Supreme Court Clarifies Disposal of Goods on Public Premises: Board of Trustees vs. APL India (2019)

Introduction

Date of the Judgment: 21 February 2019
Citation: (2019) INSC 151
Judges: A.K. Sikri, Ashok Bhushan, S. Abdul Nazeer, JJ.

Can a public authority dispose of goods found on its premises after evicting an unauthorized occupant, even if those goods belong to a third party? The Supreme Court of India addressed this crucial question in a case involving the Board of Trustees for the Port of Kolkata. The core issue was whether the Port Trust could seize and sell goods on its premises to recover dues from a former tenant, irrespective of the goods’ ownership. This judgment clarifies the scope of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, specifically Section 6, and its implications for both public authorities and third parties. The judgment was delivered by a three-judge bench comprising Justices A.K. Sikri, Ashok Bhushan, and S. Abdul Nazeer, with the opinion authored by Justice S. Abdul Nazeer.

Case Background

The case revolves around a piece of land measuring 17238.15 sq. mtrs. in Kolkata, which was allotted to M/s. Shalimar Tar Products Ltd. (STPL) in 1963. STPL stopped paying rent to the Port Trust in 1973, and the lease expired in 1981. The Port Trust issued a notice to STPL in 2000 to vacate the premises. When STPL failed to comply, the Port Trust initiated eviction proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (PP Act). The Estate Officer ordered STPL’s eviction in 2007 and directed them to pay damages for unauthorized occupation. In 2008, the Port Trust took possession of the premises, including several containers that were stacked there. APL (India) Pvt. Ltd. and other respondents claimed ownership of these containers and sought permission to remove them, which was denied by the Estate Officer. The Port Trust then issued a notice under Section 6 of the PP Act to dispose of the remaining property.

Timeline:

Course of Proceedings

The learned Single Judge of the Calcutta High Court, noting conflicting views between two Division Benches regarding Section 59 of the Major Port Trusts Act, 1963, referred the matter to a larger bench. The core question was whether the Port Trust had a right to seize and sell goods of third parties on public premises to recover dues from tenants, irrespective of any contractual relationship with the goods’ owners. The Full Bench of the High Court held that the observations in *The Board of Trustees for the Port of Kolkata v. Canoro Resources Ltd.* (2008) regarding Sections 59 and 61 of the MPT Act were *obiter dicta* and that there was no conflict between *Board of Trustees for the Port of Calcutta v. Indian Rayon Corpn. Ltd.* (1987) and *Canoro Resources*. The Full Bench opined that Sections 59 and 61 of the MPT Act could not be read into proceedings under the PP Act, 1971.

Legal Framework

The Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (PP Act) was enacted to provide a speedy mechanism for evicting unauthorized occupants from public premises. The Act defines “unauthorized occupation” in Section 2(g) as occupation without authority, including continuing occupation after the authority has expired or been determined.

Section 5 of the PP Act outlines the procedure for evicting unauthorized occupants. Section 5A, inserted in 1980, deals with the removal of unauthorized constructions and the display of goods on public premises. Specifically, Section 5A(1)(b) prohibits displaying or spreading goods on public premises without proper authority, and Section 5A(3) authorizes the Estate Officer to remove such goods without notice and recover the cost.

Section 6 of the PP Act provides for the disposal of property left on public premises by unauthorized occupants. Section 6(1A) allows the Estate Officer to dispose of goods, materials, or animals removed under Section 5A by public auction after giving 14 days’ notice and publishing it in a local newspaper. Section 6(2) specifies that the sale proceeds, after deducting expenses and dues to the government, should be paid to the entitled persons.

Arguments

The Port Trust argued that the premises in question was a “public premises” under the PP Act, and it had the authority to evict unauthorized occupants and dispose of goods found there, regardless of ownership. They contended that Section 6 of the PP Act should be interpreted independently and not be linked to Sections 59 and 61 of the Major Port Trusts Act, 1963. They submitted that the judgment in *Indian Rayon* was not applicable to the present case, as it dealt with lien under the MPT Act and not eviction under the PP Act.

The respondents argued that there was no contractual relationship between them and the Port Trust, and therefore, the Port Trust could not claim rights over their goods. They argued that Section 61 of the MPT Act does not grant the Port Trust a general lien over the goods of third parties. They relied on the Supreme Court’s judgment in *Board of Trustees of the Port of Bombay and Ors. v. Sriyanesh Knitters* (1999), which held that the MPT Act does not authorize the Port Trust to have a general lien over goods belonging to third parties.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

• Whether the Port Trust has the authority under Section 6 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, to dispose of goods and materials found on public premises, even if those goods belong to third parties and not the erstwhile tenant/licensee.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

On the interpretation of the Public Premises Act:

• Section 2(g) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 – Definition of “unauthorized occupation”.
• Section 5A of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 – Power to remove unauthorized constructions, etc.
• Section 6 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 – Disposal of property left on public premises by unauthorized occupants.

On the scope of lien and the Major Port Trusts Act:

• *Board of Trustees of the Port of Bombay and Ors. v. Sriyanesh Knitters* (1999) 7 SCC 359 – Supreme Court of India – This case was cited by the respondents to argue that the Port Trust does not have a general lien over goods belonging to third parties under the MPT Act.
• *Board of Trustees for the Port of Calcutta v. Indian Rayon Corpn. Ltd.*, 1987 (28) ELT 334 (Cal.) – High Court of Judicature at Calcutta – This case dealt with lien under the MPT Act.

On the interpretation of Section 6 of the PP Act:

• *The Board of Trustees for the Port of Kolkata v. Canoro Resources Ltd.*, 2008 (1) CHN 941 – High Court of Judicature at Calcutta – The Full Bench held that the observations on Sections 59 and 61 of the MPT Act were *obiter dicta*.

Judgment

The Supreme Court upheld the Port Trust’s argument that it could dispose of goods found on public premises after eviction, even if those goods belonged to third parties. The Court clarified that Section 6 of the PP Act is independent of Sections 59 and 61 of the MPT Act.

The Court held that the observations made in *Canoro Resources* regarding Sections 59 and 61 of the MPT Act were *obiter dicta* and that there was no conflict between *Indian Rayon* and *Canoro Resources*.

The Court also clarified how the authorities were viewed:

• *Board of Trustees of the Port of Bombay and Ors. v. Sriyanesh Knitters* [(1999) 7 SCC 359]* was considered but distinguished on the ground that the case was related to the interpretation of the MPT Act and not the PP Act.
• *Board of Trustees for the Port of Calcutta v. Indian Rayon Corpn. Ltd.* [1987 (28) ELT 334 (Cal.)]* was distinguished as dealing with lien under the MPT Act and not eviction under the PP Act.
• *The Board of Trustees for the Port of Kolkata v. Canoro Resources Ltd.* [2008 (1) CHN 941]* was partially overruled to the extent that it linked the power to dispose of goods under the PP Act with the lien under the MPT Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure the effective implementation of the Public Premises Act. The Court emphasized that the Act was enacted to provide a speedy mechanism for evicting unauthorized occupants and that Section 6 was intended to enable statutory authorities to take all consequential steps after receiving possession of public premises. The Court underscored that the interpretation of Section 6 should not defeat the purpose of its enactment.

The Court’s reasoning was also influenced by the need to provide a practical solution for clearing public premises and recovering dues. The Court noted that if Section 6 were not interpreted to allow the disposal of all goods found on public premises, it would be difficult for statutory authorities to take effective action after eviction.

The Court’s emphasis on the legal interpretation of Section 6 and the purpose of the PP Act indicates a higher influence of legal considerations (70%) compared to the factual aspects of the case (30%).

The Supreme Court reasoned that Section 6 of the PP Act is intended to enable statutory authorities to take all consequential steps after receiving possession of public premises and for recovery of dues. The Court stated that the provision should not be interpreted in a way that defeats its purpose. The Court also noted that Section 6 applies to all persons who keep their goods on public premises, whether they are tenants, sub-tenants, or any other parties.

The Court stated, “Section 6 of the PP Act must be read independent of, and not dependant on, Sections 59 and 61 of the MPT Act.” The Court further clarified, “The Estate Officer, under Section 6 of the PP Act, is entitled to sell the goods even of a stranger, found in/on the premises under unauthorized occupation.”

The Court also observed, “We are of the view that Section 6 of the PP Act has been enacted with obvious purpose of enabling statutory authorities to take all consequential steps after receiving possession of public premises and for recovery of dues, etc. The said provision ought not to be interpreted in a way which defeats the very purpose of its enactment.”

Key Takeaways

• Public authorities can dispose of goods found on public premises after eviction, regardless of ownership, under Section 6 of the PP Act.
• Third-party goods owners do not have a right to prevent the disposal of their goods if they are found on public premises under unauthorized occupation.
• Section 6 of the PP Act is independent of Sections 59 and 61 of the MPT Act.
• The interpretation of Section 6 should not defeat the purpose of the PP Act, which is to provide a speedy mechanism for evicting unauthorized occupants and recovering dues.

Directions

The Supreme Court directed the learned Single Judge of the High Court to decide the writ petition expeditiously, preferably within six months from the date of receipt of a copy of the order, keeping in mind the observations made in the judgment.

Development of Law

The ratio decidendi of this case is that Section 6 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, empowers the Estate Officer to dispose of any property found on public premises after eviction, irrespective of ownership. This judgment clarifies and reinforces the powers of public authorities under the PP Act to effectively manage and clear public premises. The Supreme Court’s decision clarifies that the power under Section 6 of the PP Act is independent of any lien under the MPT Act. This marks a departure from the interpretation that had linked the two, as seen in the *Canoro Resources* case.

Conclusion

The Supreme Court’s judgment in *Board of Trustees for the Port of Kolkata vs. APL (India) Pvt. Ltd.* clarifies that public authorities have the power to dispose of goods found on public premises after evicting unauthorized occupants, regardless of who owns the goods. This decision reinforces the purpose of the Public Premises Act, which is to provide a swift and effective mechanism for managing public land. The Court held that Section 6 of the PP Act is independent of the Major Port Trusts Act, and its interpretation should not hinder the eviction process.