Case: P. J. Irani Vs. The State Of Madras

The dispute relates to premises No. 1, Blackers Road, Mount Road, Madras - a property which was originally owned by one Sir Haji Ismail Sair. In or about the years 1914 one Venkayya obtained a lease of this property from Sir Haji Ismail Sait and constructed a cinema theatre thereon which he ran under the name of "the Gaiety Theatre". Venkayya was adjudicated an insolvent and the Official Assignee of Madras in whom his estate including the leasehold interest in the suit site vested, obtained a further lease of the property from the representatives of Sir Haji Ismail Sait who had by then diesd for a period of 9 years from March 1926. Thereafter the Official Assignee sold the superstructure of the theatre to one Mrs. Madan to whom he also assigned the unexpired portion of the lease. Mrs. Madan, subsequently, obtained a further lease of the property from the representatives of Sir Haji Ismail Saits estate for a further period of 7 years from June 1935 Mrs. Madan was thus the owner of the super-structure and the lessee of the site, with a term which would expire in or about May 1942. While one T.S.P.L.P. Chidambaram Chetty who is the second respondent before us obtained a conveyance of all the rights which Mrs. Madan possessed in the super-structure and in the lease for a sum of Rs. 36,000/- under a registered deed dated January 4, 1937, and he ran the cinema house from then.3. There was litigation between the heirs of Sir Haji Ismail Sait, pending on the original side of the High Court of Madras, and by interim orders passed in two suits (C. S. Nos. 280 and 286 of 1939), the High Court appointed two advocates as Joint Receivers to administer the property in suit. In the the early months of 1940, one J. H. Irani the father of P. J. Irani - the appellant before us - had negotiated with the Receivers for a lease of a property adjacent to No. 1 Blackers Road with a view to construct a cinema theatre thereon. That lease was for a period of 21years and would have expired in or about April May 1961. Irani offered to the Receivers to take a lease also of the property now in dispute and on which the Gaiety theatre stood, also till April-May 1961. The Receivers then moved the Court for directions regarding the grant of the lease. The second respondent, whose term of lease would have expired in 1942, was offered by the Court the option of taking a leased for 21 years from the 1st of May, 1940 but he expressed his unwillingness to take a lease for such a long term. He was, however, willing to have the lease continued for a period of 7 years from the 1st of May 1940 i.e., for 5 years beyond the term of his then existing lease. The Court thereupon passed an order on May 2, 1940, readinglessee of the Gaiety Theatre (Chidambaram Chetty) will be given a lease of seven years from this date. They will not be given any further option. On the expiry of that period, i.e., from 2nd May 1947 the same may be included in the lease of J. H. Irani at the same rate of rent at which it is being leased to the lessee of the Gaietyaccordance with this order the Receivers of the estate of the late Sir Haji Ismail Sait executed two lease deeds (1) in favour of the second respondent for a period of 7 years from May 1, 1940 and (2) a reversionary lease in favour of J. H. Irani for a period of 13 years - 11 1/2 months commencing from May 1, 1947, i.e., on the expiry of the lease in favour of the second respondent this term being fixed so as to be conterminous with the lease of the neighbouring property which Irani was being granted.4. The term of the lease in favour of the second respondent would, therefore, have ended on May 1, 1947, but before that date Madras (Lease and Rent Control) Act, 1946 (Madras Act XV of 1946), came into force under which tenants in possession who continued in occupation of residential or non-residential buildings could not be evicted therefrom except by proceedings taken under the Act before designated officers and on stated grounds which did not include the mere expiry of the term. It is now common ground that this enactment covered the second respondents possession of the premises now in dispute and that notwithstanding the termination of the term he was statutorily entitled to continue in possession even after the expiry of the lease on May 1, 1947.5. This is the result of decisions rendered in certain proceedings between the parties to which we shall immediately refer. Irani, the reversionary lessee called upon the second respondent to surrender possession In accordance with the conditions of his lease, but the latter declined to do so relying upon the Act and the protection which it conferred upon him. Thereupon the present appellant - P. J. Irani as representing the estate of his father who had by then died, filed a suit on the original side of the Madras High Court (C.S. 479 of 1947) for evicting the second respondent from the property. It may be mentioned that the suit was based upon the allegation that what had been leased to Venkayya originally was a vacant sit without any buildings and that consequently Madras Act XV of 1946 which did not apply to leases of mere vacant sites did not apply to protect the second respondents possession. The suit was however dismissed by judgment rendered on April 22, 1948, on the finding that a building as well as the site had been included in the lease, which brought it within the scope and protection of the Act. The appellant filed an appeal against this judgment (Original side appeal 37 of 1948) which was also dismissed on July 29 1951, on the same finding. Even while the appeal was still pending before the High Court, Irani applied to the Government of Madras for exemption of the premises from the operation of the Act. By the date of this application Madras Act XV of 1949 had been repealed and its provisions substantially re-enacted in the Madras Buildings (Lease and Rent Control) Act, 1949, but as the provisions of the two enactments on the points which arise for decision in this appeal are identical it is sufficient if reference is made to those of the later Act. A provision for exemption being granted from the operation of the Act by the State Government was contained in S. 13 of the Act (Madras Buildings (Lease and Rent Control) Act, 1949), to which we shall hereafter refer as the Act, in the followinganything contained in this Act the State Government may by a notification in the Fort St. George Gazette exempt any building or class of buildings from all or any of the provisions of thisGovernment, however, by their order dated June 4, 1951, rejected this application for exemption on the ground that the matter was then sub judice. After the dismissal of the appeal by the Division Bench the appellant Irani moved the Government afresh by a further petition filed in or about December 1951 praying for the same relief. The Government, by their order dated June 4, 1952, granted the exemption sought and the relevant notification which appeared in the Fort St. George Gazetteexercise of the powers conferred by Section 13 of the Madras Buildings (Lease and Rent Control) Act, 1949 (Madras Act XXV of 1949) his Excellency the Governor of Madras hereby exempts the building No. 1 Blackers Road, Mount Road, Madras (Gaiety Theatre) from all the provisions of the saidit was authenticated by the Chief Secretary to Government. The second respondent thereupon made a petition to the High Court under Art. 226 of the Constitution challenging the legality and propriety of this order of exemption on the principal ground that the provision contained in S. 13 of the Act enabling the Government to exempt particular buildings from the operation of the Act, vested in them an unguided and arbitrary discretion which was unconstitutional as violate of the equal protection of the laws guaranteed by Art. 14 of the Constitution. In the affidavit in support of the petition the second respondent further averred that in the order impugned "no justification has been shown for depriving the petitioner of the beneficial provisions of the Rent Control Act." Both the State of Madras whose order was impugned as well as the appellant Irani for whose benefit the order was passed were made respondents to this writ petition was dismissed by a learned Single Judge of the High Court by order dated March 12, 1953 on the ground that the constitutional validity of S. 13 of the Act had already been upheld by a Division Bench of the Court in another case. The second respondent thereafter took the matter in appeal under Cl. 15 of the Letters Patent. At the time this appeal was heard the Bench had before it, two other appeals in which also the question whether S. 13 of the Act violated Art. 14 of the Constitution had been raised. The three appeals were heard together and this common point was first decided by a judgment pronounced on October 23, 1953. The learned Judges held that S. 13 of the Act did not offend Art. 14 of the Constitution but that individual orders granting the exemption might be examined to find out whether such orders were within the policy and purpose of the Act or whether they were discriminatory and therefore offended, Art 14. In this view the ground upon which exemption was granted in each of the three cases before them were separately considered and in the appeal by the second respondent the learned Judges after examining the reason disclosed by the Government as to why they granted exemption in the particular case, held that those reasons were not germane to the purpose for which the power of exemption had been vested in them and quashed the order of exemption.6. Irani feeling aggrieved by the decision of the High Court applied to an obtained a certificate under Arts. 132 and 133(1) of the Constitution and has filed the present appeal before us. The State of Madras has not appealed but as a respondent has filed a statement which was repeated by counsel on their behalf, that they were not interested in disputing the correctness of the judgment of the High Court but left the matter to be decided between the rival contestants, viz., Irani and the second respondent.

Reasoning:
Writ Appeal 28 of 1953 was thereafter dealt with on its merits and it was this examination which resulted in its being allowed In our opinion, therefore, the two judgments have to be read together and as really part of one proceeding ,though for convenience and with a view to define the scope of the arguments the Court expressed its opinion on the constitutional point at an earlier stage. We also consider that it is doubtful if an appeal would have lain from the judgment of the High Court dated October 23, 1953, and even assuming that it did in view of the matters which we have set out earlier, the respondent cannot be precluded from contesting the correctness of the conclusion of the High Court, by reason of his not having moved this Court under Art, 136 of the Constitution. We therefore consider that the respondent is entitled to support the judgment in his favour by attacking those portions of that judgment which are againstwas not possible for the statute itself to contemplate every such contingency and make specific provision therefor in the enactment. It was for this reason that a power of exemption in general terms was conferred on the State Government which however could be used not for the purpose of discriminating between tenant and tenant, but in order to further the policy and purpose of the Act which was, in the context of the present case, to prevent unreasonable eviction of tenants. The learned Judges of the High Court, therefore, held that while s. 13 of the Act was constitutionally valid, any individual order of exemption passed by the Government could be the subject of judicial review by the Courts for finding out whether (a) it was discriminatory so as to offend Art. 14 of the Constitution. (b) the order was made on grounds which were germane or relevant to the policy and purpose of the Act, and (c) it was not otherwise mala fide.12. We find ourselves in complete agreement with the approach and conclusion of the learned Judges of the High Court to the consideration of the question of the constitutional validity of S. 13 of thethe High Court were right in their view that the order of exemption was passed for reasons which did not fall within the purpose for which the power was conferred by S. 13 of the Act the order itself would be one discriminatory of the second respondent as violating his fundamental right to equal protection of the laws. In such an event Art. 226 would certainly be available to set aside such an order which affected the fundamental right of the petitioner before the Court. Indeed, it was on the ground that individual orders passed by Government by virtue of the power conferred upon it by S. 13 of the Act were examinable by the Court for their violating Art. 14 that the constitutionality of S. 13 was upheld and in the circumstances no objection could, therefore, be taken to a judicial review of such individual orders. Besides even if the order did not violate Art. 14, still if the High Court were right in the view that the same was beyond the powers conferred on Government by S. 13 of the Act,we see no substance in the contention that the Court lacks power under Art. 226 to set aside as ultra vires order vitally affecting a persons right to statuary protection against eviction. We do not consider that immunity from interference by the Courts could be sought for orders which are plainly ultra vires merely because they were passed bona fide in the sense of being without indirect motive. Particularly so when the power of the High Court under Art. 226 of the Constitution is not limited to the issue of writs falling under particular groupings, such as the certiorari, mandamus, etc., as these writs have been understood in England, but the power is general to issue any direction to the authorities, viz., for enforcement of fundamental rights as well for otherentire basis for upholding the constitutional validity of S. 13 of the Act and considering that it did not offend the equal protection of the law guaranteed by Art. 14 of the Constitution was, that the discretion or the power conferred upon Government was not unguided, uncanalised or arbitrary but that it had to be exercised in accordance with the policy and object of the enactment gatherable from the preamble as well as its operative provisions. The order itself might on its face have shown that it conformed to this requirement in which event it would have been for the party challenging the validity of the order to establish to the satisfaction of the Court that it was mala fide or had been passed on grounds not contemplated by or extraneous to, the object and purpose of the enactment or the principles which should have governed the exercise of the power. For instance, if the exemption had been in favour of a particular class of buildings, say those belonging to charities - religious or secular - the classification would have been apparent in the very order of exemption. Where, however, the exemption granted is not of any class of buildings which would ex facie disclose a classification, but the exemption is of a specified building owned by A or in which B is a tenant, then prima facie it would be discriminatory and when the legality or the order is challenged, its intra vires character could be sustained only by disclosing the reasons which led to the passing of themere fact that the tenant continued in possession after the termination of the tenancy is by itself no ground why he should be evicted from the premises, because it is the very policy of the Act to protect the right of tenants to continue in possession of the premises after the termination of their term because of the great difficulty of their obtaining alternative accommodation. The circumstance, therefore, of the termination of the second respondents tenancy cannot afford a justification for Government to say that he deserved to be evicted. It the term had not expired the tenant would have been entitled to continue in possession even if the exemption were granted.We also agree with the learned Judges of the High Court that ground No. 3 is not germane for granting an exemption. As was pointed out, "the important point to be considered by the Government was whether the appellant had no other theatres at which he could carry on the business which he was carrying on at the Gaiety theatre", and this they omitted to consider. The reason why the possession of the tenant whose term had expired was afforded statutory protection was his liability to secure alternative accommodation in which either to reside in the case of residential buildings or to carry on the business which he was carrying on in the case of non-residential buildings. This was therefore a relevant matter which the Government had failed to take into account. The High Court characterised reason No. 5 as really not a reason at all and we agree with this observation. The statute had admittedly conferred upon tenants, such as the second respondent the right to continue in possession after the termination of the lease in their favour and the fact that such a tenant had exercised the rights conferred upon him by statute was certainly not an improper conduct meriting his being deprived of the statutory protection afforded by S. 7.20. The learned Judges further pointed out that the order of Government was defective, in that it had not taken into account several relevant matters as for instance the second respondent expending considerable sums to carry out improvements to the theatre in 1949, etc. which bore upon the exercise of their power, and which if taken into account would have weighed against the grant of the exemption. In view however of the conclusion reached that the reasons assigned by Government for their order were not germane to the policy and purpose of the fact, we do not consider it necessary to pursue the matter further.21. The further point urged regarding the learned Judges of the High Court having erroneously constituted themselves into a Court of appeal need not detain us long.The short answer to it is that the learned Judges had not done so. The submission ignores the distinction between findings on facts which the Court in proceedings under Art. 226 must, save in very exceptional cases, accept as correct and the relevance of those facts for considering whether their establishment satisfied the grounds necessary for the exercise of the power vested in Government under S. 13 of the Act. For instance in the case on hand, no fact found by the Government or stated by them as the reason or reasons which induced them to grant the exemption were even challenged before the High Court, the only contention urged by the second respondent which was accepted by the High Court, being that these facts were irrelevant for justifying the order.