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TMI Blog2008 (8) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... enience we may state the facts of the case in SLP (C) No. 5855/07 in the case of Leelabai Gajanan Pansare Ors. v. Oriental Insurance Company Ltd. Ors. Facts: 5. Appellants-landlords had let out the suit-premises admeasuring 3214 sq. ft. (approx.) in Thane to Oriental Insurance Company Ltd. ( OIC for short). The rent was ₹ 10,000/- per month. Vide notice dated 15.4.2002 under Section 106 of the Transfer of Property Act, appellant terminated the tenancy of the said Company. On failure of OIC to vacate the premises, they instituted a suit for eviction. OIC took the plea that it is not covered under Section 3(1)(b) of the Rent Act as it was a protected tenant under the said Rent Act, 1999 and, therefore, could not be evicted. In the said suit, the landlord pleaded that OIC is a Public Sector Undertaking and/or Corporation having a total paid up share capital of more than ₹ 1,00,00,000. 6. OIC resisted the suit by filing its written statement inter alia contending that it is neither a PSU nor a Corporation; that it was not exempted under Section 3(1)(b) of the Rent Act; that it was neither a bank nor a PSU, nor a foreign mission, nor MNC and nor a public li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinues to enjoy protection of the said Rent Act. According to the appellants, this amounts to judicial legislation by the High Court as the High Court has read into Section 3(1)(b) the words, namely, except Government companies . According to the appellants, by such exclusion of Government companies from the PSUs, the High Court has excluded a large number of PSUs from the purview of Section 3(1)(b), which is not the intention of the Legislature. This, according to the appellants, is contrary to the legislative policy and such interpretation defeats the very purpose of Section 3(1)(b) of the Rent Act. According to the appellants, in the alternative, in any event, OIC is a public limited company having a paid up share capital of rupees more than one crore and, therefore, in any event, the said company would fall in the second part of Section 3(1)(b) which denies to such public limited companies the protection of the said Rent Act, 1999. 10. Shri Shyam Divan, learned senior counsel appearing on behalf of the appellants submitted that the concept of a Government Company is alien to the scheme of Section 3(1)(b). The legislature, according to the learned counsel, has not used th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression PSUs as used in Section 3(1)(b) should be read to exclude OIC which is a Government Company where 100% of the shares are held by the Central Government. 12. On literal interpretation of Section 3(1)(b), learned counsel submitted that the expression or any PSUs as used in Section 3(1)(b) is a separate stand-alone category like, banks, foreign missions, international agencies etc.. The said expression is separated from the rest of the provision by the word `or which is disjunctive and giving a natural meaning to the said word separates PSUs from the next expression relating to statutory Corporations. Therefore, according to the learned counsel, there is no reason why the expression `any PSUs should be restricted to statutory corporations, particularly when the disjunctive word or separates the two phrases in Section 3(1)(b). In this connection, learned counsel submitted that the word PSU is not specifically defined in the Rent Act. It is not defined in the 1956 Act. Learned counsel submitted that under Rules of Procedure and Conduct of Business in Lok Sabha under Chapter XXVI there is reference to Constitution of Parliamentary Committees. Rule 312A refers to functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Malpe Vishwanath Acharya (supra) hinges upon Section 3(1)(b) being interpreted in a fair manner. According to the learned counsel, should the scope of Section 3(1)(b) be restricted by excluding Government companies as done by the impugned judgment of the High Court then the larger objective of the legislature would stand defeated and the standard rent provisions under the Rent Act (1999 Act) would be rendered vulnerable. According to the learned counsel, the golden thread which runs through Section 3(1)(b) of the Rent Act is the economic criteria. In this connection, learned counsel submitted that each of the entities mentioned in Section 3(1)(b) are cash- rich entities. These entities are tenants paying rent to the landlords. These entities, according to the learned counsel, are excluded from the Rent Act protection, particularly when with the passage of time, the landlords were not able to maintain their property and, consequently, these properties became dilapidated for want of maintenance on account of poor return on their investments and on account of increase in taxes and price rise. According to the learned counsel, the Report of the Joint Committee indicates tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in its capacity as a tenant will have the protection of the Rent Act is that Government or a local authority performs sovereign and governmental functions. In other words, learned counsel urged that Government or a local authority is covered by the ambit of Section 3(1)(a) as long as it does not enter the arena of commercial activity. Learned counsel next submitted that the concept of a Government Company is not a part of Section 3(1)(a). According to the learned counsel, the said sub-section 3(1)(a) is bodily lifted from Section 4(1) of Bombay Rent Act, 1947. That Act was a temporary enactment. According to the learned counsel, the absence of the words Government Company in sub-section 3(1)(a) and the presence of the expression any PSUs in Section 3(1)(b) leads to the inevitable conclusion that Government Companies were not entitled to receive the protection of the said Rent Act. According to the learned counsel, banks, PSUs, statutory corporations and private and public limited companies mentioned in Section 3(1)(b) are in the commercial sector and, therefore, they will not have the protection of the Rent Act when they are the tenants. According to the learned counsel, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished. Learned counsel further submitted that Section 16 of General Insurance Business (Nationalisation) Act, 1972, in particular sub-section (2), shows that four companies, including OIC and UIC, render combined services of general insurance business all over India. According to the learned counsel, all the said four companies are the Government Companies which even on the narrow interpretation placed by the respondent, are corporations established under the Nationalisation Act. Therefore, learned counsel submitted that PSUs should be read in the widest possible term so as to include within it every kind of establishments through which the Government would do business. Therefore, according to the learned counsel, PSUs would encompass Government companies, statutory corporations, public sector companies etc. through which the Government is doing business. Reliance was placed on various statutes which have defined PSUs to include Government companies. One such statute is Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 which defines PSUs under Section 2(1)(a)(ii) as any corporation established by or under any Central or State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tenants enumerated in Section 3(1)(b) are financially giants, namely, PSUs, statutory corporations, banks, multinational companies, international agencies, private or public limited companies with a paid up share capital of ₹ 1,00,00,000 or more etc. These tenants, according to the learned counsel, do not require the protection of the Rent Act. Learned counsel next submitted that in any event OIC and UIC are public limited companies having a paid up share capital of more than ₹ 1,00,00,000 and, therefore, stand excluded from the protection of the Rent Act. In this connection, learned counsel urged that Government Companies and Insurance Companies are merely sub-species of public limited companies under the 1956 Act; the genus company is divided into three species - existing company , private company and public company ; that various sub-species including holding and subsidiary companies, insurance companies, Government companies etc. are all public limited companies under 1956 Act. 17. Lastly, learned counsel urged that when the legislature provided under Section 3(1)(b) that private limited companies and public limited companies having a paid up share capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndamental or qualitative distinction between a public limited company with ₹ 1,00,00,000 paid up share capital and a Government company with ₹ 1,00,00,000 paid up share capital. According to the learned counsel, a company on becoming a Government company does not undergo metamorphosis so as to result in the emergence of a separate entity under the 1956 Act, which needs Rent Act protection to which it was formerly not entitled. The consequence, according to the learned counsel, of a company becoming a Government Company is that the Government Company is placed under a special system of control and merely because the entire share holding is owned by the Central Government will not make the incorporated company a Central Government. In this connection, learned counsel relied upon the judgment of this Court in A. K. Bindal and anr. v. Union of India and ors. 2003(5)SCC 163 at 175. According to the learned counsel, the need for Rent Act protection does not arise merely because a company is placed under strict control and regulations. The need for Rent Act protection or its absence has no nexus whatsoever with the strict regime of control imposed on a Government company by Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or. In this connection he submitted that an exemption or exclusionary clause, particularly in the context of Rent Act, to the extent that it excludes a class or category of tenants has to be narrowly interpreted. According to the learned counsel, Section 3(1)(b) of the said Rent Act needs to be interpreted in the context of the 1956 Act. It was submitted that under the definition of company under Section 2(10) of the 1956 Act, which refers to Section 3 of that Act, the definition Section of Government Company refers to Section 617 of the 1956 Act. According to the learned counsel, Section 3 of the Companies Act deals with company [see section 3(1)(i)]; existing company [section 3(1) (ii)]; private company [section 3(1)(iii)] and public company [section 3(1) (iv)]. According to the learned counsel, it is not possible to proceed on the basis as if public and private companies are two sub-sets, which exhausts the field of companies. In this connection he submitted that Section 3 of the 1956 Act does not define a public company exhaustively as a company; that, Section 3 of the Companies Act merely states that the public limited company is not a private company and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Rent Act, learned counsel submitted that, in Section 3(1)(b) a compendious expression used is any public sector undertakings or any corporation established by or under any Central or State Act . He urged that there is no comma after the words any public sector undertakings . Therefore, according to the learned counsel, Section 3(1)(b) of the said Rent Act applies to PSUs and statutory corporations established by or under any Central or State Act. Therefore, according to the learned counsel, a Government company incorporated under the Companies Act would fall outside Section 3(1)(b) and thus would be entitled to the protection of the Rent Act. In this connection, learned counsel placed reliance on the Report of the Joint Committee which vide para 19 refers to Other PSUs including Government Undertakings or Corporations established by or under Central or State enactments. According to the learned counsel, what has emerged from the said report is that the Joint Committee intended to include Government/semi-Government undertakings or corporations within the words other public sector undertakings , however, the Legislature has dropped the said inclusion from the expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Legislature has excluded statutory corporations from such protection. According to the learned counsel, the Legislature has given protection to Government companies but has not extended protection to statutory corporations as it has treated Government companies more akin to the Government as is referred to in sub-section 3(1)(a) of the Act. 26. To sum up, the basic contention advanced by learned Additional Solicitor General is that a Government company does not fall within the compendious expression any PSUs or any corporation established by or under any Central or State Act . In other words, according to the learned counsel, the impugned judgment of the High Court commends to be sustained though in a different matrix. 27. Dr. Rajeev Dhavan appearing on behalf of Bharat Petroleum Corporation Ltd.-appellant (SLP(C) Nos. 24789-90/07) submitted that the word `PSU' is a term of parlance and that it is not a term of art. Learned counsel submitted that in this case the court is required to give contextual interpretation to the words `PSUs' in Section 3(1)(b) and if such a interpretation is given then the position which emerges is that the words PSUs or any statutory co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the said section, it is clear that in cases of tenancy created in favour of Government, local authority or Government companies, the court is concerned with public necessity and public need. According to the learned counsel, a bare reading of the second part of Section 3(1)(a) indicates that the Rent Act in question also assumes that the Government, local authorities and Government companies need protection of the Rent Act. Learned counsel submitted that there is nothing in the report of the Joint Committee or in the Statement of Objects and Reasons to exclude premises let out to Government companies. Learned counsel further submitted that if Section 3(1)(a) is to be given full interpretation then all governmental functions should be taken into account. That, Section 3(1)(a) cannot be confined to non-commercial activity. Therefore, according to the learned counsel, the distinction made between governmental functions and commercial functions to interpret Section 3(1) is erroneous. According to the learned counsel, Government operates in railways, transport and energy sectors. It operates via departments, Government companies and statutory corporations. When it operates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m or a licence given by the Government in respect of premises requisitioned or taken on lease or on licence by the Government, including any premises taken on behalf of the Government on the basis of tenancy or of licence or other like relationship by, or in the name of any officer subordinate to the Government authorized in this behalf; but it shall apply in respect of premises let, or given on licence, to the Government or a local authority or taken on behalf of the Government on such basis by, or in the name of, such officer; (b) to any premises let or sub-let to banks, or any Public Sector Undertakings 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. Explanation.- For the purpose of this clause the expression bank means,- (i) the State Bank of India constituted under the State Bank of India Act, 1955; (ii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959; (iii) A corresponding new bank constituted under section 3 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not being a company as defined in this Act) which the Central Government may, by notification in the Official Gazette, specify in this behalf. (10) company means a company as defined in section 3. (16) existing company means an existing company as defined in section 3. (18) Government company means a Government company within the meaning of section 617. (19) holding company means a holding company within the meaning of section 4. (21) insurance company means a company which carries on the business of insurance either solely or in conjunction with any other business or businesses. (23) limited company means a company limited by shares or by guarantee. (23A) listed public companies means a public company which has any of its securities listed in any recognized stock exchange. ... Section 3. Definitions of company , existing company , private company and public company (1) In this Act, unless the context otherwise requires, the expressions company , existing company , private company and public company shall, subject to the provisions of subsection (2), have the meanings specified below: (i) company means a company formed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lakh rupees or such higher paid-up capital, as may be prescribed; (c) is a private company which is a subsidiary of a company which is not a private company. (2) Unless the context otherwise requires, the following companies shall not be included within the scope of any of the expressions defined in clauses (i) to (iv) of sub-section (1), and such companies shall be deemed, for the purposes of this Act, to have been formed and registered outside India:- (a) a company the registered office whereof is in Burma, Aden or Pakistan and which immediately before the separation of that country from India was a company as defined in clause (i) of sub-section (1); (3) Every private company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than one lakh rupees, shall, within a period of two years from such commencement, enhance its paid-up capital to one lakh rupees. (4) Every public company, existing on the commencement of the Companies (Amendment) Act, 2000, with a paid-up capital of less than five lakh rupees, shall within a period of two years from such commencement, enhance its paid-up capital to five lakh rupees. (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions and subject to such regulations as it thinks fit, and those conditions and regulations, shall be binding on the body to which the licence is granted, and where the grant is under sub-section (1), shall, if the Central Government so directs, be inserted in the memorandum, or in the articles, or partly in the one and partly in the other. (6) It shall not be necessary for a body to which a licence is so granted to use the word Limited or the words Private Limited as any part of its name and, unless its articles otherwise provide, such body shall, if the Central Government by general or special order so directs and to the extent specified in the directions, be exempt from such of the provisions of this Act as may be specified therein. (7) The licence may at any time be revoked by the Central Government, and upon revocation, the Registrar shall enter the word Limited or the words Private Limited at the end of the name upon the register of the body to which it was granted; and the body shall cease to enjoy the exemption granted by this section: Provided that, before a licence is so revoked, the Central Government shall give notice in writing of its intention to the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nconsistent with the provisions of the Banking Companies Act, 1949; (c) to companies engaged in the generation or supply of electricity, except in so far as the said provisions are inconsistent with the provisions of the Indian Electricity Act, 1910 or the Electricity Supply 1948; (d) to any other company governed by any special Act for the time being in force, except in so far, as the said provisions are inconsistent with the provisions of such special Act; (e) to such body corporate, incorporated by any Act for the time being in force, as the Central Government may, by notification in the Official Gazette, specify in this behalf, subject to such exceptions, modifications or adaptation, as may be specified in the notification. ... Section 617. Definition of Government Company . For the purposes of this Act Government company means any company in which not less than fifty one per cent of the paid- up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as thus defined. Point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htra Housing and Area Development Act, 1976 ( MHADA Act ) which was enacted to consolidate, unify, and amend laws relating to housing, repairing and reconstructing dangerous buildings. In the Statement of Objects and Reasons it is mentioned that in urban areas and, particularly in Greater Mumbai area the old buildings had outlived their lives and have rendered themselves in a bad state of repairs and in order to prevent possible collapse of old buildings necessity was felt to take up the programme of repairs and reconstruction of such buildings. 33. To continue our discussion on Bombay Rent Act, 1947, Section 5(10) defined `standard rent'. Under that section there were six types of standard rent, namely, rent fixed by the court under the previous Rent Acts of 1939 and 1944, rent charged on 1.9.1940 if the premises were let for the first time on that date, if the premises were let before 1.9.1940 then the rent first charged, if the premises were let after 1.9.1940 then the rent first charged when let, if the premises were exempted from standard rent then after the five years period the rent was not to exceed 15% on the investment made in construction and outgoings and in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose provisions, as discussed above, were Sections 5(10), 11, 18 and 19. This position was further compounded when large premises, particularly in South Mumbai stood occupied by cash-rich entities like, statutory corporations and corporate bodies who insisted on paying meager standard rent under the 1947 Act. 36. Ultimately, the economic reasons led one of the landlords by the name Malpe Vishwanath Acharya to challenge the provisions of Section 5 (10), 7, 9(2)(b) and 11(1)(a) of the 1947 Act. We quote hereinbelow paras 8, 15, 17, 22, 25, 26, 27, 28, 29, 30 and 31of the judgment of this Court in the case of Malpe Vishwanath Acharya and ors. v. State of Maharashtra and anr. (1998) 2 SCC 1: 8. There is considerable judicial authority in support of the submission of learned counsel for the appellants that with the passage of time a legislation which was justified when enacted may become arbitrary and unreasonable with the change in circumstances. In the State of M.P. v. Bhopal Sugar Industries Ltd. (1964) 6 SCR 846 dealing with a question whether geographical classification due to historical reasons would be valid this Court at SCR p. 853 observed as follows: Differential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... increase in the rent, with the passage of time, is leading to arbitrary results. This is also demonstrated from the facts in the case of Petitioner 3 who owns Unit No. A-18 on the first floor admeasuring 808 sq. ft. in the property known as Shri Ram Industrial Estate situated at 13 J.D. Ambedkar Road, Mumbai. The said building belongs to a cooperative society and Unit No. A-18 was given on lease and licence basis by an agreement dated 23-8-1964 by the appellant to Lokmitra Sahakari Printing and Publishing Society Ltd. on a monthly compensation of ₹ 686.80 per month. Liabilities of repairs is on the appellant and according to it this amount received in respect of the said unit by the appellant is ₹ 563.65 per month inclusive of all taxes. Out of this sum Appellant 3 has to pay ₹ 216.33 as municipal taxes leaving a balance of ₹ 320.22. From this amount the society outgoings is ₹ 250 per month, leaving a balance of only ₹ 70.20 per month with the said appellant. Another instance which has been given is that of Appellant 4 who owns a property known as Ram Mahal situated at 8, Dinshaw Vachha Road, Mumbai. The said building has 20 residential flats and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the Act for charging any premium from a tenant, such freezing of rent results in charging `pugree' or deposit or similar illicit payments which are widely prevalent. The construction of new tenements on rental basis has considerably ceased with the result that low and middle income groups are not getting premises on rent.... (emphasis added) 26. Notwithstanding the fact that the State Legislature was conscious of the illegal payments which are made because of the rent restriction law no effective steps have been taken so far to strike a balance between the interests of the landlords and the tenants. 27. It is true that whenever a special provision, like the Rent Control Act, is made for a section of the society it may be at the cost of another section, but the making of such a provision or enactment may be necessary in the larger interest of the society as a whole but the benefit which is given initially if continued results in increasing injustice to one section of the society and an unwarranted largess or windfall to another, without appropriate corresponding relief, then the continuation of such a law which necessarily, or most likely, leads to increase in lawles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of the legislative authority. Social legislation is treated with deference by the courts not merely because the legislature represents the people but also because in representing them the entire spectrum of views is expected to be taken into account. The legislature is not shackled by the same constraints as the courts of law. But its power is coupled with a responsibility. It is also the responsibility of the courts to look at legislation from the altar of Article 14 of the Constitution. This article is intended, as is obvious from its words, to check this tendency; giving undue preference to some over others. 31. Taking all the facts and circumstances into consideration we have no doubt that the existing provisions of the Bombay Rent Act relating to the determination and fixation of the standard rent can no longer be considered to be reasonable. The said provisions would have been struck down as having now become unreasonable and arbitrary but we think it is not necessary to strike down the same in view of the fact that the present extended period of the Bombay Rent Act comes to an end on 31-3-1998. The Government's thinking reflected in various documents itself shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in Section 3(1)(b) who can afford to pay rent at the market rate. This was the second item in the economic package offered to the landlords under the present Rent Act. The third item of the Rent Act was to give the benefit of annual increase of rent @ 5% under the present Rent Act. All three items constituted one composite package for the landlords. The underlying object behind the said economic package is to balance and maintain the two-fold objects of the Rent Act, namely, tenancy protection and rent protection. The idea behind excluding cash-rich entities from the protection of the Rent Act is also to continue to give protection to tenants who cannot afford to pay rent at market rate. 39. The above discussion is relevant because we must understand the reason why Section 3(1)(b) came to be enacted. As stated above, in our view, with the offer of an economic package to the landlords, the legislature has tried to maintain a balance. The provisions of the earlier Rent Act, as stated above, have become vulnerable, unreasonable and arbitrary with the passage of time as held by this Court in the above judgment. The legislature was aware of the said judgment. It is reflected in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and public sector company. According to the Committee, PSU and Government company are to be equated in the sense that these two entities are the same when it comes to autonomy and flexibility as compared to departmental undertakings. One point may be noted at this stage. The concept of PSU and the concept of Government company became relevant after introduction of economic reforms in 1991. With the said reforms, market orientation was given to our economy. It is around this time that the role of PSU became important. Both, the PSU as well as the Government company, were given autonomy and flexibility in commercial sectors. Annexure I to the Report of the Study Team on PSUs dated 10.6.1967 indicates clearly that Government companies stood covered under the concept of PSUs. In the present matter, the High Court has taken a view that Government companies stands excluded from PSU under Section 3(1)(b) as Government companies are separate and distinct entities from PSUs and since Government Company is not in the enumerated items in Section 3(1)(b) one cannot include the said entity within the meaning of the word PSU. This view of the High Court is erroneous for the simple reason that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the list of PSUs published on the web site of the Central Governmet, BPCL is shown as a PSU. Similarly, MTNL and BSNL are Government companies which are also shown as PSUs. According to Bishwa Nath Singh, author of Public Enterprise in Theory and Practice for efficient working of public enterprises a combination of economy and accountability is essential. The corporate form of undertaking has an advantageous position because it has necessary flexibility and operational freedom. The statutory corporations are set up under specific Statute of Parliament which statute indicates the extent of their accountability and the nature of Parliamentary control. On the other hand, a Government company is possessed with the merits of easy formation, flexibility in administration, wider source of resources mobilization, freedom from accounting and audit laws and procedures applicable to Government departments as well as providing a balance between autonomy and control. For its formation, there is no need of a separate enactment. Under the Indian Companies Act, 1956, a company may be established by issue of executive order by a Gazette notification or on a formal registration by a Memorandum an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as body corporates falling under PSUs. 45. Therefore, the above discussion indicates clearly that statutory corporations, public sector companies and Government companies are merely corporate forms. India's PSUs may be in the corporate forms or in the form of statutory corporations or in the form of public sector companies. This is the legislative understanding indicated by various Parliamentary Committees like Estimates Committee, Administrative Reforms Commission and Study Team on PSUs constituted by Administrative Reforms Commission. The insurance industry in India has private players in it like Bajaj Allianz Life. It also has SBI Life as one of the players. It also has LIC in the said sector/industry besides OIC, UIC etc. This aspect is important. 46. According to the respondents, the words `PSUs' in Section 3(1)(b) has to be read with the words any corporation established by or under Central or State Act. In other words, according to the respondents, only those PSUs which are established by or under any Central or State Act alone stand excluded from the protection of the Rent Act. According to the respondents, PSUs which are Government companies incorporated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereas Government companies incorporated under the Companies Act, 1956 would continue to get protection would lead to arbitrary discrimination under Article 14 to the Constitution. In the case cited by Mr. Soli J. Sorabjee, learned counsel for the appellants, namely, Shah and Co. v. State of Maharashtra (1967) 3 SCR 466 this Court held that to place such a construction as will save the statute from constitutional challenge is a well settled principle of interpretation. In the said Judgment, it has been held as follows: to place such a construction as will save the statute from constitutional challenge ... having special regard for the principle of constitutional adjudication which makes it decisive in the choice of fair alternatives that one construction may raise serious constitutional questions avoided by another. ... . (emphasis supplied) 47. Moreover, if we are to hold that PSUs do not include Government companies, as held by the High Court, we would be disturbing the package offered by the Legislature of allowing increase of rent annually at 5%, allowing the landlords to accept premium and exclusion of certain entities from the protection of the Rent Act under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. It is pro-public interest. In this connection, one must keep in mind the fact that the said Rent Act, 1999 involves a structural change vis-`-vis the Bombay Rent Act, 1947. As stated above, with the passage of time, the 1947 Act became vulnerable to challenge as violative of Article 14. As stated above, the legislature has strike to balance the twin objectives of Rent Act protection and rent restriction for those who cannot afford to pay rents at the market rates. To accept the interpretation advanced on behalf of the respondents for excluding Government companies from the meaning of the words PSUs in Section 3(1)(b) would amount to disturbing the neat balance struck by the Legislature. OIC and UIC are Government companies. They have paid up capital of more than ₹ 100 crores. They can easily afford to pay rents at the market rates. The legislature in its wisdom has kept PSUs, including Government companies, outside the Rent Act. We have to proceed on the basis that the State Legislature was aware of the meaning of the words PSUs as understood by the various Parliamentary Committees. If Government companies are to be excluded from Section 3(1)(b) then the test of intelli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with no order as to costs. Civil Appeals arising out of SLP(C) Nos. 24789-24790/07: [Bharat Petroleum Corporation Ltd. v. Sunil Niranjan Jhaveri] 51. Leave granted. 52. A decree for possession was passed by the Small Causes Court at Mumbai against the appellant herein - M/s Bharat Petroleum Corporation Ltd. (BPCL). It was confirmed by the Appellate Bench of the Small Causes Court. 53. The decree was challenged by BPCL by filing Civil Revision Application No. 173/07 in Bombay High Court. The said CRA No. 173/07 stood rejected by the impugned order dated 4.5.2007. That decision was given on the merits of the case and not on the interpretation of Section 3(1) (b) of the Maharashtra Rent Control Act, 1999 ( Rent Act ). However, thereafter a review petition was moved by BPCL vide CRA No. 173/07 in which one of the grounds taken by BPCL was that in view of the decision of the Division Bench of the Bombay High Court in the case of Smt. Leela Gajanan Pansare v. Oriental Insurance Co. Ltd. and ors. dated 20.12.2006 in First Appeal No. 1245/04 the Revision Petition of BPCL needs to be made absolute and the decree of the Small Causes Court was required to be set aside. The revi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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