Swami Motor Transport (P) Ltd. & ANR
Vs. Sri Sankaraswamigal Mutt & ANR [1962] INSC 268 (26 September 1962)
SUBBARAO, K.
SINHA, BHUVNESHWAR P.(CJ) IMAM, SYED JAFFER
WANCHOO, K.N.
SHAH, J.C.
AYYANGAR, N. RAJAGOPALA
CITATION: 1963 AIR 864 1963 SCR Supl. (1) 282
CITATOR INFO :
RF 1970 SC 564 (43,44) MV 1975 SC1146 (62) RF
1986 SC 63 (25) RF 1987 SC1272 (10)
ACT:
Landlord and Tenant-Tenant building on leased
land Right of purchase-Whether property-Withdrawal of protection of nonresidential
building to certain towns-Whether discriminatory or a restriction right of
property-Meaning of Property Madras City Tenants' Protestant Act, 1921(III of
1922), s.9, as amended by Act XIX of 1955 and Act XIII of 1960-Constitution of
India, Arts. 14, 19 and 31.
HEADNOTE:
Each of the appellants in the two appeals who
were tenants of land in Tanjore on which non-residential premises had been
constructed by them, applied to the Munsif under s. 9 of the Madras City
Tenants Protection Act, 1921 (111 of 1922) to have the respective sites
conveyed to them after fixing the sale price as contemplated by the Act.
Pending the decision of he applications by the Munsif, the protection and
rights given to the tenants who had constructed buildings on leased and by the
Principal Act was withdrawn by Act XIII of 1960, in respect of non-residential
buildings in Tanjore but with regard to the cities of Madras, Salem, Madurai,
Coimbatore and Tiruchirappalli the protection and rights were retained both as
regards residential buildings and non-residential buildings. The appellants
applied under Art. 226 of the Constitution to the High Court of Madras praying
for a mandamus directing the Munsif to determine their applications under s. 9
of the Principal Act as extended to the town of Tanjore by Notification and the
Act of 1955 ignoring Act XIII of 1960 which was impugned as offending Arts. 14,
19 and 31 of the Constitution. The High Court upheld the validity of the Act
following the earlier decision of that Court.
Held that confining the protection to
residential buildings only in the town of Tanjore while giving protection to
tenants of both residential and non-residential buildings in the other 283
towns was based upon real differences between Tanjore and the other towns
regarding the pressure on non-residential accommodation and other relevant
factors including population and that the differentiation was related to the
object namely protecting tenants of residential buildings principally and also
of nonresidential buildings where the need was most felt.
Shri Ram Krishna Dalmia v. Shri Justice S. R.
Tendolkar [1959] S.C.R. 279, Bhudan Choudhury v. State of Bihar, [1955] 1
S.C.R. 1045 and The State of West Bengal. v. Anuwar Ali, [1952] S.C.R. 284,
referred to.
Held, further, that Art. 19(1) (f) guarantees
both abstract as well as concrete rights of property and that property has the
same meaning in Art. 19(1) (f) and Art. 31 (1).
State of West Bengal v. Subodh Gopal Bose
[1954] S.C.R. 587, The Commissioner Hindu Religious Endowments, Madras v. Sri
Lakshmindra Thirtha Swamiar of Sri Shirur Nutt, [1954] S.C.R. 1005 and
Chiranjit Lal Choudhury v. Union of India, [1950] 869, referred to.
Held, further, that law' under Art. 31 must
be a valid law and to be valid it must stand the test of other fundamental
rights including Art. 19(1) (f) of the Constitution.
Kavalappara Kottarathil Kochuni v. State of
Madras, [1960] 3 S.C.R., 887 referred to.
Held, further, that the right to purchase
property conferred by a Statute is in its nature the same as the right of
purchase conferred by contract and in neither event could it amount to a right
of property.
Maharana Shri Jayvantsinghji Ranmalsinghji
etc. v. The, State of Gujrat, [1662] Supp. 2 S. C. R. 41 1.
Held, also that the principal Act did not
confer a right on the tenant to the superstructure and therefore, the impugned
Act did riot take away any such right.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 228 and 229 of 1962.
Appeals from the judgment and order dated
June 26, 1961 of the Madras High Court in W. P. Nos. 829 and 833 of 1960.
A. V. Viswanatha Sastri, G. Ramaswami, J. B.
Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants.
284 S. Kothandarama Nayanar and M. S. K,
Aiyanyar,for the respondent No. 1.
A. Ranganadham Chetty and A. V. Rangam,for
Intervener No. 1 (iii both the appeals.) R.Thiagarajan, for Intervener No. 2
(in C. A. No. 228 of 1962).
1962. September 26. The judgment of the Court
was delivered by SUBBA RAO, J.-These two appeals, on certificate raise the same
points and arise out of a common order made by the High Court. of judicature at
'Madras in Writ Petitions Nos. 829 and 830 of 1960. Both of them may
conveniently be disposed of together.
The facts in Civil Appeal No. 228 of 1962 are
briefly as follows : The first appellant is a limited company carrying on
transport business. The second appellant is its managing director. The first
appellant took over the business of Swami Motor Service Company, of which the
second appellant was the Managing Partner. In his capacity as Managing Partner
of the said company, the second appellant took a lease of a vacant site, being
survey No. 2770, belonging to the first respondent. After the first appellant
took over the business of the said partnership company' including its leasehold
interest in the said site, the first respondent recognized him ;is his tenant
and was receiving the rent from him. It is alleged that the appellants
constructed many valuable structures on the said site. The first responder
i.e.,' Sri Sankaraswamigal Mutt, through its trustee, filed a suit, O. S. No.
103 of 1953, in the court of the District Munsif, Tanjore. for evicting the
appellant company from the site; and on July 30, 1954 a compromisedecree for
eviction was made therein giving six month's time for the appellant-company to
vacate the site. The decree holder filed an execution petition 285 in the. said
court against the first appellant for executing the decree. Pending the
execution petition, Madras Act XIX of 1955 was passed empowering the State
Government to extend the Madras City Tenants' Protection Act, 1921 (III of
1922), hereinafter called the "Principal Act", to any municipal town
by notification in the Fort St. George Gazette. In exercise of the powers
confer-red by Act XIX of 1955, the Government made an order notifying the Town
of Tanjore to have come within the purview of the Principal Act. Under the
provisions of the Principal Act, the appellants filed Original Petition No. 39
of 1956 in the said court for an order directing the execution of a conveyance
of the said site in favour of the company on payment of a price fixed by the
court. Those proceedings took a tortuous course mainly, it is alleged, on
account of obstructive tactics adopted by the respondents in anticipation of
,-an expected legislation withdrawing the benefits conferred on tenants of
non-residential buildings in the Town of Tanjore. As anticipated the State
Legislature passed Act XIII of 1960, amending the Principal Act : the effect of
the amendment was to withdraw the protection given to tenants of non-residential
buildings in the municipal town of Tanjore and certain other towns. Under the
provisions of the impugned Act, proceedings instituted under the provisions of
the Principal Act relating to non-residential buildings 'situated in towns
other than those ,preferred would abate.
The appellants filed a petition under Art.
226 of the Constitution in the High Court of judicature at Madras for the issue
of a writ of mandamus directing the District Munsif to dispose of the petition
in accordance with the provisions of s. 9 of the Principal Act, as it stood
before its amendment by Act XIII of 1960.
In Civil Appeal No. 229 of 1962 the subject
matter is a site, being survey No. 74, Railway Road, Tanjore belonging to the
first respondent to this 286 appeal. The appellant's father executed a lease
deed in favour of the first respondent in respect of some parts of the said
site; the lease deed contained a clause giving an option to the tenant to renew
the lease for a further period of 10 years. It is alleged that the appellant's
father had erected substantial structures at heavy cost on the site even before
the said lease as he was in possessions of the said site as a tenant under the
predecessor of the first respondent. After the expiry of 10 years, the
appellant's father. exercised the option and continued to be in possession of
the property as tenant. The first respondent filed a suit (O. S. No. 315 of
1950) in the Court of the District Munsif, Tanjore, for evicting the appellant
from the property, and obtained a compromise decree dated January 10, 1952.
Under the compromise decree the tenancy was extended to 12 years from January
1, 1952 and after the expiry of that period the first respondent was entitled
to execute the decree and take possession of the site after removing the
superstructures. Subsequently as already noticed, the provisions of the
Principal Act were extended to the Town of Tanjore. Thereupon the appellant's
father filed O. P. No. 43 of 1956 in the Court of the District Munsif, Tanjore,
for an order directing the first respondent to convey the site in his favour on
payment of the price to be fixed by the court. As in the first case, in this
case also the proceedings dragged on till the Act of 1955 was passed. The
appellant filed a petition under Art. 226 of the Constitution in the High Court
of judicature at Madras for the issue of a writ of mandamus directing the
District Munsif, Tanjore, to dispose of the application in accordance with the
provisions of the Principal Act prior to its amendment by Act XIII of 1960.
In both the petitions the appellants attacked
the constitutional validity of Act XIII of 1960. The High Court, by a common
order, upheld the 287 constitutional validity of the said Act following the
decision of a, division Bench of the same Court, in Suaminathan v. Sundara (1).
These two appeals, as aforesaid, have been preferred on certificate issued by
the High Court.
Mr. A. V. Viswanatha Sastri, learned counsel
for the appellants in both the appeals, raised before us the following points:
(1) The 1960 Act infringes the fundamental right of the appellants under Art.
14 of the Constitution for two reasons, namely, (i) while the object of
enacting the 1960 Act was for safeguarding' tenants from eviction from
residential buildings, its provisions introduce a classification between
non-residential buildings in different municipal areas and gives relief to
tenants of non-residential buildings in some towns and refuses to give the same
relief to similar tenants of such buildings in other towns in the State and
such a classification has absolutely no relevance to the object sought to be
achieved by the Act; and (ii) the 1960 Act makes a distinction between
non-residential buildings in Madras, Salem, Madurai, Coimbatore and
Tiruchirappalli on the one hand and those in other towns, including Tanjore, on
the other and gives protection to the tenants of such buildings in the former
group and denies the same to tenants of similar buildings in the latter group,
though the alleged differences between the two sets of localities have no
reasonable relation to the object sought to be achieved, namely, the protection
of tenants who have built substantial structures from eviction.
(2) The 1960 Act also offends Arts. 19 (1)(f)
and 31(1) of the Constitution as it is not a reasonable restriction in the
interest of the public on the proprietary rights acquired by the appellants
under the earlier Act XIX of 1955.
Mr. Nayanar, appearing for the first
respondents in both the appeals, contends that ss. 3 and 9 of the Principal Act
could not be invoked by the appellants, as the lease deeds executed by them
contain a (1) I. L. R. 1961 Mad. 976.
288 clear covenant that they would vacate
their lands within a prescribed period and as they had put up their buildings
subsequent to the execution of the lease deeds. He sustains the constitutional
validity of the 1960 Act on the ground that it neither offends Art. 14 nor Art.
19 of the Constitution.
Mr. A. Ranganadham Chetty, appearing for the
State of Madras, to which notice was given, elaborates the second contention
advanced by learned counsel for the respondents by placing before us some
statistical data which, according So him, affords a reasonable basis for the
classification.
As regards the contention based on Art. 19,
he contends that the rights conferred under Act XIX of 1955, namely, right to
compensation on eviction under s. 3 of the said Act and the right to obtain a
sale deed under s. 9 thereof, are only analogous to a right to sue or a right
to purchase a property and they could not in any sense of the term be equated
with property rights.
Before we consider the arguments, it would be
convenient to notice the scope of the relevant provisions of the Principal Act,
Act XIX of 1955 and Act XIII of 1960. The Principal Act, as amended by Act XIX
of 1955, was enacted, as its preamble shows, to give protection to certain
classes of tenants who in municipal towns and adjoining areas in the State of
Madras have constructed buildings on others' lands in the hope that they would
not be evicted so long as they paid a fair rent for the land. The gist of the
relevant provisions of the Principal Act, as amended by Act XIX of 1955, may be
stated thus: The Act applies to any building whether it is residential or
non-residential. Every tenant shall on ejectment be entitled to be paid as
compensation the value of any building, which may have been erected by him and
also the value of trees which may have been planted by him; in a suit for
ejectment the court shall ascertain the amount of compensation payable 289 by
the landlord to the tenant and the decree shall direct that the landlord shall
be put in possession of the land only on payment of the said amount in court within
the prescribed time; if the landlord is unable or unwilling to pay the
compensation within the prescribed time, he may apply for fixing a reasonable
rent for the occupation of the land by the tenant; a tenant, who is entitled to
compensation and against whom a suit for ejectment has been instituted, may
apply for an order that the landlord may be directed to sell the land to him
for a price to be fixed by the court, and thereupon the court shall fix the
price in the manner prescribed in s. 9 and direct the said amount to be paid to
the landlord by the tenant within a particular time and in default his
application shall stand dismissed.
Nothing contained in the Act shall affect any
stipulations made by the tenant in writing registered as to the erection of
buildings, in so far as they relate to buildings erected after the date of the
contract : the provisions of the Act apply to suits for ejectment which are
pending and in which decrees for ejectment have been passed but have not been
executed before the coming into force of the Act: vide ss.
2(1), 2(1-A), 3, 4, 6, 9 and 12 of the Act.
It is, therefore, clear that under the Principal Act tenants in the Madras City
acquired valuable rights which they did not have before the said Act was
passed. Prior to the Principal Act a tenant of a land over which he had put up
buildings for residential or non-residential purposes was liable to be evicted
in accordance with law and his only right was to remove the superstructure put
up by him on the land before delivering vacant possession. But after the
Principal Act, a tenant similarly situated has an option to claim either
compensation for the superstructure put up by him or to apply to the court to
have the land sold to him for a consideration to be fixed by it.
The Principal Act was amended by the Madras
Act XIX of 1955 empowering the State Government 290 to extend, by notification
in the Official Gazette, the protection given by the Principal Act to tenants
of any other municipal town in the State of Madras and any specified village
within five miles of the City of Madras or such municipal towns who have
constructed buildings in others' lands with the hope that they would not be
evicted so long as they paid fair rent. In exercise of the power so conferred,
the State Government issued on March 28, 1956, a notification extending the
Principal Act to the municipal town of Tanjore. The result of the notification
was that tenants like the appellants who were tenants of land over which they
had put up non-residential buildings acquired a right to ask for compensation
for the buildings so erected on ejectment or to apply to court for directing
the decree-holder. to sell the land to the tenants after fixing the price in
the manner prescribed in the Act. This Act was also extended to various other
towns like Madurai, Coimbatore, Salem and Tiruchirappalli.
The Legislature again changed its mind and
passed Act XIII of 1960. By s. 3 of that Act the following amendments were made
in s. 2 of the Principal Act:
"(i) for clause (1), the following
clause shall be substituted, namely:(1) 'Building' means any building, hut or
other structure, whether of masonry, bricks, wood, mud, metal or any other
material whatsoeverused(i)for residential or non-residential purposes, in the
City of Madras, in the municipal towns of Coimbatore, Madurai, Salem and
Tiruchirappalli and in any village within five miles of the City of Madras or
of the municipal towns aforesaid and 291 (ii) for residential purposes only, in
any other area, and includes the appurtenance thereto." Section 9. Every
proceeding pending before any Court, other than a proceeding relating to any
property situated in(i)the City of Madras, (ii)the municipal towns of
Coimbatore, Madurai, Salem and Tiruchirappalli, and (iii)any village within
five miles of the City of Madras or of the municipal towns aforesaid, on the
date of the publication of this Act in the Fort St. George Gazette, and
instituted under the provisions of the Principal Act, shall in so far as such
proceeding relates to non-residential buildings, abate, and all rights and
privileges which may have accrued immediately before such date to any person in
respect of any property situated in any area other than the areas referred to
above by virtue of the Principal Act, shall, in so far as they relate to
non-residential buildings, cease and determine and shall not be enforceable:
Provided that nothing contained in this
section shall be deemed to invalidate any suit or proceeding in which the
decree or order passed has been executed or satisfied in full before the date
mentioned in this section.
The result of this amending Act in respect of
nonresidential buildings in places other than the City of Madras and the other
specified municipal towns is that all proceedings pending in courts in respect
of those buildings abated and the rights acquired by tenants under the 1955 Act
in respect of the said buildings are extinguished. The rights, so far relevant
to the present enquiry, which the tenants 292 had acquired under the 1955 Act
were: (i) they were entitled on ejectment to be paid as compensation the value
of the buildings erected by them or by their predecessorsin-interest, (ii) the
court before issuing a decree for eviction should ascertain the amount due to a
tenant and the decree for eviction. should be made conditional on the payment
of the decree amount, (iii) in suits where decree for ejectment had been passed
before the 1955 Act came into force, a tenant could file an application for
ascertainment of the compensation due in execution and for a fresh decree to be
passed in accordance with s. 4 of the Principal Act, and (iv) he had also a
right, at his option, to apply within the prescribed time to the court for an
order directing the landlord to sell the land to him for a price fixed by the
court, whether a decree for ejectment had or had not been passed. The tenants
of non-residential buildings in places other than the City of Madras and the
specified municipal towns lost the said rights after the 1960 Act came into
force.
The first question is whether the 1960 Act,
in so far as it withdrew the rights conferred upon the tenants of nonresidential
buildings in Tanjore, offends Art. 14 of the Constitution, or whether it can be
justified on the doctrine of classification. The law on the subject is so well
settled that it does not call for an extensive restatement :
it would be enough if the relevant
propositions in the judgment of this Court in Shri Ram Krishna, Dalmia v. Shri
Justice S. R. Tendolkar(1) are noticed, and they are :
"(1) there is always a presumption in
favour of the constitutionality of an enactment and the burden is upon him who
attacks it to show that there has been a clear transgression of the
constitutional principles 2 it must be presumed that the legislature
understands and correctly appreciates the need (1) [1959] S. C. R. 279,
297-298.
293.
of its own people, that its laws arc directed
to problems made manifest by experience and that its discrimination are based
on adequate grounds ;
(3) in order to sustain the presumption of
constitutionality the court may take into consideration matters of common
knowledge, matters of common report, the history of the times and may assume
every state of facts which can be conceived existing at the time of legislation
; and (4) while good faith and knowledge of the existing conditions on the part
of a legislature are to be presumed, if there is nothing on the face of the law
or the surrounding circumstances brought to the notice of the court on which
the classification may reasonably be regarded as based, the presumption of
constitutionality cannot be carried to the extent of always holding that there
must be some undisclosed and unknown reasons for subjecting certain individuals
or corporations to hostile or discriminating legislation." All the said
propositions are subject to the main principle of classification, namely, that
classification must be founded on intelligible differential and the
differential must have a rational relation to the object sought to be achieved
by the statute in question ; and that the classification may be founded on
different bases, such as, geographical, or according to objects or occupations
or the like : see Budhan Chaudhry v. The State of Bihar(1) and The State of
West Bengal v. Anwar Ali Sarkar. (2) Bearing the said well settled principles
in mind, let us now proceed to consider them in relation to the facts of this
case. The first contention is that the object of the Act is to safeguard the
tenants from eviction from residential quarters, but it affords (1) [1955] 1 S.
C. R. 1045.
(2) [1952] S. C. R. 284.
294 protection to tenants of non-residential
buildings in the City of Madras, in the municipal towns of Coimbatore Madurai,
Salem and Tiruchirappalli and in any village within five miles of the aforesaid
City and municipal towns, and there is no rational relation between the said
classification and the object of the Act. The object of the Act, the argument
proceeds, is to protect the tenants of residential buildings, whereas the Act
protects also the tenants of non-residential buildings in the aforesaid City
and municipal towns. So stated the argument appears to be plausible, but a
closer scrutiny reveals that the object of the Act is to protect not only
tenants of residential buildings but also of other buildings, though it is
mainly conceived to protect the tenants of residential buildings.
The following is the statement of objects and
reasons attached to Act XIII of 1960:
"'The Madras City Tenants' Protection
Act, 1921, was enacted with the main object of safeguarding the tenants from
eviction from residential quarters. In consistence with this object it is
proposed to restrict the application of the Madras City Tenants' Protection
Act, 1921 (Madras Act III of 1922) to residential buildings only." It will
be noticed from the above that the main object of the Act is to safeguard 'the
tenants of residential buildings from eviction but it is not the sole object of
that legislation. The objects of the 1960 Act only refer to the objects of the
Principal Act. The objects and reasons of the Principal Act are given in the
Fort St. George Gazette dated July 26, 1921, at p. 1491. The relevant part of
the objects reads thus :
"In many parts of the City of Madras
dwelling houses and other buildings have, from time to time, been erected by
tenants on land belonging to others in full expectation that subject to 295
payment of fair ground rent, they would be left undisturbed in possession,
notwithstanding the absence of any specific contract as to the duration of the
lease or the terms on which the buildings were to be erected. Recently attempts
made or steps taken to evict a large number of such tenants, have shown that
such expectations are likely to be defeated...........................
The Bill provides for the payment of
compensation to the tenant in case of ejectment for the value of any buildings
which may have been erected by him or by his predecessors-in-intercst. It also
provides for settlement of fair rent at the instance of the landlord." The
object of the said Act was to protect the tenants not only of dwelling houses
in the City of Madras but also of other buildings in that City. The provisions
of the Principal Act also, it is not disputed, apply both to residential and non-residential
buildings. So too the 1955 Act. Therefore, when in the " objects and
reasons" attached to Act XIII of 1960 the authors of that Act stated that
it was enacted with the main object of safeguarding the tenants from eviction
from residential quarters, they were only emphasizing upon the main object but
were not excluding the operation of that Act to non-residential buildings. So
it is not correct to state that the object of the Act is only to protect the
tenants of residential buildings. There are no merits in this contention.
The more serious contention is that there is
no rational basis for classifying the tenants of non-residential buildings in
the City of Madras and the municipal towns of Madurai, Goimbatore Salem and
Tiruchirappalli and those of similar buildings in other towns like Tanjore. It
is said that if protection is necessary for the tenants of nonresidential
buildings in the said City and towns, the same protection is equally necessary
for tenants of similar buildings 296 in Tanjore and other towns. To state it
differently, the argument is that there are no intelligible differences between
the non-residential buildings located in the City of Madras and the municipal
towns of Madurai, Coimbatore, Salem and Tiruchirappalli and those situated in
other towns. The learned judges of the High Court in Swaminathan v. Sundara
(1),which was followed in' the present case, adverting to this argument
observed at p. 987 :
"It is apparent that having regard to
the large population in the first five areas and the large scale commercial
activities in these areas, the Legislature thought fit that nonresidential
quarters occupied by tenants on lands belonging to others should also be
offered relief from being evicted summarily and arbitrarily." This passage
was criticized by learned counsel for the appellants and it was asked, what was
the relevancy between the population of the different towns in the matter of
eviction of tenants from non-residential buildings ? The population of a town
is not a relevant circumstance though its density may be : the pressure on the
buildings or on the sites suitable for building purposes does not depend solely
upon population without reference to the area available for building purposes,
so the argument proceeds. Mr. A. Ranganadhm Chetty, appearing for the state of
Madras, attempted to place before us statistics to establish that towns
preferred under. the Act are highly populated industrial and commercial centers
of the State compared to other towns like Tanjore and, therefore, there would
necessarily be high pressure on non residential buildings in the said
localities and consequently a spate of evictions.
Before looking into the statistics it would
be convenient to notice the allegations made in the affidavits. On behalf of
the State of Madras, J. Sivanandam, Secretary to Government, has filed an
affidavit, wherein he says in paragraph 8 :
(1) 1. L. R. 1961 Mad. 976.
297 "'On facts the position is that
these four towns of Madurai, Tiruchirappalli, Salem and Coimbatore ranked the
first four next to the City of Madras in population, income and commercial
activities and a very large number of tenants had been enjoying the protection
afforded by the then existing provision of this Act, in respect of residential
and nonresidential buildings as well. It was therefore thought that it would
not be proper to deprive these tenants of the protection in respect of
non-residential buildings.
It may at once be noticed that the industrial
potential of the preferred towns is not specifically mentioned. But it appears
to us that the expression "commercial activities" is used in a
comprehensive sense so as to take in industrial activities. This statement is
sought to be supported in the affidavit by the proceedings of relevant
authorities and the correspondence that passed between the State and the Union
Governments. The following extract from the Select Committee's proceedings
throws further light on the subject :
"................ on the reports
received from Collectors, the Act was extended to certain Municipalities. But
it was found that such extension caused inconvenience to public bodies and
other institutions which owned the lands inasmuch as they were not able to get
sufficient returns from these to carry on their activities under present
conditions........................... However it was represented that in the
case of Madras City such a restriction would cause considerable hardship to the
large number of small business establishments and the privilege and concession
enjoyed by them over such a long period should not be interfered with. While
the Government felt the reasonableness of this demand that in the City
non-residential buildings should not be excluded from the protection afforded
by the 298 Act, they were of the view that in place where the provisions were
being extended they should apply only to residential buildings."
"............ having regard to the wishes of certain Hon. members that not
only in the City but in other municipalities also there should be no
distinction between residential and nonresidential buildings, he (the Chairman)
proposed to add the four municipalities of Madurai, Tiruchirappalli, Salem and
Coimbatore, in sub-clause (1) of the proposed clause (1)." These passages
disclose not only the legislative objects but also the political pressures for
certain amendments. But we are not concerned with the political aspects of the
legislation but only with its objects. The special treatment given to the City
of Madras and the other specified town is based upon the fact that there are a
number of small business establishments in Madras and other specified towns
implying thereby that there are not so many such establishments in other towns.
The correspondence between the Government of India and the Government of Madras
throws light on this question. It is stated therein "Most of the tenancies
of non-residential buildings which enjoyed protection from eviction are in the
City of Madras and the Municipal towns of Madurai, Coimbatore' Salem and
Tiruchirappalli which have been classed as Special Grade or Selection Grade
municipalities on the basis of income and population ;
"This concession is considered necessary
because in the City of Madras and in the said four Municipal towns there are a
large number of such tenants to whom denial of the protection will cause great
hardship. They have been enjoying this protection for some time past and they
have invested large sums of money in the hope 299 that they will not be evicted
so long as they pay the rent due." This again emphasizes the fact that the
preferred towns are of special importance and that comparatively a large number
of non-residential buildings are situated in the said City and towns. G. O. No.
331, L. A., dated February 18, 1953, passed by the Government of Madras also
shows the comparative importance of the said towns. It is stated therein :
"They (Government) consider, however,
that in view of the size and importance of the thre e municipalities
(Tiruchirappalli, Coimbatore and Vijayawada) referred to above and also of
those of the Salem Municipality, the four municipalities stand distinctly apart
from the other first grade municipalities, excluding of course Madurai
Municipality which stands in a class by itself. The Government accordingly
direct that with effect from 1-4-1953 the municipalities of Coimbatore, Salem
and Tiruchirappalli And Vijayawada be classified as selection grade
municipalities........................ ".
In the reply affidavit many of the factual
assertions made in the counter-affidavit have been denied. It is alleged that
the number of tenants of non-residential buildings who enjoyed the benefit of
the provisions of the Act in municipal towns like Tanjore, Vellore and Connors
is also large. It is denied that the preferred towns other than the City of
Madras have been enjoying the protection for a long time, for the amending Act
itself was passed only in 1955.
It is pointed out that the population of a
town is irrelevant but density of population matters and that the density of
population in Tanjore, Coimbatore, Madurai and Salem is the same. Out of the
allegations and counter-allegations the following facts emerge (1) Madras is a
city of large population and 300 commercial importance; (2) Madurai is
classified as a special grade municipality and the municipalities of
Coimbatore, Salem and Tiruchirappalli as selection grade municipalities on
account of their size and importance: they have comparatively larger population
and commercial potentialities; (3) in the said towns there are a large number
of nonresidential buildings; and (4) except for some vague averments made in
the reply affidavit, there is nothing on record to establish that the number of
nonresidential buildings in Tanjore compares favorably with that in the
preferred towns. These facts are, to some extent, supported by the statistical
data furnished before us from authorized Government publications. In
",Madras District Gazetteers, Madurai" it is stated at p. 172:
"Madurai is one of the very few
districts in this State in which a comparatively large portion of the
population, about 37 per cent., lives by industries, trade and other
avocations. I This is no wonder, seeing that it has never had, in spite of
irrigation works, any facilities like Tanjore for absorbing the great bulk of
its population in agriculture. In fact it stands next to the Coimbatore
district in possessing a considerable proportion of the nonagricultural
population".
Though the statement refers to the districts
as a whole, it is well known that most of the industries are concentrated in
the municipal towns of Madurai and Coimbatore. In "India, 1962" the
following figures of population in some Towns of Madras State are given:
Madurai .. 4,24,975 Coimbatore 2,85,263
Tiruchirappalli..... 2,49,933 Salem 2,49,084 Tuticorin 1,24,273 Vellore...
1,13,580 301 Tanjore ... ... 1,10,968 Nagercoil ... ..1,06,497 It is not
necessary to pursue the matter further. it is true that population alone cannot
be a basis for the classification made under the Act, but concentration of
large population is generally found only in towns where there are commerce and
industries. Though it is possible that a smaller town with a lesser population
may also 'have heavy industries and commercial activities, that is an exception
rather than the rule. But in this case the Gazetteer supports the averment made
by the State in the affidavit that the municipal towns selected for
preferential treatment are more advanced commercially than other towns in the
State. Though the Government, at the earlier stages 'of this litigation or even
before the 1960 Act was passed, did not bring out these differences based upon
commercial and industry as prominently as its counsel now seeks to do before
us, we cannot brush aside the argument as an afterthought. That apart, the
Government of Madras was not a party in the High Court and it had no
opportunity to put forward its case before that Court. On the basis of the
allegations made in the affidavit filed on behalf of the State of Madras,
supported as it is by the statistical data furnished before us, we hold that
there are real differences between non-residential buildings in the towns of
Madurai, Coimbatore, Salem and Tiruchirappalli and those in other towns of the
Madras State which have reasonable nexus to the object sought to be achieved by
the Act.
The more difficult point is the impact of
Arts. 19 (1) (f) and 31 (1) of the Constitution on the impugned provisions of
the Act. The relevant Articles of the Constitution read thus:
Article 19 (1) (f). All citizens shall have
the right to acquire, hold and dispose of property.
302 Article 31. (1). No person shall be
deprived of his property save by authority of law.
To seek the protection of either of these
Articles it must be established that the tenants of residential buildings in
Tanjore had acquired a right to property, for unless they had acquired such a
right, the 1960 Act could not have deprived them of such a right or imposed any
restrictions thereon. The question, therefore, is whether the rights created by
the 1955 Act by extending the provisions of ss. 3 and 9 of the Principal Act to
such tenants had given them a right to property. The argument of learned
counsel for the State of Madras may be summarized thus: Art. 19(1) (f) deals
with abstract rights of property, while Art. 31 (1) with concrete rights; under
Art.31(1) there is no limitation on the power of the appropriate Legislature to
make a law depriving a person of his property; the only restriction in the case
of deprivation of property by a State is that it can be done only by a
statutory law; if so, on the assumption that the Act of 1955 conferred a
concrete right of property on the appellants, they have been validly deprived
of it by the 1960 Act and, therefore, no fundamental right of the appellant had
been infringed; if, on the other hand, the argument proceeds, Arts. 19 (1) (f)
and 31(1) are both held to relate to concrete rights of property, it would lead
to two anomalies, namely, (i) Art.
31(1) would become otiose, and (ii) as
deprivation of property cannot possibly be a restriction on the right to hold
property, every law depriving a person of his property would invariably
infringe Art.19 and, therefore, would be void. In support of his contentions he
relies upon the observations of Patanjali Sastri, C. J., and Das, J., as he
then was, in The State of West Bengal v. Subodh Gopal Bose(1). In that case
Patanjali Sastri, C. J., made the following observations:
"'I have no doubt that the framers of
our Constitution drew the same distinction and classed (1)...[1954] S. C. R.
587. 597.
303 the natural right or capacity of a
citizen "'to acquire hold and dispose of property" with; other
natural rights and freedoms inherent in the status of a free citizen and
embodies them in article 19(1), while they provided for the protection of
concrete rights of property owned by a person in article 31." These
observations no doubt support learned counsel's contention, but this Court in a
later decision in The Commissioner, Hindu Religious Endowment'3, Madras v. Sri
Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(1) considered the said
observations and remarked:
"This, it may be noted, was an
expression of ,Opinion by the learned Chief justice alone and it was not the
decision of the court; for out of the other four learned judges who together
with the Chief justice constituted the Bench, two did not definitely agree with
this view, while the remaining two did not express any opinion one way or the
other.
This point was not raised before us by the
Advocate-General for Madras, who appeared in support of the appeal., nor by any
of the other counsel appearing in this case. The learned Attorney-General
himself stated candidly that he was not prepared to support the view taken by
the late Chief justice as mentioned above and he only raised the point to get
an authoritative pronouncement upon it by the court. In our opinion, it would
not be proper to express any final opinion upon the point in the present
case-when we had not the advantage of any arguments addressed to us upon it. We
would prefer to proceed, as this court has proceeded all along, in dealing with
similar cases in the past, on the footing that article 19 (1) (f) applies
equally to concrete as well as abstract rights of property." (1) [1954] S.
C. R. 1005, 1020.
304 Though this Court has not finally
expressed its opinion on the question raised, it has pointed out that it has
proceeded all through on the basis that Art. 19(1) applies equally to concrete
as well as abstract rights of property. In Chiranjit Lal Chowdhuri v. The Union
of India(1), Mukherjea, J., as he then was, held that the right to hold
property under Art. 19 (1) (f)meant the right to possess as well as enjoy all
the benefits which were ordinarily attached to ownership of property. jagannadhadas,
J., in The State of West Bengal v. Subodh Gopal Bose(2). dealing with this
point observed at pp. 668-669:
"To me, it appears, that article 19(1)
(f), while probably meant to relate to the natural rights of the citizen,
comprehends within its scope also concrete property rights. That, I believe, is
how it has been generally understood without question in various cases these
nearly four years in this Court and in the High Courts".
The phraseology used in Art. 19(1)(f) is wide
and prima facie it takes in its sweep both abstract and concrete rights of
property. To suggest that abstract rights of a citizen in property cannot be
infringed by the State but his concrete rights can be, is to deprive Art.
19(1)(f) of its real content. It would mean that the State could not make a law
declaring generally that a citizen cannot acquire, hold and dispose of
property, but it could make a law taking away the property acquired or held by
him and preventing him from disposing it of It would mean that the Constitution-makers
declared platitudes in the Constitution while they gave unrestricted liberty to
the Legislature to interfere with impunity with property rights of citizens. If
this meaning was given to Art. 19(1)(f), the same meaning would have to be
given to other clauses of Art. 19(1) with the result that the Legislature
cannot make a law preventing generally citizens from expressing their views,
assembling peacefully, forming associations, and moving (1) [1950] s. C. R.
869.
(2) [1954] S. C. R. 587, 597.
305 freely throughout the country, but can
make a law curbing their activities when they are speaking, when they are
assembling and when they are moving freely in the country.
Such an intention shall not be attributed to
the Constituent-Assembly, unless the Article is clear to that effect. Indeed,
the words, as we have stated, are comprehensive and take in both the rights.
Though there is no final expression of opinion by this Court on this question,
as has been pointed out, this Court and the High Courts all through since the
date of promulgation of the Constitution proceeded on the assumption that Art.
19 applied to both the rights. We hold that Art. 19 applies both to concrete as
well as to abstract rights of property.
It is said that if this construction be given
to Art.
19(1)(f), Art. 31(1) would become otiose. We
do not see how it becomes an unnecessary provision. Article 31(1) is couched in
a negative form. It says that no person shall be deprived of his property save
by authority of law. In effect it declares a fundamental right against
deprivation of property by executive action ; but it does not either expressly
or by necessary implication take the law out of the limitations imp limit in
Art. 19(1)(f) of the Constitution. The law in Art. 31(1) must be a valid law
and to be a valid law it must stand the test of other fundamental rights. All
the other points urged in support of the contention have been considered by
this Court in Kavalappara Kottarathil Kochuni v. The State of Madra's(1), where
it was held that a law depriving a person of his property must be a valid law
and, therefore, it should not infringe Art. 19 of the Constitution. We have no
reason to differ from the view expressed therein. Indeed that view has been
followed in later decisions. We, therefore, hold that a law depriving a person
of his property would be bad unless it amounts to a reasonable restriction in
the (1) [1960] 3 S. C. R. 887.
306 interest of the general public or for the
protection of the interests of Scheduled Tribes.
We now come to the last question, namely,
whether the 1960 Act deprived the appellants of their right in property. To
state it differently, the question is whether a tenant of a non-residential
building in Tanjore had acquired a right of property under the 1955 Act and
whether he was deprived of that right or otherwise restricted in the enjoyment
thereof by the 1960 Act. The 1955 Act, as we have already noticed, conferred
two rights on such a tenant, namely, (i) every tenant on ejectment would be
entitled to be paid as compensation the value of any building erected by him,
and (ii) such a tenant against whom a suit in ejectment has been instituted has
an option to apply to the court for an order directing the landlord to sell the
land to him for a price to be fixed by the court. We are not concerned here
with the rights conferred under s. 3 of the Act, for the simple reason that
neither of the appellants claimed a right there under. Both of them have taken
proceedings only under s. 9 of the Act and they have approached the High Court
for a writ of mandamus that the petition should be disposed of under the
provisions of s. 9 of the Act. This Court's opinion on the question of the
constitutional validity of the Act in so far as it deprived the appellants of
their right under s. 3 of the Principal Act is not called for :
that will have to be decided in an
appropriate case. The question that falls to be considered is whether the
second right, namely, the right of a tenant to apply to the court for an order
directing the landlord to sell the land to him for a price to be fixed by it,
under s. 9 of the Principal Act is a right to property. The law of India does
not recognize equitable 'estates. No authority has been cited in support of the
contention that a statutory right to purchase land is, or confers, an interest
or a right in property. The fact that the right is created not by 307 contract
but by a statute cannot make a difference in the content or the incidents of
the right: that depends upon the nature and the scope of the right conferred.
The right conferred is a right to purchase land. If such a right conferred
under a contract is not a right of property, the fact that such a right stems
from a statute cannot obviously expand its content or make it any the less a non-proprietary
right. In our view, a statutory right to apply for the purchase land is not a
right of property. It is settled law that a contract to purchase a property
does not create an interest in immovable property. Different consideration may
arise when a statutory sale has been effected and title passed to a tenant :
that was the basis of the judgment of this Court in Jayvantsinghji v. State of
Gujarat(1), on which Mr. Viswanatha Sastri relied. But we are not concerned
here with such a situation. It is said that the appellants have acquired a
right under the 1955 Act to hold and enjoy the buildings erected by them by
exercising their right to purchase the site of the said buildings and that the
impugned Act indirectly deprived them of their right to hold the said
buildings. This argument mixes up two concepts, namely, (i) the scope and
content of the right, and (ii) the effect and consequences of the deprivation
of that right on the other properties of the appellants.
Section 9 of the Principal Act, extended by
the 1955 Act, only confers a right in respect of the land and not of the
superstructure. If that Act held the field, the appellants could have purchased
the land, but by reason of the 1960 Act they could no longer do so. Neither the
1955 Act conferred any right as to the superstructure under s. 9 of the
Principal Act nor did the 1960 Act take that right away. If this distinction
between the land and the superstructure is borne in mind the untenability of
the argument would become obvious. The 1960 Act does not in any way affect the
appellants' fundamental right. Therefore, their prayer that the District Munsif
should be directed to proceed with the (1)..[1962] Supp. 2 S. C. R. 41 1.
308 disposal of the applications filed by
them under s. 9 of the Principal Act could not be granted.
In this view it is not necessary to express
our opinion on the question whether the appellants., by reason of the specific
stipulation in their lease deeds, would not be entitled to any relief even
under the 1955 Act. In the result, the appeals fail and are dismissed with
costs. One hearing fee.
Appeals dismissed
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