GRANTING no reprieve to the Indian arm of leading Hollywood motion picture producer Paramount Group that was asked to vacate its 6,000 sq ft office premises in Ballard Estate,the Bombay High Court recently ruled that multinational companies (MNCs) “are not required to be protected from rack renting,exploitation and the alleged greed of landlords.”
Paramount Films (PF) of India,registered in the country as a foreign company and incorporated under the laws of Delaware,USA,was served a notice under Maharashtra Rent Control (MRC) Act,1999,dated April 24,2000,by S F Chemicals (SFC),owners of the premises,terminating their tenancy rights and asking them to vacate. PF had rented 4,117 sq ft on the ground floor and 1,855 sq ft on the mezzanine floor of Hague building in Ballard Estate and paid a monthly rent of Rs 7,307.59. PF,however,replied to the notice contending that they were protected by MRC Act.
In 2000,SFC filed a suit in the small causes court seeking possession of the disputed commercial premises. In 2006,the suit was,however,dismissed by the court. SFC moved the appellate court that,in 2009,ruled in its favour and held that PF was not protected under the MRC Act. Aggrieved by the order,PF filed a civil revision application in the High Court in 2010.
PF had contended that section 3 (1) (b) of MRC Act that excludes MNCs from protection under the Act,was applicable to only those companies that have a paid-up share capital of Rs 1 crore or more. As PF’s paid-up share capital is less than Rs 1 crore,it will be protected from eviction as MRC Act will then be applicable to it,they submitted to the court.
Section 3(1) (b) of the Act says the MRC Act is not applicable to premises let or sub-let to “banks or any public sector undertakings or any corporation by or under any central or state Act,or foreign missions,international agencies,multinational companies,and private limited companies or public limited companies having a paid up share capital of Rs 1 crore or more.”
Taking note of the comma and the word “and” that follow the word “multinational companies” in the statute,Justice S C Dharmadhikari cited a Supreme Court judgment that held that “punctuations have their own place in statutory interpretation.”
The court held that the Act was not applicable to MNCs – grouped together with foreign missions and international agencies – irrespective of their paid-up share capital being above Rs 1 crore.
“Their presence in more than one country being undisputed,it is but natural to hold that they have the financial capacity and capability to procure and purchase or afford the rates of immovable property prevailing in the market,” Justice Dharmadhikari ruled.
“They (MNCs) cannot complain economic exploitation because of their financial and other resources,” he added.
The court,however,said its order should not be executed for 12 weeks,granting time to PF to move the higher court.
No reprieve for paramount films
Paramount Films (PF) of India,registered in the country as a foreign company and incorporated under the laws of Delaware,USA,was served a notice under Maharashtra Rent Control (MRC) Act,1999,dated April 24,2000,by S F Chemicals (SFC),owners of the premises,terminating their tenancy rights and asking them to vacate. PF had rented 4,117 sq ft on the ground floor and 1,855 sq ft on the mezzanine floor of Hague building in Ballard Estate and paid a monthly rent of Rs 7,307.59. PF,however,replied to the notice contending that they were protected by MRC Act
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