Final Order 1

Order Details: Copy of Judgment
Pdf Text: 1 Misc.app.78.18
Received on : 20/02/2018
Registered on : 15/03/2018
Decided on : 09/08/2019
Duration : Y M D
01 04 25
IN THE BOMBAY CITY CIVIL COURT AT BOMBAY
Misc. Appeal No.78 of 2018
1) M/s.B.V. Stars
having its office at plot
no.55, SEEPZSEZ,
Andheri(W), Mumbai96
2) M/s.B.V. Stars
Plazza, 55, Gamdevi Road,
Mumbai7
3) Ms.Bina Shah
having her address at
Swapnalok, Napeansea Road,
Mumbai6 ..Appellants
V/s.
1) SEEPZ Special Economic Zone
having its head office at
Andheri(W), Mumbai96
2) The Estate Manager,
SEEPZSEZ Authority
having its head office at
Ministry of Commerce and
Industry, Andheri(E),
Mumbai96 ..Respondents
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Coram : H.H.THE PRINCIPAL JUDGE
V.G. BISHT
Dated : 9th August ,2019
(C.R.No.19)
Advocate Mr.Cyrus Bharucha i/b. H.K. Law Associates for appellants.
Advocate Mr.S.R. Rajguru a/w. advocate Mr.M.S. Bharadwaj for
respondents.
O R A L J U D G M E N T
Being aggrieved by the order of eviction passed by the Estate
Manager, SEEPZSEZ Authority under subSection (1) of Section 5 of The
Public Premises (Eviction of Unauthorized Occupants)Act, 1971 (“the P.P.
Act” for short) on 5th February,2018 in respect of M/s.B.V. Star, 1st and 2nd
floor, plot no.55, SEEPZSEZ, Andheri(E), Mumbai96 (“schedule
premises” for short) and subsequent notice dated 6th February,2018 under
subSection (3) of Section 7 of the P.P. Act, the appellants have preferred
the present appeal.
2 Brief facts: Appellant no.1 is a registered partnership firm was
constituted under a Deed of Partnership dated 1st January,1993. The
partners of appellant no.1 (save and except one partner) were also
partners of one M/s.B.V. Jewels and are engaged in the business of Gems
and Jewellery. Respondent no.1 is the Santa Cruz Electronics Export
Processing Zone as defined under Section 2(za) of the Special Economic
Zone Act,2005 (“SEZ Act” for short).
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3 The appellants had been conducting their business from
schedule premises since 1993. A letter of approval (“LOA”) bearing
reference No.NUS/APL/GJ/104/92/112181 dated 18th February,1993 was
issued in favour of appellant no.1 for a period of ten years. Partners of
appellant no.1, thereafter, alongwith the partners of B.V. Jewels
constructed an ultra modern state of the art building. The appellant no.1
conducted its business till 1997 and thereafter, certain dispute arose
between the then partners of appellant no.1. The matter went upto
Hon'ble High Court and from there to Arbitration. In the midst of the
aforesaid proceedings, an enquiry was initiated by the office of Customs,
Mumbai, which was carried upto Hon'ble Supreme Court and eventually
concluded somewhere in 2005.
4 According to appellants, while appellant no.1 was involved in
the aforesaid proceedings, somewhere in the year 2002, the LOA issued in
its favour elapsed and has not been renewed till date by respondent no.1.
Despite several requests and correspondences made by appellant no.1 in
relation to renewal of LOA, respondents have failed to renew the LOA.
5 The appellants allege that to appellant no.1's surprise and
utter shock on 18th March,2013, respondent no.1 addressed a letter
cancelling/terminating the sublease created in its favour and the reasons
stated was expiry of LOA. Further, on 15th April,2013 respondent no.1
addressed a show cause notice under Section 4(1) and 4(2)(ii)(b) of the
P.P. Act granting it in unauthorized occupation of the schedule premises.
According to appellants, during the pendency of hearing of the matter, the
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4 Misc.app.78.18
permission of the Officer holding the office of respondent no.2 came to an
end and now Officers were appointed on two occasions. Neither did the
officer issuing the show cause notice nor did any of her successors conduct
a detailed hearing in the matter. After filing of the reply, respondent no.2
did not frame issues nor did the appellant no.1 was called upon by
respondent no.1 to file its affidavit of evidence. No opportunity was
offered to the appellants to crossexamine respondent no.1.
6 The appellants, lastly, allege that by passing of impugned
order, the respondent no.2 has directed the appellants to handover vacant
possession of the schedule premises within 15 days and further vide notice
dated 6th February,2018 demanded an amount of Rs.78,70,265.76 ps.
Hence, this appeal.
7 Mr. Cyrus Bharucha, learned counsel for appellants, submitted
that the Letter of Approval (LOA) expired on 31st March,2002 and despite
various correspondences for renewal of LOA, the respondents did not pass
any order on the letters/applications made by appellant no.1 and this was
purposely done so that the appellant no.1 did not have written order
rejecting its applications from which it could file an appeal under the
provisions of SEZ Act.
8 The learned counsel, then took me through the relevant
documents in order to buttress his submissions. Similarly, according to
learned counsel, the appellant no.1 was never heard in respect of the
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5 Misc.app.78.18
alleged nonpayment of custom duty before the cancellation of LOA. Thus,
the whole approach adopted by respondents is completely unjustified
resulting into illegal cancellation of sublease. The learned counsel placed
reliance in Union of India V/s. J.V. Gokal & Co. Pvt. Ltd., 2017 SCC
OnLine Ker 28334 and Syndicate Bank V/s. Ramachandran Pillai and
others (2011) 15 Supreme Court Cases 398.
9 Mr.S.R. Rajguru, learned counsel for respondents, on the other
hand, supported the impugned orders passed by Estate Manager. The
learned counsel also took me through the original proceedings and pointed
out how the impugned orders passed by the Estate Manager are legal and
correct. According to learned counsel, there being no merit in the appeal,
the same is liable to be dismissed. The learned counsel placed reliance in
Ashoka Marketing Ltd. and another V/s. Punjab National Bank and
others, AIR 1991 Supreme Court 855 and Syndicate Bank V/s.
Ramachandran Pillai and others (2011) 15 Supreme Court Cases 398.
10 Following points, therefore, arise for my consideration and my
findings thereon for the reasons are as follows:
POINTS FINDINGS
1) Whether the impugned orders
passed by the Estate Manager ..Partly yes.
are legal, just and proper?
2) What order? ..As per final order.
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R E A S O N S
Point No.1:
11 The learned counsel for appellants has squarely put the blame
at the door of respondents and while doing so, he vociferously tried to
bring home twofold submissions. Firstly, inspite of several
communications and fervent plea raised by the appellant to renew the
letter of approval, respondents deliberately sat dispassionately on those
correspondences, did not take any meaningful action and rather
engineered a situation whereby the appellants could be branded as an
“unauthorised occupant”. Secondly, while doing so, the respondents
committed not only flagrant breach of the guidelines to prevent arbitrary
use of powers to evict genuine tenants from public premises but threw all
the norms incorporated in the guidelines to the winds. The quintessence
is, therefore, that the termination of sublease was unjustified and illegal
and, therefore, the impugned order needs to be set aside at once.
12 Countering the above submissions, the stand taken by the
respondents is that the grounds of eviction were not holding a valid LOA
after 31st March,2002 and a valid sublease agreement since 18 th
March,2013. These two aspects read together thus violated the provisions
prescribed under Rule 11(5) and Rule 19 of SEZ Rules,2006 (“SEZ Rules”
for short). In addition, there were various statutory dues under the
Customs Act and Government dues.
13 In the whole scenario, what should engage attention is
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whether infact the correspondences entreating the respondent to renew
LOA was meaningful and justified. Having regard to the rules prescribed
by SEZ Rules, so also the nature and significant of said guidelines which
the appellants are banking upon the stand taken by the appellants needs to
be appreciated visavis the facts and circumstances on record.
14 There is no dispute to the fact that a letter of approval (LOA)
bearing reference No. NUS/APL/GJ/104/92/112181 dated 18th
February,1993 was issued in favour of appellant no.1 for a period of ten
years in accordance with Rule 19 of SEZ Rules. It is also not disputed that
subsequent to the issuance of LOA sublease (Exh.C) came to be executed
between appellant no.1 and respondents on 14th September,1993. In the
words of appellants, the LOA issued in their favour elapsed somewhere in
the year 2002 whereas according to respondent LOA elapsed on 31st
March,2002.
15 It is pertinent to note here that the appellants for the first time
by their letter dated 8th May,2004 (Exh.H) requested respondent no.1 to
grant them LOA and thereafter repeated their requests by series of
correspondences (Exh.I to R). Apparently, the request came to be made
after more than two years of expiration of letter of approval dated 18th
February,1993.
16 Section 2(g) of the P.P. Act defines “unauthorised Occupation”
as under:
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“unathorised 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 the authority (whether by way
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.”
17 From the above definition it is clear that a person becomes
unauthorised occupant if the authority under which he was allowed to
occupy the premises has expired or has been determined for any reason
whatsoever. In the case in hand, admittedly, the validity of letter of
approval dated 18th February,1993 expired on 31st March,2002. That is to
say, there was no valid LOA after 31st March,2002. Neither appellant got
the said LOA extended before its expiration nor immediately moved the
respondents within reasonable time to get the same extended in
accordance with SEZ Rules.
18 The learned counsel for appellants have heavily placed
reliance in the judgment given in Union of India V/s. J.V. Gokal & Co.
Pvt. Ltd. (Supra). In this case, the letter of approval (LOA) was valid for a
period of five years and was then liable to be renewed upon an application
for renewal. There was no dispute that during the validity of the letter of
approval, application for renewal was filed. In this factual backdrop, the
Hon'ble High Court (Kerala) held that before the Development
Commissioner considers the question of refusal to renew the letter of
approval, she was required to issue notice to the parties giving out grounds
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and seeking a response. Thus, striking future in respect of renewal of letter
of approval in the said case was that the application for LOA was moved
during the validity of the letter of approval. Whereas it is not so in the case
in hand.
19 Reverting backs to the case in hand, at the cost of repetition,
let me place it on record straightway that the appellants were not at all
alive to expirational aspect of LOA inasmuch as it took them for more than
two years to beseech respondents to renew the LOA. This apathy is not
justifiable by any means. In this regard, SubRules (6A)(1)(2) of Rule 19
of SEZ Rules are worth quoting.
“(6A)(1) The Units which intend to renew the validity
of Letter of Approval shall submit, before two months from
the date of expiry of the Letter of Approval, the completed
application in Form F1 along with requisite document, to
the Development Commissioner, duly signed by the
proprietor or managing partner or if it is a company, by the
Managing Director or the Director(s) or any person who has
or have been duly authorised for this purpose by a
resolution of the Board of Approval of Directors of the
Company:
Provided that in case an application is not submitted
before the said period of two months, such application shall
be placed before the Approval Committee and the said
Committee, if it is satisfied that there was sufficient cause
for not filling the same before the said period, may direct
for entertainment of such application.
(2) in case of noncompliance of the procedures
specified in clause (1), the Letter of Approval shall not be
considered for renewal.”
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20 By virtue of above Rules, a right is conferred on the units to
get their LOA renewed before two months of the date of expiry of LOA.
That period of two months is further extended by another two months in
case units are prevented from doing so because of sufficient and reasonable
cause. The record nowhere shows appellants having availed the benefit of
above Rules. Therefore, the blame, if at all, is to be placed, must be
squarely placed at the door of appellants.
21 During the course of argument, learned counsel submitted that
the respondents have also failed to follow the procedure for renewal of
LOA as stipulated in Rule 19 (6B) of the SEZ Rules.
22 The said Rule provides number of criteria to be taken into
consideration by the concerned authority before renewal of letter of
approval is granted. It must be reminded at once that the said Rule must
be read in conjunction with Rule (6A)(1)(2) of Rule 19 of SEZ Rules and
not in isolation. Therefore, it is wrong on the part of learned counsel to
canvass before me that there was failure on the part of respondents to
follow Rule 19(6B) of SEZ Rules.
23 This takes me to equally important facet viz. guidelines issued
by Central Government. The Central Government has issued guidelines to
prevent arbitrary use of powers to evict genuine tenants from public
premises under the control of public sector undertaking/financial
institutions vide Resolution no.21013/1/2000Pol.1 dated 30 th May,2002
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(Gazetted on 8th June,2000). The Hon'ble Apex Court had an occasion to
interpret these guidelines in Syndicate Bank V/s. Ramachandran Pillai
and others (Supra). The observations of the Hon'ble Apex Court at
paragraph nos.6 and 7 are quite relevant for our purpose which are as
under:
“6. If any executive instructions are to have the force
of statutory rules, it must be shown that they were issued
either under the authority concerned on the Central
Government or a State Government or other authority by
some statute or the Constitution. Guidelines or executive
instructions which are not statutory in character, are not
“laws”, and compliance therewith cannot be enforced
through courts. Even if there has been any violation or
breach of such nonstatutory guidelines, it will not confer
any right on any member of the public, to seek a direction
in a court of law, for compliance with such guidelines. An
order validly made in accordance with a statute (as in this
case the Public Premises Act), cannot be interfered with,
even if there has been any transgression of any guidelines,
except where it is arbitrary or mala fide or in violation of
any statutory provision. These are wellsettled principles.
7. As the guidelines relied upon in this case were
snot issued in exercise of any statutory power under the
Public Premises Act or any other statute, even if there was
violation or noncompliance with the aforesaid guidelines
by the appellant, relief to the appellant could not be
denied by relying upon the guidelines. To do so would
amount to reading the guidelines into the statute, which is
impermissible. The only “remedy” of any person
complaining of noncompliance with such guidelines, is to
bring such violation to the notice of a higher authority.
We therefore hold that the enforcement of any right or
exercise of any power by the appellant, under the Public
Premises Act cannot be set at naught by relying upon or
referring to the guidelines issued by the Central
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Government.”
24 Keeping in mind the above interpretation of Hon'ble Apex
Court, what is immediately obvious from the record is that the procedure
followed by respondents in no way can be termed as arbitrary or malafide.
There was abysmal failure on the part of appellants to follow SEZ Rules in
letter and spirit. In the circumstances, the utility and applicability of the
guidelines could not have gone into. Therefore, the guidelines in the facts
and circumstances of the present case do not further in any manner the
cause of appellants.
25 In view of above discussion, I hold that as the lease period was
coterminus with the LOA as per Rule 11(5) of the SEZ Rules, the lease
rights ceased to exist after the expiration of the letter of approval. As there
was no renewal of the LOA, the learned Estate Manager rightly concluded
that the appellants were unauthorised occupants. To that extent, the
finding of Learned Estate Manager is upheld.
26 The appellants have also challenged a demand notice (Exh.B)
dated 6th February,2018 issued under subSection (3) of Section 7 of the
P.P. Act by the learned Estate Manager.
27 On going through the impugned order dated 5th February,2018
it appears that one of the ground for eviction was various statutory dues
under the Customs Act and Government outstanding in the name of
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appellants. However, there is no constructive discussion and speaking
order in that regard. If one goes through the show cause notice (Exh.B)
then one finds that in the light of annexureA appended to Exh.B, the
learned Estate Manager found appellants in the arrears of Rs.78,70,265.72
ps. towards rent and service charges as on 31st December,2017. Neither
annexureA nor the show cause notice give the details of the said amount.
No material is placed on record to show that the period of limitation, if
any, was taken into consideration while calculating the rent amount.
Moreover, the show cause notice and as also annexure nowhere show the
specific period covered by the learned Estate Manager for arriving at a
particular amount. It has, therefore, become necessary to direct learned
Estate Manager to consider the rental claim afresh keeping in mind the law
of limitation, by affording fresh opportunity to the appellants.
28 In view of above, I pass the following order:
O R D E R
Misc.Appeal No.78/18 is partly allowed.
The impugned order under subSection (1) of Section 5 of the
P.P. Act passed by learned Estate Manager on 5th February,2018 stands
confirmed.
However, the show cause notice (Exh.B) dated 6th
February,2018 issued by learned Estate Manager is hereby set aside with a
direction to consider the same afresh in the light of above observations and
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by affording opportunity to both the sides.
R & P be sent back.
09/07/2019 (V. G. BISHT)
Principal Judge,
Gr.Bombay.
Dictated on : 09/08/2019
Transcribed on : 09/08/2019
Signed by HHJ on : 09/08/2019
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER
Name of Stenographer: Mrs.Aruna S. Jayade
Upload date and time: 09/08/2019 (5.30 p.m.)
Name of the Judge H.H.THE PRINCIPAL JUDGE
Shri V.G. BISHT(C.R.No.19)
Date of Pronouncement of Order 9th August,2019
Order signed by P.O. on 9th August,2019
Order uploaded on 9th August,,2019
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