2011 (9) TMI 970 - SC - Indian Laws

Whether appellant is not entitled for exemption under Section 3(1)(a) or 3(1)(b) of the Act 1999. Nor can it claim the status of an agent of the Central Government?

Issues Involved:
1. Validity of the judgments and decrees of the lower courts.
2. Effect of the Textile Undertakings (Nationalisation) Act, 1995 on tenancy rights.
3. Applicability of the Maharashtra Rent Control Act, 1999.
4. Status of the appellant as an agent of the Central Government.
5. Pleadings and the necessity of factual foundation in legal proceedings.

Detailed Analysis:

1. Validity of the Judgments and Decrees of the Lower Courts:
The appellant challenged the judgments and decrees of the lower courts, asserting that none of the courts considered the impact of the Textile Undertakings (Nationalisation) Act, 1995. The Supreme Court noted that the appellant did not raise this issue in the trial court, appellate court, or revisional court. The court emphasized that pleadings and issues are necessary to narrow the controversy and inform the parties about the questions in issue, citing precedents like *M/s. Trojan & Co. v. RM N.N. Nagappa Chettiar* and *Ram Sarup Gupta (dead) by L.Rs. v. Bishun Narain Inter College & Ors.*. The court concluded that the appellant's failure to raise the issue earlier rendered the challenge invalid.

2. Effect of the Textile Undertakings (Nationalisation) Act, 1995 on Tenancy Rights:
The appellant argued that the tenancy rights vested in the Central Government by the Act 1995, making the Central Government the tenant. The court clarified that the Act 1995 transferred the right, title, and interest of the textile undertakings to the Central Government and subsequently to the National Textile Corporation. The court explained that "vesting" means having an absolute and indefeasible right, and in this context, it included the transfer of tenancy rights. The court concluded that the appellant, as a government company and not a government department, could not claim the status of the Central Government's agent.

3. Applicability of the Maharashtra Rent Control Act, 1999:
The appellant contended that it was protected under Section 3(1)(a) of the Act 1999, which exempts premises let out to the Government. The court referred to its previous judgments, including *Saraswat Coop. Bank Ltd. & Anr. v. State of Maharashtra & Ors.* and *Leelabai Gajanan Pansare & Ors. v. Oriental Insurance Company Ltd. & Ors.*, to clarify that the Act 1999 applies to all premises let out to public sector undertakings, government companies, and other specified entities. The court held that the appellant, being a government company, was not entitled to the exemption under the Act 1999.

4. Status of the Appellant as an Agent of the Central Government:
The appellant claimed to be an agent of the Central Government, arguing that the Central Government remained the tenant. The court examined the legal principles regarding the relationship between a principal and an agent, citing cases like *Southern Roadways Ltd., Madurai v. S.M. Krishnan* and *Prem Nath Motors Ltd. v. Anurag Mittal*. The court concluded that the appellant could not be considered an agent of the Central Government, as it had independent rights and was controlled by the provisions of the Act 1995, not by the Central Government.

5. Pleadings and the Necessity of Factual Foundation in Legal Proceedings:
The court emphasized the importance of proper pleadings and the necessity of laying a factual foundation in legal proceedings. It cited several precedents, including *Kashi Nath (Dead) through L.Rs. v. Jaganath* and *Syed and Company & Ors. v. State of Jammu & Kashmir & Ors.*, to underline that no evidence can be considered unless it aligns with the pleadings. The court noted that the appellant failed to take the necessary pleadings regarding its status as an agent of the Central Government, rendering its arguments untenable.

Conclusion:
The Supreme Court dismissed the appeal, concluding that the appellant was not entitled to exemption under the Maharashtra Rent Control Act, 1999, and could not claim the status of an agent of the Central Government. The court granted the appellant time until 31.12.2013 to vacate the premises, with an undertaking to hand over peaceful and vacant possession to the respondent.

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