Satyawati Sharma (Dead) by LRS Vs.
Union of
India & another
[2008] INSC 660 (16 April 2008)
B.N. Agrawal & G.S. Singhvi REPORTABLE CIVIL APPEAL NO.1897 OF 2003 With C.A. No.1898 of 2003 and C.A.
No.5622 of 2006 G.S. Singhvi, J.
1. Whether Section 14(1)(e) of the Delhi Rent Control Act, 1958 (for short
'the 1958 Act') is ultra vires the doctrine of equality enshrined in Article 14
of the Constitution of India is the question which arises for determination in
these appeals.
2. For the sake of convenience, we have noted the facts from Civil Appeal
No.1897 of 2003:
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On August 18, 1953, Delhi Improvement Trust leased out a plot of land
measuring 184 sq. yards situated at Basti Reghar, Block 'R', Khasra
Nos.2942/1820 to 2943/1820 to Shri Jagat Singh son of Pt.
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Ram Kishan. In terms of Clause 4(c) of the lease deed, the lessee was
prohibited from using the land and building (to be constructed over it) for any
purpose other than residence, with a stipulation that in case of breach of this
condition, the lease shall become void.
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After constructing the building, the lessee inducted Shri Jai Narain
Sharma and Dr. Ms. Tara Motihar, as tenants in two portions of the building,
who started using the rented premises for running watch shop and clinic
respectively.
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Smt. Satyawati Sharma (appellant herein), who is now represented by
her LRs, purchased property i.e. house bearing No.3395-3397, Ward No.XVI, Block
R, Gali No.1, Reghar Pura, New Delhi from legal heirs of the lessee.
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After purchasing the property, the
appellant filed Petition Nos.184 of 1980 and 187 of 1980 for eviction of the
tenants by claiming that she needed the house for her own bona fide need and
also for the use and occupation of the family members dependant upon her. The
appellant further pleaded that she wanted to demolish the building and
reconstruct the same. She also alleged that tenants have been using the premises
in violation of the conditions of lease and, therefore, they are liable to be
evicted.
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The tenants contested the eviction
petitions by asserting that the so called need of the landlord was not bona
fide; that there were no valid grounds for permitting the landlord to demolish
the building and reconstruct the same and that they had not violated the
conditions of lease. They further pleaded that the previous owner let out the
premises for non-residential purposes; that the appellant was also issuing rent
receipts by describing the rented portions as shop/clinic and that in view of
order dated 11.12.1978 issued by the Government of India, Ministry of Housing
and Urban Development, Delhi Development Authority was condoning violations of
the lease conditions.
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By an order dated 17.5.1991,
Additional Rent Controller, Delhi dismissed the eviction petitions. He held that
the appellant is owner and landlady of the suit premises, but she has not been
able to prove that portions thereof were let for residential purposes; that the
appellant and her dependent family members do not have suitable alternative
accommodation except the one occupied by her elder son, who was under the threat
of eviction and that the need of the appellant is bona fide. The Additional Rent
Controller further held that the tenants are guilty of violating clause 4(c) of
deed dated August 18, 1953. He, however, declined to pass order for recovery of
possession by observing that under Section 14(1)(e) of the Act, such an order
can be passed only in respect of premises let for residential purposes. The
Additional Rent Controller also rejected other grounds of eviction put forward
by the appellant.
3. The appeal preferred by the appellant was dismissed by Rent Control
Tribunal, Delhi vide its judgment dated 10.11.1998. The Tribunal agreed with
the Additional Rent Controller that an order of eviction of the tenant can be
passed under Section 14(1)(e) only if the premises were let for residential
purposes. The Tribunal then held that the portions given to the tenants were
being used for non-residential purposes and, therefore, they cannot be evicted
on the ground of bona fide need of the landlord.
4. The appellant challenged the orders of the Additional Rent Controller and
Rent Control Tribunal in Civil Writ Petition No.1093 of 1999. She filed another
petition, which was registered as Civil Writ Petition No.1092 of 1999, with the
prayer that Section 14(1)(e) of the Act be declared ultra vires of Article 14
of the Constitution insofar as it does not provide for eviction of the tenant
from the premises let for non-residential purposes. Both the writ petitions
were heard by the Full Bench of Delhi High Court along with other writ
petitions involving challenge to the vires of Section 14(1)(e) and were
dismissed by the order under challenge. The Full Bench referred to an earlier
judgment of the Division Bench in H.C. Sharma vs. Life Insurance Corporation of
India & Anr. [ILR 1973 (1) Delhi 90] and large number of judgments of this
Court including Amarjit Singh vs. Smt. Khatoon Quamarin [1986 (4) SCC 736] and
held:-
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Tenants of non-residential premises are a class by themselves. The
Parliament in its legislative wisdom did not think it fit to make any provision
for eviction of a tenant from such premises on the ground of bona fide
requirement of the landlord for residential purpose. Referenced to Section 29(2)(r) of the 1995 Act, in our opinion, cannot be
said to have any relevance whatsoever for the purpose of determining.
Admittedly, the 1995 Act is yet to come into force. If the said Act is yet to
come into force, the question of taking recourse to the provisions of the said
Act would not arise more so because this court in exercise of its jurisdiction
under Article 226 of the Constitution of India would not be in a position to
direct the Government to do so which is a legislative function. On the other
hand, the very fact that said Act is yet to come into force in an indicia to
the fact that the Central Government does not in its wisdom consider that the
said benefit should be extended to non-residential premises also.
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Judicial review of legislation is permissible only on limited grounds,
namely when a statute is enacted by a legislature which had no authority there for or when it inter alia violates any of the provisions contained in Part
III of the Constitution. Once it is held, as we are bound to, that the
non-residential premises having regard to the interpretation clause, forms a
separate class, such classification, having a reasonable nexus with the ground
of eviction, cannot be said to be discriminatory in nature. Article 14 of the
Constitution would apply only to persons similarly situated. Owners of
residential and non-residential premises stand on different footings. In the
event, the legislature in its wisdom thinks it fit to extend its protective
wing to a class of tenants from being evicted on a particular ground, the same
by itself cannot be said to be discriminatory so as to attract the wrath of
Article 14 of the Constitution of India. The court in a situation of this
nature is only entitled to see as to whether such classification is valid and
rational. Once the rationality in such legislation is found, the court will put
its hands off.
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Furthermore, the provisions of the said Act had been declared intra vires by the Apex Court in Amarjit Singh v. Khatoon Quamarain (supra). In that
case, an argument was advanced that unless the second limb of Section 14(1)(e)
of the Act is read in such a way that it was in consonance with Articles 14 and
21 of the Constitution of India, the same would be void as being
unconstitutional. The question raised therein has been dealt with the Apex
Court.
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In the instant case, the Statute
itself has indicated the persons or things to whom its provisions are
recommended to apply. The said Act is a beneficial legislation. It seeks to
protect the tenants. Tenants are broadly classified into three categories
residential, non-residential and/or other tenant. Such a classification as
regards premises or tenancy cannot per se be said to be unreasonable.
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In the instant case, so far as
Sections 14(1)(e) and 14(1)(k) are concerned, the statute itself has indicated
the persons to whom the provisions would apply. The provision is absolutely
clear and unambiguous. In such a case the Court is only required to examine
whether the classification is based upon reasonable differentia, distinguishing
the person, group from those left out and whether such differential has
reasonable nexus with the objects to be achieved. The impugned provision
indisputably was intended to beneficially apply to landlords and of one class of
tenancy viz. tenancy in respect of the residential premises and not
non-residential premises.
5. The Full Bench also noticed the judgment in Harbilas Rai Bansal vs. State of Punjab & Anr. [1996 (1) SCC 1] whereby Section 13(3)(a) of the
East Punjab Urban Rent Restriction Act, 1949, as amended by Punjab Act No.29 of
1956, was struck down but distinguished the same by making the following
observations :- "The objects and reasons of the said Act, thus, were
considered having regard to the provisions made at the time of commencement of
the said Act. Such a contingency does not arise in the instant case.
Reasonable nexus to the objects to be achieved of the said Act having regard
to the performance for which the building is being used must be found out from
the legislative intent. Legislative intent may change from State to
State."
6. Learned counsel for the appellants relied on the judgment of this Court
in Harbilas Rai Bansal vs. State of Punjab & Anr. (supra) and argued that
the classification made between the premises let for residential purposes and
non-residential purposes in the matter of eviction of tenant on the ground of
bona fide need of the landlord is irrational, arbitrary and violative of
Article 14 of the Constitution. Shri A.C. Gambhir submitted that even though
the constitutional validity of Section 14(1)(e) of the Act was upheld by the
Division Bench of the High Court in H.C. Sharma vs. Life Insurance Corporation of India & Anr. (supra), that decision
cannot, in the changed circumstances and in view of the later judgments of this
Court in Rattan Arya vs. State of Tamil Nadu [(1986) 3 SCC 385], Harbilas Rai
Bansal vs. State of Punjab (supra), Rakesh Vij vs. Dr. Raminder Pal Singh Sethi [(2005) 8 SCC 504] be treated as good law. He
argued that the reason which prompted the legislature to exclude the premises
let for non residential purposes from the purview of Section 14(1)(e) of the
1958 Act and which found approval of the Division Bench of the High Court has,
with the passage of time, become non-existent and the classification of the
premises into residential and non-residential with reference to the purpose of
lease has become totally arbitrary and irrational warranting a declaration of
invalidity qua the impugned section. In support of this argument, the learned
counsel relied on the judgment of this Court in Malpe Vishwanath Acharya and
Others vs. State of Maharashtra & Another [1998 (2) SCC 1]. Shri Gambhir pointed out that in the Delhi Rent
Control Act, 1995 (for short 'the 1995 Act'), which was enacted by the
Parliament in the light of the National Housing Policy, 1992 and observations
made by this Court in Prabhakaran Nair vs. State of Tamil Nadu [1987 (4) SCC
238], no distinction has been made between the premises let for residential and
non-residential purposes in the matter of eviction of the tenant on the grounds
of landlord's bona fide need and argued that even though that Act has not been
enforced, the Court can take cognizance of the legislative changes and declare
the implicit restriction contained in Section 14(1)(e) on the eviction of
tenant from the premises let for non-residential purposes as unconstitutional.
7. Shri C.S. Rajan, learned senior counsel appearing for the Union of India
emphasized that the purpose of the Act is to protect the tenants against
arbitrary eviction by the landlord and argued that the classification of the
premises with reference to the purpose of lease should be treated as based on
rational grounds because the same is meant to further the object of the
enactment. Shri Rajan referred to the judgment of Amarjit Singh vs. Smt. Khatoon Quamarin (supra) to show that challenge to the constitutionality of
the Section 14(1)(e) on the ground of violation of Article 14 has already been
negatived and argued that the vires of that provision cannot be re- examined
merely because a similar provision contained in the 'Punjab Act' has been
declared unconstitutional in Harbilas Rai Bansal vs. State of Punjab (supra).
Learned senior counsel relied on the judgments of this Court In Re The Special
Courts Bill, 1978 [1979 (1) SCC 380] and Padma Sundra Rao (Dead) and Others vs.
State of Tamil Nadu and Others [2002 (3) SCC 533] and argued that the Court
should not attempt to rewrite Section 14(1)(e) so as to facilitate evection of
the tenants from the premises let for non-residential purposes. Shri S.P.
Laler, learned counsel appearing for the respondents in Civil Appeal Nos.1897
of 2003 and 1898 of 2003 supported the judgment of the Full Bench of the High
Court and argued that the distinction made by the legislature between the
premises let for residential and non-residential purposes is based on rational
ground i.e. acute shortage of non-residential premises/buildings and,
therefore, the same cannot be treated as unconstitutional.
8. We have considered the respective arguments/submissions. For deciding the
question raised in these appeals, it will be useful to notice the salient
features of rent control legislations, which were made applicable to Delhi form
time to time. These are:- i) In exercise of the power vested in it under Rule
81 of the Defence of India Rules, the Government of India promulgated New Delhi
House Rent Control Order, 1939. This order was made applicable only to
residential premises. Section 11 thereof provided that a tenant in possession
of a house shall not be evicted there from whether in execution of a decree or
otherwise and whether before or after the termination of the tenancy except on
the grounds mentioned therein. Clause (iv) of sub-section 2 of Section 11A was
as under:
"that the landlord was at no time during the twelve months immediately
preceding the date of his application residing within the limits of the Delhi
or New Delhi Municipality or the Notified Areas of the Civil Station, Delhi or
Delhi Fort, that it is essential in the public interest that he should take up
residence in that area and that he is unable to secure other suitable
accommodation, the Controller shall make an order directing the tenant to put
the landlord in possession of the house, and if the Controller is not so satisfied,
he shall make an order rejecting the application."
(ii) On 15th October, 1942, the Punjab Urban Rent Restriction Act, 1941 was
made applicable to the Province of Delhi, except the areas to which the New
Delhi House Rent Control Order was applicable. The definition of the expression
"premises" in the Punjab Urban Rent Restriction Act made no
distinction between "residential" and non-residential" premises.
Section 10(1) of that Act provided that no order for recovery of possession of
any premises shall be made so long as the tenant pays or is ready and willing
to pay rent to the full extent allowable by this Act and perform other
conditions of the tenancy. However, in terms of proviso to Section 19(1), the
Court could make an order for recovery of possession if the landlord satisfied
that the prescribed notice had been served on the tenant. Sub-section 2 of
Section 10 provided that where any order mentioned in sub-section 1 has been
made on or after the First day of January, 1939 but not executed before the
commencement of the Act, the Court by which the order was made may if it is of
opinion that the order would not have been made if the Act had been in
operation on the date the order was made, rescind or vary the order. The
proviso to Section 10(2) enumerated the other grounds for eviction of the
tenants. One of the grounds was that the premises are reasonably and bona fide
required by the landlord for his own occupation.
(iii) In 1944, the Delhi Rent Control Ordinance (XXV), 1944 was promulgated.
In this Ordinance, the word 'premises' was defined to mean any building which
is let separately for use as a residence or for commercial use or for any other
purpose. Clauses (a) to (e) of Section 9 of the Ordinance specified the grounds
on which the landlord could recover possession of the premises. One of the
grounds was that the landlord requires the premises for his use as residence.
This means the landlord could not recover possession of the premises if he
needed the same for commercial use.
(iv) In 1947, the Delhi and Ajmer-Merwara Rent Control Act was enacted and
was made applicable to all the parts of Delhi. Section 2(b) of the 1947 Act
which contained the definition of the word 'premises' read as under:-
"premises" means any building which is, or is intended to be, let
separately for use as a residence or for commercial use or for any other
purpose,.."
Section 9(e) which provided for eviction of the tenant on the ground of bona
fide requirement of the landlord was as under:- "that purely residential
premises are required bona fide by the landlord who is the owner of such
premises for occupation as a residence for himself or his family, that he
neither has nor is able to secure other suitable accommodation, and that he has
acquired his interest in the premises at a date prior to the beginning of the
tenancy or the 2nd day of June, 1944, whichever is later, or if the interest
has devolved on him by inheritance or succession, his predecessor had acquired
the interest at a date prior to the beginning of the tenancy or the 2nd day of
June, 1944, whichever is later;"
(v) The 1947 Act was replaced by the Delhi and Ajmer Rent Control Act, 1952.
Section 13 of that Act enumerated various grounds on which a tenant could be
evicted. Clause (c) of Section 13(1) was as under:- "that the premises let
for residential purposes are required bona fide by the landlord who is the
owner of such premises for occupation as a residence for himself or his family
and that he has no other suitable accommodation;
Explanation:- For the purposes of this clause, "residential
premises" include any premises which having been let for use as a
residence are, without the consent of the landlord, used incidentally for
commercial or other purposes:."
(vi) After 6 years, the Delhi Rent Control Act, 1958 was enacted. The
Preamble of this Act shows that it is a legislation for the control of rents
and evictions and of rates of hotels and lodging houses, and for the lease of
vacant premises to Government, in certain areas in the Union Territory of
Delhi. Section 2(i) of that Act defines the premises to mean any building or
part of a building which is intended to be or is let for use as a residence or
for commercial use or for any other purpose. The definition of the term
"standard rent" contained in Section 2(k) refers to the premises
irrespective of its use. Section 3 which exempts certain premises from the
operation of the Act also does not make any distinction between residential and
non- residential premises. Clause (c) of that section which provides for
exemption in the context of monthly rent speaks of residential as well as
non-residential premises. Section 6 relates to standard rent. It deals with
residential as well as non-residential premises. Para A of Section 6(1) specifies
the standard rent for residential premises and para B specifies such rent for
premises other than residential premises. Sub-section (2) of Section 6 which
provides for fixation of standard rent refers to premises irrespective of their
user. The limitation prescribed (Section 12) for filing application for
fixation of standard rent does not make any distinction between the premises
let for residential, commercial and other purposes. Section 14(1) which
contains prohibition against passing of an order or decree by any Court or
Controller for recovery of possession of any premises does not make any
distinction between the premises let for residential, commercial or other
purposes. Clauses (a), (b), (c), (f), (g), (j), (k) and (l) of proviso to
Section 14(1) specify different grounds for recovery of possession of the
premises irrespective of its user. Only clauses (d) and (e) speak of premises
let for use as residence or residential purposes.
Sections 2(i) and 14(1)(d) and (e) of the 1958 Act which have bearing on the
decision of the appeals, read as under:-
2. In this Act, unless the context otherwise requires (i)
"premises" means any building or part of a building which is, or is
intended to be, let separately for use as a residence or for commercial use or for
any other purpose, and includes, (i) the garden, grounds and outhouses, if
any, appertaining to such building or part of the building' (ii) any furniture
supplied by the landlord for use in such building or part of the building;
but does not include a room in a hotel or lodging house.
14. Protection of tenant against eviction. (1) Notwithstanding anything to
the contrary contained in any other law or contract, no order or decree for the
recovery of possession of any premises shall be made by any court or Controller
in favour of the landlord against a tenant:
Provided that the Controller may, on an application made to him in the
prescribed manner, make an order for the recovery of possession of the premises
on one or more of the following grounds only, namely:- (a) to (c) (d) that the
premises were let for use as a residence and neither the tenant nor any member
of his family has been residing therein for a period of six months immediately
before the date of the filing of the application from the recovery of
possession thereof;
(e) that the premises let for residential purposes are required bona fide by
the landlord for occupation as a residence for himself or for any member of his
family dependent on him, if he is the owner thereof, or for any person for
whose benefit the premises are held and that the landlord or such person has no
other reasonably suitable residential accommodation.
Explanation. For the purposes of this clause, "premises let for
residential purposes" include any premises which having been let for use
as a residence are, without the consent of the landlord, used incidentally for
commercial or other purposes.
(vii) The 1958 Act was amended five times between 1960 to 1988, but demands
continued to be made by the landlords and the tenants for its further amendment
to suit their respective causes. In 1992 National Housing Policy was notified.
One of the important features of that Policy was to remove legal impediments to
the growth of housing in general and rental housing in particular. Both the
Houses of Parliament adopted the Policy.
Thereafter, the 1995 Act was enacted. Though the new Act has not been
enforced so far and in Common Cause vs. Union of India and Others [2003 (8) SCC
250], this Court declined to issue a writ of mandamus to Central Government to
notify the same, it will be useful to take cognizance of the statement of
objects and reasons and Section 22(r) of the 1995 Act to which reference was
made by the learned counsel during the course of hearing. The same reads as
under:- Statement of objects and reasons:
The relations between landlords and tenants in the National Capital
Territory of Delhi are presently governed by the Delhi Rent Control Act, 1958.
This Act came into force on the 9th February, 1959. It was amended thereafter
in 1960, 1963, 1976, 1984 and 1988.
The amendments made in 1988 were based on the recommendations of the
Economic Administration Reforms Commission and the National Commission on
Urbanisation. Although they were quite extensive in nature, it was felt that
they did not go far enough in the matter of removal of disincentives to the
growth of rental housing and left many questions unanswered and problems
unaddressed.
Numerous representations for further amendments to the Act were received
from groups of tenants and landlords and others.
2. The demand for further amendments to the Delhi Rent Control Act, 1958
received fresh impetus with the tabling of the National Housing Policy in both
Houses of Parliament in 1992. The Policy has since been considered and adopted
by Parliament. One of its major concerns is to remove legal impediments to the
growth of housing in general and rental housing in particular. Paragraph 4.6.2
of the National Housing Policy specifically provides for the stimulation of investment
in rental housing especially for the lower and middle income groups by suitable
amendments to rent control laws by State Governments. The Supreme Court of
India has also suggested changes in rent control laws. In its judgment in the
case of Prabhakaran Nair vs. State of Tamil Nadu, the Court observed that the
laws of landlords and tenants must be made rational, humane, certain and
capable of being quickly implemented. In this context, a Model Rent Control
Legislation was formulated by the Central Government and sent to the states to
enable them to carry out necessary amendments to the prevailing rent control
laws. Moreover, the Constitution (Seventy-Fifth Amendment) Act, 1994 was passed
to enable the State Governments to set up State-level rent tribunals for speedy
disposal of rent cases by excluding the jurisdiction of all courts except the
Supreme Court.
3. In the light of the representations and developments referred to above,
it has been decided to amend the rent control law prevailing in Delhi. As the
amendments are extensive and substantial in nature, instead of making changes
in the Delhi Rent Control Act, 1958, it is proposed to repeal and replace the
said Act by enacting a fresh legislation.
4. To achieve the above purposes, the present Bill, inter alia,
seeks to provide for the following, namely:-
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exemption of certain categories of
premises and tenancies from the purview of the proposed legislation;
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creation of tenancy compulsorily to be
written agreement;
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compulsory registration of all written
agreements of tenancies except in certain circumstances;
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limit the inheritability of tenancies;
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redefine the concept of rent payable
and provide for its determination, enhancement and revision;
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ensure adequate maintenance and
repairs of tenanted premises and facilitate further improvement and additions
and alterations of such premises;
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balance the interests of landlords and
tenants in the matter of eviction in specified circumstances;
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provide for limited period tenancy and
automatic eviction of tenants upon expiry of such tenancy;
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provide for the fixing and revision of
fair rate and recovery of possession in respect of hotels and lodging houses;
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provide for a simpler and speedier
system of disposal of rent cases through Rent Authorities and Rent Tribunal and
by barring the jurisdiction of all courts except the Supreme Court; and (k)
enhance the penalties for infringement of the provisions of the legislation by
landlords and tenants.
5. On enactment, the Bill will minimize distortion in the rental housing
market and encourage the supply of rental housing both from the existing
housing stock and from new housing stock.
6. The Notes on clauses appended to the Bill explain the various provisions
of the Bill."
22. Protection of tenant against eviction. (r) that the premises let for
residential or non-residential purposes are required, whether in the same form
or after re-construction or re-building, by the landlord for occupation for
residential or non-residential purpose for himself or for any member of his
family if he is the owner thereof, or for any person for whose benefit the
premises are held and that the landlord or such person has no other reasonably
suitable accommodation.
9. An analysis of the above noted provisions would show that till 1947 no
tangible distinction was made between the premises let for residential and
non-residential purposes. The implicit restriction on the landlord's right to
recover possession of the non-residential premises was introduced in the Delhi
and Ajmer-Marwara Rent Control Act, 1947 and was continued under the 1958 Act.
However, the 1995 Act does not make any distinction between the premises let
for residential and non-residential purposes in the matter of eviction of
tenant on the ground that the same are required by the landlord for his/her
bona fide use or occupation. Even though, the 1995 Act is yet to be enforced
and in Common Cause vs. Union of India (supra) this Court declined to issue a
writ of mandamus to the Central Government, for that purpose, we can take
judicial notice of the fact that the legislature has, after taking note of the
developments which have taken place in the last 37 years i.e. substantial
increase in the availability of the commercial and non-residential premises or
the premises which can be let for commercial or non-residential purposes and
meteoric rise in the prices of land and rentals of residential as well as
non-residential premises, removed the implicit embargo on the landlord's right
to recover possession of the premises if the same are bona fide required by
him/her.
10. Section 13(3)(a) of the Punjab Act (unamended and amended), which came
up for consideration in Harbilas Rai Bansal vs. State of Punjab (supra) reads
as under:- Unamended Section 13(3)(a) of the Punjab Act.
13(3)(a). A landlord may apply to the Controller for an order directing
tenant to put the landlord in possession
(i) in the case of a residential or a
scheduled building if (a) he requires it for his own occupation; (b) he is not occupying another residential or a scheduled building, as the
case may be, in the urban area concerned; and (c) he has not vacated such a building without sufficient cause after
the commencement of this Act, in the said urban area;
(ii) in the case of a non-residential building or rented land, if (a) he
requires it for his own use;
(b) he is not occupying in the urban area concerned for the purpose of his
business any other such building or rented land, as the case may be and (c) he
has not vacated such a building or rented land without sufficient cause after
the commencement of this Act, in the urban area concerned;
(iii) in the case of any building, if he requires it for the re- erection of
that building, or for its replacement by another building, or for the erection
of other building;
(iv) in the case of any building, if he requires it for use as an office or
consulting room by his son who intends to start practice as a lawyer or as a
"registered practitioner" within the meaning of that expression as
used in the Punjab Medical Registration Act, 1916 (II of l916), or for the
residence of his son who is married, if (a) his son as aforesaid is not
occupying in the urban area concerned any other building for use as office,
consulting room or residence, as the case may be; and (b) his son as aforesaid
has not vacated such a building without sufficient cause after the commencement
of this Act, in the urban area concerned:
Provided that where the tenancy is for a specified period agreed upon
between the landlord and the tenant, the landlord shall not be entitled to
apply under this sub-section before the expiry of such period:
Provided further that where that landlord has obtained possession of a
residential, a scheduled or non-residential building or rented land under the
provisions of sub-paragraph (i) or sub-paragraph (ii) he shall not be entitled
to apply again under the said sub-paragraphs for the possession of any other
building of the same class or rented land:
Provided further that where a landlord has obtained possession of any
building under the provisions of sub-paragraph (iv) he shall not be entitled to
apply again under the said sub-paragraph for the possession of any other
building for the use of or, as the case may be, for the residence of the same
son.
(b) The Controller shall, if he is satisfied that the claim of the landlord
is bona-fide make an order directing the tenant to put the landlord in
possession of the building or rented land on such date as may be specified by
the Controller and if the Controller is not so satisfied, he shall make an
order rejecting the application:
Provided that the Controller may give the tenant a reasonable time for
putting the landlord in possession of the building or rented land and may
extend such time so as not to exceed three months in the aggregate. Amended Section 13(3)(a) of the Punjab Act.
13. Eviction of tenants. (1) A tenant in possession of a building or rented
land shall not be evicted there from in execution of a decree passed before or
after the commencement of this Act or otherwise and whether before or after the
termination of the tenancy, except in accordance with the provisions of this
section, or in pursuance of an order made under Section 13 of the Punjab Urban
Rent Restriction Act, 1949, as subsequently amended.
(2) * * * (3)(a) A landlord may apply to the Controller for an order
directing the tenant to put the landlord in possession (i) in the case of a
residential building, if (omitted as not relevant) (ii) in the case of rented
land, if (a) he requires it for his own use;
(b) he is not occupying in the urban area concerned for the purpose of his
business any other such rented land, and (c) he has not vacated such rented
land without sufficient cause after the commencement of this Act, in the urban
area concerned.
11. Before proceeding further we consider it necessary to observe that there
has been a definite shift in the Court's approach while interpreting the rent
control legislations. An analysis of the judgments of 1950s' to early 1990s'
would indicate that in majority of cases the courts heavily leaned in favour of
an interpretation which would benefit the tenant Mohinder Kumar and Others vs.
State of Haryana and Another [1985 (4) SCC 221], Prabhakaran Nair and Others
vs. State of Tamil Nadu and Others (supra), D.C. Bhatia and Others vs. Union of
India and Another [1995 (1) SCC 104] and C.N. Rudramurthy vs. K. Barkathulla
Khan [1998 (8) SCC 275]. In these and others case, the Court consistently held
that the paramount object of every Rent Control Legislation is to provide
safeguards for tenants against exploitation by landlords who seek to take undue
advantage of the pressing need for accommodation of a large number of people
looking for a house on rent for residence or business in the background of
acute scarcity thereof. However, a different trend is clearly discernible in
the latter judgments. In Malpe Vishwanath Acharya and Others vs. State of
Maharashtra & Another (supra), this Court considered the question whether
determination and fixation of rent under the Bombay Rents, Hotel and Lodging
Houses, Rates Control Act, 1947, by freezing or pegging down of rent as on
1.9.1940 or as on the date of first letting was arbitrary, unreasonable and
violative of Article 14 of the Constitution. The three-Judge Bench answered the
question in affirmative but declined to strike down the concerned provisions on
the ground that the same were to lapse on 31.3.1998. Some of the observations
made in that judgment are worth noticing. These are:
"Insofar as social legislation, like the Rent Control Act is concerned,
the law must strike a balance between rival interests and it should try to be
just to all. The law ought not to be unjust to one and give a disproportionate
benefit or protection to another section of the society.
When there is shortage of accommodation it is desirable, nay, necessary that
some protection should be given to the tenants in order to ensure that they are
not exploited. At the same time such a law has to be revised periodically so as
to ensure that a disproportionately larger benefit than the one which was
intended is not given to the tenants. It is not as if the government does not
take remedial measures to try and off set the effects of inflation. In order to
provide fair wage to the salaried employees the government provides for payment
of dearness and other allowances from time to time. Surprisingly this principle
is lost sight of while providing for increase in the standard rent the
increases made even in 1987 are not adequate, fair or just and the provisions
continue to be arbitrary in today's context."
"When enacting socially progressive legislation the need is greater to
approach the problem from a holistic perspective and not to have narrow or
short sighted parochial approach. Giving a greater than due emphasis to a vocal
section of society results not merely in the miscarriage of justice but in the
abdication of responsibility of the legislative authority. Social Legislation
is treated with deference by the Courts not merely because the Legislature
represents the people but also because in representing them the entire spectrum
of views is expected to be taken into account. The Legislature is not shackled
by the same constraints as the courts of law. But its power is coupled with a
responsibility. It is also the responsibility of the courts to look at
legislation from the altar of Article 14 of the Constitution. This Article is
intended, as is obvious from its words, to check this tendency; giving undue
preference to some over others."
12. In Joginder Pal vs. Naval Kishore Behal [2002 (5) SCC 397], the Court
after noticing several judicial precedents on the subject observed as under:
"The rent control legislations are heavily loaded in favour of the
tenants treating them as weaker sections of the society requiring legislative
protection against exploitation and unscrupulous devices of greedy landlords.
The legislative intent has to be respected by the courts while interpreting the
laws. But it is being uncharitable to legislatures if they are attributed with
an intention that they lean only in favour of the tenants and while being fair
to the tenants, go to the extent of being unfair to the landlords. The
legislature is fair to the tenants and to the landlords - both. The courts have
to adopt a reasonable and balanced approach while interpreting rent control
legislations starting with an assumption that an equal treatment has been meted
out to both the sections of the society. In spite of the overall balance
tilting in favour of the tenants, while interpreting such of the provisions as
take care of the interest of the landlord the court should not hesitate in
leaning in favour of the landlords. Such provisions are engrafted in rent
control legislations to take care of those situations where the landlords too
are weak and feeble and feel humble.
[Emphasis added]
13. We shall now deal with the core question whether Section 14(1)(e) of the
1958 Act can be treated as violative of equality clause embodied in Article 14
of the Constitution insofar as it differentiates between the premises let for
residential and non-residential purposes in the matter of eviction on the
ground of bona fide requirement of the landlord and restricts the landlord's
right only to the residential premises.
14. Article 14 declares that the state shall not deny to any person equality
before the law or the equal protection of the laws. The concept of equality
embodied in Article 14 is also described as doctrine of equality. Broadly
speaking, the doctrine of equality means that there should be no discrimination
between one person and another, if having regard to the subject matter of
legislation, their position is the same. The plain language of Article 14 may
suggest that all are equal before the law and the State cannot discriminate
between similarly situated persons. However, application of the doctrine of
equality embodied in that Article has not been that simple. The debate which
started in 1950s on the true scope of equality clause is still continuing. In
last 58 years, the courts have been repeatedly called upon to adjudicate on the
constitutionality of various legislative instruments including those meant for
giving effect to the Directive Principals of State Policy on the ground that
same violate the equality clause. It has been the constant refrain of the
courts that Article 14 does not prohibit the legislature from classifying
apparently similarly situated persons, things or goods into different groups
provided that there is rational basis for doing so. The theory of reasonable
classification has been invoked in large number of cases for repelling
challenge to the constitutionality of different legislations.
15. In Ram Krishna Dalmia and Ors. vs. Shri Justice S.R. Tendolkar and Ors.,
[AIR 1958 SC 538], this Court considered the inter-play of the doctrines of
equality and classification and held:- "It is now well established that
while Article 14 forbids class legislation, it does not forbid reasonable
classification for the purposes of legislation. In order, however, to pass the
test of permissible classification two conditions must be fulfilled, namely (i)
that the classification must be found on an intelligible differentia which
distinguishes persons or things that are grouped together from others left out
of the group, and (ii) that that differentia must have a rational relation to
the object sought to be achieved by the statute in question.
The classification may be founded on different bases, namely, geographical,
or according to objects or occupations or the like. What is necessary is that
there must be a nexus between the basis of classification and the object of the
Act under consideration. It is also well established by the decisions of
Supreme Court that article 14 condemns discrimination not only by a substantive
law but also by a law of procedure."
Speaking for the Court, Chief Justice S.R. Das enunciated some principles,
which have been referred to and relied in all subsequent judgments. These are:
"(a) that a law may be constitutional even though it relates to a single
individual if, on account of some special circumstances or reasons applicable
to him and not applicable to others, that single individual may be treated as a
class by himself;
(b) that 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 ;
(c) that it must be presume that the legislature understands and correctly
appreciates the need of its own people, that its laws are directed to problems
made manifest by experience and that its discriminations are based on adequate
grounds;
(d) that the legislature is free to recognize degrees of harm and may
confine its restrictions to those cases where the need is deemed to be the
clearest;
(e) that 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 times and may assume every state of facts which can be conceived
existing at the time of legislation; and (f) that while good faith and
knowledge of the existing conditions on the part of a legislature are to be
resumed, 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."
16. In Mohd. Shujat Ali vs. Union of India [1975 (3) SCC 76], the Court
observed that Article 14 ensures to every person equality before law and equal
protection of the laws. However, the constitutional code of equality and equal
opportunity does not mean that the same laws must be applicable to all persons.
It does not compel the State to run "all its laws in the channels of
general legislation". It recognises that having regard to differences and
disparities which exist among men and things, they cannot all be treated alike
by the application of the same laws. "To recognise marked differences that
exist in fact is living law; to disregard practical differences and concentrate
on some abstract identities is lifeless logic." The Legislature must
necessarily, if it is to be effective at all in solving the manifold problems
which continually come before it, enact special legislation directed towards
specific ends limited in its application to special classes of persons or
things. "Indeed, the greater part of all legislation is special, either in
the extent to which it operates, or the objects sought to be attained by
it." At the same time, the Court cautioned against the readymade invoking
of the doctrine of classification to ward off every challenge to the
legislative instruments on the ground of violation of equality clause and
observed:
"The equal protection of the laws is a "pledge of the protection
of equal laws". But laws may classify. And, as pointed out by Justice
Brawer, "the very idea of classification is that of inequality". The
Court has tackled this paradox over the years and in doing so, it has neither
abandoned the demand for equality nor denied the legislative right to classify.
It has adopted a middle course of realistic reconciliation. It has resolved the
contradictory demands of legislative specialization and constitutional
generality by a doctrine of reasonable classification. This doctrine recognises
that the legislature may classify for the purpose of legislation but requires
that the classification must be reasonable. It should ensure that persons or
things similarly situated are all similarly treated. The measure of
reasonableness of a classification is the degree of its success in treating
similarly those similarly situated."
"A reasonable classification is one which includes all persons or
things similarly situated with respect to the purpose of the law. There should
be no discrimination between one person or thing and another, if as regards the
subject-matter of the legislation their position is substantially the same.
This is sometimes epigrammatically described by saying that what the
constitutional code of equality and equal opportunity requires is that among
equals, the law should be equal and that like should be treated alike. But the
basic principle underlying the doctrine is that the Legislature should have the
right to classify and impose special burdens upon or grant special benefits to
persons or things grouped together under the classification, so long as the
classification is of persons or things similarly situated with respect to the
purpose of the legislation, so that all persons or things similarly situated
are treated alike by law. The test which has been evolved for this purpose is and
this test has been consistently applied by this Court in all decided cases
since the commencement of the Constitution that the classification must be
founded on an intelligible differentia which distinguishes certain persons or
things that are grouped together from others and that differentia must have a
rational relation to the object sought to be achieved by the legislation."
"We have to be constantly on our guard to see that this test which has
been evolved as a matter of practical necessity with a view to reconciling the
demand for equality with the need for special legislation directed towards
specific ends necessitated by the complex and varied problems which require
solution at the hands of the Legislature, does not degenerate into rigid
formula to be blindly and mechanically applied whenever the validity of any
legislation is called in question. The fundamental guarantee is of equal
protection of the laws and the doctrine of classification is only a subsidiary
rule evolved by courts to give a practical content to that guarantee by
accommodating it with the practical needs of the society and it should not be
allowed to submerge and drown the precious guarantee of equality. The doctrine
of classification should not be carried to a point where instead of being a
useful servant, it becomes a dangerous master, for otherwise, as pointed out by
Chandrachud, J., in State of Jammu & Kashmir v. Triloki Nath Khosa the
guarantee of equality will be submerged in class legislation masquerading as
laws meant to govern well-marked classes characterised by different and
distinct attainments". Overemphasis on the doctrine of classification or
an anxious and sustained attempt to discover some basis for classification may
gradually and imperceptibly deprive the guarantee of equality of its spacious
content. That process would inevitably end in substituting the doctrine of
classification for the doctrine of equality: the fundamental right to equality
before the law and equal protection of the laws may be replaced by the
overworked methodology of classification. Our approach to the equal protection
clause must, therefore, be guided by the words of caution uttered by Krishna
Iyer, J. in State of Jammu & Kashmir v. Triloki Nath Khosa: (at SCC p.
42) "Mini-classifications based on micro-distinctions are false to our
egalitarian faith and only substantial and straightforward classifications
plainly promoting relevant goals can have constitutional validity. To overdo
classification is to undo equality."
[Emphasis added] 17. In L.I.C. of India and Another vs. Consumer Education
&
Research Centre and Others [1995 (5) SCC 482], the Court reiterated the
above noted principal in the following words:- "The doctrine of
classification is only a subsidiary rule evolved by the courts to give
practical content to the doctrine of equality, overemphasis on the doctrine of
classification or anxious or sustained attempt to discover some basis for
classification may gradually and imperceptibly erode the profound potency of
the glorious content of equality enshrined in Article 14 of the Constitution.
The overemphasis on classification would inevitably result in substitution of
the doctrine of classification to the doctrine of equality and the Preamble of
the Constitution which is an integral part and scheme of the Constitution.
Maneka Gandhi v. Union of India [1978 (1) SCC 248] ratio extricated it from
this moribund and put its elasticity for egalitarian path finder lest the
classification would deny equality to the larger segments of the society. The
classification based on employment in Government, semi-Government and reputed
commercial firms has the insidious and inevitable effect of excluding lives in
vast rural and urban areas engaged in unorganized or self- employed sectors to
have life insurance offending Article 14 of the Constitution and socio-economic
justice."
18. In Gian Devi Anand vs. Jeevan Kumar & Ors. [1985 (2) SCC 683] the
Supreme Court considered the question whether the statutory tenancy in respect
of commercial premises is heritable. The facts of that case were that one Wasti
Ram was tenant in respect of Shop No. 20, New Market, West Patel Nagar of the
respondents at a monthly rental of Rs.110/-. The tenancy commenced from
September 1, 1959. In April, 1970, the respondent landlord determined the
tenancy by serving a notice to quit. In September, 1970 he filed a petition
under Section 14 of the Act for eviction of Wasti Ram on the grounds of
non-payment of rent, bona fide requirement, change of user from residential to
commercial, substantial damage to the property and sub-letting. He also
impleaded one Ashok Kumar Sethi, as defendant No. 2 by alleging that he had
been unlawfully inducting a sub-tenant. The Rent Controller negatived all the
grounds of challenge except the non- payment of rent. He held that the premises
had been let out for commercial purpose and as such the ground of bona fide
requirement was not available to the landlord for seeking eviction of the
tenant. On the issue of non- payment of rent, the Rent Controller held that the
tenant was liable to pay a sum of Rs.24/- by way of arrears for the period from
March 1, 1969 to February 28, 1970 after taking into consideration all payments
made and a further sum of Rs.90/- on account of such arrears for the month of
September, 1970. He, accordingly, directed eviction of the tenant. The landlord
challenged the order of the Rent Controller by filing an appeal. The tenant,
namely Wasti Ram, filed cross objection on the findings recorded by the Rent
Controller on the issue of default. The Rent Control Tribunal allowed the cross
objection of the tenant and held that there was no default in the matter of
payment of rent. The Tribunal rejected the landlord's plea regarding damage to
the property but remanded the matter to the Rent Controller for deciding the
question of sub-letting afresh after affording opportunity to the parties to
lead evidence. Smt. Gian Devi Anand, the widow of the deceased tenant appealed
against the order of the Tribunal. The landlord filed cross objections to
question the finding recorded by the Tribunal on the issue of default by the
tenant in payment of rent. The High Court held that after the demise of the
statutory tenant, his heirs do not have the right to remain in possession because
the statutory tenancy was not heritable and the protection afforded to the
statutory tenant was not available to the heirs. This Court reversed the order
of the High Court and held:
"We find it difficult to appreciate how in this country we can proceed
on the basis that a tenant whose contractual tenancy has been determined but
who is protected against eviction by the statute, has no right of property but
only a personal right to remain in occupation, without ascertaining what his
rights are under the statute. The concept of a statutory tenant having no
estate or property in the premises, which he occupies is derived from the
provisions of the English Rent Acts. But it is not clear how it can be assumed
that the position is the same in this country without any reference to the
provisions of the relevant statute. Tenancy has its origin in contract. There
is no dispute that a contractual tenant has an estate or property in the
subject matter of tenancy, and heritability is an incident of the tenancy. It
cannot be assumed, however, that with the determination of the tenancy the
estate must necessarily disappear and the statute can only preserve his status
of irremovability and not the estate he had in the premises in his occupation.
It is not possible to claim that the "sanctity" of contract cannot be
touched by legislation. It is therefore necessary to examine the provisions of
the Madhya Pradesh Accommodation Control Act, 1961 to find out whether the
respondent's predecessors-in-interest retained a heritable interest in the
disputed premises even after the termination of their tenancy."
In paragraph 34 of the judgment, the Court highlighted difference between
the residential and commercial tenancies and concluded that the legislature
could never have intended that the landlord would be entitled to recover
possession of the premises or the building let for commercial purposes on the
death of the tenant of the commercial tenancies, even if no ground for eviction
as prescribed in the rent Act is made out. In the concluding part of the
judgment, the Court took cognizance of the absence of provision for eviction of
the tenant of non-residential premises even when the same are bona fide
required by the landlord for his use or occupation and observed:
"Before concluding, there is one aspect on which we consider it
desirable to make certain observations. The owner of any premises, whether
residential or commercial, let out to any tenant, is permitted by the Rent
Control Acts to seek eviction of the tenant only on the grounds specified in
the Act, entitling the landlord to evict the tenant from the premises. The
restrictions on the power of the landlords in the matter of recovery of
possession of the premises let out by him to a tenant have been imposed for the
benefit of the tenants. In spite of various restrictions put on the landlord's
right to recover possession of the premises from a tenant, the right of the
landlord to recover possession of the premises from the tenant for the bona
fide need of the premises by the landlord is recognised by the Act, in case of
residential premises. A landlord may let out the premises under various
circumstances. Usually a landlord lets out the premises when he does not need
it for own use. Circumstances may change and a situation may arise when the
landlord may require the premises let out by him for his own use. It is just
and proper that when the landlord requires the premises bona fide for his own
use and occupation, the landlord should be entitled to recover the possession
of the premises which continues to be his property in spite of his letting out
the same to a tenant. The Legislature in its wisdom did recognise this fact and
the Legislature has provided that bona fide requirement of the landlord for his
own use will be a legitimate ground under the Act for the eviction of his
tenant from any residential premises. This ground is, however, confined to
residential premises and is not made available in case of commercial premises.
A landlord who lets out commercial premises to a tenant under certain
circumstances may need bona fide the premises for his own use under changed
conditions on some future date should not in fairness be deprived of his right
to recover the commercial premises. Bona fide need of the landlord will stand
very much on the same footing in regard to either class of premises,
residential or commercial. We, therefore, suggest that Legislature may consider
the advisability of making the bona fide requirement of the landlord a ground
of eviction in respect of commercial premises as well."
[Emphasis added]
19. What is significant to be noted is that in para 34 of the aforementioned
judgment, the distinction between residential and non-residential tenancies was
made in the context of the rights of the heirs of the tenant to continue to
enjoy the protection envisaged under Section 14(1). The Court was of the view
that the heirs of the tenants of the commercial premises cannot be deprived of
the protection else the family of the tenant may be brought on road or deprived
of the only source of livelihood. The Court also opinioned that if the heirs of
the individual tenants of commercial tenancies are deprived of the protection,
extremely anomalous consequences will ensue because the companies, corporations
and juridical entities carrying on business or commercial activities in rented
premises will continue to enjoy the protection even after the change of
management, but the heirs of individual tenants will be denuded of similar
protection. At the same time, the Court noted that the landlord of a premises
let for residential purpose may bona fide require the same for his own use or
the use of his dependent family members and observed that the legislature
should remove apparent discrimination between residential and non-residential tenancies
when the landlord bona fide requires the same. If the observations contained in
para 34 are read in any other manner, the same would become totally
incompatible with the observation contained in the penultimate paragraph of the
judgment and we do not see any reason for adopting such course., more so,
because the later part of the judgment has been relied in Harbilas Rai Bansal
vs. State of Punjab (supra) and Rakesh Vij vs. Dr. Raminder Pal Singh Sethi
(supra).
20. In Rattan Arya vs. State of Tamil Nadu (supra), the Court considered
challenge to the constitutionality of Section 30(ii) of the Tamil Nadu
Buildings (Lease and Rent Control) Act, 1960 under which residential buildings
or part thereof occupied by any tenant paying monthly rent of more than
Rs.400/- were exempted from operation of the Act. It was urged on behalf of the
appellant that distinction made between the residential and non-residential
buildings in the matter of applicability of the Act was unreasonable,
irrational and arbitrary. The Court referred to different rent control
legislations applicable to the State of Tamil Nadu and observed that the scheme
of the Act does not make any distinction between residential and
non-residential buildings insofar as the rights of the tenant's and obligations
of the landlord's are concerned and there are no special rights attached to the
tenancies of the non-residential buildings as against the tenancies of
residential buildings so as to warrant exemption only to residential buildings.
The Court also took cognizance of enormous increase of rents throughout the
country, referred to the judgment in Motor General Traders vs. State of Andhra
Pradesh [1984 (1) SCC 222] and struck down Section 30(ii) of the Tamil Nadu Act
on the ground that the same is violative of Article 14 of the Constitution.
21. In Harbilas Rai Bansal vs. State of Punjab & Anr. (supra), the
Supreme Court examined the constitutionality of the amendment made in the
Punjab Act, whereby the landlord was deprived of his right to seek eviction of
tenant from non-residential building on the ground of bonafide requirement for
his own use. This Court referred to the unamended and amended Section 13(1)(a)
of the Punjab Act and observed:
"The Scheme of the Act, unmistakably aims at regulating the conditions
of tenancy, controlling the rents and preventing unreasonable and mala fide
eviction of tenants of the residential and non-residential buildings. For the
advancement of these objects, tenants are invested with certain rights and
landlords are subjected to certain obligations. These rights and obligations
are attached to the tenants and the landlords of all buildings, residential or
non- residential. None of the main provisions of the Act, to which we have
referred, make any serious distinction between residential and non- residential
buildings."
The provisions of the Act, prior to the amendment, were uniformly applicable
to the residential and non-residential buildings. The amendment, in the year
1956, created the impugned classification.
The objects and reasons of the Act indicate that it was enacted with a view
to restrict the increase of rents and to safeguard against the mala fide
eviction of tenants. The Act, therefore, initially provided conforming to its
objects and reasons bona fide requirement of the premises by the landlord,
whether residential or non-residential, as a ground of eviction of the tenant.
The classification created by the amendment has no nexus with the object sought
to be achieved by the Act. To vacate a premises for the bona fide requirement
of the landlord would not cause any hardships to the tenant. Statutory
protection to a tenant cannot be extended to such an extent that the landlord
is precluded from evicting the tenant for the rest of his life even when he
bona fide requires the premises for his personal use and occupation. It is not
the tenants but the landlords who are suffering great hardships because of the
amendment. A landlord may genuinely like to let out a shop till the time he
bona fide needs the same.
Visualise a case of a shopkeeper (owner) dying young. There may not be a
member in the family to continue the business and the widow may not need the
shop for quite some time. She may like to let out the shop till the time her
children grow up and need the premises for their personal use. It would be
wholly arbitrary in a situation like this to deny her the right to evict the
tenant. The amendment has created a situation where a tenant can continue in
possession of a non- residential premises for life and even after the tenant's
death his heirs may continue the tenancy. We have no doubt in our mind that the
objects, reasons and the scheme of the Act could not have envisaged the type of
situation created by the amendment which is patently harsh and grossly unjust
for the landlord of a non-residential premises."
22. For taking the aforesaid view, the Court drew support from the
observations contained in the concluding portion of the judgment in Gian Devi
Anand vs. Jeevan Kumar & Ors. (supra). This is evident from paragraph 17 of
the judgment, which is extracted below:- "In Gian Devi case the question
for consideration before the Constitution Bench was whether under the Delhi
Rent Control Act, 1958, the statutory tenancy in respect of commercial premises
was heritable or not. The Bench answered the question in the affirmative.
The above-quoted observations were made by the Bench keeping in view that
hardship being caused to the landlords of commercial premises who cannot evict
their tenants even on the ground of bona fide requirement for personal use. The
observations of the Constitution Bench that "bona fide need of the
landlord will stand very much on the same footing in regard to either class of
premises, residential or commercial" fully support the view we have taken
that the classification created by the amendment has no reasonable nexus with
the object sought to be achieved by the Act. We, therefore, hold that the
provisions of the amendment, quoted in earlier part of the judgment, are
violative of Article 14 of the Constitution of India and are liable to be
struck down."
23. The ratio of Harbilas Rai Bansal vs. State of Punjab (supra) was noted
and approved in Rakesh Vij vs. Dr. Ravinder Pal Singh Sethi (supra), in the
backdrop of the argument that the amendment made to the Punjab Act 1956 was not
applicable to the Union Territory of Chandigarh.
While rejecting the argument, the three Judge Bench referred to Article
13(2) of the Constitution, some of the judgments in which that Article was
considered and observed:
"We find sufficient force in the contention raised by the learned
counsel for the respondent landlord. In Harbilas Rai Bansal this Court held in
very clear terms that the classification created by the Amendment Act, 1956, by
which the words "a non-residential building or" occurring in Section
13(3)(a)(ii) were deleted and certain other amendments had been made, had no
reasonable nexus with the object sought to be achieved by the Act and
consequently the provisions of the Amendment Act were violative of Article 14
of the Constitution."
24. The judgment in Harbilas Rai Bansal vs. State of Punjab (supra) was
recently noticed in Mohinder Prasad Jain vs. Manohar Lal Jain [(2006) 2 SCC
724]. The respondent in that case applied for eviction of the tenant (appellant)
from the shop in question on the ground of bona fide personal requirement i.e.
for the purpose of running wholesale business in Ayurvedic medicines. The Rent
Controller dismissed the application on the ground that bona fide requirement
of the landlord has not been proved. The Appellate Authority reversed the order
of the Rent Controller and returned a finding that the landlord has been able
to prove his bona fide requirement.
In the revision filed by the appellant, reliance was placed on the judgment
of India & Ors. (that judgment is under challenge in these appeals) and it
was urged that an application for eviction of the tenant on the ground of bona
fide requirement of the landlord is not maintainable in respect of non-
residential premises. The learned Single Judge of Punjab & Haryana High
Court referred to an earlier judgment of the Division Bench of that Court in
State of Haryana vs. Ved Prakash Gupta [(1999) 1 Rent Law Reporter 689],
wherein the restriction imposed on the landlord's right to evict the tenant
under the Haryana Urban (Control of Rent and Eviction) Act, 1973, was struck
down and held that the judgment of the Full Bench of Delhi High Court cannot be
relied for granting relief to the appellant. This Court noted that a similar
provision had been declared unconstitutional in Harbilas Rai Bansal vs. State
of Punjab (supra), which was approved by three Judge Bench in Rakesh Vij vs.
Dr. Ravinder Pal Singh Sethi (supra) and held that the tenant cannot question
the landlord's right to seek eviction of the tenant from non-residential
premises.
25. We may now advert to the judgment of Delhi High Court in H.C.
Sharma vs. Life Insurance Corporation of India & Anr. (supra) and the
one under challenge. The facts of H.C. Sharma's case were that the petitioner
had leased out Flat No.28-E, Connaught Place, New Delhi to National Insurance
Company Limited for non-residential use. Subsequently, the National Insurance
Company Limited became Life Insurance Corporation of India. The petitioner made
efforts to convince the Corporation that the premises are required for his bona
fide use and occupation but could not convince the concerned authorities. He,
therefore, filed an application for recovery of possession. The same was
dismissed by the High Court. He then filed Writ Petition questioning the
constitutionality of Section 14(1)(e) on the ground that the classification of
the premises into residential and non-residential is arbitrary and violative of
Article 14 of the Constitution. The Division Bench of Delhi High Court traced
the history of rent control legislation applicable to Delhi, the background in
which protection was extended to the tenants generally and the limited right
given to the landlord to seek eviction of the tenants only from the premises
let for residential purposes and observed:
"In judging whether the restriction imposed by the impugned provisions
is reasonable, the court can look into the circumstances under which the
restriction came to be imposed. Judicial notice can be taken of the fact that
in 1947 there was a large influx of refugees into Delhi. A large number of
people who were uprooted from their hearths and homes in West Pakistan settled
in Delhi. This resulted in acute shortage of house accommodation and business
premises with the result that rents soared to a high level which necessitated
the regulation of relations between landlords and tenants..."
The object in not providing for the eviction of a tenant from a non-
residential premises on the ground specified in sub-clause (e) was to give
security of tenure to a tenant of such premises. If a tenant of a
non-residential premises was allowed to be evicted on the ground of personal
requirement by the landlord, it would have had the effect of completely
dislocating the business of the tenant and this in turn could have grave
consequences on the social and economic fabric of the country, besides causing
untold misery to the tenant."
[Emphasis added] The Division Bench rejected the plea of discrimination and
observed:- "The grievance of the petitioner is that the discrimination
between the two classes of landlords is without any rational basis. World War
II broke out in 1939 and an acute shortage of housing accommodation developed.
To control the rents and eviction of tenants, the Rent Control Order of 1939
was issued. A study of the relevant provisions of the rent control legislation
discussed in the earlier part of the judgment would show that the restrictions
imposed on the landlords to recover possession of residential premises were very
stringent upto 1952. Under the Rent Control Order of 1939 and the Delhi Rent
Control Ordinance, 1944 a landlord could recover possession of residential
premises only when he had not resided within the limits of Delhi or New Delhi
during the twelve months immediately preceding the date of the application and
further satisfied the conditions that it was essential in the public interest
that he should take up residence in that area and that he was unable to secure
other suitable accommodation. Under the Rent Control Act of 1947, a landlord
could recover possession of residential premises only if he did not possess
other suitable accommodation and further, that he had acquired his interest in
the premises at a date prior to the beginning of the tenancy or the 2nd day of
June, 1944, whichever was later. The rigour of the restrictions qua residential
premises was relaxed in the Act of 1952 and a landlord could recover possession
of residential premises if he required it bonafide for occupation as a
residence for himself or his family and he had no other suitable accommodation.
In comparison to this the Rent Control Order, 1939 was not applied to
non-residential premises. The Delhi Rent Control Ordinance did not place any
bar on the right of the landlord to recover possession of non-residential
premises. The only restriction placed was that the landlord could recover
possession of the premises for his residential use. The bar against the
eviction of tenants from non-residential premises was introduced in the Rent Control
Act, 1947 and it has continued since then. A landlord cannot recover possession
of non- residential premises on the ground of his personal need. There is a
clear object behind classification of the premises into "residential"
and "non-residential". We have earlier observed that in 1947, on
partition of the country, there was a large influx of refugees into Delhi. The
Government was faced with the problem of resettling the refugees. This
necessitated the imposition of restrictions on the right to evict tenants from
residential and non-residential premises. The legislature keeping in view the
needs of the people and other circumstances allowed the landlord to evict
tenants from residential premises for his personal use in case he did not have
any other suitable accommodation, but restricted the right of the landlord to
recover possession of non-residential premises on the ground of personal need.
The necessity behind this discrimination is to assure the security of tenure to
the tenants of non-residential premises so that they can settle in their
business without the fear of being ejected.
Owners of residential buildings and non-residential buildings each stand out
as a class by themselves. The impugned provisions make no distinction inter se
between the two classes of properties or their landlords. The impugned
provisions take within their fold all the persons similarly situate. So long as
there is equality under similar conditions and among persons similarly
situated, there is no infringement of Article 14."
[Emphasis added]
26. A critical analysis of the above noted judgment makes it clear that the
main reason which weighed with the High Court for approving the classification
of premises into residential and non-residential was that by imposing
restriction on the eviction of tenants of premises let for non- residential
purposes, the government wanted to solve the acute problem of housing created
due to partition of the country in 1947. The Court took cognizance of the fact
that as an aftermath of partition many hundred- thousands of people had been
uprooted from the area which now forms part of Pakistan; that they were forced
to leave their homes and abandon their business establishments, industries,
occupation and trade and the Government was very much anxious to ensure
resettlement of such persons.
It was felt that if the landlords are readily allowed to evict the tenants,
those who came from West Pakistan will never be able to settle in their life.
Therefore, in the 1947 and 1958 Acts, the legislature did not provide for
eviction of tenants from the premises let for non-residential purposes on the
ground that the same are required by the landlord's for their bona fide use and
occupation.
27. Insofar as the judgment under challenge is concerned, we find that the
Full Bench upheld the validity of Section 14(1)(e) mainly by relying upon
Corporation of India & Anr. (supra) and of this Court in Amarjit Singh vs.
Smt. Khatoon Quamarin (supra) and by observing that legislature has the right
to classify persons, things, and goods into different groups and that the Court
will not sit over the judgment of the legislature. It is significant to note
that the Full Bench did not, at all, advert to the question whether the
reason/cause which supplied rational to the classification continued to subsist
even after lapse of 44 years and whether the tenants of premises let for
non-residential purposes should continue to avail the benefit of implicit
exemption from eviction in the case of bona fide requirement of the landlord despite
sea saw change in the housing scenario in Delhi and substantial increase in the
availability of buildings and premises which could be let for non-residential
or commercial purposes.
28. In our opinion, the reasons which weighed with the High Court in H.C.
Sharma vs. Life Insurance Corporation of India & Anr. (supra) and the
impugned judgment cannot in the changed scenario and in the light of the ratio
of Harbilas Rai Bansal vs. State of Punjab (supra), which was approved by
three-Judge Bench in Rakesh Vij vs. Dr. Raminder Pal Singh Sethi (supra) and of
Rattan Arya vs. State of Tamil Nadu (supra), as also the observations contained
in the concluding portion of the judgment in Gian Devi Anand vs. Jeevan Kumar
& Ors. (supra). now be made basis for justifying the classification of
premises into residential and non- residential in the context of landlord's
right to recover possession thereof for his bona fide requirement. At the cost
of repetition, we deem it proper to mention that in the rent control legislations
made applicable to Delhi from time to time residential and non-residential
premises were treated at par for all purposes. The scheme of the 1958 Act also
does not make any substantial distinction between residential and
non-residential premises. Even in the grounds of eviction set out in proviso to
Section 14(1), no such distinction has been made except in Clauses (d) and (e).
In H.C. Sharma vs. Life Insurance Corporation of India (supra), the Division
Bench of the High Court, after taking cognizance of the acute problem of
housing created due to partition of the country, upheld the classification by
observing that the Government could legitimately restrict the right of the
landlord to recover possession of only those premises which were let for residential
purposes.
The Court felt that if such restriction was not imposed, those up-rooted
from Pakistan may not get settled in their life. As of now a period of almost
50 years has elapsed from the enactment of the 1958 Act. During this long span
of time much water has flown down the Ganges. Those who came from West Pakistan
as refugees and even their next generations have settled down in different
parts of the country, more particularly in Punjab, Haryana, Delhi and
surrounding areas. They are occupying prime positions in political and
bureaucratic set up of the Government and have earned huge wealth in different
trades, occupation, business and similar ventures. Not only this, the
availability of buildings and premises which can be let for non- residential or
commercial purposes has substantially increased. Therefore, the reason/cause
which prompted the Division Bench of the High Court to sustain the
differentiation/classification of the premises with reference to the purpose of
their user, is no longer available for negating the challenge to Section
14(1)(e) on the ground of violation of Article 14 of the Constitution, and we
cannot uphold such arbitrary classification ignoring the ratio of Harbilas Rai
Bansal vs. State of Punjab (supra), which was reiterated in Joginder Pal vs.
Naval Kishore Behal (supra) and approved by three- Judges Bench in Rakesh Vij
vs. Dr. Raminder Pal Singh Sethi (supra). In our considered view, the
discrimination which was latent in Section 14(1)(e) at the time of enactment of
1958 Act has, with the passage of time (almost 50 years) has become so
pronounced that the impugned provision cannot be treated intra vires Article 14
of the Constitution by applying any rational criteria.
29. It is trite to say that legislation which may be quite reasonable and
rationale at the time of its enactment may with the lapse of time and/or due to
change of circumstances become arbitrary, unreasonable and violative of the
doctrine of equity and even if the validity of such legislation may have been upheld
at a given point of time, the Court may, in subsequent litigation, strike down
the same if it is found that the rationale of classification has become
non-existent. In State of Madhya Pradesh vs. Bhopal Sugar Industries [AIR 1964
SC 1179], this Court while dealing with a question whether geographical
classification due to historical reasons could be sustained for all times and
observed:
"Differential treatment arising out of the application of the laws so
continued in different regions of the same reorganised, State, did not
therefore immediately attract the clause of the Constitution prohibiting
discrimination. But by the passage of time, considerations of necessity and
expediency would be obliterated, and the grounds which justified classification
of geographical regions for historical reason may cease to be valid. A purely
temporary provision which because of compelling forces justified differential
treatment when the Reorganisation Act was enacted cannot obviously be permitted
to assume permanency, so as to perpetuate that treatment without a rational
basis to support it after the initial expediency and necessity have
disappeared.
30. In Narottam Kishore Dev Verma vs. Union of India [AIR 1964 SC 1590] the
challenge was to the validity of Section 87-B of the Code of Civil Procedure
which granted exemption to the rulers of former Indian States from being sued
except with the consent of the Central Government. In the course of judgment,
it was observed as under:
"If under the Constitution all citizens are equal, it may be desirable
to confine the operation of Section 87-B to past transactions and nor to
perpetuate the anomaly of the distinction between the rest of the citizens and
Rulers of former Indian States. With the passage of time, the validity of historical
considerations on which Section 87-B is founded will wear out and the
continuance of the said section in the Code of Civil Procedure may later be
open to serious challenge."
31. In H.H. Shri Swamiji Shri Admar Mutt Etc, vs. The Commissioner, Hindu Religious
& Charitable Endowments Department [1979 (4) SCC 642] this Court was called
upon to consider the validity of the continued application of the provisions of
the Madras Hindu Religious Endowment Act, 1951 in the area which had formerly
been part of State of Madras and which had latter become part of the new State
of Mysore (now Karnataka) as a result of the State Re-organisation Act, 1956.
While declining to strike down the legislation on the ground of violation of
Article 14 of the Constitution, the Court observed:
"An indefinite extension and application of unequal laws for all time
to come will militate against their true character as temporary measures taken
in order to serve a temporary purpose. Thereby, the very foundation of their
constitutionality shall have been destroyed the foundation being that Section
119 of the State Reorganisation Act serves the significant purpose of giving
reasonable time to the new units to consider the special circumstances
obtaining in respect of diverse units. The decision to withdraw the application
of unequal laws to equals cannot be delayed unreasonably because of the
relevance of historical reasons which justify the application of unequal laws
is bound to wear out with the passage of time. In Broom's Legal; Maxim (1939
Edition, page 97) can be found a useful principle "Cessante Ratione Legis
Cessat Ipsa Lex", that is to say, "Reason is the sour of the law, and
when the reason of any particular law ceases, so does the law itself."
32. In Motor General Traders vs. State of Andhra Pradesh (supra), validity
of Section 32(b) of the A.P. Buildings (Lease, Rent and Eviction) Control, Act,
1960 was considered. By that Section it was declared that the provisions of the
main Act will not apply to the buildings constructed after 25th August, 1957.
The Court noted that exemption had continued for nearly a quarter century and
struck down the same despite the fact that validity thereon had been upheld by
the High Court in Chintapalli Achaiah vs. P.
Gopala Krishna Reddy [ AIR 1966 AP 51]. Some of the observations made in the
judgment are worth noticing. These are:
"What may be unobjectionable as a transitional or temporary measure at
an initial stage can still become discriminatory and hence violative of Article
14 of the Constitution if it is persisted in over a long period without any
justification."
"What was justifiable during a short period has turned out to be a case
of hostile discrimination by lapse of nearly a quarter of century....We are
constrained to pronounce upon the validity of the impugned provision at this
late stage because of grab of Constitution which it may have possessed earlier
has become worn out and its unconstitutionality is now brought to a successful
challenge".
"As already observed, the landlords of the buildings constructed
subsequent to August 26, 1957 are given undue preference over the landlords of
buildings constructed prior to that date in that the former are free from the
shackles of the Act while the latter are subjected to the restrictions imposed
by it. What should have been just an incentive has become a permanent bonanza
in favour of those who constructed buildings subsequent to August 26, 1957.
There being no justification for the continuance of the benefit to a class of
persons without any rational basis whatsoever, the evil effects flowing from
the impugned exemption have caused more harm to the society than one could
anticipate. What was justifiable during a short period has turned out to be a
case of hostile discrimination by lapse of nearly a quarter of century. The
second answer to the above contention is that mere lapse of time does not lend
constitutionality to a provision which is otherwise bad. "Time does not
run in favour of legislation. If it is ultra vires, it cannot gain legal strength
from long failure on the part of lawyers to perceive and set up its invalidity.
Albeit, lateness in an attack upon the constitutionality of a statute is but a
reason for exercising special caution in examining the arguments by which the
attack is supported."
33. In Rattan Arya and Ors. vs. State of Tamil Nadu and Anr. (supra) the
Court relied on the ratio of Motor General Traders vs. State of Andhra Pradesh
(supra) and struck down Section 30(ii) of the Tamil Nadu Buildings (Lease and
Rent) Control Act, 1960 by observing that there was no rational basis in
picking out the class of tenants of residential buildings paying a rent of more
than Rs.400/- per month and to deny similar right to tenants of other buildings
and residential or non-residential premises.
34. In Malpe Vishwanath Acharya and Others vs. State of Maharashtra &
Another (supra), the Court found that the criteria for determination and
fixation of rent by freezing or by pegging down of rent as on 1.9.1940 or as on
first date of letting, had, with the passage of time become irrational and
arbitrary but did not strike down the same on the ground that extended period
of Bombay Rent Act was coming to an end on 31.3.1998.
35. Before parting with this aspect of the case, we may refer to the
judgment of Amarjit Singh vs. Smt. Khatoon Quamarin (supra), on which reliance
has been placed by the Full Bench of the High Court for negating the
appellant's challenge to Section 14(1)(e). In that case, the respondent sought
eviction of the tenant from the first floor of the premises situated at
Maharani Bagh, New Delhi on the ground of personal and bona fide necessity. The
suit filed by the landlady was decreed by the learned Single Judge of the Delhi
High Court and a direction was issued for eviction of the tenant (appellant).
This Court referred to the earlier judgments in Pasupuleti Venkateswarlu vs.
Motor & General Traders [1975 (1) SCC 770], Hasmat Rai vs. Raghunath Prasad
[1981 (3) SCC 103] and held that in view of the availability of alternative
accommodation to the landlady, the High Court was not justified in ordering
eviction of the tenant.
36. A careful reading of the aforementioned judgment shows that the plea of
unconstitutionality of Section 14(1)(e) of the 1958 Act was neither raised nor
debated with any seriousness and the observation made by the Court in that
regard cannot be treated as the true ratio of the judgment, which as mentioned
above, mainly rested on the interpretation of the expression "reasonably
suitable residential accommodation". The bedrock of the respondent's claim
was that she had a right to comfortable living and availability of alternative
accommodation, by itself not sufficient for declining eviction of the tenant.
While rejecting this argument, the Court observed:
"17. The logic of the argument of Shri Kacker is attractive, but the
legality of the said submission is unsustainable. Rent restriction laws are
both beneficial and restrictive, beneficial for those who want protection from
eviction and rack renting but restrictive so far as the landlord's right or
claim for eviction is concerned. Rent restriction laws would provide a habitat
for the landlord or landlady if need be, but not to seek comforts other than
habitat that right the landlord must seek elsewhere."
37. Another contention raised on behalf of the landlady was that Section
14(1)(e) of the 1958 Act should be read in a manner which will make it in
conformity with Articles 14 and 16 of the Constitution. This is evinced from
para 18 of the judgment which is extracted below:- "18. Our attention was
drawn to the decision in the case of Bishambhar Dayal Chandra Mohan v. State of
U.P.[1982 (1) SCC 39] and our attention was drawn to the observations at p. 66
and 67 of the said case in aid of the submission that right to property is
still a constitutional right and therefore in exercise of that right if a
landlord or an owner of a house lets out a premises in question there was
nothing wrong. Shri Kacker submitted that the second limb of Section 14(1)(e)
of the Act should be read in such a way that it was in consonance with Article
14 and Article 21 of the Constitution.
Otherwise it would be void as being unconstitutional. As a general
proposition of law this is acceptable."
The Court rejected the argument and observed:
"The Act in question has the authority of law. There is no denial of
equality nor any arbitrariness in the second limb of Section 14(1)(e) of the
Act, read in the manner contended for by the appellant. Article 21 is not
violated so far as the landlord is concerned. The rent restricting Acts are
beneficial legislations for the protection of the weaker party in the bargains
of letting very often. These must be so read that these balance harmoniously
the rights of the landlords and the obligations of the tenants. The Rent
Restriction Acts deal with the problem of rack renting and shortage of
accommodation. It is in consonance with the recognition of the right of both
the landlord and the tenant that a harmony is sought to be struck whereby the
bona fide requirements of the landlords and the tenants in the expanding
explosion of need and population and shortage of accommodation are sought to be
harmonised and the conditions imposed to evict a tenant are that the landlord
must have bona fide need. That is satisfied in this case. That position is not
disputed. The second condition is that landlord should not have in his or her
possession any other reasonably suitable accommodation. This does not violate
either Article 14 or Article 21 of the Constitution."
38. In view of the above discussion, we hold that Section 14(1)(e) of the
1958 Act is violative of the doctrine of equality embodied in Article 14 of the
Constitution of India insofar as it discriminates between the premises let for
residential and non-residential purposes when the same are required bona fide
by the landlord for occupation for himself or for any member of his family
dependent on him and restricts the latter's right to seek eviction of the
tenant from the premises let for residential purposes only.
39. However, the aforesaid declaration should not be misunderstood as total
striking down of Section 14(1)(e) of the 1958 Act because it is neither the
pleaded case of the parties nor the learned counsel argued that Section
14(1)(e) is unconstitutional in its entirety and we feel that ends of justice
will be met by striking down the discriminatory portion of Section 14(1)(e) so
that the remaining part thereof may read as under :- "that the premises
are required bona fide by the landlord for himself or for any member of his
family dependent on him, if he is the owner thereof, or for any person for
whose benefit the premises are held and that the landlord or such person has no
other reasonably suitable accommodation."
While adopting this course, we have kept in view well recognized rule that
if the offending portion of a statute can be severed without doing violence to
the remaining part thereof, then such a course is permissible R.M.D.
Chamarbaugwalla vs. Union of India (AIR 1957 SC 628) and Bhawani Singh vs.
State of Rajasthan [1996 (3) SCC 105].
As a sequel to the above, the explanation appearing below Section 14(1)(e)
of the 1958 Act will have to be treated as redundant.
40. In the result, the appeals are allowed. The impugned judgment is set
aside and Section 14(1)(e) of the 1958 Act is partly struck down. Section
14(1)(e) shall now read as indicated in para 39 above. Consequently, the writ
petitions filed by the appellants shall stand allowed and the orders impugned
therein shall stand quashed. The parties are left to bear their own costs.
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