M N KAKA Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THESE two writ petitions were filed challenging the validity of the various provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter called Rent Act ). At the time of the final hearing, the petitioners, however, have confined their challenge to validity of section 5 (10) (b) (i), (ii) and (iii), section 11 (1) (except clause (d-1) and sections 12 (3) of the Rent Act. The petitioners have not also pressed their prayers for declaration that deletion of Article 19 (1) (f) by the Constitution (Forty-Fourth Amendment) Act, 1977, was ultra vires and against the basic structure of the Constitution of India.

(2.) MR. Atul Setalvad, the learned Counsel for the petitioners, has submitted that The Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947, was enacted with the threefold object of protection of tenants against their unreasonable eviction and demands for extortionate rent and to safeguard the legitimate interests of the landlords so as to ensure that they receive reasonable and fair return by way of rent. The definition of standard rent given in section 5 (10) (b) which freezes rent received on first day of September 1940 or at the time of the first letting of the premises was inconsistent with all these three facets of the Rent Act. Mr. Setalvad has submitted that although the Rent Act was enacted as a temporary measure by amending from time to time sub-section (2) of section 3 of the Rent Act, Maharashtra Legislature has extended the Act and it is now due to expire on 31st day of March 1991. According to Mr. Setalvad, continuation of the said pegging of rent for nearly last fifty years under section 5 (10) with a provision under the Act for only marginal changes, in spite of colossal rise in the prices of goods and services of nearly 2500/3000 per cent is unconstitutional. Two principal effects of this abnormal price rise are that the landlord no longer receives a fair return and what the tenant enjoys is not protection from payment of extortionate rates but licence to pay practically nominal and almost illusory amounts as rent. Mr. Setalvads submission is that any legislative measure to be reasonable restriction under Article 19 (6) and non-arbitrary within the meaning of Article 14, there must be reasonable balancing of interests. In other words, the restrictions ought not to be excessive and disproportionate. Because of phenomenal escalation in the prices and wages. Mr. Setalvad submits that what were considered reasonable and balanced rents in the year 1947 and for a reasonable time thereafter, have today become so hopelessly one sided and unfair to the landlords, that the continuation of section 5 (10) (b) which defines standard rent has become arbitrary and unreasonable. Therefore the said provision is violative of both Article 19 (1) (g) and Article 14 of the Constitution of India. Mr. Setalvad has further submitted that a provision of law which was reasonable and non-discriminatory at one given point of time can become arbitrary and discriminatory after lapse of time. In support of this proposition, Mr. Setalvad has relied upon two decisions of the Supreme Court in the cases of (Motor General Traders and another v. State of Andhra Pradesh and others) A. I. R. 1984 S. C. 121 and (Rattan Arya v. State of Tamil Nadu) A. I. R. 1986 S. C. 1444. Mr. Setalvad, the learned Counsel for the petitioners, has further submitted that V. A. Mohta and B. G. Deo, JJ. , in the case of (Omprakash and others v. M/s. Fattelal Maganlal and Company) A. I. R. 1987 Bom. 3, had applied the ratio of the Supreme Court decision in the case of (Motor General Traders and others v. State of Andhra Pradesh and others) (supra) and had struck down clauses 6 (1), 7 (1) and 7-A of the C. P. and Berar Letting of Houses and Rent Control Order, 1949, upon a view that indefinite continuation of outer limit in the matter of fixation of fair rent with relation to cut off date 1st April 1940 was violative of Article 14 of the Constitution of India. The said Division Bench decision in the case of Omprakash v. Fattelal Maganlal, (supra) was binding upon us. According to Mr. Setalvad, the later decision of the Supreme Court in the case of (Sant Lal Bharti v. State of Punjab) reported in A. I. R. 1988 S. C. 485: 1988 (1) S. C. C. 636 did not deal with the point decided by the Division in Omprakash v. M/s Fattelal Maganlal (supra ). Therefore, sitting singly, Mohta, J. , in the case of (Union of India v. Dr. Bhimrao Narayanrao Randaye) 1989 Mh. L. J. 662, was not right in holding that the decision in the case of Omprakash v. Fattelal Maganlal (supra) stood overruled by the later Supreme Court decision in the case of Sant Lal Bharti v. State of Punjab (supra ). Mohta J. , had held that fixation of fair rent under section 6 (1), 7 (1) and 7a of C. P. and Berar Letting of Houses and Rent Control Order were valid. Mr. , Setalvad submits that in case we are of the view that the Division Bench decision in the case of Omprakash v. M/s. Fattelal Maganlal (supra) requires reconsideration in view of pronouncements made by the Supreme Court in Sant Lals case (supra), we ought to refer the question to a larger bench.

(3.) MR. Setalvad, the learned Counsel for the petitioners, has further submitted that since the provisions of section 5 (10) (b) for pegging the standard rent with reference to the date first day of September 1940 or date of first letting of the premises was bad, clauses (a) to (d) of section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 should be also struck down at the same time maintaining as valid the opening words of section 11 (1), clauses (d-1) and (e) of the Act: so that when either the landlord or the tenant approaches the Court for fixation of standard rent the Court would be in a position, under opening words of section 11 (1), to fix the standard rent at such amount as it may deem just. The petitioners have also challenged section 12 (3) of the Act on the ground that in the context of the draconian legislation, the landlord has been thereby unreasonably deprived of his right to recover possession from his tenant even in case of default in payment of rent. Mr. Setalvad characterised section 12 (3) as one giving licence to tenants not to pay rent and at the same time to enjoy protection from ejectment by paying or tendering the arrears on the first day of the hearing of the suit. The proviso to section 12 (3) hardly affords any protection to landlords because at present suits for ejectment filed in Bombay do not come up for hearing for many years.