JURISDICTIONAL FACT
20. The learned Counsel for the appellant- Company submitted that the fact as to 'paid up share capital' of Rs. one crore or more of a Company is a 'jurisdictional fact' and in absence of such fact, the Court has no jurisdiction to proceed on the basis that the Rent Act is not applicable. The learned Counsel is right. The fact as to 'paid up share capital' of a Company can be said to be a 'preliminary' or 'jurisdictional fact' and said fact would confer jurisdiction on the Court to consider the question whether the provisions of the Rent Act were applicable. The question, however, is whether in the present case, the learned Counsel for the appellant tenant is right in submitting that the 'jurisdictional fact' did not exist and the Rent Act was, therefore, applicable.
21. Stated simply, the fact or facts upon which the jurisdiction of a Court, a Tribunal or an Authority depends can be said to be a 'jurisdictional fact'. If the jurisdictional fact exists, a Court, Tribunal or Authority has jurisdiction to decide other issues. If such fact does not exist, a Court, Tribunal or Authority cannot act. It is also well settled that a Court or a Tribunal cannot wrongly assume existence of jurisdictional fact and proceed to decide a matter. The underlying principle is that by erroneously assuming existence of a jurisdictional fact, a subordinate Court or an inferior Tribunal cannot confer upon itself jurisdiction which it otherwise does not posses.
22. In Halsbury's Laws of England, (4th Edn.), Vol.1, para 55, p.61; Reissue, Vol.1(1), para 68, pp.114- 15, it has been stated:
Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether to act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not conclusive.
23. The existence of a jurisdictional fact is thus a sine qua non or condition precedent to the assumption of jurisdiction by a Court or Tribunal.
JURISDICTIONAL FACT AND ADJUDICATORY FACT
24. But there is distinction between 'jurisdictional fact' and 'adjudicatory fact' which cannot be ignored. An 'adjudicatory fact' is a 'fact in issue' and can be determined by a Court, Tribunal or Authority on 'merits', on the basis of evidence adduced by the parties. It is no doubt true that it is very difficult to distinguish 'jurisdictional fact' and 'fact in issue' or 'adjudicatory fact'. Nonetheless the difference between the two cannot be overlooked.
31. It is thus clear that for assumption of jurisdiction by a Court or a Tribunal, existence of jurisdictional fact is a condition precedent. But once such jurisdictional fact is found to exist, the Court or Tribunal has power to decide adjudicatory facts or facts in issue.
32. As already seen earlier, in the case on hand, the appellant Company was having 'paid up share capital' of more than Rs. one crore, not only when the notice was issued and tenancy was determined but also when the suit for possession was instituted. What was stated was that a resolution was passed by the Board of Directors to reduce 'paid up share capital' from Rs.8.20 crores to Rs. 41 lakhs (less than Rs. 1 crore). But it was not approved by BIFR. The Small Cause Court considered this aspect and stated;
The reasons are that the above suit is filed on 4.4.2001. Whereas undisputed document Ex.B. annual report of the Defendant Company shows that on 30.9.1999 the paid up shares capital of the Defendant Company was more than Rs. 1 crore. If the Defendants have moved BIFR by reference of 1997, by that time the Defendant ought to have received favourable orders reducing the paid-up capital of the Defendants to less than Rs. one crore. But no such evidence is produced by the Defendants to rebut the annual report Ex.B of the Defendants showing paid up capital of more than Rs. 8 crores as on 30.9.1999. There is nothing before the court to show that the paid up share capital of the Defendants is brought down to Rs. 41 lacs as per para 1.3(1) of the revised rehabilitation proposal in BIFR case No. 74/1999 (Ex.4). The advocate for Defendants has not pointed out any order to show that the said proposal is accepted.
In the absence of such order of the appropriate court or authority accepting the proposal Ex.1 to reduce share capital to less than 1 crore rupees, I am unable to accept the case of the Defendants that the said share capital of the Defendant Company is reduced to less than Rs. 1 crore.
(emphasis supplied)
33. The High Court also dealt with this aspect and concluded;
It is not in dispute between the parties that the tenancy of the petitioners was terminated with effect from 31.3.2001 and on that day the paid up share capital of the petitioners/Company was more than Rupees one crore, no fault can be found with trial Court taking cognizance of the eviction proceedings initiated against the petitioners, as the trial Court definitely had jurisdiction to entertain such proceedings, considering the provisions of law comprised under Section 3(1)(b) of the said Act, as rightly submitted by the learned advocate for the respondents. The clause (b) of Section 3(1) of the said Act clearly provides that "the said Act shall not apply to any premises let or sub-let to banks, or any Public Sector Undertaking or any Corporation established by or under any Central or State Act, or foreign missions, international agencies, multinational companies, and private limited companies and public limited companies having a paid up share capital of rupees one crore or more". Undisputedly, the petitioner/Company is a Public Limited Company having share capital of more than Rupees one crore.
(emphasis supplied)
34. All the Courts were, therefore, in our considered opinion, right in holding that the provisions of the Rent Act were not applicable to the present case.
IN THE SUPREME COURT OF INDIA
Civil Appeal No. 2805 of 2005
Decided On: 05.10.2007
Carona Ltd.Vs. Parvathy Swaminathan and Sons
Hon'ble Judges/Coram:
C.K. Thakker and P. Sathasivam, JJ.
Citation: AIR 2008 SC 187
