Case: Prabhakaran Nair, Etc Vs. State Of Tamil Nadu And Ors

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 ((1986) 2 SCC 249 ) also judged the rules of classification in dealing with the Punjab Pre-emption Act, 1913. 32. This Court emphasized in Panchamal Narayan Shenoy v. Basthi Venkatesha Shenoy ((1970) 3 SCR 734 : (1970) 1 SCC 499 : AIR 1971 SC 942 ) 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. 33. Our attention was drawn to certain observations of Chatterjee, J. of the Calcutta High Court in Jiwanlal & Co. v. Manot and Co. Ltd. (64 Cal WN 932 0at 937) that where the landlord had established a 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 constructed 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. 34. It was held by a learned Single Judge of the Madras High Court (one of us - Natarajan, J.) in M/s. Patel Roadways Pvt Ltd., Madras v. State of Tamil Nadu (AIR 1985 Mad 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. 35. Post-war migration of human beings enable 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 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. 36. 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 landlord 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, material 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 is one of our fundamental rights. New national housing policy must attract new buildings, encourage new buildings, make available new spaces, rationalise the new structure and rationalise the rent provision 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 todays revolution. A fast changing society cannot operate with unchanging law and preconceived judicial attitude.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]13. It has to be borne in mind that it is not practicable and would be anomalous 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 basisState of Madhya Pradesh V. G. C. Mandawar ((1955) 1 SCR v. 599 : AIR 1954 Sc 493 )27. It has been borne in mind that the provisions of the Act imposed restrictions on the landlords 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 landlords 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 consequent extents 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 States appreciation of the needs and problems of its people. When we are confronted with 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 landlords right of eviction. This fact is reflected in the different provisions made in different Acts about the grounds of eviction. For example, in case of Assam, Meghalaya, Andhra Pradesh, Delhi, Harayana, 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 landlords 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 landlords right or for relaxation of those restrictions in certain cases. Ultimately it is a matter of legislative policy and judgmentWe are, however, unable to accept this submission15. 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 reconstruction16. 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 reconstruction, 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 V. B. Venkatarathnam (79 Law Weekly 363). The government in that case when passing the order of exemption used to impose condition that the landlord should complete the reconstruction 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 ton 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 beIt is clear, therefore that the Madras legislature deliberately proceeded on the basis that fair rent was to be fixed which was 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 fair rent would become meaningless if the fixation of fair rent cancan only be downwards from the contract 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 in". At the time the 1960 Act was passed the Madras legislature had before it the precedent of the Madras Cultivating Tenants (Payments of Fair Rent) Act,. That Act provides for fixation of fair rent. It also provide 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 period22. 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 constructed only in favour of the tenantWhat 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 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 rentals31. We are therefore unable to accept the submission that absence of the right ofn 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 rejected shall be exempt from all the provisions of the Act for a period of five years is bad is also unsustainable.