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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  1696        OF 2016 [Arising out of Special Leave Petition (C) No.23066 of 2013]  

SUBHASH CHANDRA ...APPELLANT

VERSUS

GULAB BAI & ORS. ...RESPONDENTS

WITH

CIVIL APPEAL NO.   1697            OF 2016 [Arising out of Special Leave Petition (C) No.32048 of 2013]  

SUBHASH CHANDRA ...APPELLANT

VERSUS

GULAB BAI & ORS. ...RESPONDENTS

J U D G M E N T

T.S. THAKUR, CJI.

 1. Leave granted.

2. The short question that falls for determination in these

appeals is whether a retired Municipal Corporation employee

can also maintain an application for eviction under Chapter

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III-A of  the  Madhya Pradesh Accommodation  Control  Act,

1961 and, in particular, whether any such ‘retired employee’

is an employee of a  ‘company owned or controlled by the

State Government’ within the meaning of Section 23-J(ii) of

the Act aforementioned.  A Full Bench of the High Court of

Madhya Pradesh at Indore has by a 2:1 decision answered

the said question in the negative and declared that ‘retired

employees’ of  Municipal  Corporation  will  not  be  covered

under Section 23-J (ii) of the Act to maintain an application

for eviction under Chapter III-A thereof.

3. We have heard Mr. Subhash Samvatsar, learned senior

counsel for the appellant and Mr. S.K. Dube, learned senior

counsel appearing as  Amicus on behalf of the respondents.

We also had the advantage of going through the judgment

and  order  under  challenge  and  several  other  decisions

rendered  by  the  High  Court  of  Madhya Pradesh  including

those  rendered in  Ranjit  Narayan Haksar  v.  Surendra

Verma  (1995  MPLJ  21) and  Ghanshyam v.  Subhash

[ILR (2011) MP 2586].   

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4. In Ranjit Narayan’s case (supra) a Division Bench of

the High Court of Madhya Pradesh was examining whether

Madhya  Pradesh  State  Road  Transport  Corporation  was  a

‘company owned or controlled by the State Government’ so

as to entitle any employee who retired from its service to

maintain  an  eviction  petition  under  Chapter  III-A  of  the

Madhya  Pradesh  Accommodation  Control  Act,  1961.

Answering the question in the affirmative,  the High Court

held that keeping in view the objects and reasons and the

scheme  of  the  Act,  especially  the  scheme  underlying

Chapter-IIIA  thereof,  the  expression  ‘company  owned  or

controlled by the State Government or Central Government’

must be understood to include even statutory corporations

like the Madhya Pradesh State Road Transport Corporation

established under the State Road Corporation Act.  The High

Court  while  saying  so,  approved  the  ratio  in  Vipin  v.

Ranajitnarayan and Ors.  (1986 MPRCJ Note 11) while

overruling  the  decision  in  Sobhagyamal  v.  Prakash

Pharmaceuticals, Indore (AIR 1990 MP 345).

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5. In  a  Special  Leave  Petition  filed  against  the  said

judgment and order, this Court by a short order affirmed the

reasoning and the view taken by the High Court.  This Court

observed:

“We agree with the view taken by the Division Bench that the word ‘company’ in Section 23(J)(ii)  would include  ‘Corporation’  created  under  the  special Statute which is owned or controlled by the Central or  the  State  Government.   Hence,  the  S.L.P.  is dismissed.” (Surendra Verma v. Ranjeet Narayan Haksar: 1995 JLJ 460)

6. Ghanshyam (supra) is a Single Bench decision of the

High Court of Madhya Pradesh where the question which fell

for  consideration  was  whether  a  retired  Municipal

Corporation  employee  could  maintain  an  application  for

eviction  under  Section  23-A(b)  of  the  Madhya  Pradesh

Accommodation Control Act, 1961. The High Court answered

the  said  question  in  the  affirmative  and  dismissed  the

revision  petition  filed  before  it.  Reliance  in  support  was

placed by the High Court upon a Division Bench decision in

Ranjit  Narayan  Haksar (supra).  The  Court  held  that

Municipal  Corporation  was  a  statutory  corporation  on

account of its constitution under Section 7 of the Madhya

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Pradesh Municipal Corporation Act, 1956 and that Chapter

XXXIV of the Act contains several provisions which empower

the  State  Government  to  exercise  control  over  it.   Such

being  the  case,  the  retired  employee  of  the  Municipal

Corporation was a landlord within the meaning of Section

23-J(ii) of the Act declared the Court.  The contrary decision

delivered by the Single Bench of that Court in Mohan Das

v. Deven Das [1994 (1) MPJR 259] was held to have

been impliedly  overruled by the pronouncement in  Ranjit

Narayan Haksar’s case (supra). A Special  Leave Petition

filed against the decision was dismissed by this Court by a

non-speaking order.

7. In the case at  hand the question  whether  a  ‘retired

employee’ of  the  Municipal  Corporation  can  maintain  an

eviction petition under Chapter III-A appears to have arisen

once again before the High Court which was referred to a

Full  Bench  of  the  High  Court  for  an  authoritative

pronouncement.   The Full Bench has, by majority, taken the

view that such an employee is not covered under Section

23-J(ii) of the Act so as to entitle him to maintain an eviction

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petition under Chapter-IIIA thereof.  The majority judgment

draws  a  distinction  between  the  fact  situation  in  Ranjit

Narayan  Haksar’s  case  (supra)  and  observes  that  the

Court was not in that case concerned with the status of a

retired employee of the Municipal Corporation or his right to

maintain  an  eviction  petition.  The  decision  in  Ranjit

Narayan  Haksar’s case  (supra)  was,  therefore,  of  no

assistance, declared the majority view. The minority view,

however,  relied  upon  Ranjit  Narayan  Haksar’s  case

(supra)  and  held  that  Municipal  Corporation  is  an

instrumentality  of  the  State  over  which  the  State

Government  exercises  its  control  not  only  touching  its

constitution but the conduct of its business also.

8. Having heard learned counsel for the parties at some

length we are of the view that the matter deserves to be

referred  to  a  larger  Bench  of  three  Judges  for  an

authoritative  pronouncement  on  the  subject.   We say  so

because  Ranjit  Narayan  Haksar (supra)  dealt  with  the

case of an employee of a trading corporation like the Madhya

Pradesh  State  Road  Transport  Corporation.   A  Municipal

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Corporation  is,  however,  not  a  trading  corporation.  Such

corporations  have  in  the  Indian  context,  a  constitutional

status inasmuch as Chapter IX-A of the Constitution of India

provides for establishment of Municipalities as institutions of

local self-Government. Article 243-Q envisages a Municipal

Corporation for a larger area.  The provision mandates the

State  to  establish  Municipalities/  Corporations  depending

upon  the  size  of  the  area  comprising  such  units  of  local

self-Government.  Having  regard  to  the  nature  of  the

functions which the Corporations discharge in terms of the

constitutional  scheme  and  the  scheme  of  the  Municipal

Corporation Act, there can be no manner of doubt that such

Corporations  are  distinctly  different  from  trading

corporations  or  companies.  The  question  that  would,

therefore, arise is whether Section 23-J(ii) was intended to

benefit  employees  of  trading  companies  or  corporations

alone  or  was  such  benefit  also  meant  to  be  available  to

Municipal Corporations which are in terms of their activities

materially different from trading companies or corporations.

If the answer be in the negative the incidental question that

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may require  to  be  examined  would  be  whether  the  term

‘company owned or controlled by the State Government or

Central Government’ appearing in the statute deserves an

expansive and liberal interpretation to save the same from

being declared unconstitutional. That is because even when

employees of Municipalities or Municipal Corporations  may

not be government employees or employees of a company

owned or controlled by the State within the meaning of the

statute and even when the classification between the State

Government  employees  and employees  of  Companies  and

Corporations owned or controlled by the State Government

on the one hand and those of Municipal Corporation on the

other may be an intelligible classification, yet, there may be

no nexus between such classification and the object sought

to  be  achieved  by  the  statute.  The  object  underlying

Chapter-IIIA, there is no gainsaying, is to make it easier for

retired  government  employees  and  employees  of

Corporations owned or controlled by the government to get

their  properties  vacated from the tenants or occupants of

the  same.  If  that  be  the  so,  there  is  no  reason  why

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employees  of  Corporations  that  are  discharging

governmental functions or functions akin thereto should be

deprived of  that  benefit.  It  may be difficult  to justify  the

refusal  of  benefit  or  discover  a  nexus  between  the

classification as suggested by the majority judgment and the

object sought to be achieved by the legislation. All told, the

issues are not only interesting but substantial having regard

to the conflict  in pronouncements and the inferences that

can  be  drawn  from  the  orders  passed  by  this  Court  in

Ranjit  Narayan  Haksar’s and  in  Ghanshyam’s cases

(supra).   We accordingly  refer  these  appeals  to  a  larger

Bench.  Papers be placed before Hon’ble the Chief Justice of

India for constitution of an appropriate Bench.  

................................CJI        (T.S. THAKUR)

…………………….…..…J.        (KURIAN JOSEPH)

NEW DELHI; FEBRUARY 24, 2016.

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