CARONA LTD. versus M/S PARATHY SWAMINATHAN & SONS

Citation: [2007] 10 S.C.R. 656 · Decided: 05-10-2007 · Supreme Court of India · Bench: C.K. THAKKER · Disposal: Dismissed

Cited by 2 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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A 
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CARONALTD. 
v. 
MIS P ARV A 11IY SW AMINA THAN & SONS 
B 
OCTOBER 5, 2007 
[C.K. THAKKERANDP.SATHASIVAM,JJ.] 
Maharashtra Rent Control Act, 1999-s. 3(J)(b)-Applicability 
c of-Tenant a company having paid up capital share of more than Rs. 
one crore-Suit for eviction before regular Court-On the ground of 
default in payment of rent-Tenant-company reducing its paid up 
capital share to less than Rs. one crore, subsequent to institution of 
suit-Trial court passing decree, holding thats. 3(J)(b) was not 
D applicable-Confirmed by appellate court as well as High Court-
After interim order of Supreme Court partial payment of rent-Plea 
that the trial court did not have the power to decide the case in absence 
of jurisdictional fact of 'paid up capital '-Held: Eviction decree was 
rightly passed-Section 3(1)(b) is not applicable to the present case, 
E as the jurisdictional fact of 'paid up capital' was existing on the date 
of termination of tenancy and institution of suit-The subsequent 
unilateral act of reduction of paid up capital by tenant would not take 
away the accrued right inf avour of Landlord-In the facts of the case, 
tenant is also not entitled to equitable relief-Rent Control and 
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F Eviction-Constitution of India, 1950-Article 136. 
Code of Civil Procedure, 1908- 'Jurisdictional fact' and 
'adjudicatory fact '-Distinction between. 
Jurisdiction-Jurisdiction of Court/Tribunal-Held: A Court can 
G decide the issues of a case only if the jurisdictional fact exists. 
A_ ... 
Subsequent Events_;_Effect of-Held: An accrued right by virtue 
of existingfact at the time of institution of suit cannot be put at naught 
by a subsequent event. 
H 
656 
CARONAL TD. v. MIS. PARV ATHYSWAMINATHAN & 
657 
SONS 
Respondent-landlord had let out the premises in question to the A 
appellant-tenant (a Public Limited Company having a paid up share 
capital of more than rupees one crore). Applicability ofMaharashtra 
Rent Control Act, 1999 was exempted to such tenants by Section 
3(1 )(b) thereof. Due of default in payment of rent, landlord gave a 
notice to the tenant on .23.2.2001 determining the tenancy w.e.f. B 
31.3.2001. Since the premises was not vacated, landlord filed a suit 
~ 
for eviction before Small Causes Court. It also prayed for payment 
of mesne profits. Subsequent to filing of suit Tenant Company passed 
a resolution to reduce the paid up share capital to less than Rs. one 
crore. But the said resolution was never approved by BIFR. Trial c 
Court passed decree of eviction-holding that provisions of the Act 
were not applicable to the suit premises. The same was confirmed 
by a Bench of Small Causes Court in appeal and by High Court in 
Writ Petition.On interim order of this Court, the tenant deposited 
part payment in the Court. 
D 
Appellant-tenant contended that in view of pendency of the 
question regarding constitutional validity of Section 3(1 )(b) of the 
Act, the matter should not have been decided by the courts below; 
that even if constitutionality thereof was assumed, it was not 
applicable to the present case, the company having its paid up capital E 
less than Rs. one crore; that the landlord should have made out the 
grounds under the Act for eviction; that the fact of 'paid up capital' 
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being a 'jurisdictional fact' and in absence thereof, the Court had 
no power to deal with and decide the matter; and that the proceedings 
could not have continued as the same stood suspended in view of F 
Section 22 of Sick Industrial Companies Act, 1985, the Company 
being a sick company. 
Respondent-landlord interalia contended that constitutional 
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A--
validity had been covered by decision of High Court; that subsequent G 
resolution of the Company reducing the share capital to less than 
Rs. one crore would not deprive the owner to the 'right accused' as 
the 'jurisdictional fact' was very much in existence at the time of 
initiation of the proceedings; and that the appeUant was not entitled 
even to any equitable relief. 
H 
658 
SUPREME COURT REPORTS 
[2007] 10 S.C.R. 
A 
Dismissing the appeal, the Court 
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HELD: 1. All the Courts were, right in holding that the 
provisions of the Rent Act were not applicable to the present case. 
It is an admitted fact that the appellant-tenant is a Public Limited 
B Company having a paid up share capital of more than one crore 
rupees. The Courts below considered the contention as to 
constitutional validity of clause (b) of Section 3(1) of Mahar

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