TMI Blog2007 (10) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... t ask for discretionary and equitable relief and we are not inclined to grant such relief. Appeal dismissed. - C.A. 2805 OF 2005 - - - Dated:- 5-10-2007 - C.K. THAKKER P. SATHASIVAM, JJ. JUDGMENT 1. This appeal by special leave is filed by the appellant-Carona Ltd. (hereinafter referred to as 'the tenant') against the judgment and order passed by the High Court of Judicature at Bombay on November 1, 2004 in Writ Petition No. 8781 of 2004. By the said order, the learned Single Judge of the High Court dismissed the writ petition filed by the tenant and confirmed the order passed by a Bench of Small Causes Court at Bombay on August 3, 2004 in Appeal No. 277 of 2003 which in turn confirmed the judgment and decree of eviction dated February 11, 2003, passed by a Judge of Small Causes Court at Bombay in T.E. R. Suit No. 226/240 of 2001 in favour of the respondent-partnership firm (hereinafter referred to as 'the landlord'). FACTS 2. To appreciate the controversy raised in the present appeal, few relevant facts may be stated. 3. The appellant-tenant was the original defendant whereas the respondent-landlord was the original plaintiff in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1999 (hereinafter referred to as 'the Rent Act') is pending before this Court and in view of the said fact, the courts below ought not to have proceeded to decide the matter. Alternatively, it was argued that even if it is assumed that the provision is legal, valid and intra vires, it would not apply to the case on hand inasmuch as tenant's net worth/paid up share capital has been substantially eroded and it was not rupees one crore or more when the proceedings were initiated by the landlord. The provisions of the Rent Act, therefore, applied to the suit premises and unless and until one of the grounds of eviction specified in the Rent Act had been made out, the landlord was not entitled to a decree for possession. The learned counsel urged that the fact as to 'paid up capital' of the Company was a 'jurisdictional fact' and in absence of such fact, the Court had no power, authority or jurisdiction to consider, deal with and decide the matter. 7. It was further contended that the proceedings could not have been continued in view of the fact that the tenant was a 'sick company' within the meaning of the Sick Industrial Companies Act, 1985 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat though the so-called resolution was said to have been passed, it had not been approved by the Board for Industrial and Financial Reconstruction (BIFR). In the eye of law, therefore, there was no decrease of share capital. The High Court was, hence, wholly right in observing that even on that ground, the tenant was not entitled to any relief. The counsel also submitted that this Court is exercising discretionary and equitable jurisdiction under Article 136 of the Constitution. The tenant is not entitled to such equitable relief. It was submitted that the tenant has not paid rent since several years i.e. from January 1, 1995. According to the counsel, the amount due and payable by the tenant as on August 31, 2007 comes to Rs. 56,22,000/- pursuant to interim order passed by this Court on April 18, 2005, an amount of Rs. 24 lakhs was deposited by the appellant in this Court which was withdrawn by the landlord, but even excluding that amount, the tenant is liable to pay to the landlord an amount of Rs.32,22,000/-. It was further stated that after order dated April 18, 2005 i.e. for more than two years, the tenant has not paid even a pie to the landlord. Such tenant, urged the counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention as to constitutional validity of clause (b) of Section 3(1) of the Rent Act and observed that the vires of the provision was upheld by the High Court in M/s. Crompton Greaves Ltd. In that case, constitutional validity of Section 3(1)(b) was challenged on the ground that it was arbitrary, discriminatory and unjust. It was contended that the so- called distinction between the Companies having a paid up share capital of less than rupees one crore and the Companies having a paid up capital of more than rupees one crore was arbitrary, discriminatory and unreasonable neither founded on any intelligible differentia nor the so- called classification has rational or reasonable nexus to the object sought to be achieved by the Legislation. It was urged that denial of protection of the Act to the Companies solely on the basis of 'paid up share capital' was based on irrational criterion and was hit by Article 14 of the Constitution. 14. The Court, however, negatived the contention and upheld the validity of the provision. The Court stated; 10. We do not see any force in any of these contentions. The Bombay Rent Act was enacted originally as a temporary measure in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Committee (for short Tembe Committee) which observed as under : ........The result of all this has been that the supply of rental housing in the market is gradually shrinking. Except in the public sector, the growing tendency is to dispose off houses on ownership or hire purchase basis. Rental housing has, therefore, almost come to a halt in cities like Bombay. This has adversely affected the economically weaker sections of the society ; ....The rent law that was enacted for the benefit of the tenants is thus operating to the detriment of their interest in that the flow of rental housing is gradually shrinking . Tembe Committee had recommended exemption of premises of floor area more than 65 sq. meters for business, trade or storage and 125 sq meters for residential purpose . The Court, therefore, concluded; It is already seen from the Statement of Objects and Reasons that the object of the Act is not merely, to protect tenants but also to provide fair returns to the landlords and to encourage housing activity so as to augment rental housing in the form of construction of buildings and letting them out. It is also meant to legitimise the pagadi or premium system w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Maharashtra Rent Control Act. Therefore, this issue does not survive. Accordingly issue No.2 is answered . 16. The courts below were, therefore, in our opinion, fully justified in proceeding to decide the matter on merits. MERITS OF THE MATTER 17. The Trial Court framed necessary issues and held that the defendant-Company was the tenant; the Rent Act was not applicable; the tenancy was legally and validly terminated; and defendant was liable to be evicted. A prayer was also made by the plaintiff for payment of mesne profits. The Court held that the landlord was entitled to a decree for possession. But since the proceedings were pending before BIFR, Section 22 of SICA was applicable and the landlord could recover amount of mesne profits only after taking requisite permission from BIFR. The Court, in the light of the above findings, issued the following directions; The Defendants shall deliver vacant repossession of the suit premises to the Plaintiffs within 4 months. The Defendants shall pay mesne profits to the plaintiffs in respect of suit premises for the period from the date Operating Agency suit till the Plaintiffs recover possession of the suit premises. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sides of the line, is not easily discernible . (emphasis supplied) 27. Likewise, the fact whether the petitioner was an 'adult' in adoption proceedings was not held to be a 'jurisdictional' fact (Eversole v. Smith, 159 SW 2nd 35). 28. In Jagdish Prasad v. Ganga Prasad, 1959 Supp (1) SCR 733, the questin was whether the landlord was entitled to enhancement of rent. Under the Act, he was not entitled to such rent unless a 'new construction' had been made after June 30, 1946. It was held by this Court that the question whether construction was new or not was a 'jurisdictional fact' and if the court wrongly decided the said fact and thereby conferred jurisdiction not vested in it, the High Court could interfere with the order. The Court stated that once it had the power it could determine whether the question of the date of construction was rightly or wrongly decided . [See also Arun Kumar v. Union of India, (2007) 1 SCC 732]. 29. But, in Roshanlal v. Ishwardas, (1962) 2 SCR 947, this Court held that the Rent Controller had jurisdiction to fix standard rent for new construction made after March 24, 1947. The question was as to when the construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions devoid of substance. First about the jurisdiction and propriety vis-`-vis circumstances which come into being subsequent to the commencement of the proceedings. It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suit or institutes the legal proceeding. Equally clear is the principle that procedure is the handmaid and not the mistress of the judicial process. If a fact, arising after the lis has come to court and has a fundamental impact on the right to relief or the manner of moulding it, is brought diligently to the notice of the tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or fairplay is not violated, with a view to promote substantial justicesubject, of course, to the absence of other disentitling factors or just circumstances. Nor can we contemplate any limitation on this power to take note of updated facts to confine it to the trial Court. If the litigation pends, the power exits, absent other special circumstances repelling resort to that course in law or justice. Rulings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in any case, the so-called sub-tenant vacated the premises on April 14, 1967 i.e. before the suit was instituted by the landlord and hence, cause of action did not survive. It was contended on behalf of the tenant that Section 13(1)(e) used the expression has sub-let , i.e. the present perfect tense which contemplated the event connected in some way with the present time. Since the sub-tenant had already vacated and left the premises, at the most it could be said that the tenant 'had sub-let' the premises but it was not a ground for eviction under the Act and hence no decree could have been passed. Reliance was also placed on an earlier decision of this Court in Goppulal v. Thakurji Shriji Shriji Dwarkadheshji, (1969) 3 SCR 989 : (1969) 1 SCC 792. 41. Negativing the contention, upholding the decree of eviction and distinguishing Goppulal, this Court said; The provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 indicate that a tenant is disentitled to any protection under the Act if he is within the mischief of the provisions of Section 13(1)(e), namely, that he has sublet. The language is that if the tenant has sublet, the protection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged before us that unless a sub-tenant were in possession of the property sublet on the date of the suit it cannot be said that the tenant 'has sub-let' the premises, even though a sub-tenancy was in fact created by the tenant. In our opinion if this interpretation were to be accepted, the result would be that a tenant can with impunity put some other person in possession of the premises as a sub- tenant and avoid an order for delivery of possession against him by seeing to it that the sub-tenant departs from the property before the plaintiff files a suit. Having regard to the scheme of the Rent Control Act, particularly the scheme of Sections 12 and 13 of the Act and the context in which the words 'has sub- let' are used, it appears to us that that is not the way in which the meaning of the words 'has sub-let' should be gathered. If the Rent Control Act were not in force and the parties were left to their ordinary rights under the Transfer of Property Act, the landlord will have a vested right to recover possession in him as soon as he terminates the tenancy of the tenant in the manner provided in the Transfer of Property Act. After terminating the tenancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be removal of the impediment in the way of the landlord to recover possession of the premises. In other words, the result of subletting would be to take away that personal right of possession which the tenant enjoyed under the provisions of the Rent Act. Now, this result must be connected with the present moment. The present moment will be the moment when the suit is filed. How is this result connected with the filing of the suit? The answer is quite obvious. It is this removal of the impediment in the way of the landlord's recovery of possession which induces him to go forthwith to the Court and file a suit for possession. Therefore, the words 'has sub-let' mean that a sub-letting has taken place and as a result of that subletting the impediment in the way of the landlord to recover possession has been removed, thus, inducing him to go to Court and ask for recovery of possession. It is the result of the completed act, i.e. the removal of the impediment in his way, which permits the landlord to go to the Court and ask for a decree for possession. It is not necessary, therefore, that subletting must continue enough if the premises have been sub-let sometime after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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