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PETITIONER:

HARBILAS RAI BANSAL

Vs.

RESPONDENT:

THE STATE OF PUNJAB & ANR.

DATE OF JUDGMENT05/12/1995

BENCH:

KULDIP SINGH (J)

BENCH:

KULDIP SINGH (J)

AHMAD SAGHIR S. (J)

CITATION:

1996 AIR 857 1996 SCC (1) 1

JT 1995 (8) 458 1995 SCALE (6)717

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

Kuldip Singh, J.

The East Punjab Urban Rent Restriction Act, 1949 (the

Act) - prior to 1956 - permitted a landlord to evict his

tenant from a non-residential building on the ground of bona

fide requirement for his own use, however, the said right of

the landlord was taken away by the East Punjab Urban Rent

Restriction (Amendment) Act, 1956 (Punjab Act 29 of 1956)

(the Amendment) which came into force on September 24,1956.

Before us the constitutional validity of the Amendment has

been challenged. A writ petition under Article 226 of the

Constitution of India challenging the Amendment was

dismissed by the Punjab and Haryana High Court in limine.

This appeal, by way of special leave, is against the order

of the High Court.

The non-residential premises in dispute was given on

rent by the appellant's father to the predecessor-in-

interest of respondent 2. After the death of appellant's

father in the year 1953 the appellant, who was in Government

service, became owner of the shop. The appellant retired

from service in 1986. According to the appellant he is a

Registered Medicines. While he was in service his employer

granted him permission in 1976 to practice as Homeopath

Physician after office hours. It is the case of the

appellant that he intends to start practice as Homeopath

Physician and for that purpose he bona fide requires the

shop in dispute for his personal use and occupation.

The relevant provisions of the Act prior to the amendment

were as under :

"Section 13 - Eviction of Tenants. (3)

(a). A landlord may apply to Controller

for an order directing the tenant to put

the landlord in possession :

(ii) in case of a non-residential

building or rented land, if

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(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) has not vacated such a building or

rented land without sufficient cause

after the commencement of this Act, in

the Urban Area concerned."

The amendment was enforced by the notification dated

September 24, 1956. The impugned provisions of the amendment

are as under :

"1. Short title -This Act may be called

the East Punjab Urban Rent Restriction

(Amendment) Act, 1956.

2. Amendment of section 13 of East

Punjab Act III of 1949. - In clause (a)

of sub section (3) of section 13 of the

East Punjab Urban Rent Restriction Act,

1949, hereinafter referred to as the

principal Act -

(i) (a)

(b)

(ii) (a) In sub-clause (iii) the words

"a non-residential building or" shall be

omitted.

(b) In sub-paragraph (b), the words

"building or" and the words "as the case

may be" shall be omitted.

(c) In sub-paragraph (c), the words "a

building or" shall be omitted.

(iii)

(iv) In sub clause (iv), for the words

"any building", where they first occur,

the words ("any residential building")

shall be substituted.

In the second proviso, for the

words "a residential, a scheduled or

non-residential building or rented

land", the words ("a residential

building or rented land") shall be

substituted.

After the enforcement of the amendment the provisions of the

Act are as under :

"(3) (a) A landlord may apply to

Controller for an order directing the

tenant to put the landlord in

possessions.

(ii) in case of (X X X) 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 2(X X X ) rented

land 3 (X X X), and

(c) has not vacated such 4 (X X X)

rented land without sufficient cause

after the commencement of this Act, in

the urban area concerned."

It is thus obvious that prior to the coming into force of

the amendment a landlord could seek eviction of his tenant

from a non-residential premises for his bona fide

requirement but the amendment has taken away the said right

of the landlord.

Learned counsel for the appellant has vehemently

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contended that the above quoted provisions of the amendment

are violative of Article 14 of the Constitution of India.

The precise argument is that the classification of the

buildings into residential and non-residential - created by

the amendment - has no reasonable nexus with the object

sought to be achieved by the Act. It is further contended by

the learned counsel that the taking away of the landlord's

right to seek eviction of his tenant, from a non-residential

premises, on the ground of his bona fide requirement, is

wholly arbitrary and as such is hit by Article 14 of the

Constitution.

The scope of Article 14 has been authoritatively laid

down by this Court in innumerable decisions including,

Budhan Choudhary Vs State of Bihar (1956)1 SCR 1045, Ram

Krishan Dalmia Vs Justice S.R.Tendolkar (1959 SCR 279), U.P.

Electric Power and Supply Company Limited Vs State of U.P.

(1969) 1 SCC 817, Mohd. Hanif Quareshi Vs State of Bihar

(1959 SCR 629). To be permissible under Article 14 of the

Constitution a classification must satisfy two conditions

namely (i) that the classification must be founded on an

intelligible differential which distinguishes persons or

things that are grouped together from others left out the

group and (ii) 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

basis, but what is necessary is that there must be a nexus

between the basis of classification and the object of the

Act under consideration.

The statement of objects and reasons of the Act is as

under:-

"Statement of Objects and Reasons of the

East Punjab Urban Rent Restriction Act,

1949 (Act 3 of 1949).- Under Article 6

of the India (Provisional Constitution)

Order 1947, any law made by the Governor

of the Punjab by virtue of section 93 of

the Government of India Act, 1995, which

was in force immediately before the 15th

August, 1947, is to remain in force for

two years from the date on which the

Proclamation ceased to have effect,

viz., the 14th August, 1947. A

Governor's Act will, therefore, cease to

have effect on the 14th August, 1947. It

is desired that the Punjab Urban Rent

Restriction Act, 1947 (Punjab Act No. VI

of 1947), being a Governor's Act, be re-

enacted as a permanent measure, as the

need for restricting the increase of

rents of certain premises situated

within the limits of urban areas and the

protection of tenants against mala fide

attempts by their landlords to procure

their eviction would be there even after

the 14th August, 1949.

In order to achieve the above

object, a new Act incorporating the

provisions of the Punjab Urban Rent

Restriction Act, 1947 with necessary

modification is being enacted."

It is obvious from the objects and reasons quoted above that

the primary purpose for legislating the Act was to protect

the tenants against the mala fide attempts by their

landlords to procure their eviction. Bona fide requirement

of a landlord was, therefore, provided in the Act - as

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originally enacted - a ground to evict the tenant from the

premises whether residential or non-residential.

The statement of objects and reasons of the amendment

was in the following words:

"Statement of Objects and Reasons of the

East Punjab Urban Rent Restriction

(Amendment) Act (Act 29 of 1956).- Under

the Ajmer Marwar Rent Control Act, 1947,

tenants of urban property cannot be

ejected except from residential

buildings and that too for bona fide

personal use. This Act applies to Delhi

city also where tenants of commercial or

industrial premises cannot be ejected on

the ground of personal use. In the

Punjab, however, such tenants can be

ejected on various grounds including

that of personal use. This entails a

great hardship on such tenants. The

provision allowing eviction on the

ground of personal use has been misused

by certain landlords and there have been

many complaints and representations on

behalf of the tenants to amend the East

Punjab Urban Rent Restriction Act, 1947.

It is, therefore, considered necessary

that the tenants of non-residential

property in the Punjab should at least

be placed at par with tenants of such

property in Delhi and other urban areas

covered by the Delhi Ajmer Act."

Two reasons have been given for bringing the amendment. It

is stated that eviction from non-residential building on the

ground of bona fide requirement of the landlord entails a

great hardship on such tenants. The second reason giving is

that the provision regarding eviction on the ground of

personal use has been misused by certain landlords. Support

is sought from the fact that in the State of Delhi and other

urban areas covered by the Delhi Ajmer Act, there were

similar provisions.

It would be useful to have a look at the provisions of

the Act. Section 2(a) defines "building" as any building or

part of a building let for any purpose whether being

actually used for that purpose or not, including any land,

godowns, out-houses, or furniture let therewith, but does

not include a room in a hotel, hostel or boarding house.

Section 2(d) defines "non-residential building" as a

building being used solely for the purpose of business or

trade. "Residential building" under Section 2(g) means any

building which is not a non-residential building.Section 3

permits the State Government to exempt any particular

building or rented land or any class of buildings or rented

lands from the provisions of the Act. Sections 4, 5 and 6

provide for fixation, increase etc, of fair rent. Section 11

provides that no person shall convert the residential

building into a non-residential building except with the

permission in writing of the Controller. Then comes the

crucial Section 13 regarding the eviction of tenants.

Section 13(2)(i) enables the landlord to evict the tenant

for non-payment of rent. Section 13(2)(ii)(a) and (ii)(b)

provide for the eviction of a tenant on the grounds of sub-

letting and misuse of the premises. Clause (iii) of Section

13 (2) makes the tenant liable to eviction when he continues

such acts as are likely to impair materially the valuer and

utility of the building or rented land. Clauses (iv) and (v)

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of Section 13(2) permit the eviction of the tenant on the

grounds of nuisance and when he ceases to occupy the

building for a period of four months without reasonable

cause. Sub-Section 3 of Section 13 provides for eviction of

the tenant from the residential premises on the ground of

bona fide requirement of the landlord. It is not necessary

to refer to other provisions of the Act.

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 right 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 we 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.

Learned counsel for the respondents contended that a

tenant occupying non-residential premises and the one

occupying residential premises belong to two different

classes under the Act and as such no fault can be found with

the amendment. Assuming that the classification exists, it

has no nexus with the object sought to be achieved by the

Act. Tenants of both kinds of buildings need equal and same

protection of the beneficial provisions of the Act. Neither

from the objects and reasons of the Act nor from the

provisions of the Act it is possible to discern any basis

for the classification created by the amendment.

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This Court in Rattan Arya etc. vs. State of Tamil Nadu

and another 1986(2) SCR 596 struck down Section 13(ii) of

the Tamil Nadu buildings (Lease and Rent Control) Act, 1960

as violative of Article 14 of the Constitution of India on

the ground that the distinction made by it between the

tenant of a residential building and the tenant of a non-

residential building based on the rent paid by the

respective tenants had no reasonable nexus to the object

sought to be achieved by the Act.

A Constitution Bench of this Court in Gian Devi Anand

vs. Jeevan Kumar & Ors. [1985(2) SCC 683] observed as

under:-

"39. 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 lenant 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 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 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

condition's 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

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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."

In Gian Devi's 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 connote 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.

We allow the appeal, set aside the impugned judgment of

the High Court, declare the above said provisions of the

amendment as constitutionally invalid and as a consequence

restore the original provisions of the Act which were

operating before coming into force of the amendment. The net

result is that a landlord - under the Act - can seek

eviction of a tenant from a non-residential building on the

ground that he requires it for his own use. The parties to

bear their own costs.