No HC relief for khadi commission in tenancy case

In a setback to the Khadi and Village Industries Commission (KVIC),the Bombay High Court recently turned down its revision application contesting its eviction from a 9,000-sq ft godown in Mahalaxmi and held that it is not protected under the Maharashtra Rent Control (MRC) Act,1999.

Written by MAYURA JANWALKAR | Published: April 1, 2013 3:13:58 am

In a setback to the Khadi and Village Industries Commission (KVIC),the Bombay High Court recently turned down its revision application contesting its eviction from a 9,000-sq ft godown in Mahalaxmi and held that it is not protected under the Maharashtra Rent Control (MRC) Act,1999.

Justice S C Dharmadhikari observed,“It is not the object and purpose for which the corporation has been established which is relevant but it is the financial capacity and capability and whether it needs protection of a social and beneficial legislation like MRC Act.”

The owner of the godown,Ila Dalmia,had entered into an agreement with KVIC,leasing the premises in the Dalmia compound on P Moses Road. KVIC paid a monthly rent of Rs 777.31. In 1988,Dalmia executed a sale agreement with one M/s Suresh Estates.

Dalmia passed away in 2003.

The company,which went through a series of litigation over its right over the property,terminated the tenancy of KVIC in June 2007 and asked them to hand over the premises.

KVIC contested their notice and filed a suit against Dalmia’s legal heirs contending that their tenancy would be protected under the Maharashtra Rent Control (MRC) Act,1999.

KVIC moved the small causes court stating that their tenancy was accepted by the state government and neither M/s Suresh Estates nor the Dalmias had the right to revoke it. The small causes court and the lower appellate court had ruled against KVIC.

Contesting the decisions in the High Court,KVIC said the lower courts had erred in holding that it is not protected under section 3 (1) (b) of the MRC Act. Section 3(1) (b) of the Act states that 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 rupees one crore or more”.

KVIC stated that it is not a corporation established under any state or central act but a commission established under the Khadi and Village Industries Commission Act,1956.

“To term such an institution a Corporation and exclude it from a beneficial and social legislation like the MRC Act would be defeating and frustrating its object and purpose completely,” their counsel submitted.

The Dalmias’ counsel argued that KVIC had all the facets of a business enterprise and said “the cherished ideals of the freedom struggle and principles so also the message of the father of the nation are long forgotten”. Their counsel said that if KVIC truly respected Gandhi,they should have avoided fighting in courts as Gandhi was an advocate of adalat mukti (freedom from courts). The court,however,did not comment on their submissions.

Justice Dharmadhikari wrote in his order,“If it is found to be not just cash-rich but able to afford payment of rent at market rate because of its financial capability,then,merely because KVIC is named as a ‘Commission’ does not mean that it is not a corporation established under a law by the central or state government.”

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