National Co-operative Consumers' Federation Excluded From Rent Control Protections Being PSU Under Rent Control Act: Bombay High Court

The Bombay High Court has held that the National Co-operative Consumers' Federation of India Ltd. (NCCF), a multi-state co-operative society, is functioning as an implementing agency of the Central Government, and qualifies as a "Public Sector Undertaking" for the purposes of Section 3(1)(b) of the Maharashtra Rent Control Act, 1999. The Court observed that the expression "Public Sector Undertaking" is not confined to statutory corporations or government companies and must be interpreted in the context of the Rent Act, keeping in view the public character of the entity's functions and the object of excluding financially capable tenants from rent control protection.Justice Arun R. Pedneker was hearing a civil revision application challenging the appellate court's decision dismissing an eviction suit filed against the National Co-operative Consumers' Federation of India Ltd. (NCCF), a multi-state co-operative society. The principal issue before the Court was whether the respondent was entitled to protection under the Maharashtra Rent Control Act or whether it fell within the category of a "Public Sector Undertaking" excluded from such protection under Section 3(1)(b). The landlord contended that the respondent functioned under the administrative control of the Central Government, implemented various governmental schemes, and was substantially controlled and financed by the Government, whereas the respondent argued that it was merely an autonomous co-operative society governed by its bye-laws and not a public sector undertaking.The Court extensively relied upon the Supreme Court's decision in Leelabai Gajanan Pansare v. Oriental Insurance Co. Ltd [MANU/SC/3535/2008], and held that Section 3(1)(b) of the Maharashtra Rent Control Act adopts the test of financial capability rather than the mode of incorporation of the tenant. It observed that the legislature intended to exclude entities capable of paying market rent and that the expression "Public Sector Undertaking" must receive a broad and purposive interpretation. The Court further held that a PSU need not necessarily be established by or under a Central or State enactment and may include autonomous bodies or co-operative societies if they satisfy the relevant functional and control-based criteria.Examining the respondent's constitution and functioning, the Court found that NCCF operated under the administrative control of the Ministry of Consumer Affairs, implemented the Price Support Scheme and Price Stabilisation Fund on behalf of the Central Government, received substantial governmental support, and had significant governmental representation in its management. The Court also noted that the Central Government directly held approximately 65% of its share capital and, together with indirect holdings, controlled about 85% of its shareholding. In view of its governmental functions, public character, financial capability and pervasive governmental involvement, the Court concluded that NCCF was a Public Sector Undertaking within the meaning of Section 3(1)(b) of the Maharashtra Rent Control Act and, therefore, could not claim the protection of the Rent Act.Accordingly, the Court allowed the civil revision application, set aside the appellate court's judgment, restored the trial court's decree directing eviction of the respondent from the suit premises, and held that the respondent was not entitled to protection under the Maharashtra Rent Control Act.Case Title: Saidpur Jute Company Limited v. National Co-operative Consumer's Federation of India Limited [Civil Revision Application No. 300 of 2026]Click Here To Read/Download Order

National Co-operative Consumers' Federation Excluded From Rent Control Protections Being PSU Under Rent Control Act: Bombay High Court

Saksham Vaishya

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Saksham Vaishya

National Co-operative Consumers' Federation Excluded From Rent Control Protections Being PSU Under Rent Control Act: Bombay High Court

Saksham Vaishya

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Saksham Vaishya

This is a premium content
Available exclusively to
Our subscribers