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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.