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PETITIONER: PRABHAKARAN NAIR, ETC.

       Vs.

RESPONDENT: STATE OF TAMIL NADU AND ORS.

DATE OF JUDGMENT03/09/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) NATRAJAN, S. (J)

CITATION:  1987 AIR 2117            1988 SCR  (1)   1  1987 SCC  (4) 238        JT 1987 (3)   492  1987 SCALE  (2)469  CITATOR INFO :  RF         1988 SC 485  (6)

ACT:      Landlord-Tenant matter-Tamil  Nadu Buildings (Lease and Rent Control) Act, 1960-Sections 14(1)(b), 16(2) and 30(ii)- Vires of-Challenged.

HEADNOTE:      There was  ’much ado  about nothing’  about these  Writ Petitions  under   Article  32   of  the  Constitution.  The petitions  sought   to  challenge   the  Vires  of  sections 14(1)(b), 16(2)  and, incidentally, sec. 30(ii) of the Tamil Nadu Buildings  (Lease and  Rent Control)  Act, 1960  on the ground of  being arbitrary, discriminatory and unreasonable. The different  petitions had  different facts,  and  it  was considered appropriate  to deal  with the  facts of the writ petition filed by Prabhakaran Nair (Writ Petition No. 506 of 1986) as a typical case to appreciate the points in issue.      In  that   case,   the   respondents-landlords,   after purchasing the premises in dispute from the erstwhile owner, filed an application for the eviction of the petitioner from the said  premises on  the grounds  of non-payment  of  rent under section  10(2)(1), unlawful  sub-letting under section 10(2)(ii)(a), causing  damages to the premises under section 10(2)(iii) and demolition and reconstruction of the premises under section 14(1)(b) of the Tamil Nadu Rent Act. The Trial Court ordered  eviction only  under section  14(1)(b) of the Act for  demolition and  reconstruction, rejecting the other grounds. The  appellate court  dismissed the  appeal of  the petitioner. The High Court also dismissed the civil revision petition of  the petitioner.  The petitioner  then  filed  a petition  for  Special  Leave  in  this  Court  against  the judgment and  order of the High Court. In the meanwhile, the City Civil  Court, on  January  29,  1983,  granted  interim injunction,  restraining   the  respondents-landlords   from demolishing the building till the disposal of an application filed by  the petitioner  in the suit, against the erstwhile owner and  the present landlords for specific performance of an agreement  to sell  the premises  to the  petitioner. The injunction was  stated to  have been confirmed and was still continuing as  the said application for specific performance

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was still pending in the City Civil Court. 2      This Court  dismissed the  petition for  special leave, observing that  the petitioner  would be at liberty to file, if so  advised, a  writ petition  under Article  32  of  the Constitution, challenging  the validity  of section 14(1)(b) of  the  Act.  The  petitioner  filed  this  writ  petition, challenging the  validity of  sections 14(1)(b) and 16(2) of the Tamil  Nadu Rent Act as being arbitrary, discriminatory, unreasonable   and    unconstitutional,    and    contending consequently that  the eviction  order  passed  against  him under section  14(1)(b) was  illegal. Several  of the  other writ petitions were on this issue.      Dismissing the Writ Petitions, the Court, ^      HELD: In  this case,  the Court  was not concerned with clause (ii) of section 30 of the Tamil Nadu Act, a challenge to the  validity of  which had been accepted by the Court in Rattan Arya  and others  v. State of Tamil Nadu and another, [1986] 3  S.C.C. 385  and the section 30(ii) had been struck down as violative of Article 14 of the Constitution. [10E]      Under section  14(1)(b) of  the Act,  a landlord  could make an application to the Rent Controller for possession of a building,  and the  Rent Controller, if satisfied that the building was  bona fide  required by  the landlord  for  the immediate purpose  of demolition and such demolition was for the purpose  of erecting  a new  building on the site of the building sought  to be  demolished,  might  pass  an  order, directing the  tenant to  deliver possession of the building to  the   landlord  before   a  specified  date.  Under  the provisions of the Act, the landlord has to commence the work of demolition  not later  than  one  month  and  the  entire demolition work  shall be  completed before  the  expiry  of three months  from the  date he  recovers possession  of the entire building,  and in  the  case  of  massive  buildings, demolition can  take six  months or  even a  year, in  which case, for  reasons to be recorded in writing, the controller may allow  further period.  During that  period a tenant was bound  to   have  found   some  other  suitable  alternative accommodation. In the case of a building vacated for repairs under section  14(1)(a) of the Act, a tenant may arrange for a temporary  accommodation for  a few months and then return to the  building.  It  was  not  practicable  and  would  be anomalous to  expect a  landlord to take back a tenant for a re-constructed building  after a  long lapse  of time during which the  tenant must  necessarily have  found  some  other suitable accommodation.  This was  the true  purpose  behind section 14(1)(b) read with section 14(2)(b). In that view of the matter,  the Court  was unable  to accept the submission that in  providing for the re-induction of the tenant in the case of repairs and not in the 3 case of  re-construction, there  was  any  unreasonable  and irrational classification  without any basis. The absence of the provision  for reinduction  does not ipso facto make the provisions of the Act unfair or make the Act self-defeating. [11G, 12A-C,D-G, 18E]      As regards  the submission  that in  most of  the  Rent Acts, there  was a  provision for re-induction of the tenant after re-construction,  but in  the case  of the  Tamil Nadu Act, there  was no  such provision and this was violative of Article  14   of  the   Constitution,  Article   14  of  the Constitution does  not authorise  the striking down of a law of one  State on  the ground  that in contrast with a law of another State  on the  same  subjects,  its  provisions  are

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discriminatory, and  nor does  it contemplate  a law  of the centre or  of the  State dealing with similar subjects being held to  be unconstitutional  by a  process  of  comparative study of  the provisions  of two  enactments; the  source of authority for  the two  statutes being different, Article 14 could have  no application,  as observed  by a  Constitution Bench of  this Court  in the State of Madhya Pradesh v. G.C. Mandawar, [1955] 1 S.C.R. 599. [12G, 13A-C]      The Act  sought to  restore the  balance in  the  scale which is  otherwise weighted in favour of the stronger party which had  larger bargaining  power. The  Act  balances  the scales and  regulates the  rights of  the parties fairly and cannot be  construed only  in favour of the tenant. The main provision of  section 14(1)(b) enables a landlord to make an application to  the rent  controller for  possession of  the building  for   demolition  for  re-construction  of  a  new building in  its place.  If the Rent Controller is satisfied with the  bona fide  need of  the landlord,  he may  pass an order, directing  the tenant  to deliver  possession of  the building to the landlord before a specified date. There must be a  bona fide  need of  the landlord. It could not be said that section  14(1)(b)  was  arbitrary  and  that  excessive powers had been given to the landlords. [16G-H, 17D-E]      The provisions  of the  Act imposed restrictions on the landlord’s right  under the  common law  or the  Transfer of Property Act  to evict  the tenant  after the termination of his tenancy.  The nature,  the form  and the  extent of  the restrictions to  be imposed  on  the  landlord’s  right  and consequent extent  of the  protection to  be  given  to  the tenants is  a matter  of legislative policy and judgment. It is inevitably  bound to  vary  from  one  State  to  another according to  the local,  peculiar conditions  prevailing in each State.  When the Courts are confronted with the problem of a  legislation being  violative of Article 14, the Courts are not  concerned with the unwisdom of the legislation. "In short, unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review" 4 observations of  Krishna Iyer,  J. in  Murthy  Match  Works, etc., v.  Asstt. Collector  of Central Excise, etc., [1974]3 S.C.R. 121, may be seen in this connection. [18F-H,19G]      The  purpose  underlying  section  14(1)(b)  read  with section 16(2)  of the  Act is  to  remove  or  mitigate  the disinclination on the part of the landlords to expend moneys for demolition  of the dilapidated buildings and reconstruct new buildings  in their  places. It  is a  matter  of  which judicial notice  can be  taken that  the return from the old and dilapidated  buildings is  very meagre,  and in  several cases, such  buildings prove  uneconomic for  the landlords, resulting in  the deterioration  of  the  condition  of  the buildings, and  there are  even collapses of such buildings. It is for this purpose that the landlord is given by section 14(1)(b), read  with section 16, an incentive in the form of exemption from  the provisions  of the Act for five years in respect  of   the  reconstructed   building.  The  principle underlying such  exemption is not discriminatory against the tenants, nor  is it  against the  policy of the Act. It only serves as  an incentive  to the  landlord  for  creation  of additional accommodation  to meet the growing housing needs. These  provisions   providing  for   exemption  of  the  new buildings from  the provisions  of the Rent Act for a period of five  years or ten years were upheld vide the decision of this Court  in Punjab Tin Supply Co., Chandigarh and Ors. v. The Central  Govt. &  Ors., [1984] 1 S.C.C. 206 at 216, 217. [20C-G]

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    The Court  was unable to accept the submission that the absence of  the right  of induction  of the  tenants in  the reconstructed premises was either arbitrary or unreasonable. The Act  must be  so construed that it harmonises the rights of the  landlords and  at the same time protects the tenants and also  serves best the purpose of the Act, and one of the purposes of  the Act  is to  solve  the  acute  shortage  of accommodation by  making rational  basis  for  eviction  and encouraging building and re-building which is at the root of all causes of shortage of accommodation. [23D;24E-F]      OBITER: There is an acute shortage of housing. The laws relating to letting and landlord and tenant in the different States have  from different  States’ angles tried to grapple with the  problem. Yet,  in view  of the  magnitude  of  the problem,  the   problem  has   become  insoluble   and   the litigations  abound   and  people   suffer.   More   houses, therefore, must be built and more accommodation must be made available for  the people  to  live  in.  The  laws  of  the landlord and  tenant must  be made rational, humane, certain and capable  of being  quickly  implemented.  The  landlords having premises in their control should be induced and 5 encouraged to  part  with  the  available  accommodation  on certain  safe-guards   which  will   strictly  ensure  their recovery when  wanted. Men with money should be given proper and meaningful incentives, as in some European countries, to build houses. Tax holidays for new houses can be encouraged. The tenants should also be given protection and security and certain amount  of reasonableness in the rent. Escalation of prices in  the urban  properties, land, materials and houses must be  rationably checked.  The country  very vitally  and urgently requires  a National  Housing Policy  if we want to prevent a major breakdown of law and gradual disillusionment of the  people. After  all shelter is one of our fundamental rights. The  New National  Housing Policy  must attract  new buildings, rationalise  the  rent  structure  and  the  rent provisions and  bring certain  amount of uniformity, leaving scope for  sufficient  flexibility  amongst  the  States  to adjust such legislation according to their needs. This Court and the  High Courts  should also  be relieved  of the heavy burden of  the rent  litigations. Tier  of appeals should be curtailed.  Laws   must  be   simple,  rational  and  clear. Litigation must  come to  an end  quickly. Such  New Housing Policy  must  comprehend  the  present  and  anticipate  the future. The idea of a National Rent Tribunal on an All India basis  should   be  examined.  This  has  become  an  urgent imperative of  today’s revolution.  A fast  changing society cannot operate with unchanging law and preconceived judicial attitude. [25B-H]      Rattan Arya  and others  v. State  of  Tamil  Nadu  and another, [1986]  3 SCC  385; State of Madhya Pradesh v. G.C. Mandawar, [1955]  1 SCR  599; S. Kannappa Pillai and another v. B. Venkatarathnam, 78 Law Weekly 363; P.J. Irani v. State of Madras, [1962] 2 SCR 169; S. Kandaswamy Chettiar v. State of Tamil  Nadu and another, [1985] 2 SCR 398; Raval & Co. v. K.C. Ramachandran  &  Ors.,  [1974]  2  SCR  629;  Murlidhar Agarwal and  another v.  State of  U.P. and others, [1975] 1 SCR 575;  Shah Bhojraj Kuverji Oil Mills and Ginning Factory v. Subbash  Chandra  Yograj  Sinha,  [1962]  2  S.C.R.  159; Metalware &  Co., etc.  v. Bansilal  Sharma and  Ors., etc., [1979] 3  S.C.R. 1107;  Meta Ram v. Jiwan Lal, [1962] Suppl. 2.S.C.R. 623;  Murthy  Match  Works,  etc.  etc.  v.  Asstt. Collector of  Central Excise,  etc., [1974] 3 S.C.R. 121; In re: The  Special Courts  Bill, 1978,  [1979] 2  S.C.R.  476; Punjab Tin Supply Co. Chandigarh & Ors. v. The Central Govt.

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JUDGMENT: State of  Haryana and  Anr., [1985]  4 SCC  221 at 226, 227; Mehsin Bhai  v. Hale  and Company  G. T.  Madras,  [1964]  2 Madras Law  Journal 147;  Metalware  Co.  etc.  v.  Bansilal Sharma and  others, etc., [1979] 3 S.C.R. 1107 at 1117, 1118 Punjab Tin  Supply Co.,  Chandigarh etc. etc. v. The Central Govt. and  Ors., [1984] 1 SCR 428; Motor General Traders and Anr. etc. etc. v. 6 State of Andhra Pradesh and Ors. etc. etc., [1984] 1 SCR 594 at 605;  Atam Prakash v. State of Haryana and Ors., [1986] 2 S.C.R. 249;  Panchamal Narayan  Shenoy v.  Basthi Venkatesha Shenoy, [1970]  3 SCR  734; Jiwanlal & Co. and Ors. v. Manot and Co., Ltd., 64 Calcutta Weekly Notes, 932 at 937 and M/s. Patel Road-ways  Private Limited,  Madras v.  State of Tamil Nadu and Ors., A.I.R. 1985 Madras 115, referred to.

&      ORIGINAL JURISDICTION:  Writ Petition  No. 506  of 1986 etc.      (Under Article 32 of the Constitution of India).      J.  Ramamurthi,   V.  Shanker,  B.  Parthasarthi,  Raju Ramachandran, S.  Srinivasan, M.C. Verma, C.S. Vaidyanathan, K.R.R. Pillai, E.C. Aggarwala, V. Balachandran, N.K. Sharma, M.N. Krishnamani,  Diwan  Balakram,  A.T.M.  Sampath,  Mukul Mudgal, V.  Balachandran, V. Shekhar, K. Parasaran, Attorney General, Soli  J. Sorabjee, Shanti Bhushan, A.K. Verma, D.N. Mishra, A.V.  Rangam, P.N. Ramalingam and M. Raghuraman, for appearing parties.      The Judgment of the Court was delivered by      SABYASACHI  MUKHARJI,  J.  There  is  ’much  ado  about nothing’  about   these  cases.   These  petitions  seek  to challenge the vires of section 14(1)(b) and section 16(2) as well as  incidentally  section  30(ii)  of  the  Tamil  Nadu Buildings (Lease  and Rent  Control) Act,  1960 (hereinafter called ’the  Tamil Nadu  Rent Act’)  on the  ground of being arbitrary,  discriminatory   and   unreasonable.   Different petitions deal  with different facts. It is not necessary to set these  out exhaustively  but it  would be appropriate to deal with  the facts  of Writ  Petition No. 506 of 1986 as a typical one  in order  to appreciate the points in issue. In Writ Petition No. 506 of 1986, the respondent-landlord on or about 21st  of March,  1978 after  purchasing  the  premises No.95, Thyagaraja  Road, T. Nagar, Madras from the erstwhile owner, filed  an eviction  petition in  the court  of  Small Causes, Madras  for eviction  of the  petitioner herein from the premises  where the  petitioner had  been carrying  on a hotel business  serving meals  etc. for  four  decades.  The grounds in  the eviction  petition were  non-payment of rent under sec- 7 tion 10(2)(1)  of the  Tamil Nadu  Rent Act,  unlawful  sub- letting under  section 10(2)(ii)(a),  causing damages to the premises under  section 10(2)(iii) and also for the purposes of demolition and reconstruction under section 14(1)(b).      The learned  Judge of  the trial court ordered eviction under section  14(1)(b) of  the Tamil Nadu Rent Act only for demolition  and   reconstruction  and  dismissed  the  other grounds, and  that is  the only  ground with  which  we  are concerned in  this appeal.  On 25th  of February,  1981  the Appellate Court  dismissed the petitioner’s appeal by saying that  the   landlords  were   rich  people  and  capable  of demolition and  reconstruction in  order to put the premises

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to a  more profitable  use by putting up their own showroom. On September  30, 1982  the High  Court dismissed  the civil revision petition  of the  petitioner and  granted time till 31st of  January, 1983  for the  petitioner  to  vacate  the premises in  question. The  petitioner  thereafter  filed  a special leave petition against the judgment and order of the High Court  in this Court. This Court initially ordered show cause notice  and also  granted ad  interim ex-parte stay of dispossession. On  29th January,  1983 the City Civil Court, Madras   granted    interim   injunction   restraining   the respondents from  demolishing the building till the disposal of the  application in  the suit  filed  by  the  petitioner against the  erstwhile owner  and the  present landlords for specific performance of an agreement to sell the premises to the petitioner.  According to  the petitioner the injunction was confirmed and was still continuing and the said suit for specific performance  was also  pending in  the  City  Civil Court, Madras.      On 17th  of February,  1986 this  Court  dismissed  the special leave  petition after  notice but  directed that the decree for  eviction would not be executed till 17.11.86. It was observed  by this  Court that the petitioner would be at liberty to  file a  writ petition  under Article  32 of  the Constitution, if  so advised,  challenging the  validity  of section 14(1)(b)  of the Tamil Nadu Rent Act as mentioned on behalf of  the petitioner.  The petitioner  filed this  writ petition challenging  the validity  of section  14(1)(b) and section 16(2)  of the Tamil Nadu Rent Act on the ground that these  were   arbitrary,  discriminatory,  unreasonable  and unconstitutional.  The  petitioner  contends  in  this  writ petition that  consequently the  eviction order passed under section 14(1)(b)  and confirmed  in appeal  is also illegal. The aforesaid  several of  the writ  petitions are  on  this issue.      The main  ground of  attack on  this aspect seems to be that while 8 other Rent  Acts in  case of  eviction for demolition permit and direct  that after  reconstruction the  tenant should be inducted as tenant or given the opportunity to have the same space in  the reconstructed  building, in the instant Act no such option is given and no such obligation imposed upon the landlord and  as such  the impugned  provision is illegal as being discriminatory against the tenant. In order to examine the various aspects on this contention, it will be necessary to examine  in detail the relevant provisions of the Act. It should be  borne in  mind, however,  that this  was  an  Act passed to  amend and  consolidate the  law relating  to  the regulation of the letting of residential and non-residential buildings and the control of rents of such buildings and the prevention of  unreasonable eviction of tenants in the State of Tamil  Nadu. Section 14 of the Tamil Nadu Rent Act states as follows:-           " 14.  Recovery  of  possession  by  landlord  for           repairs or for reconstruction.-(1) Notwithstanding           anything contained in this Act, but subject to the           provisions  of   sections  12   and  13,   on   an           application made  by a  landlord,  the  Controller           shall, if he is satisfied-                (a) that  the building  is bona fide required           by the  landlord for  carrying out  repairs  which           cannot be  carried out  without the building being           vacated; or                (b) that  the building  is bona fide required           by the  landlord  for  the  immediate  purpose  of

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         demolishing it  and such  demolition is to be made           for the  purpose of erecting a new building on the           site of the building sought to be demolished, pass           an  order   directing  the   tenant   to   deliver           possession of  the building to the landlord before           a specified date.                (2) No  order directing the tenant to deliver           possession of  the  building  under  this  section           shall be passed-                (a) on  the ground specified in clause (a) of           subsection  (1),  unless  the  landlord  gives  an           undertaking that the building shall, on completion           of the  repairs, be  offered to  the  tenant,  who           delivered possession  in  pursuance  of  an  order           under sub-section (1) for his re-occupation before           the expiry  of  three  months  from  the  date  of           recovery of  possession by the landlord, or before           the  expiry   of  such   further  period   as  the           Controller may,  for reasons  to  be  recorded  in           writing, allow; or 9                (b) on  the ground specified in clause (b) of           subsection  (1),  unless  the  landlord  gives  an           undertaking  that  the  work  of  demolishing  any           material  portion   of  the   building  shall   be           substantially commenced  by him not later than one           month and  shall be completed before the expiry of           three months  from the date he recovers possession           of the  entire building  or before  the expiry  of           such further  period as  the Controller  may,  for           reasons to be recorded in writing, allow.                (3) Nothing  contained in  this section shall           entitle the  landlord who has recovered possession           of  the   building  for   repairs  to   convert  a           residential  building   into   a   non-residential           building or  a  non-residential  building  into  a           residential building  unless  such  conversion  is           permitted by the Controller at the time of passing           an order under subsection (1).                (4) Notwithstanding  an order  passed by  the           Controller under  clause (a)  of  sub-section  (1)           directing the  tenant to deliver possession of the           building, such  tenant shall be deemed to continue           to be  the tenant,  but the  landlord shall not be           entitled to  any rent for the period commencing on           the date of delivery of possession of the building           by the  tenant to the landlord and ending with the           date on  which the  building  is  offered  to  the           tenant  by   the  landlord  in  pursuance  of  the           undertaking under clause (a) of subsection (2).                (5) Nothing in this section shall entitle any           landlord of  a building  in respect  of which  the           Government shall  be deemed  to be  the tenant  to           make any application under this section".      Section 15  empowers  the  tenant  to  re-occupy  after repairs. There  is no  such provision in case of eviction on the  ground   of  bona   fide  need   for   demolition   and reconstruction. This is one of the grounds of challenge.      Section 16 deals with the right of the tenant to occupy the building  if it is not demolished. Sub-section (2) which was amended  and introduced  by Act  23 of 1973 dealing with the reconstructed building reads as follows: 10           "16(2) Where  in pursuance  of an  order passed by           the Controller under clause (b) of sub-section (1)

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         of section  14, any building is totally demolished           and a  new building  is erected  in its place, all           the provisions of this Act shall cease to apply to           such new  building for a period of five years from           the date  on which  the construction  of such  new           building is  completed and  notified to  the local           authority concerned."      In this  connection section  30 which  exempts  certain buildings  may   be  referred  to  and  sub-section  (i)  is important. It reads as follows:           "30. Exemption  in the  case of certain buildings-           Nothing contained in this Act shall apply to-                (i) any  building for  a period of five years           from  the   date  on  which  the  construction  is           completed  and   notified   to   local   authority           concerned; or                (ii) any residential building or part thereof           occupied by  any one  tenant if  the monthly  rent           paid by  him in  respect of  that building or part           exceeds (four hundred rupees)."      In this appeal we are not concerned with clause (ii) of section 30 the challenge to whose validity has been accepted by this  Court in  Rattan Arya  and others v. State of Tamil Nadu and another, [1986] 3 S.C.C. 385. Section 30(ii) of the Tamil Nadu  Rent Act  has been  struck down  as violative of Article 14.        Various  submissions were  urged in  support  of  the several writ  petitions. Sree  Raju  Ramachandran  contended that in most of the Indian statutes dealing with eviction of tenants, there  are provisions of re-induction of the tenant where  the   eviction  is   obtained  on   the   ground   of reconstruction   after   the   premises   in   question   is reconstructed. It  was submitted  that  in  those  statutes, there is  obligation on the landlord to reconstruct within a certain period  and the  corresponding right  on the  tenant evicted to  be re-inducted at the market rate to be fixed by the Rent  Controller or  by such  authority as the Court may direct.        Our  attention was drawn to several statutes, namely, Maharashtra, Karnataka,  Kerala, West  Bengal  and  numerous others where  there are provisions for re-induction of other tenants in  the premises  after reconstruction.  Most of the provisions of  other statutes  provide  for  such  induction while the Tamil Nadu Rent Act does not. On this 11 ground  it   was  submitted,  that  firstly,  that  this  is violative of  Article 14 of the Constitution. It was further submitted that section 16(2) of the Tamil Nadu Rent Act says that where  in pursuance  of an  order of eviction passed by the Rent  Controller under  section 14(1)(b) any building is totally demolished  and a  new building  is erected  in  its place, all the provisions of the Act shall cease to apply to such new  building for  a  period  of  five  years.  It  was submitted that neither the old tenant nor any new tenant was thus entitled  to protection  of the  Rent Control Act after reconstruction. The  old tenant cannot also get into the new building  as  of  right.  This  discrimination  against  the tenants in  Tamil Nadu  is invidious and violates Article 14 of the  Constitution. Secondly,  it was submitted that if in case of repairs which also dislodges the tenants for limited period, the  tenants have  a right  to get into the premises after  repairs   under  the  Tamil  Nadu  Rent  Act,  it  is unreasonable that  tenants should not have the same right in case of  reconstruction. It was urged that once the building is ready for occupation it should make no difference whether

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the readiness is after repairs or after construction. It was urged that  in both  cases the  tenants go  out  during  the period of  building work,  and they should equally come back into the  building after  repairs or  reconstruction. It was submitted  on  this  ground  also  that  not  enjoining  re- induction of  the evicted  tenant  after  reconstruction  is discriminatory and  unconstitutional. The  classification of buildings  reconstructed   differently  from  the  buildings repaired is  not valid,  as it has no relation to the object or purpose  of the  Act. Furthermore,  that all  the tenants belong  to   one  class   and  they  could  not  be  treated differently. On  this aspect  it was  further submitted that the provisions  of re-induction in most of the Rent Acts re- presented the standard of reasonableness in the landlord and the  tenant   law  and   the  philosophy   of  Rent  Control Legislation.  It  re-presented  the  national  consensus  of reasonable  standard.   Therefore,   any   provision   which according to  learned counsel  appearing for  the  different parties in  the writ  petitions, was  in variance  with that standard was  unreasonable and  as such violative of Article 14 of  the Constitution.  In aid  of this submission various contentions were  urged. We  are, however,  unable to accept this submission.      Learned Attorney  General appearing for the respondents submitted before  us that  the  main  provision  of  section 14(1)(b) enables  a landlord  to make  an application to the Rent Controller and the Rent Controller, if he was satisfied that the building was bona fide required by the landlord for the immediate  purpose of  demolishing it for the purpose of erecting a  new building  on the site of the building sought to be demolished might pass an order directing the tenant to deliver 12 possession  of   the  building  to  the  landlord  before  a specified date.  In the case of an application under section 14(1)(a) of  the  Tamil  Nadu  Rent  Act  namely  bona  fide requirement for  carrying out  repairs it  cannot be carried out without the building being vacated and it has to be done within three  months to  enable the  tenant to re-occupy the building. It  has further  to be  borne in  mind that in the case of  demolition and re-construction, the landlord has to undertake that  the work of demolishing any material portion of the  building shall be substantially commenced by him not later than one month and the entire demolition work shall be completed before the expiry of three months from the date he recovers possession  of the  entire building.  See  in  this connection the provisions of section 16 of the said Act. The demolition  has  therefore  to  be  completed  within  three months. In  the case  of massive  buildings  demolition  can overtake six  months or  even a year and hence the provision that for  reasons to  be recorded in writing, the Controller may allow such further period.      It has  further to  be borne  in mind  that after  such demolition the re-construction of a new building on the same site is  bound to  take time  and such time depends upon the nature of the building to be erected and it might take years it was argued. During that period a tenant was bound to have found some  other suitable alternative accommodation; on the other hand  in the  case of a building for repairs, a tenant may arrange for temporary accommodation for a few months and return  back   to  the  building.  Therefore  provision  for reinduction in  the case  of repairs  and absence  of such a provision in  the case  of demolition  and reconstruction is quite understandable and rational.      It has  to be  borne in mind that it is not practicable

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and would  be anamolous  to expect a landlord to take back a tenant after  a long  lapse of  time during  which time  the tenant   must   necessarily   have   found   some   suitable accommodation elsewhere.  This is  the true  purpose  behind section  14(1)(b)   read  with   section  14(2)(b).  In  the aforesaid view  of the  matter, we  are unable to accept the submission that  in providing for re-induction of the tenant in case  of repairs  and not providing for such re-induction in case  of reconstruction,  there is  any unreasonable  and irrational classification without any basis.      The other submission as noted above was that in most of the Rent  Acts, there  was provision for re-induction of the tenants  but   there  was  no  such  provision  in  case  of reconstruction in  the Tamil  Nadu Rent Act. In The State of Madhya Pradesh  v. G.C.  Mandawar, [1955]  1 S.C.R.  599,  a Constitution Bench of this Court observed that 13 Article 14  of  the  Constitution  does  not  authorise  the striking down  of a  law of  one State on the ground that in contrast with a law of another State on the same subject its provisions are discriminatory. Nor does it contemplate a law of the  Centre or of the State dealing with similar subjects being  held   to  be   unconstitutional  by   a  process  of comparative study  of the  provisions of two enactments. The source of  authority for  the two  statutes being different, Article 14 can have no application’ it was observed.      It is  necessary now  to deal  with the submission that the section  is unreasonable.  For this,  one has to bear in mind the  public purpose  behind the  legislation. The Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 was passed in 1960.  A similar  enactment which  was in  operation from 1949 to  1960 did not contain any provision like sections 14 to 16  providing for eviction of the tenant on the ground of demolition and reconstruction.      In 1949,  however, the  enactment contained a provision empowering the Government to exempt any building or class of buildings from all or any of the provisions of the Act. When the landlords  desired to  evict tenants  on the  ground  of demolition and  re-construction, they resorted to the remedy of moving  the Government  by an  application for  exemption under  section  13  of  the  1949  Act.  The  Government  by notification  used  to  exempt  any  building  or  class  of buildings from  all or  any of the provisions of the Act. In this connection  reference may be made to the decision in S. Kannappa Pillai  and another  v. B.  Venkatarathnam, (78 Law Weekly 363).  The Government  in that  case when passing the order  of  exemption  used  to  impose  condition  that  the landlord should  complete the  re-construction  within  four months from  the date  on which the premises were vacated by the tenants  and that  he should  take back  the old tenants into the  reconstructed building at the rate demanded by the landlord subject  to the  fixation of fair rent. However, in view  of   the  tenants’   conduct  in   resorting  to  writ proceedings challenging the order of exemption and in filing suits and  having delayed  the  process  of  demolition  and reconstruction, the  Court in  the  exercise  of  discretion refused to  extend the  benefit of  the condition  as to re- induction in  favour of  the tenants. The further remedy was by writ proceedings before the High Court by the landlord or the tenant who felt aggrieved as the case may be.      It was  submitted on  behalf of  the respondents by the learned Attorney General that the Legislature in view of the experience gained  from 1949  to 1960 enacted sections 14 to 16 of the Act and which were introduced in the Act of 1960. 14

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    It was  urged  that  the  1960  Act  had  improved  the position. It  had provided  as a  ground of  eviction of the tenant the  requirement of  the landlord  for demolition and re-construction of  the building  leaving it  to a  judicial authority viz. Rent Controller to decide the matter with one statutory right of appeal and a further right of revision to the District  Court or the High Court as the case may be. It was on this ground urged that leaving the matter to judicial adjudication as  to the  ground for  eviction, it  cannot be held to be arbitrary, unreasonable or unjust. This point has to be  judged keeping in view the main purpose of the Act in question and the relevant submissions on this aspect.      It  may   be  borne   in  mind  that  historically  the constitutionality of  section 13  of the  Act  of  1949  was upheld on  the touchstone  of Article  14 both by the Madras High Court  and on appeal by this Court in P.J. Irani v. The State of  Madras, [1962]  2 S.C.R.  169. It  was  held  that section 13 of the Act did not violate Article 14 and was not unconstitutional. Enough guidance, according to the judgment of the  majority of  learned judges,  was  afforded  by  the preamble and  the operative  provisions of  the Act  for the exercise  of   the  discretionary   power  vested   in   the government. It  was observed that the power under section 13 of the Act was to be exercised in cases where the protection given by  the Act  caused great  hardship to the landlord or was the  subject of  abuse by  the tenants.  It was  held by Sinha, C.J., Ayyangar and Mudholkar, JJ. that section 13 was ultra vires  and void.  An order  made under  section 13 was subject to  judicial review  on the  grounds that (a) it was discriminatory, (b)  it was  made on  grounds which were not germane or  relevant to  the policy  and purpose of the Act, and (c)  it was  made on grounds which were mala fide. While S.K. Das  and A.K.  Sarkar, JJ.  emphasised that  the  order passed by  the government  under section  13 was a competent and legal  order. All  that the court had to see was whether the power had been used for any extraneous purpose, i.e. not for achieving the object for which the power was granted.      The Act  of 1960 contains a corresponding provision for exemption in  section 29  of the  Act which  corresponds  to section 13  of the Act of 1949 was also upheld by this Court in S.  Kandaswamy  Chettiar  v.  State  of  Tamil  Nadu  and another, [1985]  2 SCR  398. Dealing  with section 29 of the Act this  Court  observed  that  the  rationale  behind  the conferral of  such power  to grant  exemptions  or  to  make exceptions  was   that  an  inflexible  application  of  the provisions of  the Act might under some circumstances result in unnecessary  hardship entirely  disproportionate  to  the good which will result from a literal enforcement of the Act and also  the practical  impossibility  of  anticipating  in advance 15 such hardship  to such  exceptional cases.  In the matter of beneficial legislations also there were bound to be cases in which an  inflexible application  of the  provisions of  the enactment might result in unnecessary and undue hardship not contemplated  by   the  legislature.   The  power  to  grant exemption under  section 29  of the Act, therefore, has been conferred not  for making any discrimination between tenants and tenants  but to  avoid undue  hardship or  abuse of  the beneficial  provisions   that  might   result  from  uniform application  of  such  provisions  to  cases  which  deserve different treatment.  The decision reiterated that the Tamil Nadu Rent Act was a piece of beneficial legislation intended to  remedy   the  two  evils  of  rackrenting  (exaction  of exorbitant rents)  and unreasonable  eviction generated by a

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large scale  of influx of population to big cities and urban areas in  the post  Second World  War period  creating acute shortage of  accommodation in  such areas  and the enactment avowedly protects  the rights  of tenants  in occupation  of buildings in  such areas  from  being  charged  unreasonable rents and from being unreasonably evicted therefrom. In that view of  the matter it had made a rational classification of buildings belonging to government and buildings belonging to religious,  charitable,   educational   and   other   public institutions and  the different  treatment accorded  to such buildings under section 10(3)(b) of the Act.      The scope  of this  Act was  discussed by this Court in Raval and  Co. v.  K.C. Ramachandran & Ors., [1974] 2 S.C.R. 629, where  the majority  of the  court at  pages 635 to 636 observed:-           "All these  show that  the Madras  Legislature had           applied its  mind to  the problem  of housing  and           control of rents and provided a scheme of its own.           It  did   not  proceed   on  the  basis  that  the           legislation regarding  rent control  was only  for           the benefit  of the  tenants. It  wanted it  to be           fair both  to the  landlord as well as the tenant.           Apparently it  realised that  the pegging  of  the           rents at  the 1940  rates had discouraged building           construction activity  which ultimately  is likely           to affect  every body  and therefore  in order  to           encourage   new    constructions   exempted   them           altogether from  the provisions of the Act. It did           not proceed on the basis that all tenants belonged           to the  weaker section of the community and needed           protection and  that all landlords belonged to the           better off  classes. It confined the protection of           the Act  to the  weaker section paying rents below           Rs.250. It  is clear,  therefore, that  the Madras           Legislature deliberately  proceeded on  the  basis           that fair rent was to be fixed which was 16           to be fair both to the landlords as well as to the           tenants  and  that  only  the  poorer  classes  of           tenants needed  protection. The  facile assumption           on the  basis of  which an  argument was  advanced           before this  Court that all Rent Acts are intended           for the protection of tenants and, therefore, this           Act also  should be  held to  be intended only for           the protection  of tenants  breaks down  when  the           provisions of  the Act are examined in detail. The           provision that  both the  tenant as  well  as  the           landlord can  apply for  fixation of  a fair  rent           would become  meaningless if fixation of fair rent           can only be downwards from the contracted rent and           the contract  rent was  not to  be  increased.  Of           course, it  has happened  over the  last few years           that rents  have increased  enormously and that is           why it is argued on behalf of the tenants that the           contract rents  should not be changed. If we could           contemplate a situation where rents and prices are           coming down this argument will break down. It is a           realisation of the fact that prices and rents have           enormously increased  and therefore  if the  rents           are pegged  at 1940  rates there  would be  no new           construction and  the community  as a  whole would           suffer that  led the  Madras Legislature to exempt           new buildings  from  the  scope  of  the  Act.  It           realised apparently  how dangerous was the feeling           that only "fools build houses for wise men to live

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         in". At  the time  the 1960  Act  was  passed  the           Madras Legislature  had before it the precedent of           the Madras  Cultivating Tenants  (Payment of  Fair           Rent) Act, 1956. That Act provides for fixation of           fair rent.  It also  provides  that  the  contract           rent,  if   lower,  will  be  payable  during  the           contract period.  Even if  the  contract  rent  is           higher only  the fair  rent will be payable. After           the contract  period is over only the fair rent is           payable. The Madras Legislature having this Act in           mind still made only the fair rent payable and not           the contract rent if it happens to be lower. It is           clear, therefore,  that the  fair rent  under  the           present Act  is payable during the contract period           as well  as  after  the  expiry  of  the  contract           period."      The Act  sought to  restore the  balance in  the  scale which is  otherwise weighted in favour of the stronger party which had  larger bargaining  power. The  Act  balances  the scales and  regulates the  rights of  the parties fairly and cannot be construed only in favour of the tenant. 17      In Murlidhar  Agarwal and  another v. State of U.P. and others, [1975]  1 S.C.R. 575 this Court had occasion to deal with this  matter. In  that case,  powers of  High Court  to interfere with  revisional orders passed by State Government under section  7F of  U.P. Temporary  Control  of  Rent  and Eviction Act,  1947 were  challenged. The  Court was  of the view that  if a  provision was  enacted for the benefit of a person  or   class  of  persons,  there  was  nothing  which precluded him or them from contracting to waive the benefit, provided that  no question of public policy was involved. In doing so,  the question  arose what  was the ’public policy’ involved in  the said  Rent Act. There can be no doubt about the policy  of the  law, namely,  the protection of a weaker class in  the community  from harassment of frivolous suits. But the  question is,  is there  a public  policy behind  it which  precludes  a  tenant  from  waiving  it?  Mathew,  J. reiterated that  public policy does not remain static in any given community.  It may  vary from generation to generation and even  in the  same generation.  Public policy  would  be almost useless  if it were to remain in fixed moulds for all time. The  Rent Act,  however, balances  both the sides, the landlord and the tenant.      The  main  provision  of  Section  14(1)(b)  enables  a landlord to  make an  application to the Rent Controller and the Rent Controller, if he is satisfied that the building is bonafide required  by the landlord for the immediate purpose of demolishing it for the purpose of erecting a new building on the site of the building sought to be demolished may pass an order  directing the  tenant to deliver possession of the building to the landlord before a specified date.      Section 16  provides  for  the  tenant  to  occupy  the building if  it is  not demolished in certain contingencies. The scheme  of the  section was  very carefully  analysed in Shah Bhojraj  Kuverji  Oil  Mills  and  Ginning  Factory  v. Subbash Chandra Yograj Sinha, [1962] 2 S.C.R. 159.      In Metalware  and Co.  etc. v. Bansilal Sharma and Ors. etc., [1979]  3 S.C.R.  1107 this  Court emphasised that the phrase used in section 14(1)(b) of the Act was "the building was bona  fide required  by the  landlord" for the immediate purpose  of  demolition  and  reconstruction  and  the  same clearly  referred  to  the  bona  fide  requirement  of  the landlord. This  Court emphasised  that  the  requirement  in terms was  not  that  the  building  should  need  immediate

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demolition and reconstruction. The state or condition of the building and  the extent  to which  it could  stand  without immediate demolition and reconstruction in 18 future would  not  be  a  totally  irrelevant  factor  while determining "the  bona fide  requirement of  the  landlord." This Court  emphasised that if the Rent Controller had to be satisfied about  the bona  fide requirement  of the landlord which meant genuineness of his claim in that behalf the Rent Controller  would   have  to   take  into  account  all  the surrounding circumstances  including not  merely the factors of the landlord being possessed of sufficient means or funds to undertake  the project  and steps  taken by  him in  that regard but  also the existing condition of the building, its age and  situation and possibility or otherwise of its being put to a more profitable use after reconstruction. All these factors being  relevant must  enter the  verdict of the Rent Controller on  the question  of the bona fide requirement of the  landlord  under  section  14(1)(b).  The  fact  that  a landlord being  possessed of  sufficient means  to undertake the project of demolition and reconstruction by itself might not be  sufficient to establish his bona fide requirement if the building  happened to be a very recent construction in a perfectly sound  condition and  its situation  might prevent its being put to a more profitable use after reconstruction. The Rent  Controller has  thus  to  take  into  account  the totality of the circumstances and the factors referred to in the judgment  by lesser  or greater  significance  depending upon whether  in the scheme of the concerned enactment there is or  there is  not a  provision for  re-induction  of  the evicted tenant into the new construction. Reference was made to the  decision of  this Court  in Neta  Ram v.  Jiwan Lal, [1962] Suppl.  2 S.C.R. 623. There must be bona fide need of the landlord on all the conditions required to be fulfilled. That being  the scheme of the section, it cannot be said, in our opinion,  that the  section was  arbitrary and excessive powers were given to the landlords. Absence of provision for re-induction does  not ipso facto make the provisions of the Act unfair or make the Act self defeating.      It has  been borne  in mind  that the provisions of the Act imposed  restrictions on  the landlord’s right under the common law  or the  Transfer of  Property Act  to evict  the tenant after  termination of  his tenancy.  The rationale of these restrictions  on the  landlord’s rights  is the  acute shortage of  accommodation and  the consequent  need to give protection to the tenants against unrestricted eviction. The nature, the  form and  the extent  of the restrictions to be imposed on the landlord’s right and the consequent extent of protection to  be given  to  the  tenants  is  a  matter  of legislative policy  and judgment.  It is inevitably bound to vary from  one State  to  another  depending  on  local  and peculiar  conditions   prevailing  in   the  State  and  the individual State’s appreciation of the needs and problems of its people. When we are confronted with 19 the problem  of a legislation being violative of Article 14, we are  not concerned with the wisdom or lack of legislative enactment but  we are  concerned with  the illegality of the legislation. There  may be  more than  one  view  about  the appropriateness  or   effectiveness   or   extent   of   the restrictions. There may be also more than one view about the relaxation of  the restrictions  on the  landlord’s right of eviction. This fact is reflected in the different provisions made in  different Acts  about the grounds for eviction. For example, in case of Assam, Meghalaya, Andhra Pradesh, Delhi,

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Haryana, Orissa, Tripura, East Punjab, Madhya Pradesh, Tamil Nadu, Kerala,  Mysore, Himachal  Pradesh and Pondicherry, no particular duration for arrears of rent is prescribed, which would entitle a landlord to maintain an action for ejectment of his  tenant. However,  in other cases a certain period is prescribed. For  instance, two  months in Bihar, West Bengal and Jammu and Kashmir, three months in Goa and Tripura, four months in Uttar Pradesh, six months in Bombay and Rajasthan. Again some  Rent Acts  require that  before  an  action  for ejectment on  the ground  of arrears is instituted, a notice demanding rent  should be  served on the tenant-for example- Bombay, Delhi,  Kerala, Tripura,  Jammu and  Kashmir, Madhya Pradesh and  U.P. Rent  Acts. In  such cases  the tenant  is given one chance to pay up the arrears. Again different Rent Acts provide  different facts and circumstances on the basis of which  premises could  be recovered on the ground of bona fide  personal   requirement.  Generally   the   bona   fide requirement  extends   both  to   residential  as   well  as commercial premises.  However, the  Delhi Rent  Control  Act restricts the  right on account of the bona fide need of the landlord’s right  to premises  let for residential use only. Further, Bihar,  Bombay, Goa,  Jammu and Kashmir, Karnataka, Tamil Nadu,  U.P. and  West Bengal  Rent  Acts  provide  for partial eviction.  But there  is no  such provision  in  the other Acts.  It is  obvious from the above that there can be no  fixed  and  inflexible  criteria  or  grounds  governing imposition of  restrictions on  the landlord’s  right or for relaxation  of   those  restrictions   in   certain   cases. Ultimately  it   is  a  matter  of  legislative  policy  and judgment.      Courts  are   not  concerned   with  the   unwisdom  of legislation. "In short, unconstitutionality and not unwisdom of a  legislation is  the narrow  area of judicial review.". See in  this connection the observations of Krishna Iyer, J. in Murthy  Match Works, etc. etc. v. The Asstt. Collector of Central Excise,  etc.,  [1974]  3  S.C.R.  121.  This  Court approved the  above passage  from the American Jurisprudence and emphasised  that in  a classification  for  governmental purposes there  cannot be an exact exclusion or inclusion of persons and things. It is 20 important to  bear in  mind the constitutional command for a state to  afford equal protection of the law sets a goal not attainable by  the invention  and application  of a  precise formula. Therefore,  a large  latitude  is  allowed  to  the States for  classification upon  any reasonable  basis.  See also in this connection the observations of this Court in Re The Special  Courts Bill,  1978, [1979]  2 S.C.R.  476 where Chandrachud, C.J.speaking for the Court at pages 534to537 of the report laid down the propositions guiding Article 14 and emphasised that  the classification  need not be constituted by an  exact or  scientific exclusion nor insist on delusive exactness or  apply doctrinaire  tests for  determining  the validity of classification in any given case. Classification therefore, is  justified if it is not palpably arbitrary. We also in  view of  the different provisions we have discussed bear in  mind the fact that there is no such consensus among the different  States about  the right  of  re-induction  of tenant in  case of eviction required for demolition. It will depend on the particular State and, appreciation of the need and problem  at a  particular point  of time  by that  State concerned. The purpose underlying section 14(1)(b) read with section 16(2)  of the  Tamil Nadu  Rent Act  is to remove or mitigate the  disinclination on  the part  of  landlords  to expend moneys  for demolition  of dilapidated  buildings and

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reconstruct new buildings in their places. It is a matter of which judicial  notice can be taken that the return from old and dilapidated  buildings is  very meagre  and  in  several cases such buildings prove uneconomic for the landlords with the result  that the  condition of the building deteriorates and there  are even  collapses of  such buildings. It is for this purpose  that the landlord is given by section 14(1)(b) read with  section 16  an incentive in the form of exemption from  the   provisions  of   the  Rent  Act  in  respect  of reconstructed building for the limited and short duration of five years.  The policy  under section  14(1)(b)  read  with section 16  is not  in essence  different  from  the  policy adopted by  different  States  of  giving  exemption  for  a limited  duration  to  newly  constructed  buildings.  These provisions, namely,  exemption of  new  buildings  from  the provisions of the Rent Act for a period of five years or ten years  has  been  upheld  as  constitutional.  See  in  this connection the  observations of  this Court  in the  case of Punjab Tin  Supply Co.,  Chandigarh &  Ors. v.  The  Central Govt. &  Ors., [1984]  1 SCC  206 at  pages 216  and 217 and Mohinder Kumar  v. State of Haryana and Anr, [1985] 4 S.C.C. 221 at  pages 226-227. There the Court emphasised that it is entirely for the Legislature to decide whether any measures, and if so, what measures are to be adopted for remedying the situation and  for ameliorating the hardship of tenants. The Legislature may  very well  come to  a conclusion that it is the shortage  of buildings which has resulted in scarcity of accommodation 21 and  has   created  a   situation  where   the  demand   for accommodation is far in excess of the requisite supply, and, it is  because of  such acute  scarcity of accommodation the landlords are  in a position to exploit the situation to the serious detriment  of the  tenants. The  Court  observed  at pages 226to227 of the report as under:                "The Legislature  in its  wisdom may properly           consider that  in effecting  an improvement of the           situation and  for mitigating  the hardship of the           tenanted class  caused mainly  due to  shortage of           buildings,  it   will  be   proper  to   encourage           construction of  new buildings, as construction of           new buildings  will  provide  more  accommodation,           easing the  situation to  a large extent, and will           ultimately result in benefiting the tenants. As in           view of  the rigours  of Rent Control Legislation,           persons with  means may  not be inclined to invest           in construction  of new houses, the Legislature to           attract investment  in construction  of new houses           may consider it reasonable to provide for adequate           incentives so  that new constructions may come up.           It is  an elementary law of economics that anybody           who wants  to invest his money in any venture will           expect a  fair return  on the  investment made. As           acute scarcity  of accommodation  is to  an extent           responsible for the landlord and tenant problem, a           measure adopted  by the Legislature for seeking to           meet the situation by encouraging the construction           of new buildings for the purpose of mitigating the           hardship of  tenants must  be considered  to be  a           step in  the right  direction. The  provision  for           exemption from  the operation  of the Rent Control           Legislation by  way of  incentive to  persons with           means to  construct new  houses has  been made  in           Section 1(3)  of the Act by the Legislature in the           legitimate hope that construction of new buildings

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         will  ultimately   result  in  mitigation  of  the           hardship of  the tenants.  Such  incentive  has  a           clear nexus  with the  object to  be achieved  and           cannot  be   considered  to   be  unreasonable  or           arbitrary. Any  such  incentive  offered  for  the           purpose of  construction of new buildings with the           object of  easing the  situation  of  scarcity  of           accommodation for  ameliorating the  conditions of           the tenants,  cannot be  said to  be unreasonable,           provided the nature and character of the incentive           and the  measure  of  exemption  allowed  are  not           otherwise   unreasonable    and   arbitrary.   The           exemption to  be allowed  must be for a reasonable           and  a   definite  period.  An  exemption  for  an           indefinite period or a 22           period which in the facts and circumstances of any           particular case  may be  considered to  be  unduly           long, may  be held  to be arbitrary. The exemption           must necessarily  be effective  from a  particular           date and  must be with the object of promoting new           constructions. With  the commencement  of the Act,           the provisions  of  the  Rent  Act  with  all  the           restrictions   and   rigours   become   effective.           Buildings which  have been  constructed before the           commencement of the Act were already there and the           question of  any kind  of impetus  or incentive to           such buildings  does not  arise. The  Legislature,           therefore, very  appropriately allowed the benefit           of   the   exemption   to   the   buildings,   the           construction of  which commenced  or was completed           on or  after the  commencement of  the  Act.  This           exemption in  respect of buildings coming up or to           come up  on or  after the  date of commencement of           the  Act   is  likely  to  serve  the  purpose  of           encouraging new buildings to be constructed. There           is therefore  nothing arbitrary or unreasonable in           fixing the  date of  commencement of  the Act from           which the exemption is to be operative."      Section 14(1)(b) has sufficient inbuilt guidelines. The requirements to  be satisfied before initiating action under this provision  have been judicially laid down by the Madras High Court  by Anantanarayanan, J. as he then was, in Mehsin Bhai v.  Hale and company, G. T. Madras, [1964] 2 Madras Law Journal 147.  Anantanarayanan, J.  observed at  page 147  as follows:           "    What the  section really required is that the           landlord must  satisfy the Court that the building           was bona  fide required  by him, for the immediate           purpose of  demolition. I am totally unable to see           how the  present state  of the  building, and  the           extent to  which it  could stand without immediate           demolition and  reconstruction, in the future, are           not relevant  considerations in assessing the bona           fides of  the landlord. On the one hand, landlords           may bona fide require such buildings, particularly           old  buildings,   in  their   own  interest,   for           demolition and  reconstruction. On the other hand,           it is equally possible that the mere fact that the           building is  old, is  taken advantage  of  by  the           landlord to  put forward  such  pretext  his  real           object being  ulterior, and  not bona fide for the           purpose of  reconstruction.  The  Courts  have  to           apply several  criteria, and  to  judge  upon  the           totality

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23           of the  facts. But  the Courts  cannot exclude the           possibility that  the ancient  or  relatively  old           character of  the building  which may nevertheless           be in  quite a  good and sound condition, is being           taken advantage  of by a landlord in order to make           such an  application  with  an  ulterior  purpose,           which purpose  might be,  for instance,  to obtain           far more advantageous terms of rent in the future.           What the  section really  contemplates is  a  bona           fide requirement; that necessarily implied that it           is in  the interests  of the  landlord to demolish           and reconstruct  the building,  and that  the fact           that the  building is  old is not merely a pretext           for advancing  the application, with the object of           evicting  the  tenant,  and  of  obtaining  higher           rentals."      This Court  also emphasised this aspect in the decision of Metalware  & Co. etc. v. Bansilal Sharma and others etc., [1979] 3 S.C.R. 1107 at pages 1117-1118.      We are  therefore unable  to accept the submission that absence  of   the  right   of  induction   of   tenants   in reconstructed premises  is either arbitrary or unreasonable. The submission that section 16(2) which provides that when a building is  totally demolished  and on which a new building is erected  shall be  exempt from  all the provisions of the Act for a period of five years is bad is also unsustainable. See in  this connection  the observations  of this  Court in M/s. Punjab  Tin Supply  Co., Chandigarh  etc. etc.  v.  The Central Government and others, [1984] 1 S.C.R. 428 and Motor General Traders  and another  etc. etc.  v. State  of Andhra Pradesh and  others etc.  etc., [1984]  1 S.C.R. 594 at page 605. It  was submitted  that the  fact that  in these  cases exemption was  after the  first construction of the building and not  after demolition and re-construction but that would not make  any difference  to the  principle applicable.  The principle underlying  such exemption  for a  period of  five years is  not discriminatory  against  tenants,  nor  is  it against the  policy  of  the  Act.  It  only  serves  as  an incentive to the landlord for creation of additional housing accommodation to  meet the growing needs of persons who have no accommodation  to reside or to carry on business. It does not create  a class  of landlords  who will  forever be kept outside the  scope of  the Act as the provision balances the interests of  the landlords  on the one hand and the tenants on the other in a reasonable way. This Court in Atam Prakash v. State  of Haryana  and others,  [1986] 2  S.C.C. 249 also judged the  rules of  classification  in  dealing  with  the Punjab Pre-emption Act, 1913. 24      This Court  emphasised in  Panchamal Narayan  Shenoy v. Basthi Venkatesha  Shenoy,  [1970]  3  S.C.R.  734  that  in considering the reasonable and bona fide requirements of the landlord under  this clause,  the desire  of the landlord to put the  property to  a more profitable use after demolition and reconstruction  is also  a factor that may be taken into account in  favour of  the landlord.  It was also emphasised that it  was not  necessary  that  the  landlord  should  go further and  establish under  this clause that the condition of  the   building  is   such  that  it  requires  immediate demolition.      Our attention  was drawn  to  certain  observations  of Chatterjee, J.  of the Calcutta High Court in Jiwanlal & Co. and others v. Manot and Co., Ltd., (64 Calcutta Weekly Notes 932 at  page 937)  that where the landlord had established a

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case of  building and  rebuilding  the  tenants  undoubtedly would suffer on ejectment. The learned Judge was of the view that though  the landlords  required the  premises  for  the purpose of  building and  rebuilding, it  was not  desirable that the  tenants  should  be  ejected.  The  learned  Judge emphasised that  the purpose  of the  Act was to protect the tenants as  long as  possible and to eject them only when it was not otherwise possible. The landlords did not require it for their  own use  and occupation.  They wanted  it for the advantage of  increased accommodation. The learned Judge was of the  view that  if the tenants were ejected, then for the time being,  far from  the problem  being solved,  it  would create  difficulties   for  the   public  as   well  as  for themselves.  We   are,  however,   unable  to   accept  this principle. It is true that the Act must be so construed that it harmonises  the rights  of the  landlords and at the same time protects  the tenants  and also serves best the purpose of the  Act and  one of  the purposes of the Act is to solve the acute  shortage of  accommodation by  making a  rational basis for  eviction and to encourage building and rebuilding which  is   at  the  root  of  all  causes  of  shortage  of accommodation.      It was  held by  a learned  single Judge  of the Madras High Court  (one of  us-Natarajan J.) in M/s. Patel Roadways Private Limited,  Madras v.  State of Tamil Nadu and others, (A.I.R. 1985  Madras 119)  that the  provisions of the Tamil Nadu Act  were not  violative  of  Article  14  and  Article 19(1)(f) of  the Act.  But that  was in a slightly different context.      Post war  migration of  human beings  en bloc  place to place, the  partition of  the country  and uprooting  of the people from  their hearth and home, explosion of population, are the  various vital  factors leading to the present acute shortage of housing. It has to be borne in mind 25 that the  urge for land and yearning for hearth and home are as perennial  emotions  as  hunger  and  sex  are,  as  Poet Rabindranath would  say meaning  thereby, it is not wealth-I seek, it  is not  fame that  I want,  I  crave  for  a  home expressing the  eternal yearning  of all  living beings  for habitat.      It is  common knowledge that there is acute shortage of housing, various  factors have led to this problem. The laws relating to  letting and of landlord and tenant in different States have  from different  States’ angles tried to grapple the problem.  Yet in  view of  the magnitude of the problem, the problem  has become insoluble and the litigations abound and the  people suffer.  More  houses  must,  therefore,  be built, more accommodation and more spaces made available for the people  to live in. The laws of landlord and tenant must be made  rational, humane,  certain  and  capable  of  being quickly implemented. Those landlords who are having premises in their  control should  be induced  and encouraged to part with available  accommodation for limited periods on certain safeguards which  will strictly  ensure their  recovery when wanted. Men with money should be given proper and meaningful incentives as  in some  European countries  to build houses, tax holidays  for new  houses can be encouraged. The tenants should also  be given  protection and  security and  certain amount of  reasonableness in  the rent. Escalation of prices in the  urban properties, land, materials and houses must be rationally checked.  This  country  very  vitally  and  very urgently requires  a National  Housing Policy  if we want to prevent a  major breakdown  of law  and  order  and  gradual disillusionment of  people. After  all shelter is one of our

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fundamental rights. New rational housing policy must attract new buildings,  encourage new  buildings, make available new spaces, rationalise  the rent  structure and rationalise the rent provisions  and  bring  certain  amount  of  uniformity though leaving  scope for  sufficient flexibility  among the States to  adjust such  legislation according  to its needs. This Court and the High Court should also be relieved of the heavy burdens  of this  rent litigations.  Tier  of  appeals should be  curtailed. Laws  must  be  simple,  rational  and clear. Tenants  are in  all cases  not the  weaker sections. There are  those who  are weak  both among  the landlords as well as  the tenants.  Litigations must come to end quickly. Such new  Housing Policy  must comprehend  the  present  and anticipate the  future. The idea of a National Rent Tribunal on an  All India  basis with  quicker  procedure  should  be examined. This  has become  an urgent  imperative of today’s revolution. A  fast changing  society  cannot  operate  with unchanging law and preconceived judicial attitude. 26      For the reasons aforesaid the contentions urged in writ petitions fail  and are  accordingly dismissed. In the facts and circumstances  of the  case there will be no order as to costs. Interim orders if any are vacated. S.L.                                     Petition dismissed. 27