Bombay High Court: Protection Granted to Long-Standing Occupants of Railway Premises for Over 30 Years; Eviction Notices Quashed as Railways’ Action Deemed Arbitrary for Lacking Subjective Satisfaction under Public Premises Act

Court’s Decision

The Bombay High Court ruled in favor of the petitioners, setting aside eviction orders issued by the Estate Officer under the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (PPE Act). The court stayed the effect and execution of these eviction orders until the final disposal of the appeals pending before the Principal District & Sessions Judge, Chandrapur. It emphasized that government actions must adhere to principles of fairness, justice, and public interest.

The High Court directed the appellate court to decide the appeals within three months and allowed the petitioners to remain in possession of their respective shops in the interim.

Facts

1. Background:
   • The petitioners had been in occupation of shops located in the Ballarpur Railway Station complex for over 30 years.
   • These premises were originally leased to third parties, who transferred their rights to the petitioners or their predecessors without formal approval.
2. Lease Renewal Requests:
   • The petitioners repeatedly requested the renewal of lease agreements from 2005 onward. In some cases, the Railways acknowledged these requests and expressed willingness to execute new leases, subject to conditions.
   • Despite assurances, no formal lease deeds were executed, leaving the petitioners in possession without legal documentation.
3. Eviction Notices:
   • In 2022, the Railways issued eviction notices under the PPE Act, citing unauthorized occupation of the premises.
   • The petitioners challenged these notices and the subsequent eviction orders before the Principal District & Sessions Judge, Chandrapur, which were dismissed.
4. Appeals:
   • The petitioners then approached the Bombay High Court, seeking protection from eviction until the appeals were resolved.

Issues

1. Was the petitioners’ occupation unauthorized under the PPE Act?
2. Did the Estate Officer comply with the statutory requirements of subjective satisfaction before issuing eviction orders?
3. Were the eviction proceedings consistent with the principles of fairness and public interest?

Petitioner’s Arguments

1. Long-Standing Occupation:
   • The petitioners argued that they had been in possession of the premises for over three decades, regularly paying rent and municipal taxes, which the Railways had accepted without objection.
2. Lack of Subjective Satisfaction:
   • They contended that the eviction orders were issued arbitrarily without fulfilling the legal requirement of subjective satisfaction under Sections 4 and 5 of the PPE Act.
   • The eviction lacked justification, especially when the Railways had previously expressed willingness to renew the leases.
3. Reliance on Precedents:
   • The petitioners cited the Life Insurance Corporation of India v. National Insurance Co. case, where the court held that public bodies must act fairly and in accordance with reason.
   • They argued that their eviction violated Article 14 of the Constitution, as the decision was arbitrary and unreasonable.

Respondent’s Arguments

1. Unauthorized Occupation:
   • The Railways maintained that the petitioners’ possession was unauthorized as the original lease agreements had expired or been terminated.
   • It argued that the PPE Act empowered the Estate Officer to evict unauthorized occupants.
2. Public Interest and Redevelopment:
   • The Railways justified the evictions on the grounds that the premises were needed for redevelopment and renovation projects at the station.
   • It claimed that continued occupation by the petitioners hindered these public works.

Analysis of the Law

1. Subjective Satisfaction Requirement:
   • The court emphasized that under Sections 4 and 5 of the PPE Act, the Estate Officer must be satisfied on two counts before issuing eviction notices:
     (i) The premises are in unauthorized occupation.
     (ii) Eviction is necessary.
   • Both conditions must be explicitly stated in a reasoned order to ensure fairness and provide the occupant an opportunity to respond.
2. Fairness in Public Actions:
   • Citing M/s Dwarkadas Marfatia v. Board of Trustees of the Port of Bombay, the court reiterated that public authorities must act reasonably and in the public interest.
   • Even in eviction proceedings, actions must not be arbitrary and should consider the legitimate expectations of long-standing occupants.
3. Precedent Analysis:
   • The court relied on Life Insurance Corporation of India v. National Insurance Co., which held that eviction decisions by public bodies must balance public interest with fairness to occupants.
   • It also referred to Mahabir Auto Stores v. Indian Oil Corporation, which mandates that decisions involving state instrumentalities must be fair, transparent, and non-arbitrary, even in commercial dealings.

Court’s Reasoning

1. Failure to Execute Leases:
   • The court noted that the Railways had acknowledged the petitioners’ requests for lease renewal in 2005 but failed to act on them, despite collecting rent and taxes for decades.
   • This created a legitimate expectation among the petitioners that their occupation would be regularized.
2. Arbitrary Action:
   • The court found that the eviction notices lacked adequate reasoning or subjective satisfaction, making them procedurally and substantively deficient.
   • The sudden issuance of eviction notices, despite decades of inaction, was deemed arbitrary and inconsistent with government policy.
3. Public Interest Not Demonstrated:
   • The Railways failed to demonstrate why eviction was necessary for redevelopment or how the petitioners’ continued occupation posed a hindrance.

Conclusion

1. The court quashed the eviction orders issued by the Estate Officer and stayed their execution until the appeals were decided.
2. It directed the appellate court to resolve the matter within three months.
3. The judgment stressed that these observations were prima facie, leaving the final decision to the appellate court.

Implications

1. Reaffirmation of Fairness in Public Actions:
   • The judgment reinforces the principle that government actions must be fair, reasonable, and non-arbitrary, even in eviction cases.
2. Legitimate Expectations:
   • Long-standing occupants of public premises may claim protection if public authorities fail to act consistently or fairly.
3. Guidance on PPE Act:
   • The judgment clarifies that eviction under the PPE Act requires strict adherence to procedural safeguards, including subjective satisfaction and reasoned orders.

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