "pertaining to". The expression
        "pertaining to" is an expression of expansion and not
        of contraction."

F        17. The First Schedule of the 1995 Act provides the
    amount which the Central Government has to pay to the
    owner of every textile undertaking for the transfer and
    vesting of such undertaking to it. This provision cannot be
   the starting point of investigation as to which amount
G · relates to which property or as a guide to construction (See
    paragraph 54 of M/s Doypack Systems Pvt. Ltd. v.
    Union of India & Ors, (1988) 2 SCC 299).

      In the said case of M/s Doypack Systems Pvt. Ltd.
H the Court further held:
NATIONAL TEXTILE CORPORATION (MN) LTD. v. DURGA 181
TRADING CO. [SUDHANSU JYOTI MUKHOPADHAYA, J.]

     "57. The expression "and all other rights and interests      A
      in or arising 01.1t of such property, as were immediately
      before the appointed day, in the ownership, possession,
      power or control of the company in relation to the said
      undertakings", appearing in sub-section (1) of Section
      4 of the Act indicates that the shares which have been      B
      purchased from out of the funds of the textile
      undertakings and which have been held for the benefit
      of the said textile undertakings, would come within the
      scope of Section 4 of the Act and thus would also vest
    . in Central Government under Section 3. The origin of        C
      these shares and their connection with the textile
      undertakings have been fully corroborated. The textile
      business is the only business of Swadeshi Cotton Mills.
      There is interconnection and interrelation between all      D
     the six undertakings. Investments in Swadeshi Polytex
      Limited from ·the funds of Kanpur undertaking have
      always been made. Investments in Swadeshi Mining
      and Manufacturing Company Ltd. were always made
     from the funds of the Kanpur undertaking. Assets/            E
      investments held and used for the benefit of the textile
      business of SCM, were carried on in its textile
      undertakings."

     Therefore, it is clear that the property in question stood F
vested in the Central Government and, in turn, stood
transferred and vested with National Textile Corporation
under sub-section (2) of Section 3 of 1995 Act. Even if it is
admitted that respondent no. 1 has acted on the agreement
to sell and has paid the entire consideration, it cannot be a G
ground to hold that respondent no. 1 is authorized qccupant
within the meaning of Section 2(g) of the 1971 Act.
    18. We are of the view that the Division Bench of the
High Court failed to analyze the provisions correctly and
wrongly presumed that the property in question has been           H
182         SUPREME COURT REPORTS             (2015) 3 S.C.R.


A sold to the Textile Undertaking prior to the commencement
  of 1983 Act. The Court wrongly relied on Section 53A of
  the Transfer of Property Act to hold that respondent no.1
  has valid defence available under the said provision and
  hence erred in holding that respondent no. 1 is an
B authorized occupant within the meaning of Section 2(g) of
  the 1971 Act.

         19. For the reasons aforesaid, we set aside the
  · impugned judgment dated 5t11 February, 2003 passed by the
C Division Bench of High Court of Judicature at Bombay in
    Writ Petition No.1552 of 2000 and uphold notices dated 17th
    November, 2000 issued under Sections 4 and 7 of the
    Public Premises (Eviction of Unauthorized Occupants) Act,
    1971. Now, it is open to the Competent Authority/Court to
D proceed in accordance with the provisions of the 1971 Act
    and pass an appropriate order. The appeal is allowed but
   there is no order as to costs.

      Devika Gujral                              Appeal allowed.