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PETITIONER: VIVIAN JOSEH  FERREIRA & ANR.

       Vs.

RESPONDENT: MUNICIPAL CORPORATION OF GREATER BOMBAY & ORS.

DATE OF JUDGMENT04/11/1971

BENCH: SHELAT, J.M. BENCH: SHELAT, J.M. SIKRI, S.M. (CJ) DUA, I.D. ROY, SUBIMAL CHANDRA MITTER, G.K.

CITATION:  1972 AIR  845            1972 SCR  (2) 257  1972 SCC  (1)  70  CITATOR INFO :  R          1972 SC1982  (47)  R          1976 SC 670  (24)  RF         1987 SC1527  (21)

ACT: Constitution   of  India,  1950,  Articles  14   and   19(1) (f)--Bombay  Building Repairs and Reconstruction Board  Act, XLVII  of 1969--Ss. 27, 28, 29--Enactment to  solve  housing problem in the city and the danger arising from collapse  of old buildings--Tax on all residential buildings occupied  by tenants at the time of the commencement of the  Act--Classi- fication   of  buildings  according  to  age  and  type   of construction--Varying  percentage of the rateable  value  of buildings charged as basic levy--Constitutional validity of. Bombay  Building Repairs and Reconstruction Board Act  XLVII of 1969--Constitutional validity of. Taxing Statute--Principle for determination of the  validity of.

HEADNOTE: The  Bombay Building Repairs and Reconstruction  Board  Act, XLVII of 1969 was brought into force on October 1, 1969.  It was  enacted  as a temporary measure and was  to  expire  on December  31,  1970.   The  preamble  of  the  Act   recites collapses  of  residential  buildings,  acute  shortage   of housing  accommodation  and  the problem of  law  and  order arising from the increasing influx of persons into the  city of  Bombay  in  search of work as  having  necessitated  its enactment.  It also recites the recommendations, suggestions and objections received by the government in response to the proposals  made by it and its conclusion  after  considering them,  as to the necessity for establishing a Board to  deal with  the  problems.   The Act is  confined  to  residential buildings   occupied   by  tenants  at  the  time   of   the commencement of the Act.  Section 28 cls. (a) to (J) exempts buildings  exclusively  occupied by  the  owners,  buildings exclusively  used  for non-residential  purposes,  buildings exclusively  occupied  on leave and licence, open  land  not built  upon, buildings vesting in or leased  to  cooperative

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societies  and  buildings which might be erected  after  the commencement  of the Act.  Section 27 provides for the  levy of tax on buildings and lands, save those exempted under  s. 28,  at  rates  of percentum of the rateable  value  of  the properties as laid down in the Schedule to the Act,  Section 29  divides the buildings so taxed into categories A, B  and C.Buildings  built  prior  to September 1,  1940  fall  into category A; those   built  between  September  1,  1940  and December  31,  1950 fall into category B;  and  those  built between  January 1, 1951 and the date on which the  Act  was brought into force fall into category C, Varying  percentage of the rateable value of the buildings is charged as a basic levy  and  at  a  higher rate  when  any  such  building  is structurally  repaired.  The Act thus makes three  kinds  of classifications  namely,  (1) by confining the  tax  to  the residential tenanted buildings it classifies buildings which are used for residential purposes and are tenanted, from the rest; (2) by confirming the tax to such existing building it classifies them from those built after the date on which the Act  is brought into force and (3) by dividing  those  which are  liable  to tax into three categories according  to  the three  periods in which they were constructed.   The  amount recovered under the levy 258 is  to  be first credited to the Consolidated  Fund  of  the State,  and,  thereafter, to be transferred  by  a  suitable appropriation to the fund designated as the Bombay  Building Repairs  and Reconstruction Fund.  An owner who is  required to  pay the tax pays only 10% of the rateable value of  .the building  and  is entitled to recover the balance  from  the tenant  by  making  a corresponding  increase  in  the  rent payable by such tenant.  During the life of the Act such  an owner  is  not bound to keep the premises let  in  good  and tenantable repair. Owners  of two residential buildings in the city  of  Bombay neither of which was, by reason of its having been  recently constructed,  either dilapidated or in  dangerous  condition challenged  the constitutionality of the Act on the  grounds (i)  the tax amounted to unreasonable restriction and  could not be said to be for a public purpose in that it  benefited neglectful  and defaulting owners, and, therefore,  violated Art.  19(1)(f)  of  the  Constitution;  (ii)  the  Act   was discriminatory  and, therefore, infringed Art.  14  because, (a)  the classification of buildings into  three  categories and  imposition of different rates of tax was not  based  on any  rational  principle;  and (b) the  exemption  given  to buildings under cls. (g), (h), (i) and (i) of s. 28 and  the classification between buildings constructed before the  Act and  those  constructed thereafter  was  irrational  without being founded on any principle. HELD : The Act is valid and the petitions unsustainable. (1) The principles arising from the decisions of this  Court wherein  the  question of validity of taxing  statutes  have arisen  are : (i) in order that a tax may be valid  it  must be, first, within the competence of the Legislature imposing it,  secondly, it must be for a public purpose and  thirdly, it  should not violate the fundamental rights guaranteed  by Part  III of the Constitution. (ii) a taxing statute  is  as much subject to Art. 14 as any other statute; but in view of the  inherent  complexity of fiscal  adjustment  of  diverse elements  a  larger discretion has to be  permitted  to  the legislature  for  classification  so long as  there  is  no. transgression  of the fundamental principle  underlying  the doctrine  of classification; (iii) a taxing statute  is  not invalid on the ground of discrimination merely because other

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objects   could  have  been,  but  are  not  taxed  by   the legislature; (iv) when a statute divides the objects of  tax into  groups or categories so long as there is equality  and uniformity  within each group the tax cannot be attacked  on the  ground  of its being discriminatory; and (v)  the  mere fact that a tax falls more heavily on some in the same group or  category is by itself not a ground for  its  invalidity. [268 E-269 D] K.  T. Moopil Nair v. State of Kerala, [1961] 3  S.C.R.  77, Raja  Jagannath  v. U.P., [1963] 1 S.C.R.  220,  East  India Tobacco Co. v. Andhra Pradesh, [1963] 1 S.C.R. 404, Khandige Sham  Bhatt  v. Agricultural income-tax  Officer,  [1963]  3 S.C.R.  809,  Andhra Pradesh v. Nalla Raja Reddy,  [1967]  3 S.C.R.  28,  Ravi Varma v. Union of India. [1969]  3  S.C.R. 827,  and Twyford Tea Co. Ltd. v. State of Kerala, [1970]  3 S.C.R. 282, referred to. Where the object of a tax is directly private, indirect  and incidental  benefits which may result to the public  do  not make  a public purpose.  But the purpose of a tax would  not be  regarded  as private merely because some  persons  might receive  more  benefits from the use of  its  proceeds  than others  or,  is imposed for a purpose  other  than  revenue. But.  the principle that funds raised by taxation cannot  be expended  for private use does not prevent  the  legislature from  looking  at  the ultimate rather  than  the  immediate result of the expenditure, and incurring an expense 259 or  creating a liability on the part of the public which  it was under no constitutional obligation to incur or create if the  ultimate effect will be beneficial to the public.   The fact  that  a statute authorising an expenditure  of  public tunas  for  a public purpose may foster  another  enterprise which is not a public one does not invalidate the statute if the  purpose of the expenditure is legitimate because it  is public.   The test is not as to who receives the  money  but the character of the purpose for which it is expended.  What is  to  be  borne in mind is  the  distinction  between  the purpose and the method of its implementation. [272 B-E) Cooley  on Taxation (4th ed.), Vol. 1, Ch. 4, Arts.  174  to 221;  American  Jurisprudence Vol. 51, paras  321  and  329. lbid, para 330 at p. 381; and Carmichael v. Southern Coal  a Coke  Co.  81  L.  Ed.  1245  and  American   Jurisprudence, Taxation, Vol, 51 para 353 at 396. The  incidence of tax may fall upon a class  or  individuals who  derive no benefit from its expenditure or who  are  not responsible  for  the mischief to remedy which  the  tax  is imposed..  Besides,  in  the present case  the  doctrine  of benefits cannot apply first, because the cess goes  directly to   the  Consolidated  Fund  and,  secondly,  because   the legislature  has the power to authorise expenditure  out  of the consolidated fund on any public purpose. [272 G] Carmichael  v. Southern Coal & Coke Co., 81 L. ed  1245,  at pp. 1261 and 1265, referred to. Both the purpose of the tax and its use are, without  doubt, for public purpose., The purpose is to prevent collapses and the suffering they must cause.  The use is for  preservation and  prolonging  the life of teh buildings existing  at  the date  of  the enactment. if, in  implementing  the  purpose, which   is   demonstrably  public,  some   benefit   reaches particular individuals, the statute which does not  directly purport so to do, cannot be invalidated. [273 C] (ii)  When a combination of various factors raised  problems which  are of imminent concern to the state as well  as  the municipal  authorities,  if the legislature  took  a  policy decision  to  give  priority  to  the  residential  tenanted

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premises, in respect of which in its opinion, the danger was graver  and  imminent no challenge to the  division  between residential and non-residential premises can be  sustainable particularly  when  dealing with a part of the  problem  and confining  its  treatment to residential premises  only  was considered feasible.  In the light of the studies undertaken by the government and the corporation if legislature thought it  best  to  preserve  and prolong  the  life  of  existing structures  no challenge on the ground of discrimination  or arbitrariness  can  legitimately  be  made.   Therefore  the classification  of  residential premises from the  rest  and that  between  those existing at the time when the  Act  was brought  into force from the new ones which might  be  built thereafter   can  be  regarded  as  based  on   intelligible differentia   and  related  to  the  objectives  and   their feasibility   which  the  legislature  bad  in  mind   while undertaking the questioned legislation. [275 A-G] The  classification  of buildings into three  categories  is based  on their age and the construction current during  the period  of  their  erection.   It  is  therefore  based   on intelligible  differentia  and  is closely  related  to  the objects  of  the  legislation.   There  is,  therefore,   no question  of  unequals  being  treated  as  equals  as  each building in respect of which the tax is payable falls within the  surveillance  of the Board and has to  be  structurally repaired  if  the need were to arise.  Further, the  tax  is payable on 260 the  rateable  value  of each building  which  differs  from building  to building and it is distributed  between  owners and the tenants, the former bearing 10% of it only.  [275 H, 276 C, 277D] The  grievance that individual tax-payers get more  or  less return  from  the tax proceeds would not  be  a  sustainable ground for a challenge against its constitutional  validity. The primary object of the Act is not to repair all buildings subject  to  cess  but to  prevent  the  annually  recurrent mischief  of  house  collapses and  the  human  tragedy  and deprivations  they  cause.   The tax being  thus  levied  to prevent  such  disasters, there is no  question  of  unequal treatment between one class of owners and another. [276 F] Moopil  Nair  v. State of Kerala, [1961] 3  S.C.R.  77,  New Manck  Chowk Spinning & Weaving Mills Co. Ltd. v.  Municipal Corporation  of the City of Ahmedabad, [1967] 2  S.C.R.  679 and  Railroad  Retirement Board v. Alton  Railroad  Co.,  79 L.ed. 1468, held inapplicable. The buildings in each of the categories exempted under s 28, form a distinct class by themselves., Buildings in cls.  (a) to  (f) are buildings to which Rent Act does not  apply  and therefore the considerations for which the cess is levied do not  apply  to  them.   Buildings  used  for  nonresidential purposes  do  not  fall  within the scope  of  the  Act  and therefore  had  to be excluded from the levy  of  the  cess, Buildings vesting in or leased to cooperative societies form a  class by themselves and cannot be equated with  buildings built  by individuals.  The relation between a  society  and its members are not the same as those between landlords  and tenants  and besides, there is considerable control  by  the registered  over  .the administration of the  funds  of  the societies  and overall supervision over their affairs.   The premises  occupied  by  licences form a  distinct  class  by themselves,  and  could not have been lumped  together  with tenanted  premises without the danger of a  challenge  under Art.  14.  The circumstances which led to the imposition  of the  cess  do  not apply to premises in  the  occupation  of

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licensees because such licensees have no rights such as  the tenants  have,  namely, irremovability and the  freezing  of rents, and the consequential reluctance or inability of  the landlords to maintain their premises tenantable repairs.  If buildings used for non-residential purposes on the basis  of leave   and   licence  are  validly   treated   differently, buildings,  if  used partly for one and partly  for  another such  purpose  or  purposes can also  be  similarly  treated provided that no part or parts thereof are occupied or  used for  a  purpose  other than those  specified  in  the  three clauses.   Since  these buildings form separate  classes  by themselves  from  the  tenanted  residential  premises,  the provisions for exempting them cannot be held as violative of the equal protection clause. [277 F-278 G]

JUDGMENT: ORIGINAL  JURISDICTION : Writ Petitions Nos. 187 and 188  of 1970. Petition  under  Art. 32 of the Constitution  of  India  for enforcement of the fundamental rights. S.  J. Sorabjee and B. R. Agarwala, for the  petitioner  (in both the petitions). M. C. Bhandare, P. C. Bhartari, J. B. Dadachanji and  261 Ravinder  Narain, for respondent no. 1 (in W.P. No.  187  of 1970). P . C. Bhartari, J. B.  Dadachanji and Ravinder Narain,  for respondent no.  1 (in W.P. No. 188 of 1970). M.   C.  Setalvad, P. K. Chatterjee and B.  D.  Sharma,  for respondent no. 3 (in W.P. No. 187 of 1970). M.  C. Bhandare and B. D. Sharma, for respondent no. 3  (in. W.P. No. 188 of 1970). S.   J.  Sorabjee,  R. D. Diwan and 1. N.  Shroff,  for  the intervener(in W.P. No. 187 of 1970). The Judgment of the Court was delivered by Shelat,  J.  These petitions by owners  of  two  residential buildings,  in the city of Bombay, neither of which  is,  by reason  of  its  having been  recently  constructed,  either dilapidated   or  in  dangerous  condition,  challenge   the validity  of the Bombay Building Repairs and  Reconstruction Board Act, XLVII of 1969. The  preamble  of the Act recites collapses  of  residential buildings, acute shortage of housing accommodation, and  the problems of law and order arising from the unceasing  influx of  persons  into the city of Bombay in search  of  work  as having  necessitated  its enactment.  It  also  recites  the recommendations,  suggestions  and  objections  received  by Government  in response to the proposals made by it and  its conclusion  after considering them as to the  necessity  for establishing  a  Board  to deal with the  said  problems  by carrying  out structural repairs to dangerous buildings,  by acquiring  and  reconstructing buildings  which  are  beyond repair and by providing for the rehousing of occupiers, who, because  of such repairs would be dishoused, and to  provide for  the temporary levy of an additional cess  on  buildings and  lands  to  meet  the  expenditure  for  the   aforesaid purposes.  The Act was brought into force on October 1, 1969 and  the  cess payable thereunder became operative  as  from November 1, 1970. The  Act by s. 1(4) is declared to be a temporary  one  and’ would  expire on December 31, 1979.  Structural repairs  are defined  by  s. 2 (s) as meaning repairs or  replacement  of decayed, cracked, or out of plumb structural components of a

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building  or  any substantial part thereof or  any  part  to which  the occupiers have common access, by new ones of  the like  materials, or of different materials including  change in the mode of construction such as converting load  bearing wall type or timber framed structure to an R.C.C. one, which repairs  or replacement, if not carried  out  expeditiously, may result in the collapse of the building or any- 262 part thereof.  Ss. 3 and 4 provide for the establishment and composition    of   the   Bombay   Building   Repairs    and Reconstruction  Board.  Ss. 21 and 22 lay down  the  duties, powers  and  functions of the Board including the  power  to carry out structural as also tenantable repairs, to move the State  Government to acquire old and dilapidated  properties in  respect  of which the cess is levied and which,  in  the opinion  of the Board, are beyond repair and to  reconstruct new  buildings  thereon,  to  establish  transit  camps   to temporarily  accommodate persons dishoused and  to  demolish dangerous  and  dilapidated  buildings  incapable  of  being repaired at reasonable cost.  S. 27 provides that subject to the  provisions  of  S. 28 there shall be levied  a  tax  on buildings and lands called the Bombay Buildings Repairs  and Reconstruction Cess at the rate of so many percentum of  the rateable  value of the concerned property as  is  prescribed therefor  under the Schedule to the Act.  Sub-s. 4 of s.  27 provides  that the share of the owner shall be 10 per  cent. of the rateable value of the property and confers a right on such owner to recover the balance from the tenant by  making a proportionate increase in rent and recovering it as  such. S.  28 ,,enumerates various classes of buildings  which  are exempted from the enforcement of the levy.  S. 29 lays  down three categories of buildings to which the Act applies.  The Schedule  to  the  Act provides  different  rates  at  which buildings  falling in each category would be subject to  the cess.   The  Schedule  also  provides  in  respect  of  each category  of  buildings different rates at  which  the  cess would  be payable if structural repairs are carried  out  to such  building.   The proceeds of the cess  would  be  first credited  to  the  ,consolidated  fund  of  the  State   and thereafter  under an appropriation duly made by law in  that behalf  would be transferred to a fund, the amount of  which would  be placed at the disposal of the Board  for  carrying out its several functions. (S. 31).  Lastly, s. 71  provides that  in the case of any building subject to the  cess,  the owner  shall  not be bound to keep the premises let  to  any occupier in good and tenantable repair and accordingly S. 23 of ,the Bombay Rents, Hotel and Lodging House Rates  Control Act,  1947  shall be deemed to have been suspended  and  the provisions  of the Transfer of Property Act,  1882  relating thereto shall apply. Counsel  for the petitioners challenged the validity of  the Act principally under three heads : (1) that in the  context of  the  ,existing legislation, i.e., the  Bombay  Municipal Corporation  Act,  III of 1888 and the Bombay  Rent  Control Act,   1947,  the  imposition  of  a  cess  on   residential buildings, which are in sound and good condition, and  which would  not require structural repairs for the entire  period of  the  Act, amounts to an  unreasonable  restriction,  and therefore,  violates Art. 19(1)(f) of the Constitution;  (2) that the Act is also violative of Art. 14, in that, it fails to  recognise  the  material  differences  between   various buildings  263 with regard to their physical conditions and treats unequals as equals; and (3) that the exemption provided by S. 28  are

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arbitrary and without any principle, and therefore,  violate Art.  14.   Counsel argued that  by  subjecting  residential buildings  in  sound  condition  to the  cess,  the  Act  in substance and effect provides bounties for those owners  who have  been neglectful of their buildings and have  infringed requisitions  issued to them by the  Municipal  Corporation. Counsel  for the respondents, on the other hand,  urged  (1) that the imposition of the tax was by virtue of power  under Art.  246(3)  read with entry 49 in List II of  the  Seventh Schedule of the Constitution, and being for a public purpose cannot  be  challenged as an unreasonable  restriction,  (2) that   there  is  an  intelligible  classification  of   the buildings  and such classification having a  rational  nexus with  the  objects of the Act and the mischief it  seeks  to avert,  it is not challengeable on the ground of  its  being discriminatory;  and  (3) that the exemptions in s.  28  are provided  for in the light of the objects and the  scope  of the Act and being in consonance with them, S. 28 is not open to such a challenge. The  argument  of Mr. Sorabji, however, was  that  the  cess amounted  to unreasonable restriction and could not be  said to be for a public purpose, in that, it benefits  neglectful and  defaulting owners at the cost of owners who  have  been looking after their properties and consistently carrying out tenantable  repairs,  thus preventing their  buildings  from being reduced to dangerous conditions.  In this  connection, he  relied on certain passages from Cooley on Taxation  (4th ed.),  vol. 1, American Jurisprudence, vol. 51  on  Taxation and   the  Commissioner,  Hindu  Religious   Endowments   v. Lakshmindra.(1)   The   argument  was  that  the   tax   was objectionable  as  it  equated buildings  in  dangerous  and dilapidated   conditions  with  those  in  good  and   sound condition,  thus,  laying down a fictional equality  in  the teeth  of factual and physical inequality.   Counsel  relied for  that  argument  on K. T. Moopil Nair v.  The  State  of Kerala(2) and urged that the tax should be declared  invalid on  the principles laid down therein.  He also  argued  that the  classification  of  buildings  into  three   categories imposing  different  rates  of  tax was  not  based  on  any rational  principle as even recently  constructed  buildings and  buildings  not  needing or likely  to  need  structural repairs were brought into the class of buildings subject  to the  cess.   There was next an assumption,  he  argued,  not based  on  realities, that a building constructed  before  a certain  number  of  years  would  need  structural  repairs although it has been kept in proper condition and  therefore not needing such structural repairs.  A building constructed several   years  ago  might  be  in  better   condition   if consistently taken care (1) [1954] S.C.R. 1005,1040. (2) [1961] 3 S.C.R. 77. 264 of than the one built later but not taken care of, yet  such a building, only because it was built earlier, is  subjected to  a higher rate of tax.  Sec. 27 and the Schedule  created discrimination  between properties (a) inter se in the  same category, (b) between buildings in different categories, and (c)  in  imposing the same percentage, on buildings  in  the same  category  though their actual conditions  are  totally different   and   also  between   buildings   in   different ,categories.   Thus, buildings in category A, built  say  in 1900  and those built in 1939 are treated as  equals.   Even buildings erected ,at about the same time need not be  equal in  condition,  as, in the ,case of one  tenantable  repairs might  have  been consistently carried  ,out  or  structural

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repairs might have recently been carried out than the one in which no such repairs, tenantable or structural, have so far been  carried  out.  Even if such a tax was  necessary,  its levy  should have been made dependable on the actual  condi- tions  of the buildings and after a survey of the  necessity and  the  extent of structural repairs  required.   Further, buildings  in  sound condition and  not  needing  structural repairs  ought to have been ,exempted.  The Act, thus,  does not take notice of the actualities in the sense that  though a building built in 1939 but wherein extensive repairs  have been  carried  out in 1968 would be a better  building  than another built in 1950, yet the former has to pay .the tax at a higher percentage than the latter.  The categorisation ,of the buildings, therefore, was arbitrary and not based on any rational  principle.  Counsel also attacked  the  exemptions given :to buildings falling under cls. (g), (h), (i) and (j) of  S. 28 as being irrational and without being  founded  on any  principle.   Lastly, he urged that  the  classification between  buildings  constructed  before the  Act  and  those constructed  thereafter  was not valid since  there  was  no nexus  between the date fixed under the Act and the  objects of the Act.  Even assuming that the Act were to be found  to be valid, those buildings which were sound in condition  and were  likely  to remain so throughout the life  of  the  Act ,could  be separated from the rest and a  restraint  against tax  being enforced in respect of them can be imposed.   The attack against ,the validity of the Act thus falls under two heads : (a) that the cess is not for a public purpose as  it results   in  bounties  to  owners  whose   buildings   need structural  repairs at the expense of those whose  buildings are  sound and are not likely to need any such repairs,  and (b)  that it suffers from arbitrariness and is violative  of Art. 14. Before  these  contentions are examined it is  necessary  to consider the background in which the Act was passed as  that would throw light upon the targets which the Legislature had in mind while enacting it. Prior  to the last World War, buildings had been one of  the major  investments  in  the city of  Bombay.   The  cost  of construc-  265 tion, owing to the easy availability of building  materials, was fairly reasonable and the cost of upkeep and maintenance correspondingly low.  It was then a tenant’s market as there was then no pressure of population on the city as it is  now due to rapid industrialisation, concentration of  industries and other allied reasons.  The owners of properties then had sufficient   incentives   to  keep   their   properties   in satisfactory   repairs.    The   situation,   however,   was completely reversed at the end of the last World War as  the gap between the demand and supply had by then widened at  an alarming  rate.   The result was the emergence of  the  Rent Control  Act which froze the rent at the pre-war  level  and gave  security  to  the tenants by conferring  on  them  the status  of  irremovability.  The building materials  in  the meantime became scarce, and consequently, with the  freezing of rents and the rising costs of materials, the incentive to maintain  properties in good repair gradually vanished.   As the  gap  between demand and supply  of  accommodation  grew wider,  the pressure on the existing premises  substantially increased.   The  situation got worsened by  reason  of  the reluctance of the owners of the buildings to maintain  their properties in tenantable repairs as they found carrying  out the repairs uneconomical.  A more comprehensive Rent Control Act then replaced in 1947 the existing 1939 Act which had by

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them, been found inadequate.  But while it guaranteed to the tenants   security  of  tenancy  rights  it   generated   an increasing  reluctance on the part of the owners  to  invest any  more  capital  on  their  buildings  as  that  type  of investment was found to be less and less attractive. One  of the features of the city is that a large  percentage of  the  existing  residential  buildings  in  it  had  been constructed several years ago.  Being almost an island  city with limited construction space, the buildings had to expand vertically,  a feature not then prevalent in  other  cities. These  buildings  were  built on  timber  frames  as  R.C.C. construction had not then come into vogue.  Several of  them had been built upto five or six storeys having mostly one or two  rooms tenements, each of which was habited by  a  large number  of  persons.   The saline  atmosphere  of  the  city coupled with the absence of repairs carried out on this type of  structures  began to have its  inevitable  consequences. Collapses  of  houses which were almost unknown  in  pre-war days  began to occur in increasing numbers till the  figures rose  to about 125 on an average per year.  These  collapses had their toll in the loss of human life, physical  injuries to the residents of those buildings and the dishousing of  a large number of persons from amongst the teeming  population residing in them. The  problem  became so alarming that the  city  Corporation carried  out in 1956 a comprehensive survey of buildings  in all its 266 seven words. The survey was confined mainly to building used for  residential purposes.  That was not due to the  absence of  likelihood of human loss, suffering and  deprivation  of accommodation  occurring  in non-residential  premises,  but presumably because the need for such a survey of residential premises  was found to be of a more urgent  character.   The survey  revealed  that  there were within  the  city  36,000 residential  buildings, of which 17,490 were built prior  to 1905.   The  survey showed that residential  buildings  fell into six categories, namely, 7.48% being buildings in  steel or R.C.C. frame, 1.58% with external masonry walls and steel or  R.C.C. frame, 33% with timber frames, 42% with  external masonry  walls and internal timber frames, 1%  with  masonry walls and jackarch floors and 15% temporary tin sheds.   The report  further revealed that of the said 17,490  buildings, (a) 5,081 of them had a future life of five years only,  (b) 3,549 a future life of six to ten years, (c) 3,286 a  future life of eleven to fifteen years, (d) 3,583 a future life  of sixteen  to  twenty-five years, (e) 1,716 a future  life  of more  than  twenty-six  years,  and  (f)  275  in  a   sound condition.  Therefore, by 1969 when the impugned legislation was undertaken, buildings in (a), (b) and (c) and partly  in (d)  classes  had  already  outlived  the  period  of  their survival.  The total number of families living in  buildings which imminently required substantial repairs, if they  were to survive, came to 1,04,270, 80% of whom were occupying one room tenements. The  Report  on  the development plan  for  Greater  Bombay, submitted  to the State Government in 1964, stated that  out of about seven lacs tenements in Greater Bombay as on  March 31, 1961, 23% of them containing 18,000 buildings would need extensive repairs in the next fifteen years and about  1,000 of  them  would have to be  immediately  demolished.  10,000 buildings would have a life of about ten years, and 7,000  a life of fifteen years. With  such  a situation it was no wonder that  collapses  of buildings  became almost an annual  occurrence  particularly

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during  rainy  seasons.   In  1965,  the  State   Government appointed the Bedekar Committee to examine the problem.  The Committee   reported  the  following  principal  causes   of collapses; 1.  Indifference of owners to repair due to the freezing  of rents, on the one hand, and the rise in the cost of building materials, on the other; 2. Resulting leakages in sanitary blocks; 3.   Failure  to  demolish buildings even  where  they  were incapable of being sustained with repairs only; 4.   Overcrowding  in  the  tenements,  and  the  consequent increasing pressure on sanitary services therein, and  267               5. Soaring land values tempting owners to  let               their buildings collapse rather than  continue               to have them let out on frozen rents. Amongst  the difficulties presented by the current law,  the Committee found one of them in the absence of an independent agency to finance and execute repairs on behalf of owners or tenants  who  have  no means to carry  them  out  even  when otherwise willing to do so.  Such was the reluctance of  the owners  to  invest capital in these  buildings  that  though 18,000  notices  for  major  repairs  were  issued  by   the Corporation since 1960, only one third of them were complied with.   The  Committee  also noted  that  according  to  the Municipal engineering staff incharge of the several wards in Greater  Bombay,  386 buildings had  already  been  declared unsafe  and  by 1970 and 1980 751 and  2416  more  buildings would respectively be due for demolition.  Thus, a total  of 3,600 buildings having about 2 lacs of people living in them would  be threatening collapse and would have either  to  be demolished  or repaired in time to prolong their lives.   On the  several recommendations made by the Committee, one  was to  have  a  separate  department  to  deal  with   problems connected   with   the   demolition   of   old   structures, construction of new buildings replacing old ones, and annual and  special  inspection of buildings.   For  prevention  of collapses   it  suggested,  (a)  timely   demolition   where collapses were inevitable, (b) special repairs where it  was possible  to  prolong  the  life  of  old  structures,   (c) acquisition  of  old buildings and replacing them  with  new ones, (d) provision for temporary transit accommodation  for persons dishoused in this process, and (e) encouragement  to local   bodies   and  housing  cooperatives   to   construct residential  accommodation, since that was the only  way  of augmenting residential premises. The  problem confronting the State Legislature as  appearing from  these reports was that of the 17,490 buildings out  of the  total 36,000 surveyed by the Corporation, barring  only 1991  such buildings, the rest of them would  have  outlived their  lives by about 1980.  On June 3, 1968 the  Government Published certain proposals for eliciting public opinion for a legislation to prevent collapses and salvaging dilapidated structures.   It was after considering the  recommendations, suggestions  and objections received by the Government  that the  impugned Act was brought before the  Legislature.   The Act was confined to the problem of residential houses  only. That  was  not because there was no danger of  collapses  of non-residential  buildings,  but because it  was  considered feasible  to  deal with a limited problem, namely,  that  of residential  Premises in respect of which the  distress  was accuter As the Minister for Housing said during the  Passage of the bill. the intention of the Government was "to bit the evil where it is 500SUP.CI/72 268

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greatest".   It  is also clear that following  the  reports, such  as  the  survey  report, and  the  report  of  Bedekar Committee,  the  Act placed the residential  buildings  into three categories according to the periods during which  they were constructed and the construction in vogue during  those periods.   The  date,  September  1,  1940,  in  respect  of category  A  was chosen as it was from that  date  that  the rents were frozen under the Rent Control Act. The  life  of  the Act upto 1979  only,  restricting  it  to residential  buildings  only,  their  division  into   three categories,  the  raising of the fund for  implementing  the purposes   of  the  Act  from  three  agencies   immediately concerned with the problem, the Government, the  Corporation and  the  owners  and occupiers,  the  exemptions  from  the operation  of  the Act in s. 28, all these emerge  from  the earlier investigations and reports of which the  Legislature and  the  Government  were  aware  of.   As  aforesaid,  the mischief  which  the Legislature intended to  avert  applied also  to non-residential premises.  But the Legislature  was entitled  to  choose priorities according to the  degree  of danger  apprehended  by  it, and  therefore,  no  infirmity, constitutional  or  otherwise,  can be  attributed  to  such priority if it chose a part of the problem which it  thought should  be dealt with immediately, not because it was  blind to the larger problem but because it considered dealing with a part of it as feasible. The  question  of  validity of taxing  statutes  has  arisen before  this  Court  in a number of  cases.   The  principle emerging from them is that in order that a tax may be valid, it  is  firstly, within the competence  of  the  legislature imposing’ it, secondly, that it is for a public purpose, and thirdly,  that  it does not violate the  fundamental  rights guaranteed  by  Part III of the  Constitution.   The  taxing statute is as much subject to Art. 14 as any other  statute. (K.   T.  Moopil Nair v.  Kerala(1), Raja  Jagannath  v.  U. P(2), East India Tobacco Co. v. Andhra Pradesh(8),  Khandige Sham Bhatt v. Agricultural Income Tax officer(4) and  Andhra Pradesh V. Nalla Raja Reddy(5).  But in view of the inherent complexity of  fiscal  adjustment  of  diverse  elements   a larger discretion has to be   permitted  to the  Legislature for classification so long as there is  no transgression  of the  fundamental  principles  underlying  the  doctrine   of classification.  (cf.  Khandige Sham Bhatt  v.  Agricultural Income  Tax  Officer  (4) . These principles  are  that  the classification must be based on an intelligible  differentia which distinguishes persons or objects grouped together from others  left out of the grout), and that  differentia-  must have  a rational nexus with the object of the  statute.   So long as these principles are properly (1)   [1961] 3 S C R. 77. (4)   [1963] S.C.R. 809. (2)   [1963] 1 S.C.R. 220. (3)   [1963] 1 S.C.R. 404. (5)   [1967] 3 S.C.R. 28. 269 followed in classifying persons or objects for taxation, the power to classify must be wide and flexible so as to  enable the  Legislature  to adjust its system of  taxation  in  all proper  and  reasonable ways. (see Khandige  Sham  Bhatt  v. Agricultural Income Tax Officer(1) It  is well recognised that a Legislature does not  have  to tax  everything in order to tax something.  It can pick  and choose  districts, objects, persons, methods and even  rates of  taxation as long as it does so reasonably(2).  A  taxing statute  is  not  invalid on the  ground  of  discrimination

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merely  because other objects could have been, but  are  not taxed by the legislature.(Ravi Varma v. Union of India (3)]. When  a  statute divides the objects of tax into  groups  or categories,  so  long as there is  equality  and  uniformity within each group, the tax cannot be attacked on the  ground of  its  being discriminatory, although  due  to  fortuitous circumstances  or a particular situation some included in  a class or group may get some advantage over others,  provided ofcourse they are   not  sought out for  special  treatment. Khandige Sham Bhatt v.   Agricultural Income Tax Officer(1). Likewise,  the  name fact that a tax falls more  heavily  on some in the same group or category is by itself not a ground for  its invalidity, for then hardly any tax, for  instance, sales tax and excise tax, can escape such a charge. [Twyford Tea Co. Ltd. v. State of Kerala(4)]. Definition of taxation imply that a legislature can impose a tax for public purpose only.  A tax for purposes other  than public purposes would constitute taking of property  without due  process  of law within the meaning  of  the  Fourteenth Amendment  in the United States.  It would be  objectionable in   this   country  by  reason  of  Art.   31(1)   of   the Constitution(").   Taxation, however, is,  nonetheless,  for public  purpose  even  if particular  persons  receive  more benefit from the use of the tax proceeds than others(6). A  perusal of the provisions of the Act makes it clear  that its  objects  were : ( 1 ) to preserve the  residential  and tenanted  buildings existing at the date of  its  enactment, (2) for that purpose, to set up a special agency, the Bombay Buildings Repairs and Reconstruction Board, whose duties and functions   would  be,  (a)  to  undertake  and  carry   out structural  repairs  to buildings in respect  of  which  the impugned  tax  is  levied,  (b)  to  provide  temporary   or alternative accommodation to occupiers of any such buildings where  any  such building collapses, (c)  to  undertake  and carry  out  tenantable repairs to buildings  placed  at  its disposal,  (d)  to move the Government to  acquire  old  and dilapidited buildings in respect (1)    [1963] 3 S.C.R. 809.      (2) Willis,  Constitutional Law of the United States, 587. (3)    [1969] 3 S.C.R. 827.      (4) [1970] 3 S.C.R. 282. (5)   Cooley on Taxation (4th ed.), vol. 1, 381, 382. (6)    Ibid, 392. 270 of which the cess is levied and which are beyond repairs  or buildings in which structural repairs have once been carried out but further repairs are not possible, (e) to reconstruct new  buildings,  (f)  to  set up  transit  camps  for  those dishoused  on account of collapses, fire, rain  or  tempest, and  (g) to undertake demolition of dangerous  buildings  or portions thereof.  These objects obviously were, fixed  upon as a result of the earlier studies undertaken by the Govern- ment  and  the Corporation and the recommendations  made  by members  of the public in answer to the proposals  published by  Government in connection with collapses  of  residential buildings and the tragic consequences following them. To ensure implementation of these functions and duties,  the Act  provides the levy of tax on buildings and  lands,  save those  exempted  under s. 28, at rates of percentum  of  the rateable  value  of  the  properties as  laid  down  in  the Schedule  to  the  Act.  Under S. 27 and  the  Schedule  the properties  are grouped into three categories in respect  of which  varying  percentage  of the  rateable  value  of  the buildings  is charged as a basic levy and at a  higher  rate where any such building is structurally repaired.  The three categories are formulated on two principles, the age of  the

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buildings  and the type of construction in vogue during  the periods when they were constructed.  These principles appear to  have been adopted from the earlier studies made  at  the instance of the Government and the Corporation.  The  amount recovered  under  this levy is to be first credited  to  the Consolidated  Fund  of  the  State,  and  thereafter  to  be transferred   by  a  suitable  appropriation  to  the   fund designated as the Bombay Building Repairs and Reconstruction Fund.  (S.  31).  For providing initial expenditure  of  the Board,   the  Government  and  the  Corporation  have   been empowered to make advances. (s. 48).  The Act also  provides that  the Government may and the Corporation shall  make  an annual grant of Rs. 1,00,00,000/- each. Two  further  provisions in this connection need  be  noted. The  first is S. 27(4) under which an owner who is  required to  pay the cess pays only 10% of the rateable value of  his building  and  is entitled to recover the balance  from  the tenant  by  making  a corresponding  increase  in  the  rent payable  by such a tenant.  Default by the tenant gives  him the right to sue for eviction under s. 12 of the Bombay Rent Act, 1947, or, on intimation to the Municipal  Commissioner, for  recovery thereof as arrears of tax due under the  Bomay Municipal  Corporation Act.  The second is that  during  the life  of  the  Act such an owner is not bound  to  keep  the premises  let to any occupier in good and tenantable  repair and  S.  23 of the Bombay Rent Act is deemed  to  have  been suspended and s. 108 (m) of the Transfer of Property Act  is to  apply,  which  means that it is the  obligation  of  the tenant to keep the premises in tenantable  271 repairs.   It is, however, true that s. 5 8, as  amended  by Act 6 of 1971, saves the power of the Commissoner under  the Bombay  Municipal  Corporation Act to require the  owner  to carry  out repairs to such things as drains,  water-closets, latrines  etc., to pull down or repair dangerous  structures and to prevent causes of danger by such structures, to  stop nuisance  caused by a leaking roof or by a ditch, tank  etc. or  by  collection of water, and also saves  his  powers  to enforce  his orders to execute works, and the right  of  the occupier to execute any such work in the event of default by the  owner.   The section also saves the right  in  such  an event  of  a  tenant to execute such work  required  by  the Commissioner  under  s. 10-D of the Bombay Rent  Act.   This saving of cannot be equated the powers of the  Commissioner, however, with the obligation to carry out tenantable repairs under  s.  23  of the Bombay Rent Act or the  right  of  the tenant  to  carry  out  such repairs  in  the  case  of  the landlord’s default and to reimburse himself to the extent of two months’ rent. Such being the scheme and the objects of the, Act, can it be said  that the cess imposed thereunder is not for  a  public purpose ? It may be that some of the existing buildings,  by reason  of their having been recently constructed  or  their having been properly cared for or structural repairs  having been  recently  made  therein,  might  not  require  repairs contemplated by the Act.  Yet, their owners are required  to pay  the  cess from out of which the Board would  carry  out structural  repairs  to  buildings whose  owners  have  been neglectful or even defaulters in carrying out the  Municipal requisitions.   Does it, however, follow from such a  result that  the  purpose of the Act is to confer  bounty  on  such owners,  and  that therefore, the purpose of the tax  is  to serve  a  private and not a public purpose,  and  therefore, violative of Art. 19 (1) (f) ? The  rule, no doubt, is that taxes can be levied for  public

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purposes  and  indirect and incidental  benefits  which  may result to the public do not make a public purpose, where the object is directly private.  But the purpose of a tax  would not be regarded as private merely because some persons might receive  more  benefits from the use of  its  proceeds  than others or is imposed for a purpose other than revenue,  such as tarff duties for encouragement of manufactures or licence fees with a view to regulate a particular trade or industry. A law, not only exempting from taxation the limited means of poor  and  afflicted persons but providing public  funds  to ameliorate  their conditions, is undoubtedly one for  public purpose.  A clear example of such a tax is the provision for hospitals  and asylums where medical and other aid is  given to the poor and the dependent free of any charge.  A tax  in aid of private enterprises would undoubtedly be regarded as 272 loading "the table of the few with bounty that the many  may partake  of the crumbs that fall therefrom", unless such  an enterprise  is  one of such magnitude or  promise  that  its prosperity  constitutes  a  substantial  element  of  public welfare or which renders it important to national defence or other  such  national interest(1).  But the  principle  that funds raised by taxation cannot be expended for private  use does  not  prevent  the  Legislature  from  looking  at  the ultimate   rather   than  the  immediate   result   of   the expenditure,   and  incurring  an  expense  or  creating   a liability  on the part of the public which it was  under  no constitutional obligation to incur or create if the ultimate effect  will be beneficial to the public.  Upon this  theory laws  establishing  minimum wage or limiting  the  hours  of labour  have  been  sustained.   The  fact  that  a  statute authorising  an  expenditure of public funds  for  a  public purpose may foster another enterprise which is not a  public one  does not invalidate the statute if the purpose  of  the expenditure is legitimate because it is public.  It will not be  defeated  merely because the execution  of  it  involves payments to individuals.  The test is not as to who receives the  money but the character of the purpose for which it  is to  be  expended(2).   What is to be home  in  mind  is  the distinction between the purpose and the method of its imple- mentation.   If  in the course of the  latter  some  benefit incidentally reaches to a particular person or persons,  the former  neither changes its character nor is it  invalidated for  that  reason.   For  instance,  when  a  sudden  or  an overwhelming   disaster   strikes,  such  as  flood   or   a destructive  fire, a Legislature may legitimately  authorise expenditure  of  public  money to  provide  succour  to  the victims.  Persons living in the area may become helpless  or destitute, irrespective of whether rich or poor, but it is a public  purpose to supply the sufferers with food,  clothing and  shelter  in  order to relieve  their  immediate  needs. Expenditure of public funds in such cases have been  treated as necessary for the proper exercise of the police powers of the State(3). It is a common experience in the field of taxation that  the incidence of tax falls upon a class or upon individuals  who derive no direct benefit from its expenditure or who are not responsible  for  the mischief to remedy which  the  tax  is imposed.    Besides,  in  the  present  case  the  cess   on collection has. in the first instance, to be credited to the State’s  Consolidated Fund and then under  an  appropriation duly made after deducting the cost of collection the balance is to be transferred to the Repairs and Reconstruction (1) Cooley on Taxation, (4th ed.). vol. 1, Ch. 4, Arts,  174 to  221 ; and American Jurisprudence vol. 51, paras 321  and

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329. (2)  Ibid, Para 330, at P. 381; and Carmichael v.  Sourthern Coal & Coke Co., 81 Law. ed., 1245. (3)  American Jurisprudence, Taxation, vol. 51, Para 353, at 396.  273 fund.  The doctrine of benefits cannot apply to such a case, firstly, because the cess goes directly to the  Consolidated Fund  in  augmentation of that fund and not  to  a  specific fund, and secondly, because the legislature has the power to authorise  expenditure out of the Consolidated Fund  on  any public purpose which it thinks necessary and proper(1). Both  the purpose of the cess and its use are without  doubt for public purpose.  The purpose is to prevent collapses and the  suffering they must cause including  rendering  several persons homeless, a condition accentuated by the demand  for accommodation  outrunning  the  supply.   The  use  is   for preservation  and  prolonging  the  life  of  the  buildings existing at the date of the enactment of the Act by carrying out  structural repairs where owners due to diverse  reasons refuse  or  are  reluctant to spend their  capital  on  such preservation, jeopardising the life of their properties  and due  to the peculiar conditions in the property market  find it profitable to render buildings into vacant plots.  If  in implementing   the   purpose,  which,   as   aforesaid,   is demonstratably  public,  some  benefit  reaches   particular individuals, the statute, which does not directly purport so to do, cannot be invalidated. Ch.  IV of the Act deals with the levy of the cess  and  the buildings subjected to its imposition.  Though s. 27 imposes the  tax  on buildings and lands, the  exemptions  given  to buildings  exclusively occupied by the owners, to  buildings exclusively used for non-residential purpose, to residential buildings exclusively occupied on leave and licence, to open lands not build upon and to buildings which might be erected after  the date on which the Act comes into force. have  the effect  of confining the tax to residential houses  occupied by  tenants existing at the date of the commencement of  the Act.  Sec. 29 divides the buildings so taxed into categories A, B and C. Buildings built prior to September 1. 1940  fall into category Al. those build between September 1, 1940  and December  31,  1950  fall into category B  and  those  built between  Janury 1, 1951 and the date immediately before  the date  on  which  the Act was brought into  force  fall  into category  C.  Under the Schedule, category A  buildings  are charged  at the rate of 25% of the rateable value and at  4% if any building in that category is structurally repaired by the Board.  If a building falls in category B, it is charged at  20%  and  at 30% if it  is  structurally  repaired,  and buildings falling in category C have to bear the tax at 15%, and  at 20% if any one of them is structurally  repaired  by the Board.  The Act thus makes three kinds (1) Carmichael v. Southern Coal & Coke Co., 81 Law Ed.  1245 at pp. 1261 and 1265. 274 of   classification,  (1)  by  confining  the  tax  to   the residential  tenanted  buildings,  it  classifies  buildings which  are  used for residential purpose and  are  tenanted, from  the  rest; (2) by confining the tax to  such  existing buildings it classifies them from those built after the date on which the Act is brought into force, and (3) by  dividing those  which  are  liable  to  tax  into  three   categories according   to  the  three  periods  in  which   they   were constructed. To  such a classification, the challenge, firstly  was  that

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there  was no rationale in dividing the residential and  the non-residential  buildings as a number of buildings  falling in  both  the  groups  had been  found  to  be  in  imminent dangerous  condition,  and posed the problem  of  danger  to human  lives and of collapse.  It was said, therefore,  that both the kinds ought to have been subject to the  provisions of the Act.  The second challenge was to the equality of the percentum of the rate to buildings falling in any on of  the three  categories  without regard to their  actual  physical conditions.  Counsel sought to work out several permutations and  combinations  to  show that  such  equal  treatment  to buildings  in  each  one of  the  three  categories  created inequality   by  reason  of  disregard  to   their   unequal conditions.   Thus,  a building built in  1900  was  treated equal  with one built in 1939 and both bore the tax  at  the same  rate.  Similarly, a building totally neglected by  the owner, and therefore, needing structural repairs was treated on  equal footing with another in the same category, but  on which  the  owner has recently carried out  full  structural repairs  and was therefore in a sounder condition  than  the former.   There was, according to counsel,  inequality  writ large in secs. 27 and 28, and the Schedule to the ’the  Act. The third attack was on the exemptions, the ground of attack being  that some of them had no foundation in principle  and were totally arbitrary.  Reliance was placed in this connec- tion  on  some of the decisions of this Court to  show  that discrimination results where classification among equals  is based  on no rational principle and which has no  reasonable nexus with the object with which the impugned legislation is enacted.  Similarly, such discrimination arises where  there is  no  classification  even though the  objects  which  are subjected to tax are unequal and yet treated alike. [see  K. T. Moopil Nair v. Kerala(1), State of Madras v. R. Nand  Lal &  Co.  (2)  and Andhra Pradesh  v.  Nalla  Raja  Reddy(3)]. Counsel  for the respondents, on the other hand, urged  that those decisions had no application to the Present Act as the classifications made and the exemptions provided  thereunder were based on principles which had intimate relation to  the objects with which the Act was passed and the evil it sought to avert. (1)   [1961] 3 S.C.R 77.      (2) [1967] 3 S.C.R. 645. (3)   [1967] 3 S.C.R. 28.  275 From  what  has been earlier stated, it is manifest  that  a combination of factors, such as geographical limitations  on living  space in the city, the consequent limited number  of buildings,  the fact of a large number of them  having  been constructed  as early as 1905 and even before, the  fact  of many  of then,. having had to be built vertically  and  that too  on  timber  frames, the effect  of  freezing  of  rents together with obligations imposed on the owners by the  Rent Act  rendering  the maintenance  of  buildings  economically unattractive,  reluctance  and sometimes  inability  of  the owners  to  carry  out  repairs  and  even  to  comply  with Municipal  requisitions,  the alarming spurt in  the  city’s population, immigration of labour in large numbers from  the hinterland, increasing pressure on the existing  residential premises and on sanitary facilities therein, house collapses in  large  numbers every year entailing  human  tragedy  and rendering hundreds homeless, had raised problems which  were of  imminent concern to the State as well as  the  Municipal authorities.   In  these circumstances, if  the  legislature took  a policy decision to give priority to the  residential tenant  premises  in respect of which, in its  opinion,  the danger  was  graver and more imminent, no challenge  to  the

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division  between residential and  non-residential  premises can be sustainable particularly when dealing with a part  of the  problem  and  confining its  treatment  to  residential premises  only  was considered feasible.  From  the  studies undertaken  by  the Government and the  Corporation  earlier referred  to, it appears that there were  two  alternatives. the  first was reconstruction of large sections of the  city and  replacing  new buildings in place of the old,  and  the second  was the preservation and prolonging the life of  the existing  structures by carrying out structural repairs  and alterations  therein. The first obviously would have  raised numerous  problems,  legal and economic.  The  second  would create lesser number of them.  If the Legislature thought it best  in "lie circumstances to choose the second instead  of the  first  and  confined  its  attention  to  the  existing structures no challenges on the ground of discrimination  or arbitrariness can legitimately be made.  The  classification of residential premises from the rest and that between those existing  at  the time when the Act was brought  into  force from  the  new ones which might be built thereafter  can  be regarded as based on intelligible differentia and related to the  objectives and their feasibility which the  legislature had in mind while undertaking the questioned legislation. The   division  of  such  existing  structures  into   three categories was evidently made in the light of the survey  of buildings  by  the  Corporation and the  report  of  Bedekar Committee  and the classification of buildings made  therein on the basis of age and the kind of construction in vogue in the respective periods in which 276 they  were erected.  That being so, it is impossible to  say that the aforesaid groupings of buildings was  unprincipled, whimsical or arbitrary. But,  as Mr. Sorabji was at pains to point out, there  might be buildings requiring structural repairs while there  might be  some in the same category which might not  require  them for the reason that they had been consistently looked  after by their owners, and yet the latter are made to pay the  tax and  that  too to the same degree.  To that  the  answer  is twofold.   Firstly, that the tax payable is on the  rateable value  of  each  building which  differs  from  building  to building, and secondly, it is distributed between owners and the  tenants, the former bearing 10 % of it only.   To  make such distribution reasonable and just, the Legislature  sus- pended during the life of the Act some of the obligations of the owners under the Rent Act and revived the obligations of the tenants under s. 108(m) of the Transfer of Property Act, though retaining the powers of the Corporation obviously  en the  overriding consideration of public health.  It is  true that  even so, some of ’,lie owners, whose buildings do  not need  structural repairs, have to pay the tax, the  proceeds of  which  would  be  spent  for  carrying  out  repairs  to buildings   whose  landlords  have  been  neglectful.    The argument,  in other words, is reduced to this, namely,  that there would be one class of tax-payer who would not get  the return and individual benefit while the other’ would get  it at  the expense of the former.  Such an  argument,  however, can  be  urged  almost against every tax  and  every  public expenditured and no tax can ever escape such a censure.  The grievance that individual tax-payers get more or less return from  the tax proceeds has hardly ever been entertained  and would  not be a sustainable ground for a  challenge  against its  constitutional  validity.   The  decision  in  Railroad Retirement  Board v. Alton Railroad Co., (1) leaned  heavily by   counsel,  disapproving  a  provision   establishing   a

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compulsory  bonus  system  of  employees  on  all   carriers treating  them all as a single employer, on the around  that in  imposed upon solvent carriers the burden  of  furnishing money  necessary  to  meet the demands of  the  system  upon insolvent  carriers. cannot apply as the decision turned  on due   process  clause,  a  clause  not  available   in   our Constitution. The levy of the cess under s. 27 of the Act is not based  on the  principle of qid pro quo.  Its object is not to  repair all residential premises, but to preserve and prolong  their lives  in  order  to avert the dilema caused  by  the  acute shortage  of residential accommodation on the one hand,  and the  reluctance and/or inability of the owners to carry  out repairs resulting from the (1) 79 Law.  Ed. 1468.  277 Rent  Act, on the other, and to establish an agency so  that structural  repairs  to buildings in  dangerous  or  ruinous conditions  can  be  carried out.  The  finances  for  these objects are provided from. a fund from the impugned cess and contributions by the State and the Corporation. The contention that some of the buildings falling in catego- ries  B and C would not need structural  repairs  throughout the  life of the Act or that such repairs would  be  carried out  in  buildings not cared for  by  defaulting  landlords, takes  no notice of the fact that the primary object of  the Act  is not to repair all buildings subject to cess  but  to prevent the annually recurrent mischief of’ house  collapses and the human tragedy and deprivations they cause.  The cess being  thus  levied to prevent such disasters, there  is  no question  of unequal treatment between one class  of  owners and  another.   The classification of buildings  into  three categories is based, as already stated, on their age and the construction  current during the periods of their  erection. It  is, therefore, based on an intelligible differentia  and is  closely  related  to the objects,  of  the  legislation. There  is, therefore, no question of unequals being  treated as equals, as each building in respect of which the cess  is payable  falls within the surveillance of the Board and  has to be structurally repaired if the need were to arise.   The principle laid down in Moopil Nairs case(1) or in New  Manek Chowk  Spinning  and  Weaving Mills Co.  Ltd.  v.  Municipal Corporation  of  the City of Ahmedabad(2) clearly  does  not apply to the present case. The  objection to the exemptions under s. 28 can be  met  by the  fact that buildings in each of the groups  therein  set out form a distinct class by themselves.  Buildings in  cls. (a)  to  (f) are buildings to which the Rent  Act  does  not apply, and therefore, the considerations for which the  cess is  levied  do not apply to them.  Buildings used  for  non- residential  purposes  do not fall within the scope  of  the Act, and therefore, had to be excluded from the levy of  the cess.   Cls. (g), (h) and (j) read with the  newly  inserted cl.  (ja) were, however, objected to.  Buildings vesting  in or leased to cooperative housing societies registered’ under the Maharashtra Cooperative Societies Act, 1960 form a class by themselves and cannot be equated with buildings built  by individuals.  A perusal of that Act is sufficient to satisfy that the relations between a society and its members to whom apartments are either allotted or leased are not the same as those  between  landlords and tenants.’ There  is,  besides, considerable,   control   of  the   Registrar,   Cooperative Societies,  over  the  administration of the  funds  of  the societies  and their expenditure and an overall  supervision over their affairs.  The Bedekar Committee;,

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(1) [1961] 3 S C.R  77. (2) [1967] 2 S.C.R. 679. 278 no  doubt,  sounded  a warning in respect  of  some  of  the buildings  put up by some of such societies.  But these  are exceptions  and the Legislature could not have carved out  a sub-clause in respect of them.  The Committee, however,  had observed  that these societies in the present state  of  the property market were the only real instrumentalities through which  an increase in the residential accommodation  can  at present be achieved, and therefore, should be encouraged. Likewise, the relations between the owners and persons occu- pying  their  buildings under leave and  licence  cannot  be equated  with relations between landlords and tenants.   The circumstances which led to the imposition of the cess do not apply  to  premises in the occupation of  licensees  because such  licensees  have no rights such as  the  tenants  have, namely, irremoveability and. the freezing of rents, and  the consequential  reluctance or inability of the  landlords  to maintain their premises in tenantable repairs.  There is  no such  statutory  control over compensation paid by  them  as there  is  in  the case of  standard  rent.   Considerations ,applicable  to them are, therefore, quite  different.   The two classes of occupiers, therefore, cannot be equated.  The premises  ,occupied by licensees thus form a distinct  class by  themselves and could not have been lumped together  with tenanted  premises without the danger of a  challenge  under Art. 14. So  far  as the building occupied by owners  themselves  and falling  under  cl.  (h)  are  concerned,  counsel   frankly conceded  that  different  considerations  would  apply  and therefore  no  objection  could  be  taken  to  their  being exempted   from  the  tax.   If  buildings  used  for   non- residential  purposes or on the basis of leave  and  licence are  validly treated differently, buildings, if used  partly for one and partly for another such purpose or purposes  can also  be  similarly treated provided that no part  or  parts thereof  occupied  or used for a purpose  other  than  those specified  in  the  three clauses.   Since  these  buildings forming  separate  classes by themselves form  the  tenanted residential  premises,  the provisions  for  exempting  them cannot be held as violative of the equal protection clause. For  the reasons stated above, the Act has to be held  valid and the petitions unsustainable.  Accordingly, the petitions are  ,dismissed but in the circumstances of the  case  there will not be any order of costs. K.B.N.                  Petitions dismissed. 279