TaxTMI 
TaxTMI 
1987 (9) TMI 421
X X X X Extracts X X X X
X X X X Extracts X X X X
.... eviction petition in the court of Small Causes, Madras for eviction of the petitioner herein from the premises where the petitioner had been carrying on a hotel business serving meals etc. for four decades. The grounds in the eviction petition were non-payment of rent under section 10(2)(1) of the Tamil Nadu Rent Act, unlawful sub- letting under section 10(2)(ii)(a), causing damages to the premises under section 10(2)(iii) and also for the purposes of demolition and reconstruction under section 14(1)(b). The learned Judge of the trial court ordered eviction under section 14(1)(b) of the Tamil Nadu Rent Act only for demolition and reconstruction and dismissed the other grounds, and that is the only ground with which we are concerned in this appeal. On 25th of February, 1981 the Appellate Court dismissed the petitioner's appeal by saying that the landlords were rich people and capable of demolition and reconstruction in order to put the premises to a more profitable use by putting up their own showroom. On September 30, 1982 the High Court dismissed the civil revision petition of the petitioner and granted time till 31st of January, 1983 for the petitioner to vacate the premi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants in the State of Tamil Nadu. Section 14 of the Tamil Nadu Rent Act states as follows:- " 14. Recovery of possession by landlord for repairs or for reconstruction.-(1) Notwithstanding anything contained in this Act, but subject to the provisions of sections 12 and 13, on an application made by a landlord, the Controller shall, if he is satisfied- (a) that the building is bona fide required by the landlord for carrying out repairs which cannot be carried out without the building being vacated; or (b) that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, pass an order directing the tenant to deliver possession of the building to the landlord before a specified date. (2) No order directing the tenant to deliver possession of the building under this section shall be passed- (a) on the ground ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion (2) which was amended and introduced by Act 23 of 1973 dealing with the reconstructed building reads as follows: "16(2) Where in pursuance of an order passed by the Controller under clause (b) of sub-section (1) of section 14, any building is totally demolished and a new building is erected in its place, all the provisions of this Act shall cease to apply to such new building for a period of five years from the date on which the construction of such new building is completed and notified to the local authority concerned." In this connection section 30 which exempts certain buildings may be referred to and sub-section (i) is important. It reads as follows: "30. Exemption in the case of certain buildings- Nothing contained in this Act shall apply to- (i) any building for a period of five years from the date on which the construction is completed and notified to local authority concerned; or (ii) any residential building or part thereof occupied by any one tenant if the monthly rent paid by him in respect of that building or part exceeds (four hundred rupees)." In this appeal we are not c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the readiness is after repairs or after construction. It was urged that in both cases the tenants go out during the period of building work, and they should equally come back into the building after repairs or reconstruction. It was submitted on this ground also that not enjoining re- induction of the evicted tenant after reconstruction is discriminatory and unconstitutional. The classification of buildings reconstructed differently from the buildings repaired is not valid, as it has no relation to the object or purpose of the Act. Furthermore, that all the tenants belong to one class and they could not be treated differently. On this aspect it was further submitted that the provisions of re-induction in most of the Rent Acts re- presented the standard of reasonableness in the landlord and the tenant law and the philosophy of Rent Control Legislation. It re-presented the national consensus of reasonable standard. Therefore, any provision which according to learned counsel appearing for the different parties in the writ petitions, was in variance with that standard was unreasonable and as such violative of Article 14 of the Constitution. In aid of this submission various contention....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to take back a tenant after a long lapse of time during which time the tenant must necessarily have found some suitable accommodation elsewhere. This is the true purpose behind section 14(1)(b) read with section 14(2)(b). In the aforesaid view of the matter, we are unable to accept the submission that in providing for re-induction of the tenant in case of repairs and not providing for such re-induction in case of reconstruction, there is any unreasonable and irrational classification without any basis. The other submission as noted above was that in most of the Rent Acts, there was provision for re-induction of the tenants but there was no such provision in case of reconstruction in the Tamil Nadu Rent Act. In The State of Madhya Pradesh v. G.C. Mandawar, [1955] 1 S.C.R. 599, a Constitution Bench of this Court observed that Article 14 of the Constitution does not authorise the striking down of a law of one State on the ground that in contrast with a law of another State on the same subject its provisions are discriminatory. Nor does it contemplate a law of the Centre or of the State dealing with similar subjects being held to be unconstitutional by a process of comparative stud....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d as a ground of eviction of the tenant the requirement of the landlord for demolition and re-construction of the building leaving it to a judicial authority viz. Rent Controller to decide the matter with one statutory right of appeal and a further right of revision to the District Court or the High Court as the case may be. It was on this ground urged that leaving the matter to judicial adjudication as to the ground for eviction, it cannot be held to be arbitrary, unreasonable or unjust. This point has to be judged keeping in view the main purpose of the Act in question and the relevant submissions on this aspect. It may be borne in mind that historically the constitutionality of section 13 of the Act of 1949 was upheld on the touchstone of Article 14 both by the Madras High Court and on appeal by this Court in P.J. Irani v. The State of Madras, [1962] 2 S.C.R. 169. It was held that section 13 of the Act did not violate Article 14 and was not unconstitutional. Enough guidance, according to the judgment of the majority of learned judges, was afforded by the preamble and the operative provisions of the Act for the exercise of the discretionary power vested in the government. It w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies and urban areas in the post Second World War period creating acute shortage of accommodation in such areas and the enactment avowedly protects the rights of tenants in occupation of buildings in such areas from being charged unreasonable rents and from being unreasonably evicted therefrom. In that view of the matter it had made a rational classification of buildings belonging to government and buildings belonging to religious, charitable, educational and other public institutions and the different treatment accorded to such buildings under section 10(3)(b) of the Act. The scope of this Act was discussed by this Court in Raval and Co. v. K.C. Ramachandran & Ors., [1974] 2 S.C.R. 629, where the majority of the court at pages 635 to 636 observed:- "All these show that the Madras Legislature had applied its mind to the problem of housing and control of rents and provided a scheme of its own. It did not proceed on the basis that the legislation regarding rent control was only for the benefit of the tenants. It wanted it to be fair both to the landlord as well as the tenant. Apparently it realised that the pegging of the rents at the 1940 rates had discourage....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Legislature having this Act in mind still made only the fair rent payable and not the contract rent if it happens to be lower. It is clear, therefore, that the fair rent under the present Act is payable during the contract period as well as after the expiry of the contract period." The Act sought to restore the balance in the scale which is otherwise weighted in favour of the stronger party which had larger bargaining power. The Act balances the scales and regulates the rights of the parties fairly and cannot be construed only in favour of the tenant. In Murlidhar Agarwal and another v. State of U.P. and others, [1975] 1 S.C.R. 575 this Court had occasion to deal with this matter. In that case, powers of High Court to interfere with revisional orders passed by State Government under section 7F of U.P. Temporary Control of Rent and Eviction Act, 1947 were challenged. The Court was of the view that if a provision was enacted for the benefit of a person or class of persons, there was nothing which precluded him or them from contracting to waive the benefit, provided that no question of public policy was involved. In doing so, the question arose what was the 'public policy....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eans or funds to undertake the project and steps taken by him in that regard but also the existing condition of the building, its age and situation and possibility or otherwise of its being put to a more profitable use after reconstruction. All these factors being relevant must enter the verdict of the Rent Controller on the question of the bona fide requirement of the landlord under section 14(1)(b). The fact that a landlord being possessed of sufficient means to undertake the project of demolition and reconstruction by itself might not be sufficient to establish his bona fide requirement if the building happened to be a very recent construction in a perfectly sound condition and its situation might prevent its being put to a more profitable use after reconstruction. The Rent Controller has thus to take into account the totality of the circumstances and the factors referred to in the judgment by lesser or greater significance depending upon whether in the scheme of the concerned enactment there is or there is not a provision for re-induction of the evicted tenant into the new construction. Reference was made to the decision of this Court in Neta Ram v. Jiwan Lal, [1962] Suppl. 2 S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ars is instituted, a notice demanding rent should be served on the tenant-for example- Bombay, Delhi, Kerala, Tripura, Jammu and Kashmir, Madhya Pradesh and U.P. Rent Acts. In such cases the tenant is given one chance to pay up the arrears. Again different Rent Acts provide different facts and circumstances on the basis of which premises could be recovered on the ground of bona fide personal requirement. Generally the bona fide requirement extends both to residential as well as commercial premises. However, the Delhi Rent Control Act restricts the right on account of the bona fide need of the landlord's right to premises let for residential use only. Further, Bihar, Bombay, Goa, Jammu and Kashmir, Karnataka, Tamil Nadu, U.P. and West Bengal Rent Acts provide for partial eviction. But there is no such provision in the other Acts. It is obvious from the above that there can be no fixed and inflexible criteria or grounds governing imposition of restrictions on the landlord's right or for relaxation of those restrictions in certain cases. Ultimately it is a matter of legislative policy and judgment. Courts are not concerned with the unwisdom of legislation. "In short, uncons....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onstructed building for the limited and short duration of five years. The policy under section 14(1)(b) read with section 16 is not in essence different from the policy adopted by different States of giving exemption for a limited duration to newly constructed buildings. These provisions, namely, exemption of new buildings from the provisions of the Rent Act for a period of five years or ten years has been upheld as constitutional. See in this connection the observations of this Court in the case of Punjab Tin Supply Co., Chandigarh & Ors. v. The Central Govt. & Ors., [1984] 1 SCC 206 at pages 216 and 217 and Mohinder Kumar v. State of Haryana and Anr, [1985] 4 S.C.C. 221 at pages 226-227. There the Court emphasised that it is entirely for the Legislature to decide whether any measures, and if so, what measures are to be adopted for remedying the situation and for ameliorating the hardship of tenants. The Legislature may very well come to a conclusion that it is the shortage of buildings which has resulted in scarcity of accommodation and has created a situation where the demand for accommodation is far in excess of the requisite supply, and, it is because of such acute scarcity of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of any particular case may be considered to be unduly long, may be held to be arbitrary. The exemption must necessarily be effective from a particular date and must be with the object of promoting new constructions. With the commencement of the Act, the provisions of the Rent Act with all the restrictions and rigours become effective. Buildings which have been constructed before the commencement of the Act were already there and the question of any kind of impetus or incentive to such buildings does not arise. The Legislature, therefore, very appropriately allowed the benefit of the exemption to the buildings, the construction of which commenced or was completed on or after the commencement of the Act. This exemption in respect of buildings coming up or to come up on or after the date of commencement of the Act is likely to serve the purpose of encouraging new buildings to be constructed. There is therefore nothing arbitrary or unreasonable in fixing the date of commencement of the Act from which the exemption is to be operative." Section 14(1)(b) has sufficient inbuilt guidelines. The requirements to be satisfied before initiating action under this provision have been judicial....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustainable. See in this connection the observations of this Court in M/s. Punjab Tin Supply Co., Chandigarh etc. etc. v. The Central Government and others, [1984] 1 S.C.R. 428 and Motor General Traders and another etc. etc. v. State of Andhra Pradesh and others etc. etc., [1984] 1 S.C.R. 594 at page 605. It was submitted that the fact that in these cases exemption was after the first construction of the building and not after demolition and re-construction but that would not make any difference to the principle applicable. The principle underlying such exemption for a period of five years is not discriminatory against tenants, nor is it against the policy of the Act. It only serves as an incentive to the landlord for creation of additional housing accommodation to meet the growing needs of persons who have no accommodation to reside or to carry on business. It does not create a class of landlords who will forever be kept outside the scope of the Act as the provision balances the interests of the landlords on the one hand and the tenants on the other in a reasonable way. This Court in Atam Prakash v. State of Haryana and others, [1986] 2 S.C.C. 249 also judged the rules of classi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....; and Article 19(1)(f) of the Act. But that was in a slightly different context. Post war migration of human beings en bloc place to place, the partition of the country and uprooting of the people from their hearth and home, explosion of population, are the various vital factors leading to the present acute shortage of housing. It has to be borne in mind that the urge for land and yearning for hearth and home are as perennial emotions as hunger and sex are, as Poet Rabindranath would say meaning thereby, it is not wealth-I seek, it is not fame that I want, I crave for a home expressing the eternal yearning of all living beings for habitat. It is common knowledge that there is acute shortage of housing, various factors have led to this problem. The laws relating to letting and of landlord and tenant in different States have from different States' angles tried to grapple the problem. Yet in view of the magnitude of the problem, the problem has become insoluble and the litigations abound and the people suffer. More houses must, therefore, be built, more accommodation and more spaces made available for the people to live in. The laws of lan....