1994 INSC 0725
Ranjit Narayan Haksar
v.
Surendra Verma
(Supreme Court of India)
HON'BLE CHIEF JUSTICE MR. U.L. BHAT HON'BLE MR. JUSTICE R.D.
SHUKLA
Civil Revision No. 61 Of 1991 | 07-09-1994

(1.) THE common petitioner in these revision petitions has challenged the
orders passed by the Rent Controlling Authority in two different proceedings
for eviction against his tenants, upholding the objection raised by the tenants
that the proceedings cannot lie under Section 23-A of the M. P. Accommodation
Control Act, 1961 (for short the Act).

(2.) THE landlord seeks eviction of tenants from different premises, under
Section 23-A (a) of the Act on the ground of bona fide requirement for
residence of himself and for members of his family, alleging that he has no
other reasonable suitable accommodation of his own in the city or town
concerned. Section 23-A is in Chapter III A which has been incorporated by the
M. P. Act 27 of 1983. This chapter contains special provisions in regard to
certain categories of landlords. 'landlord' means a person who is a retired
servant of any Government including a retired member of Defence Services or a
retired servant of a company owned or controlled either by the Central or State
Government, or a widow or a divorced wife, or physically handicapped person
or a servant of any Government including a member of defence services 'who,
according to his service conditions, is not entitled to Government
accommodation on his posting to a place where he owns a house or is entitled to
such accommodation only on payment of a penal rent on his posting to such a
place. ' 'landlord' as defined in Section 23-J of the Act can apply to the Rent
Controlling Authority under Section 23-A of the Act for eviction of the tenant
on grounds specified therein. Sections 23b to 231 deal with procedure, revision
and incidental matters. These provisions constitute a departure from the general
provisions and procedure provided in Chapter III of the Act dealing with
eviction of tenants. Section 11-A states that the provisions of Chapter III in so
far as they relate to matters specially provided in Chapter IIIA shall not apply to
the landlord defined in Section 23-J of the Act. The general provisions of

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eviction on the ground of bona fide requirement is contained in clauses (e) and
(f) of Section 12 (1) of the Act. But eviction under Section 12 has to be sought
by filing a suit before the competent Civil Court. The purpose of Chapter IIIA is
to provide for expeditious remedy to certain categories of landlords before a
different forum.

(3.) THE landlord in these cases who has filed eviction petitions under Section
23-A of the Act is a retired employee of the M P. State Road Transport
Corporation, a statutory body which came into existence under the provisions of
the Road Transport Corporation Act, 1950 which is admittedly owned, if not
controlled by the State Government.

(4.) THE controversy is whether a retired employee of the Corporation is
attracted by definition of 'landlord' in Section 23-J (ii) of the Act, i. e. "a retired
servant of a company owned or controlled either by the Central or State
Government". According to the petitioner, 'company' referred to in Section 23j
(ii) is not restricted to company incorporated under the Companies Act but has
to be understood in the general legal sense. The tenants contend that the word
'company' in Section 23j (ii) has to be understood as a company incorporated
under the Companies Act, that the Corporation is not a company incorporated
under the Companies Act, 1956, but a statutory Corporation and hence would
not be a 'company contemplated in Section 23j (ii) of the Act. The learned
Single Judge (Qureshi, J.) who heard the revision petitions noticed conflicting
decisions of Single Judge of this Court on this aspect and referred the question
involved to a larger Bench. We have heard the revision petitions and propose to
dispose of the same.

(5.) WE will first advert to the conflicting decision referred to by the learned
Single Judge. In Vipin v. Ranajitnarayan and others, 1986 MPRCJ Note No. 11,
Mulye, J. held that a retired employee of the M. P. State Road Transport
Corporation is governed by Section 23-J (ii) of the Act on the ground that the
petitioner's counsel was unable to point out that the Corporation was not
controlled by the State Government. The next decision is Shiv Singh v. Krishan
Gopal, 1986 MPRCJ 341, in which Shrivastava, J. held that the employee of a
Municipality is not an employee of a Company. In Sobhagyamal v. Prakash
Pharmaceuticals, Indore, AIR 1990 M. P. 345, Dube, J. held that a retired
employee of L. I. C. is riot covered under Section 23-J (ii) of the Act, and

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cannot invoke the provisions of Chapter IIIA of the Act. The learned Judge
indicated that the expression 'company' has to be understood as company
incorporated under the provisions of the Companies Act and as defined in the
provisions of that Act. In Mohandas v. Deven Das, 1994 (1) MPJR 259,
Issarani, J. held that Municipal Corporation is not a company and retired servant
of the Municipal Corporation is not a 'landlord' under Section 23-J (ii) of the
Act. A reading of these decisions shows that direct conflict exists only between
Vipin v. Ranajitnarayan, 1986 MPRCJ Note 11, and Sobhagyamal v. Prakash
Pharmaceuticals, Indore, AIR 1990 M. P. 345. The other decisions deal with
Municipality or Municipal Corporation.

(6.) SECTION 23-J (ii) refers to Company owned or controlled by the Central
or the State Government. The expression 'company' is not defined under the
Act. Section 2 (10) of the Companies Act, 1956 defines 'company' as meaning
'company' as defined in Section 3. Section 3 states, inter alia that in the
Companies Act, unless the context otherwise requires, the expression 'company'
means a company formed and registered under that Act or an existing company
as. defined in clause (ii). Clause (ii) defines 'existing company' as meaning a
company formed and registered under any of the previous companies laws
specified therein. Section 616 of the Companies Act deals with application of
the provisions of the Companies Act to insurance, banking, electricity supply
and other companies governed by special Acts. Clause (a) refers to insurance
company, (b) to banking companies, (c) to the companies engaged in the
generation or supply of electricity, (d) to any other company governed by any
special Act. Clause (e) of Section 616 reads as follows : "to such body
corporate, incorporated by any Act for the time being in force as the Central
Government may, by notification in official gazette, specify in this behalf,
subject to such exceptions, modifications, or adaptation as may be specified in
the notification. " Though Companies Act is intended to apply to companies as
defined in that Act, the Legislature has provided for application of the
provisions pf the Act to a body incorporated by any Act.

(7.) M. P. S. R. T. Corporation is not a company incorporated under or as
defined in the Companies Act. It is a Corporation incorporated by Road
Transport Corporation Act. 'company' is not necessarily restricted to the
meaning assigned to it under the provisions of the Companies Act. In Wharton's
Law Lexicon, Fourteenth Edn. , at page 224 it is stated that a company has its
origin either (1) in a charter, as the Bank of England and many insurance

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companies; or (2) in a special Act of Parliament with which as authorizing an
undertaking of a public nature such as a railway, the Companies Clauses
Consolidation Act, 1845 (8 and 9) Vict. c. 16, is necessarily incorporated; or (3)
in registration under the Companies Act, 1862 and subsequent Acts, now
consolidated into the Companies Act, 1925. In Webester's Dictionary at page
204 meaning of 'company' is given as, fellowship, society, an assemblage of
individuals, society in general, people assembled for social intercourse, an
association of persons for a joint purpose, esp. for carrying on business etc. In
Halsbury's Laws of England, Fourth Edn. , Vol. 7 at page 11, it is stated as
follows :

"the word 'company' imports an association of a number of individuals formed
for some common purpose. Such an association may be incorporated (that is, a
body incorporate with perpetual succession and a common seal) or it may be
unincorporated. . . . . . . . . There are many other bodies corporate which
although they may largely or partially engage in trading or comparable
activities, are not commonly described as companies. These fall broadly into
three categories. There are first those which are incorporated pursuant to some
general Act or Parliament permitting incorporation to be effected by any body
of persons which fulfils certain specified conditions :. . . . . . . . . The second
category (which is a large and growing one and which is economically a very
important one) companies that are known as public corporations. These are each
the creation of a royal charter or, more commonly, a special Act of a Parliament
which defines the objects, constitution and powers of Corporation. They are
created to fulfil in each case some special social or economic purpose. . . . . . . "

(8.) LET us now examine the amplitude of the expression 'corporation'. Law
Lexicon b y Justice T. P. Mukherjee. (Vol. I) Edn. 1989 at page 381 describes
'corporation' as collection of natural persons joined by or under the authority of
an Act of the Legislature. The expression 'corporation' occurring in Order 29 of
the Code of Civil Procedure though not defined in the Code, has been held to
include not only a statutory corporation, but also a company registered under
the Indian Companies Act. (See- Hakamsingh v. Gammon (India) Ltd. , AIR
1971 SC 740). According to Halsbury's Laws of England 4th Edn. Vol. 9 para
1201 :

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"corporation may be defined as body of persons (in the case of corporation
aggregate) or an office (in the case of a corporation sole) which is recognised by
the law as having a personality which is distinct from the separate personalities
of the members of the body or the personality of the individual holder for the
time being of the office in question. "

(9.) CORPORATION could be of different kinds. Halsbury's Laws of England
at para 1201 states that

"the usual examples of a trading corporation are (1) charter companies, (2)
companies incorporated by special Act of Parliament, (3) Companies registered
under the Companies Act etc. Non-trading corporations, are illustrated by (1)
Municipal Corporations. . . . "

In Principles of Company Law by J. Charesworth, fourth edn. , at page 234
under the heading "statutory Companies" it is stated as follows :

"railways canal dock and water companies and other companies formed for the
purpose of public undertakings are usually incorporated by a special Act of
Parliament because they usually require powers and privileges which they could
not obtain under the Companies Act, 1929. Such companies are accordingly
governed by the Companies Clauses Act, 1845 to 1889, except in so far as those
Acts are modified or excluded by the Special Acts which incorporate them. Of
these Acts, the Companies Clauses Consolidation Act, 1845 applied to all
companies incorporated by special Act after 1845, unless it is expressly
excepted, while parts I and II of the Companies Clauses Consolidation Act,
1863 only apply if they are expressly incorporated. "

(10.) THUS we see the expression 'company' has a specific and restricted
meaning as contained in the provisions of the Companies Act, 1956 as also a
general meaning in the legal sense as in an association, collection of individuals
or as a company incorporated by a Special Act of the legislature. Company for
the purpose of the Companies Act, 1956 is not one incorporated by the Act but
are incorporated under that Act. 'company' in the general legal sense can include

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what is known as statutory corporation, which is also regarded as a statutory
company.

(11.) THE question for consideration is which is the meaning attributed to the
expression 'company' in Section 23j (ii) of the Act. A brief reference to the
legislative history is instructive. M. P. Accommodation Control Act, 1961 as it
originally stood did not contain any special provision for the benefit of any
category of landlords. The Act was amended in 1964 introducing Section 20a
enabling an expeditious or special remedy to members of armed forces of the
Union or member of the family of a deceased member of such forces. Section
20aa was introduced in 1981 extending the benefit to the retired Government
employees and members of the family of deceased retired Government
employees. Sections 20a and 20aa were deleted and Chapter III (a) was
introduced without Section 23-J (ii) in 1981 making the special benefit available
to all categories of landlords. Section 23-J was incorporated in 1985 defining
expression 'landlord' for the purpose of the chapter and thereby limiting the
benefit only to such specified categories of landlords.

(12.) THE Statement of objects and reasons accompanying the amending Bill
does not explain the reason for introducing clause (ii) of Section 23j of the Act.
Therefore, we shall look at the scheme of the Act. and the scheme underlying
Chapter IIIA to find out the purpose of the amendment.

(13.) THE general provisions relating to eviction viz. Section 12 onwards of the
Act serves to restrict the grounds of eviction which can be invoked by a
landlord in a suit in a civil Court. The purpose of Chapter IIIA is to provide
expeditious remedy to certain categories of landlords on whom restrictions are
imposed by Section 12 of the Act. This purpose is sought to be achieved by
changing the forum and substituting a right of revision to High Court for the
right of appeal and second appeal which is otherwise available. Section 23j
specifies certain categories of landlords, namely, a retired servant of any
Government including a retired member of defence services, a retired servant of
a company owned or controlled either by the Central or State Government, a
widow or a divorced wife, physically handicapped person etcetera. It was
thought that widows, divorced women and physically handicapped persons
should not be driven to the necessity of going through the elaborate procedure
followed in civil courts and that more expeditious remedy should be available to

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them. The same view was taken in regard to other categories viz. retired
government servants, retired servants of Government owned or controlled
company and certain categories of the Government employees. They were or
continue to be public servants, instruments through which the State acts for
public benefit. In the generality of such servants, transfer is an incident of
service and this factor may inhibit meritorious candidates entering such
services. Meritorious candidates may own buildings or they may construct
buildings while in service. If they are to face the prospect of not securing
possession of their building at the time of retirement or their posting in places
where the buildings are situated, they may render the employment unattractive.
The Legislature therefore thought it necessary to give special treatment to
landlords of buildings who belong to these special categories.

(14.) FROM such legislative perspective, there could riot be any discrimination
between retired employees of Government owned or controlled companies, or
corporation. Of course we are not called upon to decide if Section 23j (ii) if
understood as being applicable only to companies incorporated under the
Companies Act, 1956 will violate Article 14 of the Constitution. Nevertheless in
considering the legislative intent, regard must be had to the equality clause in
the Constitution in case of an ambiguity. We sought the assistance of learned
counsel in finding the possible reasons for treating retired employees of
companies under the Indian Companies Act and statutory corporation
differently. The only reason suggested at the bar is that the corporations are
more in number and larger in size and have large number of employees and the
legislature did not desire to extend the benefit of Chapter IIIA to such a large
number of landlords to the detriment of the tenants. This reason is not sound in
view of Section 23j (i) which includes the very large number of retired
Government employees in the definition of landlord. There is nothing in the
language or context of Section 23j (ii) indicating any intention to give a
restricted meaning to the expression 'company'. The legislature did not refer to
the Companies Act in Section 23j (ii) and did not specifically exclude statutory
corporation. The expression 'company' has been used in its general legal sense
and takes in Government owned or controlled statutory Corporations. We hold
that retired employee of a Government owned or controlled statutory
corporation is a landlord as defined in Section 23j (ii) of the Act.

(15.) WITH great respect we approve the ratio in Vipin's case and hold that
Sobhagyamal case does not lay down good law.

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(16.) THE impugned order is therefore set aside and the preliminary objections
raised by the tenants before the Controlling Authority are overruled. The Rent
Controlling Authority will proceed with the eviction petitions pending before it
in accordance with law.

(17.) CIVIL Revisions are allowed, but in the circumstances of the case, without
costs.

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