The Supreme Court vide its judgement dated March 18, 2020, in the case of West Bengal Small Industries Development Corporation Ltd. and Ors. vs. Sona Promoters Pvt. Ltd. and Ors., adjudicated upon the applicability of the West Bengal Government Premises (Tenancy Regulation) Act, 1976 (“Act”) upon a bare land (i.e. land without any structures thereon) let out by government undertakings. 

Brief Facts: 

The West Bengal Small Industries Development Corporation Limited (“Corporation”) had purchased immovable properties including a factory with land belonging to the Bengal Potteries Limited by participating in an auction. The Corporation had become the owner of all the building and structures along with the land appurtenant thereto belonging to the said company. After the purchase of land, the Corporation decided to set up a small-scale industrial zone according to the approved site plan. The Corporation constructed an administrative block in a part of the plot after demolishing the existing structure and wherever necessary, it divided the area into small plots. One of the respondents was allotted three plots of land, which did not contain any structure at the time of lease. 

Whenever an allottee remains a non-starter or its production closes down, after giving reasonable opportunity to re-start/re-open, the plots of land and the structures are resumed by the Corporation. The resumed plots/structures thereafter are re-allotted to other small-scale industries which are in the waitlist. The Corporation terminated the lease of the respondent in accordance with Section 3 of the Act, read with Rule 3(1) of the West Bengal Government Premises (Tenancy and Regulation) Rules, 1976 (“Rules”), for not taking steps for construction of the factory building as required under clauses 2(c) and (g) of the lease deed. 

Issue:

When neither a building nor a part of the building nor a hut nor a part of the hut nor a seat in a room is let out to a tenant but only bare land is let out to a tenant, can such tenancy be regarded as relating to a "Government premises" to attract the provisions of the Act? 

Held:

The Supreme Court held that bare land has not been independently included in the definition of ‘government premises’ (as defined under Section 2(a)) read conjointly with the definition of ‘premises’ (as defined under Section 2(c)). Therefore, 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. Further, it dismissed the contention of the Corporation that the plots leased cannot be treated separately since it is a larger plot of the land containing the building. Furthermore while interpreting the definition of ‘premises’ and ‘government premises’ under the Act, it was held as follows: 

“If we read the definition of "Government premises" appearing in Section 2 of the said Act conjointly with the definition of "premises" appearing in Section 2(c) of the said Act, it not only includes a building or a part of it or a hut or a part of it but also includes a seat in a room, let separately, and also includes the gardens, grounds and out-houses, if any, appurtenant thereto together with the furniture, all fittings and fixtures provided for the use of the tenant in such building, hut or a seat in a room let separately. Thus, when a seat in a room of a Government premises is let out to a tenant, certainly it will be a Government premises. Again, if a seat in a room is let out together with the gardens; grounds and out-houses, if any, appurtenant to a seat in a room, such tenancy will be of a "Government premises"….The expression "includes" is used in two places of the definition of "premises" in Section 2(c) and the expression "includes" which was used for the second time in the said definition without any doubt was included to expand the ambit of "Government premises" so as to attract the provisions of the said Act. The expression "appurtenant to it" carries special significance. We cannot read the definition of "premises" bereft of the expression "appurtenant to it". The expression "appurtenant" in the context means 'relating to', 'usually enjoyed', 'occupied with' or 'adjoining'. Therefore, if a garden, ground, or an out-house is let out along with building or hut or a seat in a room, such a garden, ground or an out-house becomes part of the "premises".”

This update has been contributed by Arka Majumdar (Partner) and Debanik Bid (Associate).