Public Premises (Eviction Of Unauthorised Occupants) Act Shall Override Provisions In Rent Control Legislations: Supreme Court

The Supreme Court held that the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 shall override the provisions in the Rent Control Legislations.

The Court held thus in a batch of cases in which the issue under reference was whether the provisions of the PP Act, 1971 would prevail over the respective State Rent Control legislations, in relation to premises let out prior to the commencement of the said Act, as against the premises let out after its enforcement but before their acquisition or transfer to the Government or any statutory corporation, by which the character of such premises stood transformed into “public premises” within the meaning of the Act.

In view of two conflicting Judgments on the aspect of overriding applicability of the PP Act as against State Rent Control Legislations, a two-Judge Bench of the Supreme Court passed an Order in 2015, referring the matters for adjudication by a three-Judge Bench.

The three-Judge Bench comprising Justice Vikram Nath, Justice Sandeep Mehta, and Justice N.V. Anjaria observed, “Both categories of statutes namely, the PP Act 1971 on one hand, and the Bombay Rent Control Act, 1947, Maharashtra Rent Control Act, 1999, Delhi Rent Control Act, 1958 and similar Rent Control Legislations, on the other hand, are special laws. Therefore, in order to determine as to which Act will apply in case of conflict, reference has to be made to the purpose and policy underlying the two enactments and the clear intendment conveyed by the language of the relevant provisions therein. Keeping in view the object and purpose underlying both the enactments, that is, the PP Act 1971 and the Rent Control Acts, the provisions of the PP Act 1971 shall override the provisions in the Rent Control Legislations.”

The Bench said that the PP Act and the State Rent Control Acts are special enactments in themselves and rule generalia specialibus non derogant will not apply. It added that having regard to the purpose, policy, and legislative intent of the PP Act, the same would prevail over the State Rent Control Acts in respect of eviction of ‘unauthorised occupants’ of ‘public premises’ as defined in Section 2(g) of the Act.

Attorney General of India (AGI) R. Venkataramani, Senior Advocates Ashok Panigrahi, P.V. Dinesh, and Salman Khurshid represented the Appellants, while Senior Advocates Anindita Pujari and Vishnu Mehra represented the Respondents.

Brief Facts

In the lead case, the Bombay High Court quashed an Order of the City Civil Court which had declared the order of eviction passed by the Estate Officer under the PP Act to be illegal, resting on the reasoning that the controversy was covered by the Judgment of the Supreme Court in the case of Suhas H. Pophale v. Oriental Insurance Company Limited and its Estate Officer (2014). The Appellant-Life Insurance Corporation of India Limited (LIC) owned and maintained amongst other immovable properties, the premises in Mumbai and the tenancy was created in favour of the Respondent-Vita Private Limited in or around April 1957. The PP Act came into force in 1971 and in 2007, the Respondent addressed a letter asking the Appellant to send the bills and receipts at the address as suggested in the letter. The Building Inspector gave report in 2008 that the premises in question was locked for over a period of one year and that the same was occupied by one B.J. Malhoutra (Respondent No.2), who used to visit the premises occasionally.

It was the case of the Appellant that Malhoutra was a trespasser, and her occupation of the premises was illegal. Thereupon, a notice under Section 108 of the Transfer of Property Act, 1882 (TPA) for terminating the tenancy was sent by the Appellant to the Respondents. As the same did not yield any result, the Appellant made an application under Sections 5 and 7 of the PP Act before the Estate Officer appointed under Section 3 of the Act, seeking eviction of the Respondents and any other persons found to be in unauthorised occupation of the public premises. Holding that the premises was governed by the PP Act, the Estate Officer directed eviction of the Respondents. The Appeal preferred by the Respondents before the City Civil Court was dismissed and this was challenged before the High Court, which allowed the Writ Petition. Hence, the case was before the Apex Court.

Court’s Observations

The Supreme Court in view of the above facts, remarked, “Conspicuously, the two-Judge Bench of this Court in Suhas H. Pophale, in what it decided and in the propositions it laid down, overlooked, ignored and disregarded the ratio decidendi of the Constitution Bench in Ashoka Marketing Ltd. as also the very ratio laid down by three-Judge Bench in M/s. Jain Ink. The mandate of law of precedent was completely disregarded by the two-Judge Bench in Suhas H. Pophale. It could be viewed as judicial indiscipline, if not judicial impropriety.”

Discipline of Law of Precedent:

The Court noted that the Doctrine of Stare Decisis embodies the foundational principle that precedents must be observed with institutional fidelity, not merely by the High Courts or Subordinate Courts, but by the Supreme Court as well and it enjoins that a Bench of lesser or co equal strength must follow the law declared by a larger Bench, in recognition of the binding authority of such pronouncements.

“This adherence to precedent is not a matter of mere formality, but of judicial discipline and constitutional propriety. The underlying purpose for respecting and following the decisions of the Bench consisting of greater number of Judges and even of the Bench of co-equal strength, is part of judicial discipline. It ensures certainty, predictability and dependability in the operation and application of law”, it added.

The Court said that it is immaterial that the decision of the larger Bench is rendered prior in point of time or at subsequent stage and the precedential value is determined by virtue of the hierarchical position or the number of Judges delivering the Judgment.

“Given these well settled principles in the realm of law of precedent, the two-Judge Bench in Suhas H. Pophale could not have taken a view contrary to the decisions of the Benches of larger strength of this Court”, it observed.

Positions of Law

The Court held that in view of the law laid down by the Constitution Bench in Ashoka Marketing Ltd. and Another v. Punjab National Bank and Ors. (1990) and the three-Judge Bench decision in M/s. Jain Ink Manufacturing Company v. Life Insurance Corporation of India & Anr. (1980), the view taken in Suhas H. Pophale case which is a two-Judge Bench decision, is palpably incorrect and unjustified and the said case cannot and does not hold the field.

“Since, the propositions laid down in Suhas H. Pophale runs contrary to the decisions laid down by the Benches of larger strength in Ashoka Marketing and M/s. Jain Ink, the same is bad in law. … The ratio decidendi by the Bench of larger strength is binding on the Bench of the smaller strength, irrespective of the fact whether the judgment by the Bench of the larger strength is apriori or posterior, in point of time”, it added.

The Court emphasised that a Bench of the smaller strength cannot mark a departure from the decision of the Bench of larger strength, so as to vary the ratio of the Bench of larger strength, in guise of explaining the decision of the larger Bench.

“It was not permissible for the two Judge Bench in Suhas H. Pophale to interpret the statutes and lay down propositions in conflict with what was laid down by the Constitution Bench in Ashoka Marketing and by a three-Judge Bench in M/s. Jain Ink, when the set of material facts in the background of the controversy dealt with, were similar”, it further said.

The Court remarked that the Bench in Suhas H. Pophale case disregarded the principle of stare decisis and violated the well settled law of precedent.

Conclusion

The Court held that the provisions of PP Act to the extent they cover the premises falling within the ambit of Rent Control Act, override the provisions of the Rent Control Act.

“A person in unauthorised occupation of ‘Public Premises’ under Section 2(e) of the Act cannot invoke the protection of the Rent Control Act. … In cases where the tenanted premises are claimed to be governed by the State Rent Control Act and the same have also become ‘Public Premises’ within the meaning in Section 2(e) of the PP Act 1971, for their unauthorised occupation, the PP Act 1971 will have the application”, it clarified.

The Court also observed that the statutory machinery envisaged under the PP Act, could be activated for recovery of possession of public premises by any Government or public entity mentioned in the definition.

“The PP Act 1971 will apply to the tenancies which may have been created and in existence either before coming into force of the Act or which may have been created subsequent to coming into the force of the Act. … Two conditions must be satisfied for the applicability as above. Firstly, the tenanted premises must fall within the purview of definition under Section 2(e) of the PP Act 1971. Secondly, the premises should have been in unauthorised occupation”, it noted.

Moreover, the Court said that the termination of tenancy of ‘Pubic Premises’ by issuing notice under Section 106 of the TPA is one of the modes which would render the occupation of the tenant unauthorised, post the date specified in such notice and this would hold true in respect of tenancies created before or after coming into force of the PP Act.

“Invocation and applicability of the provisions of the PP Act 1971 is not dependent upon the aspect of possession. What is material is the occupation of the premises which has become unauthorised occupation. The occupation is a continuous concept. … The propositions enunciated in Suhas H. Pophale, as noticed in paragraph 3.3.6 of this judgment, do not, in our considered view, state the correct position of law. The observations made therein, with great respect, are not in consonance with the settled legal principles and runs contrary to the principle of stare decisis and stand overruled to that extent”, it concluded.

Accordingly, the Apex Court answered the Reference.

Cause Title- Life Insurance Corporation of India & Anr. v. Vita (Neutral Citation: 2025 INSC 1419)

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