Case: Swami Motor Transport (P) Ltd.And Another Vs. Sri Sankaraswamigal Muttand Another(And Connected Appeals)

2. The facts in Civil Appeal No. 228 of 1962 are briefly as follows: The first appellant is a limited company carrying on transport business. The second appellant is its managing director. The first appellant took over the business of Swami Motor Service Company, of which the second appellant was the Managing Partner. In his capacity as Managing Partner of the said company, the second appellant took a lease of a vacant site, being survey No. 2770, belonging to the first respondent. After the first appellant took over the business of the said partnership company, including its leasehold interest in the said site, the first respondent recognized him as his tenant and was receiving the rent from him. It is alleged that the appellants constructed many valuable structures on the said site. The first respondent i.e., Sri Sankaraswamigal Mutt through its trustee, filed a suit, O. S. No. 103 of 1953, in the Court of the district Munsif Tanjore, for evicting they from the site, and on July 30, 1954 a compromise decree for eviction was made therein giving six months time for they to vacate the site. Ther filed an execution petition in the said court against the first appellant for executing the decree. Pending the execution petition, Madras Act XIX of 1955 was passed empowering the State Government to extend the Madras City Tenants Protection Act, 1921 (III of 1922), hereinafter called the "principal Act", to any municipal town by notification in the Fort St. George Gazette. In exercise of the powers conferred by Act XIX of 1955, the Government made an order notifying the Town of Tanjore to have come within the purview of the principal Act. Under the provisions of the principal Act, the appellants filed Original Petition No. 39 of 1956 in the said court for an order directing the execution of a conveyance of the said site in favour of the company on payment of a price fixed by the court. Those proceedings took a tortuous course mainly, it is alleged, on account of obstrutive tactics adopted by the respondents in anticipation of an expected legislation withdrawing the benefits conferred on tenants ofl buildings in the Town of Tanjore. As anticipated the State Legislature passed Act Xlll of 1960, amending the principal Act: the effect of the amendment was to withdraw the protection given to tenants of nonresidential buildings in the municipal town of Tanjore and certain other towns. Under the provisions of the impugned Act proceedings instituted under the provisions of the principal Act relating tol buildings situated in towns other than those preferred would abate. The appellants filed a petition under Art. 226 of the Constitution in the High Court of Judicature at Madras for the issue of a writ of mandamus directing; the District Munsif to dispose of the petition in accordance with the provisions of S. 9 of the principal Act, as it stood before its amendment by Act XIII of 19603. In Civil Appeal No. 229 of 1962 ther is a site, being survey No. 74. Railway Road, Tanjore, belonging to the first respondent to this appeal. The appellants father executed a lease deed in favour of the first respondent in respect of some parts of the said site; the lease deed contained a clause giving an option to the tenant to renew the lease for a further period of 10 years. It is alleged that the appellants father had erected substantial structures at heavy cost on the site even before the said lease as he was in possession of the said site as a tenant under the predecessor of the first respondent. After the expiry of 10 years, the appellants father exercised the option and continued to be in possession of the property as tenant. The First respondent filed a suit (O. S. No. 315 of 1950) in the Court of the District Munsiff, Tanjore, for evicting the appellant from the property, and obtain a compromise decree dated January 10, 1952. Under the compromise decree the tenancy was extended to 12 years from January 1. 1952 and after the expiry of that period the first respondent was entitled to execute the decree and take possession of the site after removing the superstructures. Subsequently, as already noticed, the provisions of the principal Act were extended to the Town of Tanjore. Thereupon the appellants father filed O. P. No. 43. of 1956 in the Court of the District Munsiff Tanjore, for an order directing the first respondent to convey the site in his favour on payment of the price to be fixed by the court. As in the first cases in this case also the proceedings dragged on till the Act of 1960 was passed. The appellant filed a petition under Art 226 of the Constitution in the High Court of Judicature at Madras for the issue of a writ of mandamus directing the District Munsiff. Tanjore, to dispose of the application in accordance with the provisions of the principal Act prior to its amendment by Act XIII of 19604. In both the petitions the appellants attacked the constitutional validity of Act XIII of 1960. The High Court, by a common order upheld the constitutional validity of the said Act following the decision of a Division Bench of the same Court, in Swaminathan v. Sundara ILR(1961) Mad 976 These two appeals, as aforesaid, have been preferred on certificate issued by the High Court.

Court's reasoning:
8. Before we consider the arguments, it would be convenient to notice the scope of the relevant provisions of the principal Act, Act XIX of 1955 and Act XIII of 1960. The principal Act, as amended by Act XIX of 1955, was enacted, as its preamble shows, to give protection to certain classes of tenants who in municipal towns and adjoining areas in the State of Madras have constructed buildings on others lands in the hope that they would not be evicted so long as they paid a fair rent for the land. The gist of the relevant provisions of the principal Act, as amended by Act XIX of 1955 may be stated thus The Act applies to any building,, whether it is residential or nonresidential. Every tenant shall on ejectment be entitled to be paid as compensation the value of any building, which may have been erected by him and also the value of trees which may have been planted by him; in a suit for ejectment the court shall ascertain the amount of compensation payable by the landlord to the tenant and the decree shall direct that the landlord shall be put in possession of the land only on payment of the said amount in court within the prescribed time; if the landlord is unable or unwilling to pay the compensation within the prescribed time, he may apply for fixing a reasonable rent for the occupation of the land by the tenant; a tenant, who is entitled to compensation and against whom a suit for ejectment has been instituted, may apply for an order that the landlord may be directed to sell the land to him for a price to be fixed by the court, and thereupon the court shall fix the price in the manner prescribed in S. 9 and direct the said amount to be paid to the landlord by the tenant within a particular time and in default his application shall stand dismissed. Nothing contained in the Act shall affect any stipulation made by the tenant in writing registered as to the erection of buildings, in so far as they relate to buildings erected after the date of the contract: the provisions of the Act apply to suits for ejectment which are ending and in which decrees for ejectment have been passed but have not been executed before the coming into force of the Act : vide Ss. 2 (1),, 3, 4, 6, 9 and 12 of the Act. It is, therefore clear that under the principal Act tenants in the Madras City acquired valuable rights which they did not have before the said Act was passed. Prior to the principal Act a tenant of a land over which he had put up buildings for residential orl purposes was liable to be evicted in accordance with law and his only right was to remove the superstructure put up by him on the land before delivering vacant possession. But after the principal Act, a tenant similarly situated has an option to claim either compensation for the superstructure put up by him or to apply to the court to have the land sold to him for a consideration to be fixed by it11. The result of this amending Act in respect of nonresidential buildings in places other than the City of Madras and the other specified municipal towns is that all proceedings pending in courts in respect of those buildings abated and the rights acquired by tenants under the 1955 Act in respect of the said buildings are extinguished. The rights, so far relevant to the present enquiry, which the tenants had acquired under the 1955 Act were: (i) they were entitled on ejectment to be paid as compensation the value of the buildings erected by them or by their predecessors in interest, (ii) the court before issuing a decree for eviction should ascertain the amount due to a tenant and the decree for eviction should be made conditional on the payment of the decree amount, (iii) in suits where decree for ejectment had been passed before the 1955 Act came into force, a tenant could file an application for ascertainment of the compensation due in execution and for a fresh decree to be passed in accordance with S. 4 of the principal Act, and (iv) he had also a right, at his option, to apply within the prescribed time to the court for an order directing the landlord to sell the land to him for a price fixed by the court, whether a decree for ejectment had or had not been passed. The tenants ofl buildings in places other than the City of Madras and the specified municipal towns lost the said rights after the 1960 Act came into forceThe population of a town is not a relevant circumstance though its density may be: the pressure on the buildings or on the sites suitable for building purposes does not depend solely upon population without reference to the area available for building purpose, so the argument proceeds20. These passages disclose not only the legislative objects but also the political pressures for certain amendments. But we are not concerned with the political aspects of the legislation but only with its objects. The special treatment given to the City of Madras and the other specified towns is based upon the fact that there are a number of small business establishments in Madras and other specified towns implying thereby that there are not so many such establishments in other towns. The correspondence between the Government of India and the Government of Madras throws light on this question27. Though this Court has not finally expressed its opinion on the question raised, It has pointed out that it has proceeded all through on the basis that Art. 19 (1) applies equally to concrete as well as abstract rights of property. In Chiranjit Lal Chowdhary v. Union of India, 1950 SCR 869  : (AIR 1951 SC 41  ), Mukherjee, J. as he then was, held that the right to hold property under Art. 19 (1) (f) meant the right to possess as well as enjoy all the benefits which were ordinarily attached to ownership of property. Jagannadhadas, J. in 1954 SCR 587  : (AIR 1954 SC (92) dealing with this point observed at pp.9 (of SCR): (at p. 117, of AIR)29. It is said that if this construction be given to Art. 19 (1) (f), Art. 31 (1) would become otiose. We do not see how it becomes an unnecessary provision. Article 31 (1) is couched in a negative form. It says that no person shall be deprived of his property save by authority of law. In effect it declares a fundamental right against deprivation of property by executive action, but it does not either expressly or by necessary implication take the law out of the limitations implicit in Art. 19 (1) (f) of tine Constitution. The law in Article 31 (1) must be a valid law and to be a valid law It must stand the test of other fundamental rights. All the other points urged in support of the contention have been considered by this Court in Kavalappara Kotharathil Kochuni v. States of Madras and Kerala, (1960) 3 SCR 887  : (AIR 1960 SC 1080  ), where it was held that a law depriving a person of his property must be a valid law and, therefore, it should not infringe Art. 19 of the Constitution. We have no reason to differ from the view expressed therein. Indeed that view has been followed in the later decisions. We, therefore, hold that a law depriving a person of his property would be bad unless it amounts to reasonable restriction in the interest of the general public or for the protection of the interests of Scheduled Tribes30. We now come to the last question, namely, whether the 1960 Act deprived the appellants of their right in property. To state it differently, the question is whether a tenant of a nonresidential building in Tanjore had acquired a right of property under the 1955 Act and whether he was deprived of that right or otherwise restricted in the enjoyment thereof by the 1960 Act. The 1955 Act, as we have already noticed, conferred two rights on such a tenant, namely, (i) every tenant on ejectment would be entitled to be paid as compensation the value of any building erected by him, and (ii) such a tenant against whom a suit in ejectment has been instituted has an option to apply to the court for an order directing the landlord to sell the land to him for a price to be fixed by the court. We are not concerned here with the rights conferred under S. 3 of the Act, for the simple reason that neither of the appellants claimed a right. Both of them have taken proceedings only under S. 9 of the Act and they have approached the High Court for a writ of mandamus that the petition should be disposed of under the provisions of S.9 of the ActThe law of India does not recognize equitable estates. No authority has been cited in support of the contention that a statutory right to purchase land is, or confers, an interest or a right in property. The fact that the right is created not by contract but by a statute cannot make a difference in the content or the incidents of the right: that depends upon the nature and the scope of the right conferred. The right conferred is a right to purchase land.If such a right conferred under a contract is not a right of property, the fact that such a right stems from a statute cannot obviously expand its content or make it any the less a nonproprietary right. In our view, a statutory right to apply for the purchase of land is not a right of property. It is settled law that a contract to purchase a property does not create an interest in immovable property. Different consideration may arise when a statutory sale has been effected and title passed to a tenant: that was the basis of the judgement of this Court in Jayvantsinghji v. State of Gujarat, AIR 1962 SC 821  , on which Mr. Viswanatha Sastry relied. But we are not concerned here with such a situation. it is said that the appellants have acquired a right under the 1955 Act to hold and enjoy the buildings erected by them by exercising their right to purchase the site of the said buildings and that the impugned Act indirectly deprived them of their right to hold the said buildings. This argument mixes up two concepts, namely, (i) the scope and content of the right, and (ii) the effect and consequences of the deprivation of that right on the other properties of the appellants. Section 9 of the principal Act, extended by the 1955 Act, only confers a right in respect of the land and not of the superstructure. If that Act held the field, the appellants could have purchased the land, but by reason of the 1960 Act they could no longer do so. Neither the 1955 Act conferred any right as to the super structure under S. 9 of the principal Act nor did the 1960 Act take that right away. If this distinction between the land and the superstructure is borne in mind the untenability of the argument would become obvious. The 1960 Act does not in any way affect the appellants fundamental right. Therefore, their prayer that the District Munsiff should be directed to proceed with the disposal of the applications filed by them under S. 9 of the principal Act could not be granted.