Paragraph numbers below are the court’s original numbering, recovered from the source text.
9. In Kashi Nath (Dead) through L.Rs. v. Jaganath, (2003) 8 SCC 740, this Court held that "where the evidence is not in line of the pleadings and is at variance with it, the said evidence cannot be looked into or relied upon." Same remain the object for framing the issues under Order NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 491 BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.] XIV CPC and the. court should not decide a suit on a matter/ point on which no issue has been framed. (Vide: Biswanath Agarwal/a v. Sabitri Bera & Ors., (2009) 15 SCC 693; and Kalyan Singh Chouhan (supra).
10. In Syed and Company & Ors. v. State of Jammu & 8 Kashmir & Ors., 1995 Supp (4) SCC 422, this Court held as under: "Without specific pleadings in that regard, evidence could not be led in since it is settled principle of law that no amount of evidence can pe looked unless there is a C pleading. Therefore, without amendment of the pleadings merely trying to lead evidence is not permissible."
11. In Chinta Lingam & Ors. v. The Govt. oflndia & Ors., AIR 1971 SC 474, this Court held that unless factual foundation has been laid in the pleadings no argument is permissible to be raised on that particular point.
12. In J. Jermons v. Aliammal & Ors, (1999) 7 SCC 382, . while dealing with a similar issue, this Court held as under: "…… there is a fundamental difference between a case of raising additional grounds based on the pleadings and the material available on record and a case of taking a new plea not borne out of the pleadings. In the former case no amendment of pleading is required, whereas in the latter it is necessary to amend the pleadings … The respondents cannot be permitted to make out a new case by seeking permission to raise additional grounds in re.vision."
13. In view of the above, the law on the issue stands crystallised to the effect that a party has to take proper pleadings and prove the same by adducing sufficient evidence. No evidence can be permitted to be adduced on a issue unless factual foundation has been laid down in respect of the same.
14. There is no quarrel to the settled legal proposition that a new plea cannot be taken in respect of any factual controversy whatsoever, however, a new ground raising a pure legal issue for which no inquiry/proof is required can be permitted to be raised by the court at any stage of the B proceedings. (See : Mis Sanghvi Reconditioners Pvt. Ltd. v. Union of India & Ors., AIR 2010 SC 1089; and Greater Mohali Area Development Authority & Ors. v. Manju Jain & Ors., AIR 2010 SC 3817).
15. The questions do arise as to whether in the facts and C circumstances of this case the Government is a tenant or the appellant can be termed as "Government" or "Government Department" or "agent" of the Central Government in thE? context of the Act 1999. The Government loosely means the body of persons authorized to administer the affairs of, or to govern, a State. It commands and its decision becomes binding upon the members of the society. Government includes, both the Central Government as well as the State Government. The government E is impersonal in character having three independent functionaries as its branches. It performs regal and sovereign functions, which are not alienable to any other person, e.g. defence, security, currency etc. Government means a group of people responsible for governing the country. It consists of the F activities, methods and principles involved in governing a country or other political unit. The Government is a body that governs and exercises control by issuing directions and is not governed by any other agency. It is a body politic that formulates policies and the laws G by which a civil society is controlled. It is a political concept formulated to rule the nation. It is not a profit and loss establishment. "From the legal point of view, government may be described as the exercise of certain powers and the performance of certain duties by public authorities or officers, NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 493 BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.) together with certain private persons or corporations exercising public functions." Thus, Government Department means something purely fundamental, i.e. relating to a particular government or to the practice of governing a country. It has different Wings. However, the expression 'Government' may be required to be interpreted in the context used in a particular Statute. The expression denotes the Executive and not the Legislature. (Vide: State of Rajasthan & Anr. v. Sripal Jain, AIR 1963 SC 1323; P<Ishupati Nath Sukut v. Nern Chandra Jain & Ors., AIR 1984 SC 399; R.S. Nayak v. A.R. Antulay, AIR 1984 SC 684; and V.S. Mallimath v. Union of India & Anr., AIR 2001 SC 1455)
16. To perform the functions, the Government has its various departments and to facilitate its working, the Government itself may be divided into various Sections. To carry out the commercial activities by the State, the Corporations have been established by enactment of Statutes and the "p'ower to charter Corporations is incidental to or in aid of Governmental functions." Such Corporations would ex- hypothesis be agencies of the Government. (Vide : Sukhdev Singh & Ors. v. Bhagatram Sardar Singh Raghuvanshi & Anr., AIR 1975 SC 1331; and Ramana Dayaram Shettyv. The International Airport Authority of India & Ors., AIR 1979 SC 1628).
17. Banks and Financial institutions carrying out financial transactions, are independent to do business subject to the regulatory laws made by the legislature. They are not under the direct executive control of the government. They are profit and loss earning organisations coupled with all connected financial and economic activities. They are a body corporate with a limited role to play and do not "govern~· people as understood by governance. (See: Federal Bank Ltd. v. Sagar Thomas & Ors., AIR 2003 SC 4325). c
18. In State of Punjab & Ors. v. Raja Ram & Ors., AIR 1981 SC 1694, this Court considered the provisions of the Food Corporation Act, 1964 and held that Food Corporation of India was not a Government department but a Government Company. The Court observed : "A Government department has to be an organisation which is not only completely controlled and financed by the Government but has also no identity of its own. The money earned by such a department goes to the exchequer of the Government and losses incurred by the department are losses of the Government. The Corporation, on the other hand, is an autonomous body capable of acquiring, holding and disposing of property and having the power to contract. It may also sue or be sued by its own name and the Government does not figure in any litigation to which it is a party." (See also: The State of Bihar v. The Union of India & Anr., AIR 1970 SC 1446; S.S. Dhanoa v. Municipal Corporation Delhi & Ors., AIR 1981 SC 1395; K. Jayamohan v. State of E Kera/a & Anr., (1997) 5 SCC 170; Hindustan Steel Works Construction Ltd. v. State of Kera/a & Ors., AIR 1997 SC 2275; Mohd. Hadi Raja v. State of Bihar & Anr., AIR 1998 SC 1945; and State through Narcotics Control Bureau v. Ku/want Singh, AIR 2003 SC 1599).
19. In Food Corporation of India v. Municipal Committee, Ja/a/abad & Anr., AIR 1999 SC 2573, this Court considered the case of imposition of house tax under the provisions of the Punjab Municipalities Act, 1911 and held that Food Gorporation of India was a Government Company and not a Government G Department – a distinct entity from Central Gov~mment. Thus, was not entitled to exemption from tax under !.rticle 285 of the Constitution. While deciding the said case, reliance had been placed by the Court on its earlier judgment in Mis. Electronics Corporation of India Ltd., etc. etc. v. Secretary, Revenue NATIONAL TEXTILE CORPORATION LTD. v. 1-JARESHKUMAR 495 BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.] Department, Government of Andhra Pradesh & Ors., etc. etc., AIR 1999 SC 1734.
20. In AK. Binda/ & Anr. v. Union of India & Ors., (2003) 5 SCC 163, this Court clarified: "The legal position is that identity of the government company remains distinct from the Government. The government company is not identified with the Union but has been placed under a special system of control and conferred certain privileges by virtue of the provisions contained in Sections 619 and 620 of the Companies Act. Merely because the entire shareholding is owned by the Central Government will not make the incorporated company as Central Government. …. " (Emphasis added) o
21. In Southern Roadways Ltd., Madurai v. S.M. Krishnan, AIR 1990 SC 673, this Court examined an issue whether the possession of the agent can be termed to be the possession of the principal for all purposes including the acquisition of title and held that agent who receives property from or for his principal, obtains no interest for himself in the property for the reason that possession of the agent is the possession of the principal and in view of the fiduciary relationship the agent cannot claim his own possession. While deciding the said case reliance was placed on various earlier judgments including Smt. Chandrakantaben v. Vadi/al Bapalal Modi, AIR 1989 SC 1269. In Prem Nath Motors Ltd. v. Anurag Mittal, AIR 2009 SC 569, this Court dealt with the relationship of agent and principal and held that in view of the provisions of Section 230 of the Indian Contract Act 1872 (hereinafter called the 'Contract Act'), an agent is not liable for the acts of a disclosed principal Sl!bject to a contract to the contrary. Where the relationship of principal and agent is established the agent cannot be sued when the A principal has been disclosed. (See also: Vivek Automobiles Ltd. v. Indian Inc., (2009) 17 SCC 657). c Thus, it was made clear that suit does not lie against an agent where the principal is known or has been disclosed. The appellant may be called 'agency' or 'instrumentality' of the Central Government for a limited purpose, namely to label it to be the "State" within the ambit of Article 12 of the Constitution. (See: Pradeep Kumar Biswas v. Indian Institute of Chemical Biology & Ors., (2002) 5 SCC 111). However, even by stretch of imagination, the appellant cannot be held to be an 'agent' of the Central Government as defined under Section 182 of the Contract Act.
22. Thus, if the aforesaid settled legal principles are applied to the appellant, it becomes evident that appellant is neither the government nor the department of the government, but a Government Company. Appellant cannot identify itself with the Central Government. The submission made by Mr. Tripathi that appellant is merely an agent of the Central Government is E not worth consideration at all for the simple reason that rights vested in the appellant stood crystallised after being transferred by the Central Government. Appellant is being controlled by the provisions of the Act 1995 and not by the Central Government. Whereas an agent is merely an extended F hand of the principal and cannot claim independent rights.
23. Section 3 (1) (a) & (b) provide for exemption from the application of the Act 1999. This Court examined the validity of provisions of Section 3(1) (a) and (b) of the Act 1999 in G Saraswat Coop. Bank Ltd. & Anr. v. State of Maharashtra & Ors., (2006) 8 sec 520 and came to the conclusion that it was within the exclusive domain of the legislature to decide which section of tenants should be afforded protection on the basis of economic criteria. If a particular section of tenants is not H protected considering their economic conditions it can be held NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 497 BADRIKUMAR JAGAD [DR. 8.S. CHAUHAN, J.) to be a reasonable classification and making such distinction -.is valid. The exclusion of premises let or sub-let to banks or any public sector undertaking or any corporation established by or under any Central or State Act or foreign missions, international agencies, multinational companies and private and public limited companies having paid up share capital of rupees one crore or more could not be held to be arbitrary. The Court further held that the provisions of Section 3(1 )(b) are applicable to all premises whether let out before or after commencement of the Act 1999.
24. In Leelabai Gajanan Pansare & Ors. v. Oriental Insurance Company Ltd. & Ors., (2008) 9 SCC 720, this Court dealt with the same issue as which of the categories of tenants have been excluded from the operation of the Act 1999 and held as under: "Therefore, we are of the view that on a plain meaning of the word "PSUs" as understood by the legislature, it is clear that, India's PS Us are in the form of statutory corporations, public sector companies, government companies and companies in which the public are substantially interested (see the Income Tax Act, 1961). When the word PSU is mentioned in Section 3(1 )(b), the State Legislature is presumed to know the recommendations of the various Parliamentary Committees on PSUs. These entities are basically cash-rich entities. They have positive net asset value. They have positive net worths. They can afford to pay rents at the market rate …….. vw'e r.:ild tr,c;t Section 3(1)(b) c clearly applies to different categories of tenants, all of whom are capable of paying rent at market rates. Multinational companies, international agencies, statutory corporations, government companies, public sector companies can certainly afford to pay rent at the market rates. This thought is further highlighted by the last category in Section 3(1){b). Private limited companies and public limited companies having a paid-up share capital of more than Rs 1,00,00,000 are excluded from the protection of the Rent Act. This further supports the view which we have taken that each and every entity mentioned in Section 3(1)(b) can afford to pay rent at the market rates." (Emphasis added) (See also: D.C. Bhatia & Ors. v. Union of India & Anr., (1995) 1 sec 104).
25. The case stands squarely covered by the judgment of c this Court in Leelabai Gajanan Pansare (supra) so far as the issue of exemption to the Act 1999 is coricerned.
26. Section 3(1) and (2) of the Act 1995 reads as under: "3(1) On the appointed day, the right, title and interest of the owner in relation to every textile undertaking shall stand transferred to and shall vest absolutely in, the Central Government. (2) Every textile undertaking which stands vested in the Central Government by virtue of sub-section (1 ), shall immediately after it has so vested, stand transferred to, and vested in, the National Textile Corporation." (Emphasis added) The aforesaid provisions require construction giving proper F meaning to the expression 'vesting'. 27. 'Vesting' means having obtained an absolute and indefeasible right. It refers to and is used for transfer or conveyance. 'Vesting' in the general sense, means vesting in G possession. However, 'Vesting' does not necessarily and always means possession but includes vesting of interest as well. 'Vesting' may mean vesting in title, vesting in possession or vesting in a limited sense, as indicated in the context in which it is used in a particular provision of the Act. Word 'Vest' has H different shades, taking colour from the context in which it is NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 499 BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.] used. It does not necessarily mean absolute vesting in every A situation and is capable of bearing the meaning of a limited vesting, being limited, in title as well as duration. Thus, the word 'vest' clothes varied colours from the context and situation in which the word came to be used in the statute. The expression 'vest' is a word of ambiguous import since it has no fixed connotation and the same has to be understood in a different context under different set of circumstances. (Vide: Fruit & Vegetable Merchants Union v. Delhi Improvement Trust, AIR 1957 SC 344 ; Maharaj Singh v. State of Uttar Pradesh & Ors., AIR 1976 SC 2602; Municipal Corporation of Hyderabad v. c P.N. Murthy & Ors., AIR 1987 SC 802; Vatticherukuru Village Panchayat v. Nori Venkatarama Deekshithulu & Ors., 1991 Supp. (2) SCC 228; Dr. M. Ismail Faruqui etc. v. Union of India & Ors., AIR 1995 SC 605; Government of A.P. v. H.E.H. The Nizam, Hyderabad, (1996) 3 SCC 282; K. V. Shivakumar & D Anr. v. Appropriate Authority & Ors., (2000) 3 SCC 485 ; Municipal Corporation of Greater Bombay & Ors. v. Hindustan Petroleum Corporation & Anr., AIR 2001 SC 3630 ; and Sulochana Chandrakant Galande v. Pune Municipal Transport & Ors., (2010) 8 SCC 467). 28. The Act 1995 has been brought for providing the acquisition and transfer of the rights, title and interest of the owners in respect of the textile undertakings. Respondents had not been the owner of the textile undertaking. They had rented out the premises to Poddar Mills and what had vested in the Central Government was only the right, title and interest of the Poddar Mills and nothing else. The Poddar Mills was having only right in tenancy in the suit premises. The owner had been defined in clause (g) of Section 2 of the Act 1995, taking into consideration the expression in relation to textile undertaking G as a proprietor or lessee, or occupier of the textile company undertaking. It included even the receiver and liquidator where the companies had gone under liquidation. Textile undertaking has been defined in Section 2(m) which means undertaking specified in column (2) of the First Schedule to the Act 1995 H A i.e., the textile undertakings, management of which had been taken over by the Central Government under the Act 1983. The First Schedule included Poddar Mills at SI. No.9 and Poddar Mills had been paid compensation to the tune of Rs.7,46,30,000. Nothing has been paid so far as respondent B No.1 is concerned. Sub-section (6) of Section 4 of the Act 1995 provides that any suit, appeal or other proceedings of whatever nature in relation to any property which had vested in the Central Government under Section 3 on the appointed day, instituted or preferred by or against the textile company is pending, the c same shall not abate or adversely affect the rights of the parties by reason of the transfer of textile undertaking. Thus, the commencement of the Act 1995 does not really affect even the pending cases. In view thereof, it is beyond our imagination as how the Act 1995 would prejudice the cause of the respondents 0 in the proceedings which arose subsequent to the commencement of this Act. 29. It is not permissible for the appellant to canvass that the Central Government has any concern so far as the tenancy rights are concerned. Right vested in the Central Government E stood transferred and vested in the appellant. Both are separate legal entities and are not synonymous. The appellant being neither the government nor government department cannot agitate that as it has been substituted in place of the Central Government, and acts merely as an agent of the Central F Government, thus protection of the Act 1999 is available to it. Appellant cannot be permitted to say that though a// the rights vested in it but it merely remained the agent of the Central Government. Acceptance of such a submission would require interpreting the expression 'vesting' as holding on behalf of G some other person. Such a meaning cannot be given to the expression 'vesting'. It is a settled legal proposition that an agent cannot be sued where the principal is known. In the instant case, the H appellant has not taken plea before either of the courts below. NATIONAL TEXTILE CORPORATION LTD. v. NARESHKUMAR 501 BADRIKUMAR JAGAD [DR. B.S. CHAUHAN, J.] In view of the provisions of Order VIII Rule 2 CPC, the appellant was under an obligation to take a specific plea to show that the suit was not maintainable which it failed to do so. The vague plea to the extent that the suit was bad for non-joinder and, thus, was not maintainable, did not meet the requirement of law. The appellant ought to have taken a plea in the written statement that it was merely an 'agent' of the Central Government, thus the suit against it was not maintainable. More so, whether A is an agent of B is a question of fact and has to be properly pleaded and proved by adducing evidence. The appellant miserably failed to take the required pleadings for the purpose. c 30. Thus, in view of the above, we reach the inescapable conclusion that appellant is not entitled for exemption under Section 3(1 )(a) or 3(1 )(b) of the Act 1999. Nor can it claim the status of an 'agent' of the Central Government. Submissions advanced on behalf of the appellant are preposterous. Facts and circumstances of the case do not warrant review of the impugned judgment. However, considering the nature of business pf the appellant, it is in the interest of justice that appellant be given time upto 31.12.2013, to vacate the premises. Appellant shall file a usual undertaking within four weeks from today to hand over peaceful and vacant possession to .the respondent No.1. With the aforesaid observation, appeal stands dismissed. B.B.B. Apppeal dismissed.