2015 (2) TMI 1344 - SC - Indian Laws

Authorized occupant or not - filing of suit by the Respondents for the enforcement of their alleged rights in respect of the subject premises - whether the subject premises can be said to be an asset of the SSML vested with the State? HELD THAT - In National Textile Corporation Ltd. v. Sitaram Mills Ltd. and Othrs. 1986 (4) TMI 349 - SUPREME COURT , this Court noticed 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 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 Section 3 of the Act and directed the Central Government to restore the possession of the said land to the Company. The agreement to sell relied upon by Respondent No. 1 itself contains 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 suit for specific performance was filed by Respondent No. 1 before Bombay High Court against SSML 25 years after unregistered agreement to sell dated 25th March, 1975, thereby, acknowledging that there was no registered document of title with Respondent No. 1. The said suit is still pending - thus, all other rights and interests in or arising out of such property as were existing immediately before the appointed day in the ownership, possession, power or control of the textile company in relation to the said undertaking vested with the Central Government and by virtue of Sub-section (2) of Section (3) stood transferred to, and vested in, the National Textile Corporation. Liability 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. 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 relates to which property or as a guide to construction - Therefore, it is clear that the property in question stood 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 ground to hold that Respondent No. 1 is authorized occupant within the meaning of Section 2(g) of the 1971 Act. Thus, the Division Bench of the High Court failed to analyze the provisions correctly and wrongly presumed that the property in question has been 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 authorized occupant within the meaning of Section 2(g) of the 1971 Act - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the proceedings initiated by the Appellant before the Estate Officer against Respondent No. 1 under the 1971 Act should continue or if the Appellant should be relegated to prefer a suit before the civil court as held by the High Court.

Issue-Wise Detailed Analysis:

1. Proceedings Initiated by the Appellant:
The High Court ruled that the Respondent, having acted on the agreement of sale and paid the entire consideration, was not an unauthorized occupant under Section 2(g) of the Public Premises Act. Consequently, the summary procedure under the Public Premises Act was deemed inappropriate. The High Court set aside the order dated 23rd June 2000 and notices dated 17th November 2000 issued under Sections 4 and 7 of the 1971 Act by the Estate Officer, National Textile Corporation (MN) Ltd.

2. Factual Matrix:
Respondent No. 1 challenged the proceedings initiated by the Appellant under the 1971 Act regarding the subject premises. The Respondent argued that the subject premises belonged to SSML, and an agreement to sell was executed on 25th March 1975, with full consideration paid and possession handed over on 1st April 1975. The management of SSML was taken over by the Central Government in 1983 under the 1983 Act, and later, the right, title, and interest vested in the Central Government under the 1995 Act.

3. Appellant's Arguments:
The Appellant contended that Respondent No. 1's claim was based on an unregistered agreement to sell, which did not fructify into a registered sale deed, making Respondent No. 1 neither the owner nor an authorized occupant. The land vested with the State under the 1983 and 1995 Acts, and Respondent No. 1 could not claim authorized occupancy under Section 2(g) of the 1971 Act.

4. Respondent's Arguments:
Respondent No. 1 argued that the subject premises did not form part of the textile undertaking of SSML on the appointed day under the 1983 Act. The management and right, title, and interest over the subject premises never vested in the Central Government or the Appellant under the 1983 and 1995 Acts. The Respondent also argued that a serious dispute about the title could not be resolved under the 1971 Act and required a suit for enforcement of rights.

5. Legal Provisions and Precedents:
The Court examined the provisions of the 1983 and 1995 Acts, noting that the right, title, and interest of the owner in relation to every textile undertaking vested in the Central Government and subsequently transferred to the National Textile Corporation. The Court referenced previous judgments, including National Textile Corporation Ltd. v. Sitaram Mills Ltd., which dealt with similar issues regarding the vesting of assets.

6. Analysis and Conclusion:
The Court concluded that the property in question stood vested in the Central Government and subsequently transferred to the National Textile Corporation under the 1995 Act. The Respondent's reliance on an unregistered agreement to sell and the defense under Section 53A of the Transfer of Property Act did not make them an authorized occupant under Section 2(g) of the 1971 Act. The High Court's judgment was set aside, and the notices issued under Sections 4 and 7 of the 1971 Act were upheld. The Competent Authority/Court was directed to proceed in accordance with the provisions of the 1971 Act.

Judgment:
The Supreme Court set aside the impugned judgment dated 6th February 2003 passed by the Division Bench of the High Court of Judicature at Bombay in Writ Petition No. 1552 of 2000. The appeal was allowed, and the notices issued under Sections 4 and 7 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 were upheld. The Competent Authority/Court was directed to proceed in accordance with the provisions of the 1971 Act. No order as to costs was made.