State
of Andhra Pradesh & Ors Vs. Nallamilli Rami Reddi
& Ors [2001] Insc 438 (29 August 2001)
S. Rajendra
Babu & Brijesh Kumar Rajendra Babu, J. :
[WITH
W.P. (C) NOS. 1429/1987 and 120/1988]
J U D
G M E N T
CIVIL
APPEAL NOS. 3694-3748 OF 1996 In a batch of writ petitions filed in the High
Court of Andhra Pradesh the constitutional validity of Section 82 of the Andhra
Pradesh Charitable & Hindu Religious Institutions & Endowments Act,
1987 [hereinafter referred to as the Act] was challenged. The learned Single
Judge who heard these matters held that sub-section (1) of Section 82 of the
Act is arbitrary and ultra vires of Articles 14 and 21 of the Constitution to
the extent of lessees who are marginal or small farmers, are not excluded from
its effect while sub-section (2) was declared to be unconstitutional in its
entirety. The matter was carried in appeal to the Division Bench. The Division
Bench concluded that Section 82(1) of the Act is violative of equal protection
clause of the Constitution inasmuch as the provisions of Section 82 singles out
the tenants of the lands held by religious institutions or endowments resulting
in putting an end to their tenancy rights; that the said classification was not
only unreasonable but also it had no nexus to the object sought to be achieved
(i) as
to payment of rent or augmentation of the revenue of the religious institutions
inasmuch as the rents stood frozen by reason of the Tenancy Acts in force in
the State of Andhra
Pradesh;
(ii)
that sale of lands is not a feasible proposition;
(iii) that
there is no exclusion of application of the tenancy Acts and the lands held by
religious institutions or endowments in treating the tenants in question
differently suffers from the vice of discrimination by putting an end to their
leases.
For
the aforesaid reasons, sub-section (1) of Section 82 was declared void as violative
of Article 14 of the Constitution. While the question as to the enforceability
of Section 82(2) of the Act is concerned, the Division Bench observed that sub-section
(2) puts an end to tenancy rights of the landless poor persons too though in
name sub-section (2) purports to save them from the cancellation. The learned
Judges of the Division Bench proceeded to illustrate that if the land is held
by two persons A and B who do not own any land of their own and A is a tenant
of a land of an extent of Ac.2-50 cents. wet., B is also a tenant of a land of
an extent of Ac.2.60 cents. wet. While A is a landless poor person and is saved
from cancellation, B would not be such a landless person. To avoid
discrimination between these persons, the Legislature ought to have provided
that in the case of B his lease would not stand terminated to the extent of
Ac.2-50 cents wet and that he would be entitled to purchase to the extent of
Ac.2-50 cents in accordance with sub-section (2) and not providing for such a
situation amounts to discrimination between two similarly placed persons. The
learned Judges thereafter proceeded to hold what we have adverted to earlier
that the object of augmentation of revenue of the institutions and endowments
is not realistic. However, the learned Judges did not go into the question as
to the meaning of marginal or small farmers and did not find it necessary to
examine the contention of the State that the learned Single Judge had, in fact,
legislated to the extent of introducing the concept of marginal or small
farmers into Section 82 inasmuch they have held the entire sub- section (1) to
be void. The Division Bench also noticed that though there is no appeal by writ
petitioners inasmuch as the constitutionality of the enactment was involved and
when the learned Single Judge had struck down certain provisions, their reasons
were sufficient to sustain the same. The Division Bench also did not consider
it necessary to express any opinion as to whether it is competent for the
Legislature to put an end to the tenancy rights and whether such cancellation
is violative of Article 19(1)(g) of the Constitution or not. On that basis,
after making a declaration of law in the manner stated above, the Division
Bench dismissed the appeals filed by the State. Hence these appeals by special
leave.
The
Division Bench of the High Court found that the classification is unreasonable
inasmuch as all tenants except those who are defined to be landless poor
tenants are covered by Section 82 and such classification has been made which
has no nexus to the object to be achieved, namely, augmentation of income to
the institutions in question and better management of the properties. One of
the reasons given by the Division Bench of the High Court to reach this
conclusion is that the tenancy Acts, namely, the Andhra Pradesh (Andhra Area)
Tenancy Act, 1956 [hereinafter referred to as the Andhra Act] and Andhra
Pradesh (Telangana Area) Tenancy and Agricultural Land Act, 1950 [hereinafter
referred to as the Telangana Act] are still in force. These enactments have not
been excluded in the application to lands held by tenants of the agricultural
lands of the institutions in question. Therefore, the view of the High Court is
that the rents are frozen and eviction of the tenants are not possible and
unless the operation of the Tenancy Acts are excluded insofar as the lands held
by the institutions in question are concerned, the objectives cannot be
fulfilled. It would only result in displacing one tenant by another tenant and
would not achieve the objectives of the Act.
Thus
there is no nexus in making the classification.
Smt. K.Amreshwari,
learned Senior Advocate appearing for the appellants, strongly contended that
this approach of the High Court is plainly unsustainable in view of the fact
that the law on the matter is very clear that charitable or religious
institution or endowment fall into a separate category and form a class by
themselves. She submitted that such tenants coming under them also form
separate class and they can be treated differently from others; secondly, she
submitted that in striking down the provisions of Section 82 of the Act, the
High Court has unnecessarily relied upon far too much on the tenancy laws in
force in the State to fetter the legislature in cancelling the existing
agricultural leases and lands belonging to charitable or religious institution
or endowment. The High Court, she complained, has speculated on the outcome of
the impugned legislation and proceeded to hold that there is no reasonable
connection with the object of the enactment in the absence of any material
other than the laws in force in the State which would not indicate as to the
type of tenants who are holders of leases under consideration, the rent payable
by them, what rent the lands would fetch after the lands are resumed by the
charitable or religious institution or endowment, possibility of sale or self
cultivation. The judgment of the High Court is based on conjectures and
surmises unsustainable in law and they are not strong reasons to invalidate a
law.
Shri L.Nageswara
Rao, learned Senior Advocate appearing for the respondents, however, urged that
the view taken by the High Court gives recognition to the ground realities by
reference to the appropriate legislations in force in the State such as tenancy
laws and we should not ignore the same and interfere with the order of the High
Court. He submitted that all tenants covered by the tenancy laws in the State
of Andhra Pradesh fall into one category and to
distinguish them on the basis that the lands are held by religious institutions
will lead to hostile discrimination particularly when the object of
classification is not fulfilled. He pointed out that there are about 40,000
tenants holding about 3,20,000 acres of land and the measure adopted in
enacting Section 82 of the Act is drastic resulting in deprivation of their
leases without practical benefit to the institutions as noticed by the High
Court.
Hence,
he very forcefully urged that we should not interfere with the order of the
High Court. He submitted that we should take note of every circumstance
available such as matters of common knowledge, history, antecedent legislation,
social conditions, impact of other law on the impugned law in judging whether
the same would be violative of Article 14 of the Constitution.
The
legislation in question is preceded by a report made by a Commission headed by
Justice C.Kondaiah, former Chief Justice of the Andhra Pradesh High Court. It
was noticed in para 1.18.1 of the said report as under:
It is
stated that all concerned who are interested in the charitable or religious
institutions have stated that the temple authorities are facing innumerable
difficulties in the management of the landed properties of the institutions,
the income is very meagre, not worth-mentioning, and in some cases it is nil,
although the institution owns large extent of lands. Reasons thereof is the
provisions of the Tenancy Act, attitude of the persons in possession and
enjoyment for several years, the lands belonging to these institutions are
mostly in the hands of the rich and powerful sections against whom the
concerned authorities are experiencing difficulties to dispossess them from the
lands. The trustees or archakas are in enjoyment of the lands kept Benami in
the names of their relations, etc. The authorities also are in the collusion
with them. The rents paid by the tenants are nominal fixed decades back. The
Estimates Committee also expressed the same opinion.
It is
thereafter the Act in question was brought in force and in the Statement of
Objects and Reasons, inter alia, it was stated as follows:
A
provision is also made to terminate the lease held by persons other than
landless poor persons and to enable landless persons to purchase the lands
already held by them on lease.
Section
82 has the effect of cancelling all leases of agricultural lands belonging to
the institutions subsisting on the date of commencement of the Act
notwithstanding any other law in force.
However,
such cancellation will not affect leases held by landless poor persons.
Landless poor person is identified by the Act as a person whose total land held
by him, either as owner or as cultivating tenant or as both, does not exceed
two and a half acre of wet land or five acres of dry land. In respect of leases
held by landless poor persons for not less than six years continuously such
persons are given the right to purchase such land on payment of 75% of prevailing
market value being payable in four equal instalments as may be prescribed. If,
however, such landless poor persons fail to purchase the land as aforesaid or
is unwilling to purchase the land, the lease shall be deemed to have been
terminated.
Rules
have to be made providing for the authority competent to sanction the lease or licence
in respect of properties belonging to charitable and religious
institutions/endowments and also provide for other terms and conditions. This
provision has no effect upon leases or licences of immovable properties other
than agricultural lands.
What
Article 14 of the Constitution prohibits is class legislation and not
classification for purpose of legislation. If the legislature reasonably
classifies persons for legislative purposes so as to bring them under a
well-defined class, it is not open to challenge on the ground of denial of
equal treatment that the law does not apply to other persons.
The
test of permissible classification is two fold :
(i) that
the classification must be founded on intelligible differentia which
distinguishes persons grouped together from others who are left out of the
group, and
(ii) that
differentia must have a rational connection to the object sought to be
achieved. Article 14 does not insist upon classification, which is
scientifically perfect or logically complete. A classification would be
justified unless it is patently arbitrary. If there is equality and uniformity
in each group, the law will not become discriminatory, though due to some
fortuitous circumstance arising out of peculiar situation some included in a
class get an advantage over others so long as they are not singled out for
special treatment. In substance, the differentia required is that it must be
real and substantial, bearing some just and reasonable relation to the object
of the legislation.
We may
notice the effect of the two Tenancy Acts in force in the State of Andhra Pradesh. Under Section 18(2) of the Andhra
Act provisions of Sections 3 to 7 are made inapplicable to leases of lands
belonging to or given or endowed for the purpose of any charitable or religious
institution or endowment falling within Section 74(1) of the A.P.Act 17 of
1966. Section 18(2) of the Andhra Act further provides that rent payable by the
tenants in respect of such property will be the rent in force at the
commencement of the Andhra Tenancy (Amendment) Act, 1974 and where reasonable
rent has been fixed under Section 74(1)(e) of the A.P.Act 17 of 1966, such
reasonable rent. Sections 3 to 7 of Andhra Act provide for maximum rent payable
by tenants, prescribe the form of agreement of tenancy, provide for
determination of rent, and also for deposit of rent during the pendency of
proceedings for fixation of fair rent. All other provisions including Sections
8 to 16 of the Andhra Act do apply to leases in question.
Insofar
as the Telangana Act is concerned, it exempted from its operation inams held by
charitable or religious institution or endowment as well as service inam lands.
Inams were abolished in the Telangana area of the State in 1955 and that
process was completed in 1973. By Amendment Act of 1985, all such inams have
also been brought within the purview of the Act and abolished and that
resultant position is that none of the charitable or religious institution or
endowment in the Telangana area are exempt from the operation of Hyderabad Act
21 of 1950.
The
Division Bench in reaching the conclusion that Section 82 is unconstitutional
held that the two tenancy Acts in force in the State of Andhra Pradesh are still applicable to the
institutions covered by the Act and, therefore, the object of the enactment of
Section 82 will not be fulfilled. The Division Bench also noticed that there is
no overriding effect given to the Act. In effecting the agrarian reforms, the
major programme of the Government has been to protect the tenants by securing
them a permanent tenure of the land and freezing the rent or conferring a right
upon them to purchase the land at certain sum which is far below the market
rate and the right of the landlord to evict them would be severely restricted
and that too by initiating proceedings before special Tribunals. Under the Telangana
Act, the rent does not exceed five times of the land revenue and in case of wet
lands irrigated by wells it is only three times the land revenue, while in case
of dry lands it is four times the land revenue. Though a maximum rent had been
prescribed under the Andhra Pradesh Act, the same will not be applicable in
view of Section 18(2) of the Act to which we have already adverted to. The
Andhra Pradesh Tenancy Act had granted perpetuity in so far as leases were
concerned. The Division Bench was impressed by the fact that Section 82 is the
first attempt to undo the right of tenants in respect of agricultural lands
held by institutions or endowments governed by the Act. The learned Judges
stated that protecting the right of tenants is equally important just as
protecting the interest of the institutions or the endowments. Cancellation of
the tenancy, by itself, will not achieve the ends. First, the High Court
considered whether augmentation of income is possible in view of the rents
having been frozen which was obtained on the date of the commencement of the
Andhra Pradesh Tenancy Act, 1974. They felt that it is not possible to augment
the income of the institutions at all. Except referring to the enactments
arising under the tenancy Acts, there is no material before the High Court to
support the view as to what are the rents payable at present and what would be
the rent that becomes payable after the leases are put to an end in terms of
Section 82 of the Act and fresh tenancies commence if the lands are leased to
others as provided under the provisions of the Act. When the material is not
clear before the court, the court cannot hazard a guess as to the manner in
which the enactment would operate. How the tenancy Acts will have effect upon
the new tenancies would be a matter to be worked out appropriately.
Therefore,
at the stage of enacting Section 82 or examining its constitutional validity,
the High Court could not have proceeded to hold that unless the operation of
the tenancy Acts are excluded the objectives of enactment cannot be achieved.
It is possible under the new Rules to be framed that the Government may proceed
to grant leases or licences only to small or marginal holders of lands as may
be found by them suitable to cultivate the land thereby freeing the lands from
the grip of rich and powerful persons. Therefore, at this stage, again to state
that the purpose of the enactment of freeing the lands from the grip of rich
and powerful persons cannot be achieved is not correct. The learned Judges have
felt that it is possible for the old tenants themselves to get back the
possession of the lands in question. But, that is as good a guess as against
other possibilities, which we have suggested. Therefore, that will not be a
permissible ground to strike down the law. Wherever possible, some of these
lands which are not within the manageable limits of the concerned religious
institutions may be sold in the manner prescribed in Section 80 of the Act or
may be leased out by them, as the case may be, like a prudent owner or manager
of the property. The High Court proceeded to consider further that cultivation
of these lands by these institutions would not be feasible. We fail to
understand as to how it can be stated so. It is certainly possible if the
institutions hold large holdings of land to have a department in the
institutions to get the lands cultivated and to expect that the very same
incidence and consequences will follow as were applicable earlier prior to
coming into force of Section 82 of the Act does not, therefore, appeal to us.
Whether a tenancy Act should be applicable to a religious institution or should
be kept out of it is not a matter for the court to decide. How far a tenancy
Act is applicable to a religious institution and to what extent it should be
limited is a matter for the legislature to decide. But such a policy should not
be irrational. We do not think on that basis, we can interfere with the
validity of the Act.
It is
plain that religious institutions fall into a separate class and lands held by
them have a special character in respect of which tenancies had been created
and these tenancies are sought to be put to an end to for resumption of lands
for better management thereof. It is clear that the tenants under the religious
institutions form a special class by themselves and such classification is
made, so far as tenants are concerned, to achieve the object of protecting the
interests of the religious institutions. Therefore, we do not think, any of the
principles which result in hostile discrimination would be applicable to the
present case.
So far
as the validity of Section 82(1) in classifying the landless poor persons is
concerned, the High Court felt that the provisions themselves are inconsistent
and that the illustration given by them, to which reference has already been
made earlier, will show how discrimination will result. It is settled law that
it is open to the legislature to state as to who should be exempt from the
application of the law and, in the present case, there is definition of
landless poor person whose total extent of land held by him either as owner or
as cultivating tenant or as both does not exceed two and half acres of wet land
or five acres of dry land having been identified as landless poor person and he
is enabled to purchase the land at 75% of the prevailing market value by paying
in four equal instalments as may be provided under the Rules. Therefore, that
aspect of saving the small land holders cannot be objected to nor can the
meaning of landless poor person be enlarged, as has been sought to be done by
the learned Single Judge. If, however, the said landless poor persons are not
willing to purchase the land or fail to purchase such land, the lease would
lapse. This latter provision cannot be held to be inconsistent with the earlier
provisions as has been held by the High Court because that is a consequence flowing
from the fact that such landless poor person is either not anxious to purchase
the land or fails to do so. The validity of an enactment cannot be judged by
fortuitous circumstance arising out of peculiar circumstances. Therefore, that
reasoning of the Division Bench is also faulty.
None
of the learned counsel appearing in the case supported the view taken by the
learned Single Judge. Therefore, we do not propose to examine the same.
We may
sum up the upshot of our discussion:
1.
That charitable or religious institution or endowment fall into a separate
category and form a class by themselves. If that is so, tenants coming under
them also form separate class. Therefore, they can be treated differently from
others;
2. In
operation of the Act it is possible that it may result in hardship to some of
the tenants but that by itself will not be a consideration to condemn the Act;
3. The
manner in which the charitable or religious institution or endowment would deal
with the properties that are resumed after the provisions of Section 82 of the
Act come into force by cancelling the existing leases is in the region of
speculation.
4.
Fresh tenancy can be entered into and there is no material before the court as
to what was the rent paid by tenants at the time when the Act came into force
in terms of Section 18(2) of the Act or as provided under the Andhra Act or
under the Telangana Act. In the absence of a such material, it would be
hazardous for the court to reach any conclusion one way or the other to state
that the tenants would be frozen and, therefore, there is no likelihood of
charitable or religious institution or endowment getting higher rents. If there
is no material one way or the other, the presumption that the Act is good
should prevail.
5. It
is a matter of policy with the legislature as to whether all provisions of the
tenancy Acts should be exempt in its application to the charitable or religious
institution or endowment in their entirety.
6. The
identification of landless poor persons and protection given to them is
justified as enunciated earlier.
7. It
will be very difficult to predict at this stage that the result of Section 82
of the Act would be so hazardous as not to achieve the object for which it was
enacted. It would not only result in displacing the old tenants by new tenants,
it may also achieve other social objectives in another manner. If appropriate
provisions are made under the Rules and if the leases are given to small
holders of land, another social objective could be achieved.
8. In
what manner charitable or religious institution or endowment would deal with
matters of this nature is a mere guess work at this stage. On some hypothetical
approach the High Court could not have declared a law to be invalid.
In the
light of the discussion made above, we hold that the tenants of the
institutions in question fall into a separate class which is identifiable. If
that is so, what is to be next considered is whether the cancellation of the
lease in their favour would achieve the objectives of the Act. We have
demonstrated that there is no material before the court to show that such
cancellation would not carry out the purposes of the Act, whether the
legislature should have gone ahead to exclude the applicability of the Tenancy
Acts in their application to the charitable or religious institution or
endowment is another matter.
Thus,
the order under appeal shall stand set aside and the writ petitions filed by
the parties shall stand dismissed. However, it is made clear that the
undertaking given to the Court that while the writ proceedings were pending no
steps would be taken for evicting the tenants holding the lands at present
until appropriate Rules are framed shall be binding on the appellants and will
hold good even now.
Subject
to these observations, the appeals stand allowed.
However,
in the circumstances of the case, there shall be no order as to costs.
W.P. (C
) NOS. 1429/1987 AND 120/2988 Certain additional contentions have been raised
on behalf of the petitioners in the other two writ petitions to the effect that
Section 80 would not be applicable to agricultural lands while Section 82
refers only to agricultural lands and whether the lands in question could be
sold by the charitable or religious institution or endowment themselves would
be doubtful. The learned counsel also contended that cancellation of leases of
all tenancies is arbitrary inasmuch as the protection given under the Andhra
Act and the Telangana Act being different, the tenants could not have been
classed into one category. He next contended that tenancies are inheritable and
in such a situation without paying compensation could not have deprived the
rights to the same. He also submitted that Section 38-E of the Telangana Act
provides for conferment of ownership rights to tenants in question and this
aspect has not been considered by the High Court. He further contended that the
livelihood of the tenants being deprived, the provision is violative of Article
21 of the Constitution.
He
also drew our attention to Article 31A of the Constitution to contend that the
tenants in question are entitled to compensation.
We
need not delve deep into the operation of Section 80 of the Act and whether it
is applicable to the lands in question or not and as to the manner the lands
would be dealt with by the charitable or religious institution or endowment on
resumption thereof after cancellation of the leases. It is possible to read
that Section 80 of the Act is an independent provision though falling under
Chapter X with the heading Alienation of any Immovable Property and Resumption
of Inam Lands and contention advanced on behalf of the Petitioners is that
there is a discernable difference between the applicability of the Act which is
for agricultural lands and other properties and Section 80 of the Act which is
applicable to only other properties. Prima facie, Section 80 of the Act does
not appear put such a restriction. The tenants covered either by the Andhra Act
or the Telangana Act may fall into two different categories but insofar as
their holdings with reference to the institutions are concerned, they fall into
the same category. Therefore, the aspect that they had different kinds of
rights arising under different enactments and make them distinct class in the
present circumstance will not be of much relevance.
Therefore,
this contention also does not hold water. The question of tenancy being
inheritable or not would arise if the leases are maintained but if the leases
are themselves cancelled, such a question will not arise at all. Conferment of
ownership under Section 38E of the Telangana Act has no relevance to the
present case at all inasmuch as if the proper procedure has been adopted and
the proceedings have reached the logical end, the tenant would become the owner
of the land. Therefore, Section 82 would not be attracted to such a situation
but if the proceedings have not been terminated and a tenancy continues to be
in force, Section 82 of the Act would be attracted to such a case. This
contention based on Section 38-E of the Telangana Act is untenable.
The
arguments relating to livelihood also have no legs to stand.
The
object of the Act is to resume lands in the hands of existing tenants for
better management. After resumption some tenants may be dependent on the land
leased to them by the charitable or religious institution or endowment but it
cannot be said that was the only land held by them and that was the only
avocation carried on by them, the objectives of the cancellation of the land is
not to deprive anyone of his livelihood but, on the other hand, it is the
better management of the properties belonging to the charitable or religious
institution or endowment. The incident that the same may result in hardship to
some of the tenants will not be a ground to say that it deprives them of their
livelihood.
The
next argument of the learned counsel based on Article 31A of the Constitution,
in our view, is entirely unfounded. Article 31A provides for granting certain
enactments immunity from attack under Articles 14 and 19 of the Constitution.
That is not relevant in the present context at all inasmuch as no such exercise
has been undertaken by the State.
Therefore,
we find no merit in any one of the contentions raised on behalf of the
petitioners. The writ petitions, therefore, stand dismissed.
No
costs.
...J.
[ S.
RAJENDRA BABU ] ...J.
[BRIJESH
KUMAR] AUGUST 29, 2001.
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