PROPERTY OWNERS ASSOCIATION Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) BY this petition filed under Article 226 of the Constitution of India, the petitioners are challenging Constitutional validity of Chapter VIII-A of the Maharashtra Housing and Area Development Act, 1976 (hereinafter referred to as the "act" ). The petitioner No. 1 are an Association of Property Owners who claims to protect the interest of owners of immovable properties in City of Bombay. The petitioners Nos. 2 to 5 are Trustees of a Public Charitable Trust, while petitioner No. 6 is a landlady of a house situated at Matunga. The petitioners Nos. 7 to 17 are owners of diverse properties and claim that their properties are structurally sound and the Floor Space Index (F. S. I.) in respect of these properties is not exhausted and is available for further construction.

(2.) BEFORE adverting to the challenge raised in the petition, it is necessary to refer to the Legislative provisions which are relevant to appreciate the contentions raised in the petition. The land available for housing in the island City of Bombay is very limited due to geographical limitations and Bombay City being the commercial capital of the country, the pressure on the limited availability of the land is extremely heavy. The prices of houses were always on the rise and it is extremely difficult for persons belonging to the lower income group or even middle income group to secure shelter by payment of reasonable rent. The Legislature realised the plight of people residing in the City and as far back as in year 1938, the Bombay Rent Restrictions Act, 1939 was enacted to restrict the increase in the rents of the premises where the rent charged was not in excess of Rs. 80/- per month. After IInd World War, the rents sky-racketed and it was almost impossible for a common citizen to secure housing accommodation in the city. The break of War resulted into shortages of building material and the Government was required to step in and issue orders under the provisions of Defence of India Rules, 1939. On May 12, 1944, the Legislature enacted the Bombay Rents, Hotel Rates (Control) Act, 1944 and this legislation was found to be inadequate to protect the interest of lessees of both residential and commercial premises in the town. The Legislature thereupon enacted Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 to replace the earlier Acts and Orders and this Act came into force on February 13, 1948. The Bombay Rent Act covers the towns of Bombay, Pune, Nasik, Thane and the Western Districts of Maharashtra. The Vidarbha region is governed by the Rent Control Act which is known as Central Provinces and Berar Letting of House and Rent Control Act, 1946 and the former areas of in Hyderabad State are covered by the provision of the Hyderabad House (Rent, Eviction and Lease) Control Act, 1954. The dominant intention of the Legislature in enacting the Bombay Rent Act was to uphold protection to the tenants from wrongful eviction and also to ensure that the tenants are able to secure housing accommodation at a reasonable rent. With that object in view, the Rent Act provided that the landlord shall not charge the rent in excess of standard rent and the expression "standard rent" means that the rent which was payable for the premises on September 1, 1940. In other words, the Legislature has frozen the rent which the landlords were recovering on September 1, 1940 and has issued a flat not to recover the rent in excess of the standard rent. The Bombay Rent Act from time to time underwent amendments and the landlord was permitted to recover certain additional amount known as permitted increases. These permitted increase were for reasons of increase in tax, etc. , but the basic principle of determination of standard rent with reference to September 1, 1940 was not disturbed.

(3.) THE result of freezing of rent with reference to September 1, 1940 resulted into complex questions. The owners of the land were not prepared to erect buildings to provide shelters to the tenants both for the reason that the expenses for construction of buildings had risen stiffly as well as because of freezing of rent had restrictions on recovering possession from the tenants. The return which the landlord can expect from the properties due to the freezing of the rent was hardly 1 to 2% of the investment and that led to the landlord ignoring necessary repairs to the building. Section 23 of the Bombay Rent Act demands the landlord to keep the premises in good and tenantable repairs and in case the landlord fails to do so, then the right is created in favour of the tenant to carry out the repairs and deduct the expenses, but this provisions was entirely insufficient either to compel the landlord to carry out the repairs or for the tenant to take over the burden. Several buildings in City of Bombay in absence of necessary repairs or attention, became dilapidated and due to heavy rain fall in the city and saline atmosphere prevalent, the conditions of the buildings started deteriorating. The result of the failure to attend to the requisite repairs led to collapse of large number of buildings causing loss of life and dis-housing a large number of people. Realising the seriousness of the situation, the Legislature passed enactment known as "the Building Repairs and Reconstruction Board Act, 1969. " The legislation enabled levy of cess on buildings in Greater Bombay and the Legislature felt that from the recovery of the cess in addition to the contribution of substantial amount to be made by the State Government and the Bombay Municipal Corporation, it might be possible for the Boards constituted under the Act to carry out structural repairs to the old buildings for safe habitation. The Legislature also felt that in case structural repairs could not improve the condition of the building, then the Board could undertake reconstruction of the building by pulling down the dilapidated structure. The Act also made provision for accommodating the occupiers of such buildings and further provided that during the period of repairs or reconstruction, the occupiers should be accommodated in the transit camp set up by the Board. The Government had also passed a parallel legislation in respect of other areas of the State.