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Khairatabad, Hyderabad, Telangana, 500004
Khairatabad, Hyderabad, Telangana, 500004

Kosha Doshi | Symbiosis Law School, Pune | 22nd March 2020

West Bengal Small Industries Development Corporation Ltd. v. M/s. Sona Promoters Pvt. Ltd. [Civil Appeal No. 2201 of 2020]

Facts:

            The appellant, West Bengal Small Industries Development Corporation Ltd. is engaged in small scale industries of West Bengal. It is a government company established under Section 617 of the Companies Act, 1956. The entire shareholding of the company vested with State, in addition to this the directors which were appointed were from the State Government. Registered small scale industries would apply to this corporation for allotment and the same was done in regard with the concessional rates. The West Bengal Small Industries Development Corporation Ltd. further provided assistance in setting up and establishment of the small-scale industries. 

            Bengal Potteries Ltd., a company which had been liquidated was put on auction by the Kolkata High Court orders. The West Bengal Small Industries Development Corporation Ltd. participated in the same auction and became the owner of the buildings, structures and assets. The West Bengal Small Industries Development Corporation Ltd. set up small scale industrial zone which were planned and sanctioned by the authorities. 

            The structure was demolished and construction work started, soon after three plots were given on lease by the West Bengal Small Industries Development Corporation Ltd. to the respondent under the West Bengal Government Premises (Tenancy & Regulation) Rules, 1976. On the 10th of October, 2012 the West Bengal Small Industries Development Corporation Ltd. issued show cause notice why the tenancy should not be terminated for violation of terms of lease. The notice was issued which instructed the company to vacate within 30 days. The respondent appealed before the Managing Director of the company but while the appeal was pending the appellant filed a writ petition seeking termination of the notice. 

Issue:

            Whether the Corporation is regarded as a government undertaking to attract applicability of provisions? And whether premises owned by Corporation and let out to respondent are government premises under Section 2 (a) of the Act?

Judgment:

The case decided on the 18th of March, 2020 stated that if bare land is let out by the government and/or the government undertaking to its tenant, the incidence of such tenancy cannot be governed by the provisions of the Act and as such a tenant cannot be evicted by taking aid of the provisions of the Act. The bench comprising of Justice Abdul Nazeer and Justice Deepak Gupta stated that since all the shares are owned by the government and the entire administrative control lays with the government, the corporation is a government undertaking under Section 2 (b) of the Act.

Under Section 2(a) of the Act, government premises are defined and this does not include any official residence of any person authorized to occupy the land. It was held that the eviction proceedings initiated by the West Bengal Small Industries Development Corporation Ltd. under the act were without jurisdiction. Finally concluding that the government and/or the government undertaking to its tenant, the incidence of such tenancy cannot be governed by the provisions of the Act and as such a tenant cannot be evicted by taking aid of the provisions of the Act.

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