Final Order 1

Order Details: Copy of Judgment
Pdf Text: : 1 : Judgment in Misc.Appeal Nos.7/19 & 4/19
Received on
Misc.Appeal
Nos.7/19 &
4/19
:
:
14.09.2018/
15.09.2018
Registered on : 22.01.2019/
07.01.2019
Decided on : 20.04.2022
Durations : 03:M07:D06:/
Y03:M07:D05:
IN THE COURT OF CITY CIVIL FOR GREATER BOMBAY
AT BOMBAY
MISC.APPEAL NO.7 OF 2019
(CNR NO.:MHCC010118082018)
The Liquidator,
The Mumbai Chhatrapati Shivaji
Terminus Central Railway Employees
Consumer CoOperative Society Limited
General Manager Officer, Ground Floor,
Mumbai CST 400 001. … Appellant
Versus
1. Central Railway,
Through the Assistant Divisional
Engineer, Divisional Railway Manager's
Office, Central Railway, Mumbai CST.
2. Shri Vivmoorat Jagatdev Kushwaha,
and Smt.Smita S.Kushwaha,
Proprietor of M/s.Stuti Enterprises,
(Conductor of Business),
The Mumbai Chhatrapati Shivaji
Terminus Central Railway Employees
Consumer Cooperative Society Limited,
General Manager Office, Ground Floor,
Mumbai CST 400 001. … Respondents.
AND
-- 1 of 39 --
: 2 : Judgment in Misc.Appeal Nos.7/19 & 4/19
MISC.APPEAL NO.4 OF 2019
(CNR NO.:MHCC010002362019)
Shri Shivmoorat Jagatdev Kushwaha,
Partner of M/s. Stuti Enterprises,
carrying on business at
The Mumbai Chhatrapati Shivaji
Terminus Central Railway Employees'
Consumer Cooperative Society Limited,
General manager Office, Ground Floor,
CST, Mumbai 400 001. … Appellant
Versus
1. Assistant Division Engineer,
Divisional Railway Manager's Office,
Central Railway, Mumbai CST.
2. Estate Officer,
Divisional Engineer,
Central Railway Office of the
Senior Divisional Engineer,
Annexure Building, 3rd Floor,
Mumbai – 400 001.
3. The Official Liquidator,
The Mumbai Chhatrapati Shivaji
Maharaj Terminals, Central Railway
Employees Consumer CoOperative
Society Limited, (Under Liquidation)
Ground Floor, near to General Manager's
Office, Mumbai CST 400 001. … Respondents
Shri.V.Y.Sanglikar, Ld.Counsel a/w. Vinod Gajangi, Ld adv. for
Appellant in Appeal No.7/19 and Respdt.no.2 in Appeal No.4/19.
Shri L.K.Tripathi a/w. R.P.Ojha, Ld.Advs. for Respondent no.1 in
Appeal No.7/19 and Respondent nos.1 and 2 in Appeal No.4/19.
Ms.Hetal Patel for Respondent no.2 in Appeal no.7/19 and
Appellant in Appeal No.4/19.
CORAM : H.H.THE PRINCIPAL JUDGE
U.S.JOSHIPHALKE(C.R.No.19)
DATED : 20th APRIL 2022
-- 2 of 39 --
: 3 : Judgment in Misc.Appeal Nos.7/19 & 4/19
COMMON JUDGMENT
1. Both these appeals are preferred against the order passed by the
Estate Officer in Case No.1 of 2017 dated 31.08.2018 by which
opponents are directed to vacate the premises. Appeal bearing No.7 of
2019 is filed by the Liquidator i.e. opponent no.1 and another appeal
bearing No.4 of 2019 is filed by the Opponent no.2 M/s.Stuti
Enterprises through its proprietor Shivmoorat Jagatdev Kushwaha
(parties are hereafter referred as per their original nomenclature in the
original application).
2. As per the applicants, applicant Central Railway is owner of the
premises admeasuring 875 sq.ft. Sitauted at Administrative Building,
Central Railway, Mumbai. Applicants way back in the year, 1965 given
the said premises through its welfare origination to set up a Co
operative Society. As per the terms and conditions between applicants
and Mumbai Central Railway Employees Consumer's Cooperative
Society, society shall not make any structural changes in the allotted
premises. It is further agreed that the space allotted/ license shall be
utilized for the purposes for which it was provided. The Society shall
not sublet or activity therein to anybody, assigning, subletting or
transferring any interest in the whole on any part of this license is
prohibited and is liable to result in termination of allotment without
notice. As per terms and conditions, no outsiders are allowed to act as
salesmen/manager etc. which is strictly prohibited. It is further agreed
that if the applicants requires the said premises for any other purposes,
alternate accommodation will be provided to the opponents. It is
further alleged by the applicant that the then Managing Committee of
the said Society entered into an agreement with opponent no.2 Mr.
Shivmoorat Jagatdev Kushwaha, the proprietor of M/s. Stuti Enterprises
-- 3 of 39 --
: 4 : Judgment in Misc.Appeal Nos.7/19 & 4/19
to conduct the business at the premises of the Society. Said agreement
was subsisting till 2014. Said agreement was entered by the Society in
contravention of terms and conditions agreed between Society and the
applicants. On 14.05.2012 liquidator was appointed to look after the
activities of Society. Applicant came to know about the illegal
agreement between the Society and opponent no.2, therefore Central
Railway i.e. applicant initiated action against the said conductor i.e.
M/s.Stuti Enterprises i.e. opponent no.2 for eviction. Proprietor of M/s.
Stuti Enterprises filed Arbitration Petition before the Hon'ble High Court
bearing No.947 of 2013 for appointment of Arbitrator.
3. The Hon'ble High Court has passed interim order in the said
application and observed that certain dispute arose between members
and the Society. The Dy.Registrar Cooperative wound up respondent
no.1 Society and the society is under charge of Liquidator. Applicant
Central railway submitted that the lands belong to the railway and the
society without permission transferred the premises to the opponent
no.2 who is the petitioner. The agreement between cooperative society
and M/s.Stuti Enterprises is not binding on Central Railway. It is
submitted before the Hon'ble High Court by the applicant that Railway
Administration require back the possession as building is declared as
heritage structure. The Hon'ble High Court observed that the agreement
between Central Railway Employees Cooperative Society and M/s.Stuti
Enterprises does not bind the railways. M/s.Stuti Enterprises entitled to
be in possession till 08.04.2014. The stand taken by Railway is fair. It
is observed by the Hon'ble High Court that M/s.Stuti Enterprises cannot
claim any right to continue in possession under the agreement.
Furthermore, this agreement is not binding on the owner of premises
i.e. railway as central railway was not party to the said agreement. Said
-- 4 of 39 --
: 5 : Judgment in Misc.Appeal Nos.7/19 & 4/19
order is challenged before the Division Bench by the opponent no.2.
Opponent no.2 also filed Notice of Motion No.468 of 2014. Hon'ble
High Court observed that Railways are always at liberty to take any step
in accordance with law for taking back possession. The pendancy of the
arbitration does not prevent them from doing so. The Hon'ble High
Court has passed this order on 02.04.2014. Thereafter, on 18.11.2015
applicant Central Railway issued a show cause notice to M/s.Stuti
Enterprises and the Liquidator. Said show cause notice was replied by
Liquidator on 26.11.2015. In 2016 applicant Central Railway initiated
proceedings under the Public Premises Act against M/s.Stuti Enterprises
bearing No.16 of 2016. Application was not filed against Liquidator and
show cause notice was withdrawn against the Liquidator. After
recording the evidence Estate Officer has passed eviction order against
M/s.Stuti Enterprises and directed to pay damages of Rs.74,57,694.66.
4. Against the order passed by the Estate Officer in Application
No.16 of 12016, M/s.Stuti Enterprises i.e. opponent no.2 preferred an
appeal bearing No.90 of 2016 before this Court i.e. City Civil Court.
Said appeal is allowed by this Court with observation that though
respondent i.e. Central Railway were aware that proceedings are
required to be initiated against M/s.Stuti Enterprises as well as
Liquidator, however in view of letter of Liquidator dated 26.11.2015,
Central Railway changed their mind and initiated proceedings against
the M/s.Stuti Enterprises. Estate Officer although has framed this
specific issue, Liquidator has examined himself in the said proceedings
as the witness of M/s.Stuti Enterprises reiterated that M/s.Stuti
Enterprises is merely agent of the Liquidator. It is observed by this
Court that the possession of an agent is possession of the principal and
the agent cannot assert any independent right in this regard. This Court
-- 5 of 39 --
: 6 : Judgment in Misc.Appeal Nos.7/19 & 4/19
has allowed the said appeal and order of the Estate officer passed on
17.11.2016 in Case No.16 of 2016 was set aside. While allowing the
appeal, it is made clear by this Court that the respondent i.e. central
railway shall be at liberty to initiate appropriate proceedings against the
Liquidator as well as M/s.Stuti Enterprises. In view of the said order of
this applicant, central railway obtained the permission of Dy.Registrar.
Dy.Registrar by its order granted permission on 13.10.2017.
Thereafter, the termination notice was issued by the office of Central
Railway on 18.10.2017 to opponent nos.1 and 2. Thereafter, central
railway filed this application bearing no.1 of 2017 on 31.10.2017.
Estate Officer has issued the show notice to both the opponents on
02.11.2017. Initially Estate Officer Shri.R.K.Jain was appointed.
Opponent no.2 has filed an application before the Estate Officer for
recusal of Estate officer on the ground that Shri R.K.Jain, Estate officer
is regularly handling administrative work of the applicant as Divisional
Engineer CST Mumbai. Shri R.K.Jain has actively involved himself to
obtain permission to initiate eviction proceedings against the opponents
from the Dy. Registar, Cooperative Society, Mumbai as Shri R.K.Jain,
Estate Officer has himself attended all the hearings conducted before
the Dy.Registrar in order to obtain permission to initiate eviction
proceedings against the opponents therein. Thus, Estate Officer Shri
R.K.Jain has a personal interest and bias and therefore he be recused.
Accordingly, by order dated 11.01.2018 earlier Estate Officer was
recused and another Estate Officer was appointed.
5. In response to show cause notice, opponent no.1 filed written
statement before the Estate Officer. As per contention of opponent no.1
admitted that Central railway has allotted the premises to Employees
Consumer Cooperative Society in 1965. Thereafter, dispute and
-- 6 of 39 --
: 7 : Judgment in Misc.Appeal Nos.7/19 & 4/19
differences arose between members and dispute was referred to
Dy.Registrar CoOperative Society. Dy.Registrar by its order dated
14.05.2012 appointed an Administrator. The board of Administrators
were conducting the affairs of the Society. Thereafter, the Liquidator
was appointed on 26.04.2013. Liquidator has issued a letter on
22.02.2013 to terminate the conducting agreement and demanded the
possession of the premises from M/s.Stuti Enterprises, however
M/s.Stuti Enterprises filed an application before Hon'ble High Court for
appointment of Arbitrator.
6. It is further contention of the opponent no.1 that the conducting
agreement dated 08.04.2009 and 20.10.202014 is not a subletting of
the said premises. The conducting agreement merely grant a permission
to the opponent no.2 to use the said premises for the purposes of the
object of the said Society. This cannot be construed to be subletting the
said premises. It is further contended that opponent no.2 is now under
the control of opponent no.1 and is occupying the subject premises as
an agent of the opponent no.1. Opponent no.1 is the custodian of the
Society and no legal proceedings can be taken against the opponent
no.1 and prayed for the dismissal of the application.
7. Opponent no.2 also filed written statement. As per contention
of the opponent no.2 that the Central Railways Employees Consumer
cooperative Society Limited invited tender by publishing notice in the
newspaper to conduct the activities of the Society. The opponent no.2
was selected as a conductor. Conducting agreement was executed
between Society and the opponent no.2 for the period of five years from
08.04.2009 to 31.04.2014 with renewal clause mentioned therein.
Subsequently, due to the mismanagement, Dy.Registrar Cooperative
Society Mumbai appointed a Liquidator. Said Liquidator has issued a
-- 7 of 39 --
: 8 : Judgment in Misc.Appeal Nos.7/19 & 4/19
letter to terminate the said conducting agreement. Therefore, he filed
Arbitration Petition before the Hon'ble High Court. Hon'ble High Court
has finally heard the arbitration petition and directed the opponent no.2
to hand over the possession to the Central Railway on 08.04.2017. Said
order was challenged before the Division Bench. Division Bench of the
Hon'ble High Court directed the Liquidator to file an affidavit as regards
extension of term of the conducting agreement. Liquidator has filed an
affidavit and in view of that affidavit Hon'ble High Court disposed off
the said appeal and directed that the Arbitrator to decide the arbitration
proceedings on its own merits. The order of the Hon'ble High Court is
misconstrued by the applicant Central Railway and applicant Central
Railway locked the premises. In Notice of Motion the Division Bench of
Hon'ble High Court clarified the earlier order and directed the Central
Railway to reopen the lock. Accordingly, Central Railway reopened the
lock and handed over the possession to opponent no.2. Opponent no.2
denied that premises have been sublet to opponent no.2 by the Railway
Employees Consumer Cooperative Society in an unauthorized manner.
It is contention of the opponent no.2 that it cannot be held as subletting
the conducting agreement merely grant a permission to the opponent
no.2 to conduct the business in the said premises and prayed for the
dismissal of the application.
8. After recording the evidence, Estate Officer allowed the eviction
application by passing order on 31.08.2018 and directed both the
opponents to vacate the premises and also directed to pay damages.
9. Being aggrieved and dissatisfied with the order of the Estate
Officer, both the opponents i.e. Liquidator and M/s.Stuti Enterprises
have filed these appeals on the ground that learned Estate officer failed
to appreciate that alleged notice dated 18.10.2017 was not proper and
-- 8 of 39 --
: 9 : Judgment in Misc.Appeal Nos.7/19 & 4/19
valid notice as required under the law. Said notice was issued and only
seven days notice was given which was not as per the requirement of
Section 106 of the Transfer of the Property Act and therefore the
opponents did not become unauthorised occupants on the expiry of this
period of the said notice. The Estate Officer failed to appreciate that
witnesses examined by the applicant were unable to state what was the
status of the Society. Estate Officer failed to appreciate that there was
no record to show that how the premises were let out to the said
Society, initially @ Rs.1/ per annum and presently @ Rs.1,000/ per
annum. Estate Officer also failed to appreciate that rent was paid for
the period upto December, 2018. Estate Officer also failed to appreciate
that opponent no.2 is only conducting the business, it is not subletting.
Estate Officer also failed to appreciate that it is not a breach of terms
and conditions contained in letter dated 11.01.2012 and therefore, the
order of the Estate Officer deserves to be set aside.
10. Heard Learned Counsel Mr.V.Y.Sangalikar for the opponent
no.1. He pointed out various provisions and submitted that show cause
notice is not as per the law. The notice of termination is not at all
issued. Initially Estate Officer Shri R.K.Jain was appointed who was
being controlled by the superior and not independent person. He has
participated in process in initiating action against the opponent no.1.
On that ground opponents requested his recusal. After this recusal,
another Estate Officer was appointed who has not issued a show cause
notice. Estate Officer has not framed the issues properly. No issue on
eviction was framed. There was no transfer of interest from employees
Society to opponent no.2. Said proceedings is issued without notice of
termination. Show cause notice is to be issued by the Estate Officer and
not by authority. Under Public Premises Eviction Act only unauthorized
-- 9 of 39 --
: 10 : Judgment in Misc.Appeal Nos.7/19 & 4/19
occupants to be evicted. There was no arrears of rent. Estate Officer
has followed wrong procedure by misapplication of law. Giving business
is not subletting damages awarded by Estate Officer are not based on
evidence. In view of definition given U/s.2(g) of Public Premises Act
opponents are not the unauthorized occupants. Estate Officer was a
biased and for all above these grounds order of the Estate Officer
deserves to be set aside.
11. Learned advocate Hetal Patel for the opponent no.2 submitted
that opponent no.2 is only conducting the business. It is not a
subletting. Railway came before the Arbitrator and admitted that
opponent no.2 as a Lessee. Opponent no.2 is not crossexamined on
subletting. She submitted that entire procedure followed by Estate
Officer is not according to the law. Opponent no.2 filed an application
for dismissal of show cause notice. Show cause notice is not according
to law and therefore, order of the learned Estate Officer deserves to be
set aside.
12. On the other hand, learned advocate Mr.L.K.Tripati for applicant
Central Railway submitted that premises was allotted on a welfare
basis. As per the terms and conditions, no outsiders are permitted in the
application premises. Being premises given on welfare basis, provisions
of Transfer of Property Act not applicable. He submitted that M/s.Stuti
Enterprises is in possession. The premises was given to the Society and
not to the M/s. Stuti Enterprises. As the Society contravened the terms
and conditions, Central Railway entitles for the possession back. He
also invited the attention towards the order passed by the Hon'ble High
Court and submitted that Hon'ble High Court has also observed that as
applicant Central Railway was not party to the agreement between
Society and M/s.Stuti Enterprises, therefore opponent no.2 cannot
-- 10 of 39 --
: 11 : Judgment in Misc.Appeal Nos.7/19 & 4/19
claim any right to continue in possession in the agreement. This
agreement is not binding on the owner of the premises i.e. railway not
being party. Opponent no.2 was directed to hand over the possession.
Said order was challenged by the opponent no.2 before the Division
Bench of the Hon'ble High Court. In the said order also, it is observed
by the Hon'ble High Court that the railway owned the property. It is
specifically observed by the Division Bench that it is made clear that
railways are always at liberty to take any step or to adopt proceedings
in accordance with law for the purpose of taking back possession of the
said premises. The agency of arbitration proceedings does not prevent
them from doing so. In the order dated 22.04.2014 also it is clarified by
the Hon'ble High Court that the opponent no.2 shall be entitled to use
the said premises in accordance with the conducting agreement. It is
further clarified that the rights of the railways, if any, to take steps or to
adopt proceedings shall only be in accordance with law. He further
submitted that the object of the Society is to be taken in to
consideration. Object of the Society is not to take the business but to
provide the facilities to the members of the Society. Moreover, the
premises was declared as a heritage building. Certificate of Word
Heritage Building is filed on record. He submitted that opponent no.2
was found in possession of the said premises. Society entered into an
agreement with the opponent no.2 in contravention of terms and
conditions and hence applicant Central Railway is entitled to take
possession back from the opponents. Estate Officer has considered all
these aspects and rightly allowed the application. There is no merit in
the appeal and hence appeal deserves to be dismissed.
-- 11 of 39 --
: 12 : Judgment in Misc.Appeal Nos.7/19 & 4/19
13. After hearing both the sides and after perusal of the evidence on
record, following points arise for my consideration and I answer the
same as follows.
POINTS FINDINGS
1. Whether applicant prove that opponent nos.1
and 2 are unauthorized occupants of the
application premises?
In the
Affirmative
2. Whether applicants prove that Society has
contravened the terms and conditions and
therefore applicants are entitled to initiate
action of eviction against both the opponents.
In the
Affirmative
3. Whether the compensation awarded by the
Estate officer is proper and legal one?
In the
Negative
4. Whether the order passed by the Estate Officer
calls any interference?
Partly in the
affirmative
5. What order? As per final order
REASONS
As to Point Nos.1 & 2:
14. Admittedly, applicant Central Railway is owner of premises
admeasuirng 875 sq.ft. Situated at Administrative Building Central
Railway, Mumbai. It is also an admitted position that applicant Central
Railway has allotted the said premises to Central Railway Employees
Consumer Cooperative Society in the year, 1965. It is also an admitted
position that the terms and conditions that Society shall not make any
structural modification or alteration to the allotted premises. The
society shall be responsible for the damages to the railway property by
its employer or the consumers. The society shall not sublet the premises
or activity therein to anybody, assigning, subletting or transferring any
-- 12 of 39 --
: 13 : Judgment in Misc.Appeal Nos.7/19 & 4/19
interest in the whole on any part of this license is prohibited and is
liable to result in termination of allotment without notice. Society shall
regularly pay license fees, rent, electricity and water charges. No
outsiders are allowed to act as salesmen/manager etc. which is strictly
prohibited and in case the said premises are required by the
administration same shall be vacated by the Society within notice
period of three months. Administration will make attempt to provide
alternate accommodation. All the terms and conditions are agreed and
accepted by the office bearers of the Society vide their letter dated
15.02.2012. Admittedly, Managing Committee of the said Society
entered into an agreement with opponent no.2 Shivmoorat Kushawaha,
proprietor of M/s.Stuti Enterprises, to conduct the business of the
Society and said agreement was subsisted till 2014. It is also admitted
position that on 14.05.2012 liquidator i.e. opponent no.1 was appointed
to look after the activities of Society. It is also an admitted position that
Central Railway initially initiated action against the said conductor i.e.
M/s.Stuti Enterprises for eviction. Estate Officer has allowed the said
application. Being aggrieved with the order of the Estate Officer,
opponent no.2 M/s.Stuti Enterprises filed an appeal bearing No.90 of
2016 which was allowed by this Court and order of the Estate Officer is
set aside. At the same time this Court has clarified that applicant
railway shall be at liberty to initiate proceedings against the opponent
nos.1 and 2 and due to the dispute between opponent nos.1 and 2,
opponent no.2 filed Arbitration Petition before the Hon'ble High Court
bearing No.947 of 2013 for appointment of Arbitrator. Hon'ble High
Court has directed to vacate the premises. Hon'ble High Court has also
observed that Central Railway is not party to the agreement between
Central Railway Employees Cooperative Society and M/s.Stuti
Enterprises and therefore said agreement is not binding on railway.
-- 13 of 39 --
: 14 : Judgment in Misc.Appeal Nos.7/19 & 4/19
Railway administration required back the possession and they are at
liberty to take steps. It is also an admitted position that opponent no.2
filed an appeal before the Division Bench. While observing that
opponent no.2 can continue to run the business, it is further observed
that Railway is at liberty to initiate action to take the possession as per
the law. Thereafter, applicant Railway has issued the termination
notice on 18.10.2017 to opponent nos.1 and 2 and thereafter initiated
the eviction proceedings against both the opponents on 31.10.2017.
15. Applicant has come with the case that Central Railway co
operative society has entered into an agreement with the opponent no.2
to conduct the business at the premises of the Society which was
allotted to them by the Central Railway in contravention of the terms
and conditions settled between applicants and the Society. Society has
parted the possession of the premises with opponent no.2 without the
permission of applicant. Moreover, the premises was declared as
heritage building and therefore applicant is entitled to get back the
possession of the said premises. Whereas it is contention of the
opponent nos.1 and 2 only for conducting the business the agreement is
executed. It is not subletting. It is not in contravention of terms and
conditions settled between the Society and the applicant and therefore,
applicant is not entitled for the possession of the application premises.
In support of the contention, applicant has examined Shri.S.K.Khare,
Assistant Divisional Engineer in the office of applicant. He reiterated
contention as per the pleadings in the application. The sum and
substance of his evidence is that the premises was allotted to the Society
in the year, 1965. Said premises was allotted to the Society for welfare
of its members but the managing committee entered into an illegal
agreement and parted the possession with opponent no.2 by
-- 14 of 39 --
: 15 : Judgment in Misc.Appeal Nos.7/19 & 4/19
contravening the terms and conditions. Applicant first came to know
about the same in the year, 2012. Said terms and conditions are
accepted by the managing committee of the Society vide his letter dated
15.02.2012. He further testified that the alleged conducting agreement
is illegal and void abinitio. Moreover, said building is declared as
heritage building and therefore Central Railway is claiming the
possession of the application premises.
16. In support of his contention, he relied upon the documents i.e.
copy of the application form for registration of the Society dated
06.08.1965. Certificate issued to the Society dated 07.08.1965. Bye
laws of the society, terms and conditions settled between the applicant
and the society which are accepted vide letter dated 15.02.2012 at
AnnextureB, Certificate of Heritage Building, notice issued by the
society to its members mentioning that the certificates of the said
services of the said society are terminated, order passed by the Hon'ble
High Court in Arbitration Petition No.947 of 2013, orders passed by the
Hon'ble Bombay High Court in Appeal(Lodging ) No.106 of 2014 dated
02.04.2014 and 22.04.2014, earlier order passed by the Estate Officer
in Proceedings No.16 of 2016, permission granted by Dy.Registar to
initiate the proceedings against the Liquidator dated 13.10.2017, notice
issued by applicant to opponent nos.1 and 2 dated 18.10.2017, show
cause notice issued by Estate Officer dated 02.11.2017 and stamp duty
and ready reckoner and market value of property in Mumbai etc.
17. This witness is crossexamined by both the opponents. During
crossexamination the authority of this AW1 is challenged by the
opponent nos.1 and 2. During crossexamination of this witness it came
on record that he visited the application premises on various occasions.
His evidence also shows that it revealed to him that society is not in
-- 15 of 39 --
: 16 : Judgment in Misc.Appeal Nos.7/19 & 4/19
possession, it is under liquidation and it is sublet as per records. It also
came in his crossexamination that opponent no.2 is using the said
premises as per the record since 08.04.2009 and applicant came to
know about the same in the year, 2012. Society was conducting the
business of food stuff etc. through opponent no.2 M/s.Stuti Enterprises.
He further stated that the question of termination notice does not arise
as there was no agreement between the Railway and M/s.Stuti
Enterprises. He further stated that as per the record Society has already
stopped functioning since May 2013. He further stated that he has
signed the application in the capacity of Asst.Divisional Engineer, being
the custodian of the land and premises. It also came in the cross
examination that the premises was allotted to the Society on the basis
of Society registration papers of 1965. As per his evidence, Railway
Manual, Asst.Divisional Engineer being custodian of land is authorized
to file eviction proceedings before the Estate Officer. He also produced
on record said manual and pointed out the clause110 wherein it is
mentioned that the Asst.Engineer should take necessary action for
management of land and shall prevent encroachment and protect the
land from unauthorized use. He also pointed out Clause no.813(b)
wherein the Section Engineer is responsible for maintaining railway
land without any encroachment or development of easement rights.
Responsibility is casted on to prevent and remove encroachment. He
also shown clause No.814(c) which says that Section engineer can
ensure against any unauthorized use. In case of any misuse and/or
encroachment he should immediately report it to Engineer department.
Responsibility is also casted on sub clause(e) that all the cases under
Public Premises Act have been filed is to be ensured by him. Thus, as
per his evidence he is empowered to initiate action in the light of
provisions in Railways Works Manual. In further crossexamination it
-- 16 of 39 --
: 17 : Judgment in Misc.Appeal Nos.7/19 & 4/19
came that the Assistant Engineer should take necessary action for
management of land and shall prevent encroachment. He further stated
that Engineering official subordinate to him can also file the case under
Public Premises Eviction Act before the Estate Officer. During his cross
examination it is attempted to bring on record that the opponent no.2 is
authorised to take business which is not subletting, but he denied the
said suggestion. He further stated that Society has given rights to
M/s.Stuti Enterprises to conduct the business in the premises in
unauthorized manner. He also stated that the letter addressed by
M/s.Stuti Enterprises to Asst Divisional Engineer dated 27.11.2015 is
sufficient to show that Society has sublet the premises to M/s.Stuti
Enterprises. Thus, the sum and substance of his evidence is that in
contravention of terms and conditions society has sublet the premises to
M/s.Stuti Enterprises which is illegal and therefore applicant Central
Railway is entitled to take the possession of the said premises.
18. Applicant further came with the case that Society and M/s.Stuti
Enterprises entered into the agreement in contravention of the terms
and conditions. Opponent no.2 is using the said premises
unauthorizedly and therefore applicant is entitled to receive the
damages. To prove the factor of damages, applicant relied upon
evidence of PW2 Vedprakash Meena who testified that he has prepared
the calculations on the basis of ready reckoner and market value of the
property and submitted this report. During his crossexamination it
came on record that he is working with Divisional Engineer, CSMT
instructed him to collect the damage rent of the said premises. His
calculation is on the basis of ready reckoner rates of commercial zone.
Thus, his evidence shows that he has not measured the premises and on
the basis of ready reckoner has submitted his report.
-- 17 of 39 --
: 18 : Judgment in Misc.Appeal Nos.7/19 & 4/19
19. On behalf of opponent no.2, opponent proprietor Shivmoorat
Jagatdev Kushwaha entered into witness box by filing affidavit of
examinationinchief. He reiterated the contention as per his written
statement. As per his evidence Central Railway Employees, Consumer
Cooperative Society invited tender by publishing notice. He was
selected as a conductor. Therefore, conducting agreement is executed
between him and the Society for the period of five years from
01.04.2009 to 31.03.2014 with renewal clause. Said agreement is
renewed and hence he is in possession. It is not subletting. He also
stated that due to the internal dispute he approached to the Hon'ble
High Court and filed arbitration petition. Against the said order of the
Hon'ble High Court, he filed appeal before the division Bench. Division
Bench of the Hon'ble Bombay High Court observed that he can continue
his business as per the conducting agreement. Thus, he is in legally
possession of the premises and therefore the applicant has no right to
evict him. In support of his contention, he relied upon the copy of
conducting agreement dated 08.02.2009. Copy of conducting
agreement dated 20.10.2014, office copy of the advocate's letter dated
28.10.2017, copy of tender notice published in Newspapers, copy of
provisional bill for the year 2017 and 2018 and copy of Times of India.
He is crossexamined by the applicant. During his crossexamination it
came on record that he was doing the business at Borivali along with
his father. He also stated that he is running CanteencumConsumer
Store at CST Railway Station in the name of Rail Bazaar from 2007. He
is running the business in the premises which allotted to Mumbai
Central Railway Employees Consumer Cooperative Society Ltd. It
further came in his crossexamination that Railway allotted premises to
carry out the business by the Society members. He was selected bidder
to run the business of the Consumer Cooperative society, invited by the
-- 18 of 39 --
: 19 : Judgment in Misc.Appeal Nos.7/19 & 4/19
Railway officer. He admitted that the premises belongs to Mumbai CST
Central Railway Consumer Cooperative Society Ltd. It was informed to
him by the Society that they are the Lessee of the said premises. Thus,
his crossexamination shows that he is in possession of the said premises
as Society entered into an agreement with him. During his cross
examination the provisions of Indian Railway Establishment Manual
1992 are brought on record. As per the said Manual, membership of the
Society shall be open to all serving railway servants. As per Clause 2323
it refers bye laws wherein it is mentioned that the cooperative society
shall adopt the model byelaws framed by the Railway Board in
consultation with Registrars of Cooperative Societies concerned. As
per clause 2326 the system of selling goods through an outside agency
should be discouraged as also practice of employment of private agent
on payments of commission to conduct the business of consumer
societies. If any society functions in contravention of the above policy
its recognition should be withdrawn and all facilities to it stopped.
Thus, his crossexamination and his entire evidence shows that there
was an agreement between Society and M/s.Stuti Enterprises being the
proprietor of the said M/s.Stuti Enterprises. He is in possession for the
said premises and conducting the business.
20. On behalf of opponent no.2, opponent no.2 examined Mr.Kazi
Raziuddin Gulam Dastagir, a Valuer. His evidence shows that he has
prepared the valuation report dated 25.07.2016 in respect of subject
premises and submitted the same. This valuation report is on record.
As per this valuation report market rental from rent bazaar premises
worked out to Rs.62 sq.ft. per month.
21. Opponent no.1 Liquidator has also entered into the witness box
by filing affidavit of examinationinchief. As per his evidence
-- 19 of 39 --
: 20 : Judgment in Misc.Appeal Nos.7/19 & 4/19
application premises was allotted to the Mumbai CST Central Railway
Station ground floor way back in the year, 1969. As dispute and
differences arose between members and the Society, Liquidator was
appointed. As per his evidence Society entered into the agreement with
the opponent no.2 to conduct the business. It is not a subletting of the
premises. Conducting agreement merely grant a permission to the
opponent no.2 to use the said premises for the purpose of the objects of
the said Society. It is testified by the Liquidator that it is not at all
subletting. The proceedings initiated against the liquidator is wrong
and illegal and liable to be set aside. Liquidator is crossexamined at
length. During his crossexamination it came on record that fresh
conducting agreement was executed in view of order dated 22.04.2014
passed by the Hon'ble High Court. He replied in the affirmative. As per
his evidence he has issued notice to the opponent no.2 to terminate the
conducting agreement and called upon Opponent no.2 to vacate the
subject premises. He admitted that he has not taken possession of the
premises after the said notice. As per his evidence permission of the
Railways was not required before entering into the conducting
agreement. Thus, sum and substance of his evidence is that the
premises was given to opponent no.2 only for conducting business. It is
not subletting and therefore, action initiated by applicant is not legal.
22. On behalf of opponent no.1 witness Hitendra K. Mehta, the
Valuer, is examined. As per his evidence, he visited the premises on
02.08.2018. As per his evidence he visited the said premises and on the
basis of rent in the area he assessed the valuation of the application
premises. As per his valuation report mesne profit Rs.3125/ per month
for the said premises.
-- 20 of 39 --
: 21 : Judgment in Misc.Appeal Nos.7/19 & 4/19
23. On the basis of above said evidence both the parties have
substantiated their contentions. Admittedly the Society was established
in the year, 1965. Certificate was issued to the Society by Assistant
Registrar, Cooperative Society on 07.08.1965. The objects of the
Society at the time of establishment are;
i) to arrange for a purchase in bulk, of foodstuffs, cloths, grocery
and other consumer goods for rental sale to its members;
ii) to carry on for the benefit of its members the retail distribution
of consumer goods;
iii) with the previous sanction of the Registrar of cooperative
Societies, to sell consumer goods in wholesale to consumer co
operative societies of railway employees and also other dealers;
iv) to open and manage canteens;
v) subject to the sanction of the Registrar, to establish and conduct
an cooperative principles such other lines of work as may, from
time to time, be resolved upon by the general meetings;
Admittedly, there is no evidence on record that before entering into any
conducting agreement with the opponent no.2 Society has obtained any
permission from the Registrar, Cooperative. Applicant relied upon the
letter dated 15.02.2012 which is issued by the Central Railway
Employees Consumer Cooperative Society Limited by which it is
mentioned that they agreed for the terms and conditions given in
AnnextureA and also agreed to pay outstanding electricity bills. They
have also to follow bye laws of Cooperative Societies given by
Dy.Registrar, Mumbai. As per the terms and conditions the Society shall
not sublet the premises or activity therein to anybody assigning,
subletting or transferring any interest in the whole on any part of this
license is prohibited and is liable to result in termination of allotment
without notice. As per terms and conditions clause16 Society agreed
that no outsiders are allowed to act as salesmen/ manager etc. which is
-- 21 of 39 --
: 22 : Judgment in Misc.Appeal Nos.7/19 & 4/19
strictly prohibited. It is also agreed that in case the said premises are
required by administration, same shall be vacated by the Society within
notice period of three months. Administration will make attempt to
provide alternate accommodation. Indian Railway Establishment
Manual is also on record, ChapterXXIII of the said Manual specifically
deals with types of Cooperative Societies. Clause2301 states about the
types of Cooperative Societies. It further states that the following types
of cooperative Societies are functioning on the railways:
(1) Consumer Cooperative Societies.
(2) Cooperative Credit Societies and Banks.
(3) Cooperative Housing Societies.
As per Clause 2326 membership shall be open to all serving railway
servants.
As per Clause 2323 The Cooperative Societies shall adopt the model
byelaws framed by the Railway Board in consultation with Registrars of
Cooperative Societies concerned. Copies of which shall be obtainable
from the Railway Administration or Cooperative Departments of the
States.
As per Clause 2326 the system of selling goods through an outside
agency should be discouraged as also practice of employment of private
agent on payments of commission to conduct the business of consumer
societies. If any society functions in contravention of the above policy
its recognition should be withdrawn and all facilities to it stopped.
These are the terms and conditions for running cooperative societies as
per the Central Railway Manual.
24. Before entering the merits of the matter, the background
regarding the litigation is to be taken into consideration. Admittedly
-- 22 of 39 --
: 23 : Judgment in Misc.Appeal Nos.7/19 & 4/19
Liquidator was appointed on 14.05.2012, Liquidator has issued the
notice to the opponent no.2 to terminate the conducting agreement and
vacate the premises. Thereafter, opponent no.2 filed arbitration
proceedings bearing No.947 of 2013. In the said arbitration proceedings
it is observed by the Hon'ble High Court that certain dispute arose
between the members and the respondent society and the Dy.Registrar
by its order dated 20.12.2012 wound up the respondent no.1 Society
and society is under charge of Liquidator. It is further observed by the
Hon'ble Bombay High Court that the agreement between the petitioner
and the Society does not bind the railways. Under the agreement upon
which the petitioner i.e. opponent no.1 seek reliance, the petitioners are
entitled to be in possession till 8.04.2014. Thus, even if the case of the
petitioners, based on the agreement is accepted, under the terms of the
agreement the petitioners cannot continue in possession beyond
8.04.2014. It is observed by the Hon'ble Bombay High Court that the
stand taken by the Railways is fair one as this agreement is not binding
on the owner of the premises i.e. railways they were not party. It is
directed to the opponent no.2 to vacate the premises and hand over the
possession. It is also admitted position that opponent no.2 filed the
appeal before the Division Bench. Division bench by its order dated
02.04.2014 specifically observed that Railways are always at liberty to
take any step or to adopt proceedings in accordance with law for the
purpose of taking back possession of the premises. The pendency of the
arbitration proceedings does not prevent them from doing so. Hon'ble
Bombay High Court has also set aside the action taken by Railways by
locking the premises and directed the railway to initiate the action as
per the law. Admittedly, initially on 18.11.2015 applicant issued a
notice to M/s.Stuti Enterprises and the Liquidator. Subsequently, said
notice was withdrawn against the Liquidator and only proceedings was
-- 23 of 39 --
: 24 : Judgment in Misc.Appeal Nos.7/19 & 4/19
initiated under the Public Premises Act against M/s.Stuti Enterprises
bearing No.16 of 2016. The Estate Officer passed the eviction order.
Opponent no.2 preferred an appeal against the eviction order before
this Court bearing No.90 of 2016. Said appeal is allowed with the
observations. It is further observed that applicant railway shall be at
liberty to initiate the proceedings against both the opponents i.e.
M/s.Stuti Enterprises and the Liquidator. Thereafter, applicant railway
obtained the permission of Dy.Registrar and Dy.Registrar by its order
issued permission on 13.10.2017. Thereafter, show cause notice was
issued by the administrative office of Central Railway on 18.10.2017 to
opponent nos.1 and 2 and thereafter eviction application was filed on
31.10.2017.
25. It is vehemently submitted by the learned Counsel Shri
Sangilakar that notice issued by the applicant is not a termination
notice. Under provisions of PPE Act show cause notice can only be
issued by the Estate Officer and not by the parties. He further
submitted that the notice issued by the applicant is not within the
purview of Section 106 of Transfer of Property Act. It is not a
termination notice at all. As the notice issued by the applicant is not
proper notice and therefore, the action initiated against the opponents
is liable to be set aside. He invited my attention towards the said notice
and submitted that heading of the notice shows that show cause notice
is issued to both the opponents. Said notice is not a termination notice.
There is no termination notice issued to both the opponents and
therefore the action without termination notice is not legal and liable to
be set aside. He invited my attention towards Section 106 of Transfer
of Property Act. Section 106 of Transfer of Property Act reads thus;
-- 24 of 39 --
: 25 : Judgment in Misc.Appeal Nos.7/19 & 4/19
“[106. Duration of certain leases in absence of written
contact or local usage. In the absence of a contract or
local law or usage to contrary, a lease of immovable
property for agricultural or manufacturing purposes
shall be deemed to be a lease from year to year,
terminable, on the part of either lessor or lessee, by six
months' notice; and a lase of immovable property for
any other purpose shall be deemed to be a lease from
month to month, terminable, on the part of either lessor
or lessee, by fifteen days' notice.”
The commentary of section 106 in respect of notice says that notice to
quit U/s.106 is a technical rule. It should not be construed in a
pedantric and impractical way so as to pickholes and find fault with the
notice. The aim of the interpretation should be only to ascertain
whether the person receiving the notice has understood the same. A
liberal construction would always enable to do practical justice to the
cause. The court should construe the quit notice, in such a way that it
should not be defeated by inaccuracies in the language of the notice
especially in matters of the description of the premises, the name of the
tenant or the name of the landlord or the date of expiry of the notice. A
liberal construction is put upon a notice to quit, so that it is not
defeated by minor errors. Notice to quit may, notwithstanding
erroneous particulars, be still good and effective so long as the recipient
is not misled.
26. As the bonafide issue resolved regarding the termination notice
or quit notice, it is submitted by the learned advocate for the applicant
that the provisions of Transfer of Property Act is not applicable in the
present case. Even for the sake of argument if it is observed, it is
applicable then also whether said notice can be termed as illegal. It is
observed by the Hon'ble Apex Court in Bhagabandas Agarwal Vs.
-- 25 of 39 --
: 26 : Judgment in Misc.Appeal Nos.7/19 & 4/19
Bhagwandas Kanu & Ors. Reported in 1977 SC 1120 that notice to
quit must not be read in a hypercritical manner nor must its
interpretation be affected by pedagogic pedantism or over refined
subtlety but it must be construed in a commonsense way. It is further
observed by the Hon'ble Apex Court that now it is settled law that a
notice to quit must be construed not with a desire to find faults in it
which would render it defective but it must be construed ulresmedia
coolest quam pereat. The validity of a notice to quit as pointed out by
Lords Justice Lindley L.J. in Sidabotham Vs Holland (1895)1 SC 376
“out not to turn on the splitting of a straw”. It must not be read in
hypercritical manner nor must its interpretation be affected by
pedagogic pendantism or over refined subtlety but it must be construed
in a commonsense way.
27. Here in the present case notice which is issued must be judged
for its validity in the light of this well recognized principle of
interpretation. It is thus, well settled that notice to quit need not be
worded with accuracy. It would not be invalid merely because the
period mentioned therein falls short of the period specified under sub
section1 of Section 108 of the Transfer of Property Act. The object and
purpose being that the lease should have a reasonable notice before he
is asked to vacate the premises. Thus, the law is not that, the notice to
quit issued by the landlord must be strictly construed in favour of the
tenant, but notice is required to be construed in a commonsense way. It
is settled that the notice would be required to be construed broadly and
it should not be defeated by inaccuracies even in regard to the date of
expiry of the notice. Even the amended section 106(3) of the Transfer
of Property Act reflects this position. When the language used in the
notice is clearly to covey the intention of the lessor namely that the
-- 26 of 39 --
: 27 : Judgment in Misc.Appeal Nos.7/19 & 4/19
tenant should quit and vacate the suit premises, surely, a honest and
inadvertent error would not invalidate the notice. In the present case
the notice issued by the applicant clearly suffices and give the
reasonable notice to the opponents to vacate the premises. Merely
because notice is referred as a show cause notice is not sufficient to
discard the said notice. By the said notice applicant has clearly informed
both the opponents and called upon them to quit, vacate and deliver the
vacant peaceful possession of the said premises. The word used in the
notice that the premises have been sublet by management committee of
Mumbai CST Central Railway Employees Consumer Cooperative
Society in unauthorized manner. It is specifically mentioned that
premises is already declared as “World Heritage building” and called
upon both the opponents to vacate the said premises. Therefore,
contention of the opponents that notice is not issued in proper manner
and within the purview of Section 106 is not acceptable.
28. Next issue raised by the opponent no.1 is that Estate Officer has
mechanically issued the show cause notice which is not as per the
provision of Section4 of PPE Act. The Estate Officer must be satisfied
that the public premises was in unauthorized occupants and person
with unauthorized occupants should be evicted. Officer must have
found opinion. In support of his contention, he relied upon Minoo
Framroze Balsara Vs. The Union of India and Others reported in
AIR 1992 Bombay 375 wherein it is observed by the Hon'ble Bombay
High Court that prima facie satisfaction of the Estate Officer is a sine
qua non of the issuance of the show cause notice. The prima facie
satisfaction must be two fold; firstly, that the addressee is in
unauthorized occupation of public premises and, secondly, that, he
should be evicted. The notice must set out the grounds on which the
-- 27 of 39 --
: 28 : Judgment in Misc.Appeal Nos.7/19 & 4/19
order of eviction is proposed to be made. It must, therefore, state not
only why the addressee is thought to be in authorised occupation but
also why it is thought that he should be evicted. It must inform the
addressee that he is entitled to show cause against the proposed order
of eviction. The addressee cannot effectively show cause unless he
knows why the Estate Officer is of the opinion that he is in
unauthorized occupation. He also cannot show effective cause unless
he knows why his eviction is proposed. The provision of Section 4
makes it clear that the addressee may seek a personal hearing from the
Estate Officer and may lead evidence for the purposes of showing cause
against the proposed order of eviction. This is clear also from the
provisions of Section 8 which vest in the Estate Officer the powers of a
Civil Court in regard to the summoning of witnesses and examining
them on oath and the discovery and production of documents.
29. On the other hand, learned advocate for the applicant relied
upon Safari Airways Vs. The Estate Officer and Ors. Reported in AIR
1983 Delhi 347 wherein it is observed that under the Act the form of
notice is prescribed. Before issuing notice under Section 4(1) the Estate
Officer has to form a tentative opinion. Opinion means estimation, not
decision. If a man is to form an opinion, he must form it himself on such
reasons and grounds as seem good to him. Those reasons may be good
or bad. But he does not arrive at a definite conclusion because he has
not heard the affected party so far. There are no counter allegations
before him at the stage of the formation of the opinion. He must hear
the occupant and decide whether he is there on the premises with or
without authority. Then he arrives at a decision and his decision is
appealable under section 9 of the Act to the district judge.
-- 28 of 39 --
: 29 : Judgment in Misc.Appeal Nos.7/19 & 4/19
30. Here in the present case show cause notice was issued on
2.11.2017. The recitals of the show cause notice shows that grounds
are mentioned by the Estate Officer while issuing the show cause notice.
As observed by the Hon'ble Bombay High Court in the case of Minoo
Framroze Balsara, the notice of Estate Officer shall set out the grounds
on which the order of eviction is proposed to be made. It must therefore
state why the addressee is thought to be in authorised occupation but
also why he should be evicted. It must inform the addressee that he is
entitled to show cause against the proposed order of eviction. The
addressee cannot effectively show cause unless he knows why the Estate
Officer is of the opinion that he is in unauthorized occupation.
31. In the present case show cause notice specifies the ground why
the Estate Officer came to the conclusion to issue show cause notice. It
also set out the ground that why Estate Officer came to the conclusion
to issue show cause notice as prima facie it shows that premises has
been sublet by the management committee of the Mumbai CST to the
opponent nos.1 and 2. Thus, the notice i.e. show cause notice is as per
the provisions of Public Premises Act. It is further argued by the learned
advocate Shri Sangalikar that the Estate Officer who has issued the
show cause notice has initially participated in the proceedings to initiate
action against the opponents. He invited attention towards the order
passed by the Dy.Registrar CoOperative A Division, Mumbai which
shows that the application was filed by the applicant for seeking
permission to initiate immediate action against the Liquidator. At the
time of hearing before the Dy.Registrar, advocates Shri D.S.Rao, Shri
R.P.Ojha, L.K.Tripathi and Estate Officer R.K.Jain were present. It is
submitted by the learned advocate Sangalikar that the person who
participated in the proceedings himself has conducted the proceedings
-- 29 of 39 --
: 30 : Judgment in Misc.Appeal Nos.7/19 & 4/19
and this shows that he was personal interest in the said proceedings and
therefore the order passed by the Estate Officer deserves to be set aside.
32. In support of his contention he relied upon Gajanan Shivram
Lele Vs. Dena Bank and another reported in 2015(3)Mh.L.J 735
wherein Hon'ble Bombay High Court has observed that the test in such
matter is not of 'actual bias', but rather the test is that of 'reasonable
apprehension of bias'. The real question is not whether the respondent
no.2 is actually biased but whether there is reasonable ground for
believing that he is likely to be biased or whether there is substantial
possibility of bias. In deciding the question of bias, human probabilities
and the ordinary course of human conduct have to be taken into
consideration. In such matters, it may not be necessary to prove actual
prejudice, what is necessary is to see whether a reasonable impression
was created in the minds of the petitioners whose rights are being
adjudicated, that there may be a likelihood of bias. What is
objectionable in such cases is not that the decision is actually tainted
with bias but that the circumstances are such as to create reasonable
apprehension in the minds of others that there is a likelihood of bias
affect the decision.
33. Here in the present case after show cause notice was issued by
Shri R.K.Jain, Estate Officer, opponent no.2 has immediately filed an
application on 04.12.2017 for his recusal from the proceedings. On
11.01.2018 by passing order Shri R.K.Jain has been recused from the
case and another Estate Officer was appointed. The record shows that
applicant has filed affidavit of examinationinchief on 16.01.2018 i.e.
after Shri R.K.Jain was recused from the proceedings. Further entire
proceedings was conducted by the next Estate Officer. Record shows
-- 30 of 39 --
: 31 : Judgment in Misc.Appeal Nos.7/19 & 4/19
that sufficient opportunity is granted. Thus, the contention of the
opponents that Estate Officer was biased is not sustainable has only
initiated proceedings i.e. only act of issuing show cause notice was done
by Shri R.K.Jain. Further proceedings was conducted by the different
Estate Officer against whom no allegations of bias are raised by the
opponents. So the ground raised by the opponents that Estate Officer
was bias and therefore proceedings is to be set aside is not acceptable
and not sustainable.
34. Learned advocate Shri Sanglikar also relied upon
G.K.Bhatnagar(D) by Lrs V/s. Abdul Alim reported in AIR On Line
2002 SC 311 wherein it is observed by the Hon'ble Apex Court that
ground of subletting. Held, not established. Question of interpretation
of partnership deed was substantial question of law. There is no
material available to hold the partnership a sham or nominal one and to
hold that the partnership was brought into existence for disguising a
subletting in reality.
He also relied on Fatimabai Noor Mohamed V/s. M.Khallil
Ahmed reported in Laws(Bom1989973 wherein it is observed by the
Hon'ble Bombay High Court that provisions of Section5(4a) of the said
Act 1947 make it abundantly clear that the permission given for
conducting the said Pan Beedi business in the suit premises does not fall
within the definition of the word licence and, therefore, there is no
question of protection of the present respondent under the Bombay
Rent Act. These provisions coupled with the three agreements produced
by the petitioner would make it further clear that the dominant
intention of the parties was to create a conducting licence for
conducting the said pan beedi business and incidentally the premises
-- 31 of 39 --
: 32 : Judgment in Misc.Appeal Nos.7/19 & 4/19
was allowed to be used by the respondent as permissive user and,
therefore, the case of the present respondent clearly falls within the
exception of the word licensee as mentioned above.
He also relied upon Mine Manager, Manganese Ore(India)
Ltd. V/s. Sham Kunjilal Yadav reported in LAWS(BOM)2002694
wherein it is observed the issuance of proper notice to show cause is
mandatory requirement of the statute.
He also relied upon Mavilayi Service Cooperative Bank and
others V/s. Commissioner of Income Tax, Calicut and another.
35. After going through the evidence on record admittedly it shows
that object of the Society was to carry out and deliver the foodstuffs,
cloths, grocery to its members. The society with the previous sanction
of the Registrar of cooperative Societies, to sell consumer goods in
wholesale to consumer cooperative societies of railway employees.
Admittedly the premises was declared as a heritage building and
heritage building certificate was issued. The provisions of Indian
Railway Establishment Manual also shows specifically Clause 2326 that
the system of selling goods through an outside agency should be
discouraged as also practice of employment of private agent on
payments of commission to conduct the business of consumer societies.
If any society functions in contravention of the above policy its
recognition should be withdrawn and all facilities to it stopped.
Admittedly opponent no.2 is not the Railway Employee. Admittedly it
is an outside agency. In view of guiding principle of the said manual
said practice is to be discouraged. Moreover, society has accepted the
terms and conditions. As per he said terms and conditions also no
outsiders are allowed to act as salesmen/ manager etc. which is strictly
-- 32 of 39 --
: 33 : Judgment in Misc.Appeal Nos.7/19 & 4/19
prohibited. Terms and conditions also show the Society shall not sublet
to anybody, assigning, or transferring any interest in the whole on any
part of this license is prohibited and is liable to result in termination of
allotment without notice. Said terms and conditions are agreed and
accepted by the Society and its office bearers and resolution has been
passed in monthly meeting on 09.02.2012. Thus, the evidence shows
that the premises was allotted with a specific object. Society has
contravened the terms and conditions, also contravened the guiding
principles which are mentioned in Indian Railway Establishment
Manual in ChapterXXIII. The evidence on record specifically shows
that applicant railway was not party to the said agreement and
therefore said agreement is not binding on the applicant. Hon'ble
Bombay High Court in its order dated 16.01.2014 held that the stand
taken by the railway is fair. Railway has given no objection to opponent
no.2 to continue possession till 08.04.2014 thereafter possession of the
opponent no.2 admittedly unauthorized possession. Hon'ble Bombay
High Court has specifically observed that this agreement is not binding
on the owner of the premises i.e. Railway not being the party. Not only
single bench of the Hon'ble Bombay High Court but Division Bench of
the Hon'ble Bombay High Court also made it clear that the Railways are
always liberty to take any step or adopt proceedings in accordance with
law for the purpose of taking back possession of the premises. The
pendancy of the arbitration proceedings does not prevent them from
doing so. In another order though Hon'ble Bombay High Court has set
aside the action of the applicant Railway to lock the premises but it is
clarified that in accordance with law petitioner shall be entitled to use
the premises in according with conducting premises. It is further
clarified the rights of the railways, if any to take step or to adopt the
proceedings shall only be in according with law. Thus, applicant proved
-- 33 of 39 --
: 34 : Judgment in Misc.Appeal Nos.7/19 & 4/19
that Society entered into the agreement in contravention of the terms
and conditions as well in contravention of the guiding principles
mentioned in the Manual. Therefore, I answer point nos.1 and 2 in the
affirmative.
As to Point no.3 :
36. Estate Officer has awarded the damages @ Rs.1,25,54,568/.
The Estate Officer has come to the conclusion that applicants are
entitled for payment of compensation at market rate as per the Railway
Board Circular No2005/LM/1818 dated 10.02.2005 compensation was
of Rs.7817.29 and multiply by total number of days of unauthorized
days beyond 08.04.2014 upto 31.08.2018 which comes to
Rs.1,25,54568/. Admittedly, applicant has adduced the evidence of
Valuer who has not measured the premises and only on the basis of
ready reckoner he has given Valuation Report. On the other hand,
opponent nos.1 and 2 have adduced evidence by examining the Valuer.
Opponent no.2 has adduced the evidence of Mr.Kazi Raziuddin Gulam
Dastagir. His valuation report is on the basis of market rental of
commercial premises under reference. He has assessed market rental @
Rs.62/ per sq.ft. On the other hand, opponent no.1 has also examined
Valuer Hintendra K.Mehta. His evidence shows that he is an Architect.
He also worked as empaneled as an architect and Valuer by the Hon'ble
Bombay High Court and Hon'ble Consumer Disputes Redressal
Commission. He has personally prepared this provisional opinion. As
per his report suit premises is consists of Canteen premises known as
Rail Bazaar. The locality is developed one and having all civic amenities
available in the nearby vicinity and it is approached by BEST buses,
taxis and other means of surface transportation. At the time of
inspection, he observed that condition of building structure is bad and
-- 34 of 39 --
: 35 : Judgment in Misc.Appeal Nos.7/19 & 4/19
the present condition of the premises is fairly good. He came to
conclusion that fair market rental and mesne profits @ Rs.3125/ per
month is reasonable amount. Admittedly applicant has not adduced the
evidence on what basis the Valuer came to the conclusion. The evidence
of opponent no.2 is also not reasonable regarding the valuation. But
the valuation report issued by Hintendra K.Mehta appears to be
reasonable one. He has visited the locality. He has also considered all
the civil amenities available in the nearby vicinity. Therefore, Estate
Officer ought to have taken into consideration the evidence of witness
Hintendra Mehta while granting the damages. Therefore, finding of the
Estate Officer that opponents are liable to pay damages @ Rs.71817.29
is not correct. It is illegal. It is based on only on the assumption. On the
other hand, the amount ascertained by Hitendra Mehta appears to be
more reasonable one. Hence, the observation of the Estate Officer and
finding to that effect regarding the damages is liable to be set aside.
Opponents are liable to pay compensation @ Rs.3,125/ per month X 52
months which comes to Rs.1,62,500/. Hence, it deserves to be
modified. Therefore, I answer point no.3 in the negative.
As to point No.4 :
37. To summarily evict any person in unauthorized occupation of
any public premises has been construed in the widest term and no court
other than the authorities prescribed by the PPE Act have always to deal
with the cases of eviction of any person who is in unauthorized
occupation. Unauthorized occupation definition is given in Section2(g)
which says that unauthorized occupation in relation to any public
premises, means the occupation by any person of the public premises
without authority for such occupation and includes the continuance in
occupation by any person of the public premises after authority
-- 35 of 39 --
: 36 : Judgment in Misc.Appeal Nos.7/19 & 4/19
(whether power of grant or any other mode of transfer) under which he
was allowed to occupy the premises, has expired or has been
determined for any reason whatsoever.
38. A bare perusal of this definition would denote that the public
premises means any premises owned, belonging to or taken on lease or
requisition by or on behalf of Central Government and includes any
such premises which have been placed by the government under control
of Secretariat of either house of parliament for providing residential
accommodation to any member of the staff of that Secretary. Equally
definition means any premises belonging to, taken on lease or on behalf
of the entities enumerated in Section2(e) (1)(2) and (3). The authority
to whom the Public Premises belong is a statutory authority though it
may be company or any corporation or University or any institute and
equally any board of trustees and the above enumerated entities. The
term “unauthorized occupation” denotes that all those in possession and
occupation of public premises, be it individuals or statutory bodies can
be held to be as such if continuance of any person of the public
premises after the authority whether by way of grant or any other mode
of transfer under which he or it was allowed to occupy the premises,
has expired or has been determined for any reason whatsoever.
39. Here in the present case, admittedly the premises was allotted to
the Society on the welfare basis, the object of the society was to provide
food stuffs, clothes grocery and other consumer goods to carry on for
the benefit of its members for retail distribution of the consumer goods,
to open and manage canteens. But terms and conditions are agreed by
the office bearers of the Society and resolution was passed. In
contravention of the said terms and condition the possession of the
-- 36 of 39 --
: 37 : Judgment in Misc.Appeal Nos.7/19 & 4/19
premises was parted by the Society with the opponent no.2. There is no
evidence that before entering into an agreement, Society has obtained
any permission either from the Registrar, Cooperative or from the
Railway. Guiding principles in the Manual clearly shows that the
society is prohibited to engage outside agency. It is specifically
mentioned in Clause2326 that the system of selling goods through an
outside agency should be discouraged as also practice of employment of
private agent on payments of commission to conduct the business of
consumer societies. The clause also clarifies if any society functions in
contravention of the above policy its recognition should be withdrawn
and all facilities to it stopped. Hon’ble High Court also in its order
observed that as the applicant was not party to the said agreement and
therefore said agreement is not binding on the applicant and the
applicant is at liberty to initiate the proceedings to recover the
possession. Division Bench of the Hon’ble Bombay High Court has also
observed that pendency of the arbitration proceedings does not prevent
the railway from taking any step to take back the possession of the
premises. It is specifically clarified by the Hon’ble Bombay High Court
Division Bench that railways are at liberty to take any step or to adopt
proceedings in accordance with law for the purpose of taking back
possession of the said premises. Accordingly, applicant Railway by
following due procedure of law issued quit notice and initiated the
proceedings. Estate Officer has given ample opportunity to both the
parties and accordingly decided the application in favour of the
applicant. But order of the Estate Officer regarding the damages is only
not on the basis of evidence adduced before him and therefore the
finding regarding the damages is liable to be set aside and deserves to
be modified. Rest of he finding regarding the eviction and directions to
both the opponents to vacate the premises is liable to be maintained.
-- 37 of 39 --
: 38 : Judgment in Misc.Appeal Nos.7/19 & 4/19
Hence, appeal to be allowed partly. Hence, I proceed to pass following
order.
O R D E R
1. Misc.Appeal Nos.7 of 2019 and 4 of 2019 are hereby partly
allowed.
2. The order dated 31.08.2018 passed by the Estate Officer
directing both the opponents to vacate the premises within 15
days from the date of receipt of the order is hereby
maintained.
3. The finding of the Estate Officer to pay the damages @
Rs.7817.29 is hereby set aside.
4. Opponents are directed to pay damages @ Rs.3,125/ per
month X 52 months which comes to Rs. 1,62,500/.
5. Opponent nos.1 and 2 jointly and severely are liable to pay
the said amount @ 12% per annum on the above sum. Said
amount is to be paid by the opponents within 30 days. The
amount is to be recovered as per the law.
6. Record and Proceedings be sent back to Respondent/
Applicant.
7. Original Judgment be kept in Misc.Appeal No.7 of 2019 and
Copy of Judgment be kept in Misc.Appeal no.4 of 2019.
20/04/2022 (U.S.JOSHIPHALKE)
PRINCIPAL JUDGE,
CITY CIVIL COURT, MUMBAI.
Dictated on : 20/04/2022
Transcribed on : 25/04/2022
Signed by HHJ on : 26/04/2022
-- 38 of 39 --
: 39 : Judgment in Misc.Appeal Nos.7/19 & 4/19
“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGEMENT/ORDER”
UPLOAD DATE TIME NAME OF STENOGRAPHER
27/04/2022 12.25p.m. B.R.HATEKAR (S.G.)
Name of the Judge HH THE PRINCIPAL JUDGE
URMILA S.JOSHI-PHALKE (CR No.19)
Date of Pronouncement of Judgment/Order. 20.04.2022
Judgment/order signed by P.O on 26.04.2022
Judgment/order uploaded on 27.04.2022
Reuploaded on 06.05.2022
-- 39 of 39 --