Interplay between Public Premises Eviction and Rent control legislations

A tale of never-ending conflict

Harsha Asnani

I. Introduction

The Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (“PPE Act”) is a special legislation enacted for the purpose of eviction of unauthorized occupants from public premises and create a speedy and effective framework in furtherance thereto. The Act also created a special authority known as the “Estate Officers” who were vested with the powers to conduct eviction proceedings under the PPE Act. In order to avoid the issue of duality of jurisdiction, the legislators had inserted Section 15 in the Act by virtue of which the jurisdiction of any other civil court stood ousted. Such exclusivity of jurisdiction in eviction matters brought PPE Act in direct conflict with extant rent control legislations. Several cases were filed before the Apex Court challenging the vires of PPE Act and time and again the Court had to decide on this apparent conflict between PPE Act and rent control legislations.

One of the first cases to deal with the issue as to whether the provisions of the PPE Act would override the provisions of the Rent Control Act in relation to the premises which fall within the ambit of both the enactments was the case of Ashoka Marketing Ltd. & Anr. v. Punjab National bank & Ors. Therein, the Court had to resolve this conflict while keeping in mind that both the legislations are special statutes dealing with similar subject of law. The Court had held that such conflict has to be resolved by reference to the purpose and policy underlying the two enactments. The Court took note of the mischief that the PPE Act had been enacted to cure i.e. rampant unauthorised occupation of public premises. Given such objective, the Court held that since the PPE Act deals with a more special objective, the same ought to have overriding effect over the rent control legislations.

II. Suhas Pophale: Divider of the two phases

One aspect that Ashoka Marketing did not expressly clarify was regarding the retrospectivity of the PPE Act and whether it would govern those tenancies where the tenants had occupied the premises before the Act became applicable for such premises. The Supreme Court had to deal with this question in the matter of Dr Suhas H Pophale v Oriental Insurance Company Limited. Mr. Eric Voller was the original tenant of Indian Mercantile Insurance Company. He had inducted Dr. Suhas Pophale vide License Agreement dated 20.12.1972 and put him in possession. In the interregnum, owing to the nationalisation process of general insurance companies, the management of Indian Mercantile was taken over by Oriental Insurance Company (a government undertaking) w.e.f 1971 and Indian Mercantile finally merged with the Oriental Insurance Company w.e.f 01st January 1974.

In this case, two questions were framed before the Supreme Court viz. (i) When did the premise come under the ownership of Oriental Insurance Company and consequently became a public premises?; (ii) Can PPE Act be applied retrospectively upon protected tenants who occupied premises before the PPE Act being applicable to such premises.

With respect to the first contention, the Court held that the premises could be regarded as ‘public premises’ only after 1974 i.e. the date after on which Oriental Insurance Company Limited took over the assets of the Company. Thus, the premises became public premises after the tenant was inducted into the premises.

On the larger question of retrospectivity, the Court held that where the premises become public premises after the tenants were declared as protected tenants, such rights of tenants cannot be taken away by the PPE Act when the Act itself is not retrospective in nature. The ‘tenants’ who fall under the protected category cannot be subjected to the PPE Act by giving it a retrospective application as it would go against the welfare objective that the rent control legislation purport to achieve. This is further fortified by the fact that the PPE Act does not contain any provision for retrospective application. In respect of such tenants, eviction proceedings under the PPE Act cannot be initiated. The Court clarified that the touchstone for determining as to whether eviction proceedings under the PPE Act can be initiated will be later of either the date of commencement of the PPE Act or the date when such premises fall under the ambit of the PPE Act.

III. Post Suhas Pophale: A muddled ground

The decision in the matter of Suhas Pophale came up for consideration once again in the case of Band Box Pvt Ltd v EO, Punjab and Sindh Bank wherein it was alleged that it runs in contravention to what has been already laid down in the case of Ashoka Marketing. However, the Court clarified that the aspect of retrospective application was not dealt with in the case of Ashoka Marketing. It was clarified in the case of Suhas Pophale that the Court was not taking any different position than Ashoka Marketing rather clarifying the same.

Despite providing such clarification, the position was far from clear due to the ambiguity created in the case of Rani Sewakram v Oriental Insurance Company. A Single Bench of the High Court while dealing with the question as to whether the decision in the matter of Ashoka Marketing or Suhas Pophale should be followed, preferred to follow the principle laid down in Ashoka Marketing. It was opined that once the subject premises becomes public premises, the public authority has resort to provisions of the PPE Act for eviction rather than rent control legislations. The latter cannot be invoked merely on the ground that the occupant was inducted prior to the premises becoming the public premises. Resorting to rent control legislations would run contrary to the Statement and Objects and reasons for which the Public Premises Act was enacted and the exclusivity of jurisdiction provided under Section 15 of the PPE Act. Further, given that the rent control legislations expressly exclude the premises belonging to the Government from its ambit, therefore, the public authority has to initiate eviction under the PPE Act.

This inconsistency created by Rani Sewakram was finally put to rest in the case of Dr. Preeti Bhatt v. Central Bank of India. A Division Bench of the Bombay High Court clarified that the judgement in the case of Suhas Pophale has extensively considered Ashoka Marketing and recorded a finding that the former is not in conflict with the latter. Therefore, the High Court cannot overrule such finding and declare Suhas Pophale to be conflicting with Ashoka Marketing. On the contrary, since the case of Rani Sewakram has held that in view of the decision in the case of Ashoka Marketing, the decision in the case of Suhas Pophale is contradictory, the same is per incuriam.

This issue was once again deliberated in a single bench decision of the Bombay High Court in the matter of Indian Coffee Workers Co-operative Society Limited v LIC wherein the Court had distinguished Suhas Pophale on factual aspects. It was opined that the proceedings initiated under the PPE Act were justified as the premises belonged to a Government Company unlike a private corporation which later became a public company under Suhas Pophale and Preeti Bhatt.

In the author’s view these judgements (Rani Sevakram and Indian Coffee Workers Co-operative Society Limited) are not correct position as they seek to overrule an already declared position by the Supreme Court. The High Court cannot go into the merits of such decision and any such act by the High Court is against the principles of stare decisis.

IV. Applicability of Suhas Pophale to Port Trust Lands

Suhas Pophale provided a very simple distinction between the timeline post which the PPE Act was to be made applicable. It did not consider as to whether such ruling shall be made applicable upon premises belonging all categories of authorities under the PPE Act or would exclude some. This precise question was raised in the case of MbPT v New India Assurance. While dealing with the question as to whether the Suhas Pophale ruling shall be made applicable on port trust lands, a Single Bench of the Bombay High Court analysed the ruling in the context of its applicability of local authorities. Thereafter, it was opined that the Suhas Pophale offered protection to only those tenants who were protected or deemed to be protected under the rent control legislations. If such legislations did not provide any protection to a tenant, the question of providing benefit under the Suhas Pophale ruling does not arise. Consequently, since the Port Trust being a public authority is excluded from the ambit of rent control legislations, the tenants cannot claim that they cannot be subjected under the PPE Act in light of the principles laid down in Suhas Pophale.

V. Pending Reference

The ratio laid down under Suhas Pophale is also under challenge before a Larger bench of the Supreme Court. In the matter of LIC v Vita Engineering, the Supreme Court referred the question of whether Suhas Pophale is in conflict with Ashoka Marketing for consideration of a Larger (3 judge) Bench

To the best knowledge of the author, the said reference is still pending before the Supreme Court