1983 (10) TMI 281 - SC - Indian Laws

Section 32(b) of Andhra Pradesh Buildings Control Act 1960 struck down for creating privileged landlord class without rational basis

Motor General Traders Versus State of Andhra Pradesh

The SC declared clause (b) of section 32 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 unconstitutional and quashed it for ... Constitutional validity of clause (b) of section 32 of the Andhra pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 ('the Act') which exempts all buildings constructed on and after August 26,1957 from the operation of the Act - Doctrine of Severability - Violation of Article 14 of the Constitution - HELD THAT:- Having regard to the history of the legislation under review, we are of the view that the Act has to be sustained even after striking down clause (b) of section 32 of the Act. The effect of striking down the impugned provision would be that all buildings except those falling under clause (a) of section 32 or exempted under section 26 of the Act in the areas where the Act is in force will be governed by the Act irrespective of the date of their construction. We are of the view that clause (b) of section 32 of the Act should be declared as violative of Article 14 of the Constitution because the continuance of that provision on the statute book will imply the creation of a privileged class of landlords without any rational basis as the incentive to build which provide a nexus for a reasonable classification of such class of landlords no longer exists by lapse of time in the case of the majority of such landlords. There is no reason why after all these years they should not be brought at par with other landlords who are subject to the restrictions imposed by the Act in the matter of eviction of tenants and control of rents. We do realize the adverse effect of this decision on many who may have recently built houses by spending their life savings or by borrowing large funds during these inflationary days at high rates of interest, on the expectation and belief that they would not be subjected to the restrictions imposed by the Act. The incentive to build provides a rational basis for classification and it is necessary, in the national interest, that there should be freedom from restrictions for a limited period of time. It is always open to the State Legislature or the State Government to take action by amending the Act itself or under section 26 of the Act, as the case may be, not only to provide incentive to persons who are desirous of building new houses, as it serves a definite social purpose but also to mitigate the rigour to such class of landlords who may have recently built their houses for a limited period as it has been done in the Union Territory of Chandigarh as brought out in our recent judgment in M/s. Punjab Tin Supply Co. Chandigarh etc. v. The Central Government & Ors.[1983 (10) TMI 271 - SUPREME COURT]. The question whether new legislation should be initiated to exempt newly constructed buildings for a limited period of time on the pattern of similar legislation undertaken by different States or to exempt such class of buildings for a given number of years from the provisions of the Act by the issue of a notification under section 26 of the Act is one for the State Government to decide. In the result these petitions succeed. Clause (b) of section 32 of the Act is hereby declared as unconstitutional and it is quashed. We, however, make it clear that this declaration would not affect the validity of any proceedings in which the decree for eviction passed by a civil court has become final and the landlord has already taken possession of the building in question pursuant thereto. The petitions are accordingly allowed. Issues Involved:1. Constitutional Validity of Clause (b) of Section 32 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960.2. Violation of Article 14 of the Constitution.3. Doctrine of Severability.Summary:1. Constitutional Validity of Clause (b) of Section 32 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960:The Supreme Court examined the constitutional validity of clause (b) of section 32 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, which exempts buildings constructed on and after August 26, 1957, from the operation of the Act. The provision was initially intended to provide an incentive for new construction, but its continued application for over 26 years was challenged.2. Violation of Article 14 of the Constitution:The petitioners argued that the exemption under clause (b) of section 32 violated Article 14 of the Constitution, which guarantees equality before the law. The Supreme Court noted that while the initial exemption might have been justified as a temporary measure to incentivize construction, its prolonged application had resulted in discrimination. The Court emphasized that 'the classification must be founded on an intelligible differentia' and 'must have a rational relation to the object sought to be achieved by the statute.' The Court found that the exemption had become discriminatory, as it created two classes of landlords and tenants without any rational basis, thus violating Article 14.3. Doctrine of Severability:The Court addressed the issue of severability, determining whether the invalidity of clause (b) of section 32 would affect the rest of the Act. It concluded that clause (b) was not so inextricably bound with the rest of the Act as to render the entire Act unworkable. The Court held that the rest of the Act could stand independently and that the Legislature would have enacted the Act even without the impugned provision. The Court cited principles from previous judgments, stating that 'a statute bad in part is not necessarily void in its entirety' and that 'the general rule is that when a provision which is in the nature of an exception to a general statute is invalid, the general provisions of the statute are not invalidated thereby.'Conclusion:The Supreme Court declared clause (b) of section 32 of the Act as unconstitutional and quashed it. The Court acknowledged the potential adverse effects on recent builders but emphasized the necessity of equality before the law. The Court left it to the State Legislature or Government to decide on potential amendments or notifications to provide incentives for new construction. The petitions were allowed, and clause (b) of section 32 was struck down without affecting the validity of any final decrees for eviction already executed.