Sunday, 25 August 2019

Whether multinational company having paid up share capital of less than one crore is entitled to get protection of rent law?

In these circumstances, it is not possible to agree with Mr. Dani that only such multinational companies having a paid up share capital of Rs. 1 Crore or more are excluded from the purview of the Act. The Act is inapplicable to foreign missions, international agencies and multinational companies and they are grouped together only because of the foreign or international element in them. There presence being at global or international level, their presence in more than one country being undisputed, it is but natural to hold that they have the financial capacity and capability to procure and purchase or afford the rates of immovable property prevailing in the market. They are not required to be protected from rack renting, exploitation and the alleged greed of landlords as urged by Mr. Dani. They cannot complain of economic exploitation because of their financial and other resources. In such circumstances, the Legislature deemed it fit that such entities together with banks, public sector undertakings or statutory Corporations and others are not required to be brought within the purview of rent control legislation. They can stand out and compete and equally they can on their own buy properties at prevailing market rates. The presumption that the protection of beneficial and social legislation meant to protect tenants who cannot afford to pay market price, holds good and there is no question of any discrimination much less classification having no nexus with the object sought to be achieved. If the object sought to be achieved is to exclude such entities, who are financially sound and cash rich because they were misusing the protection of rent control act, then, that cannot be said to be vitiated by any arbitrariness or unreasonableness. In such circumstances and when the vires of the provision has also been upheld by the Supreme Court in Pansare's case (supra), then, all the more, this is not a fit case for holding that the applicant continues to enjoy the protection of the rent control legislation and it is not excluded from its purview.

IN THE HIGH COURT OF BOMBAY

Civil Revision Application No. 184 of 2010

Decided On: 13.03.2013

Paramount Films of India Limited  Vs.  S.F. Chemicals Industries Pvt. Ltd.

Hon'ble Judges/Coram:
S.C. Dharmadhikari, J.

Citation: 2013(3) MHLJ 239,2013(3) AllMR 660
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Whether exemption from rent law is in respect of premises or with respect to parties?

It is well settled by a decision of this Court in Bhatia Cooperative Housing Society Ltd. v. D.C. Patel MANU/SC/0064/1952 : [1953]4SCR185 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 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 Radhevlal Somsingh v. Ratansingh Kishansingh MANU/MP/0095/1977 : 1977 MPLJ 335 and it was held that the immunity from operation of the Madhya Pradesh Accommodation Control 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 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.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2704 of 2000

Decided On: 01.05.2003

 Parwati Bai Vs.  Radhika

Hon'ble Judges/Coram:
R.C. Lahoti and B.N. Agrawal, JJ.

Citation: AIR 2003 SC 3995,(2003) 12 SCC 551
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Whether second suit filed under Transfer of property Act is to be stayed if first suit under rent Act is pending?

 I am fortified in my view by a decision of this Court in R.E. Fanibunda v. Nicholas of India Ltd. reported in 2003 (3) All 967 wherein this Court has explained what is the ratio of the decision of the Supreme Court in the case of Ambalal Sarabhai Enterprises Ltd. supra. In that case a landlord had filed a suit for eviction of a tenant on 9th June, 1977 on the ground of reasonable and bonafide requirement under the provisions of the Bombay Rent Act. The trial Court decreed the suit by a judgment dated 12th July, 1990 and the appellate Court set aside the decree. The appellate judgment was challenged by the landlord by filing a Writ Petition. During the pendency of the writ petition, the landlord filed another suit for eviction under the general law - Transfer of Property Act- as by then the provisions of Bombay Rent Act, 1947 had been repealed and the provisions of the Maharashtra Rent Act were not applicable to the tenant being a public limited company with a paid up capital of more than rupees one crore. At the hearing of the writ petition challenging the judgment of the appellate Court rendered under the provisions of the Bombay Rent Act, an objection was raised to the maintainability of the petition on the ground that the landlord had filed another suit under the general law and therefore the Writ Petition could not be continued. Relying upon the decision of the Supreme Court in Ambalal Sarabhai Enterprises v. Amrutlal (supra) it was contended that the landlord cannot pursue two parallel proceedings for the same reliefs. Negativing the objection, the court held that though the relief of possession claimed in both the suits was the same the causes of action for the two suits was entirely different. The cause of action for possession in the first suit was existence of a ground for eviction under the Bombay Rent Act while the cause of action for the second suit under the general law was only termination of the tenancy either by efflux of time or by notice. Existence of a ground under the Bombay Rent Act was not necessary for the second suit under the general law. The learned Judge therefore held that the two proceedings were not parallel as they were based on different cause of action and therefore there was no question of choosing between the two parallel proceedings. In Ambalal Sarabhai's case the Supreme Court has observed that a litigant cannot be permitted to take recourse to two parallel proceedings. In other words, two proceedings which are not parallel are permitted. This Court held that the two proceedings one for eviction under the provisions of the Bombay Rent Act and the other under the general law - Transfer of Property Act filed after repeal of the Bombay Rent Act were not parallel and were allowed to be continued and proceeded with simultaneously.

IN THE HIGH COURT OF BOMBAY

Civil Revision Application No. 58 of 2004

Decided On: 06.07.2004

 Godrej and Boyce Mfg. Co. Ltd.  Vs. Sridhar Jagannath Nerurkar

Hon'ble Judges/Coram:
D.G. Karnik, J.
 Citations: 2005 (1) BomCR 839, 2005 (1) MhLj 1097,2005(1) ALLMR 128
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Saturday, 24 August 2019

How to ascertain whether a transaction is lease or mortgage?

The guidelines for deciding - whether a transaction is a lease or a mortgage contemplate that the name given to the document is not conclusive. The question has to be decided with reference to the predominant intention of the parties as gathered from the recitals and the terms of the documents and the surrounding circumstances including conduct of the parties. In the case of a mortgage, there is a transfer of interest to secure repayment of debt and in the case of a lease, there is a transfer of a right to enjoy the property [See: T.P. Act by Mulla - 9th Edn. Page 621]. In the case of Fuzhakkal Kuttappu v. C. Bhargavi and Ors.MANU/SC/0366/1976 : [1977]1SCR696 , it has been observed that the nomenclature given to a document by the writer or even by the parties is not always conclusive. In construing a document, it is necessary to find out the intention of the parties executing such document. Such intention has to be gathered from the recital, the terms in the document and from surrounding circumstances. When there is a document of a composite character disclosing features of mortgage and lease, the Court will have to find out the pre-dominant intention of the parties executing the document viewed from the essential aspect of the reality of the transaction. In that case, it was further observed that the mortgages are not always simple, English, usufructuary as defined in T.P. Act. They may be anomalous. Even so, the essential feature of a mortgage, which is not there in a lease, is that the property transferred is a security for repayment of a debt in a mortgage whereas in a lease, it is transfer of a right to enjoy the property. In the instant case, the suit property is a shop; the transferee was put in possession as he was to carry on his business; however, he had no power to lease or sell; no rate of interest was fixed; there is nothing to indicate as to how Rs. 16,200/- was to be appropriated. In the present matter there is no evidence to show that Ex.P5 was executed as security for the alleged loan. As slated above, the tenancy of the respondent continued even after 1969 and in the above circumstances the High Court was right in holding that Ex.P5 was a device to defeat the said Act.
IN THE SUPREME COURT OF INDIA

Civil Appeal No. 4122 of 1999

Decided On: 22.07.2004

Kaveripatnam Subbaraya Setty Annaiah Setty Charities Trust
Vs. S.K. Viswanatha Setty
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