Full Judgment Text
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PETITIONER:
SWAMI MOTOR TRANSPORT (P) LTD.AND ANOTHER
Vs.
RESPONDENT:
SRI SANKARASWAMIGAL MUTTAND ANOTHER(And Connected Appeals)
DATE OF JUDGMENT:
26/09/1962
BENCH:
SUBBARAO, K.
BENCH:
SUBBARAO, K.
SINHA, BHUVNESHWAR P.(CJ)
IMAM, SYED JAFFER
WANCHOO, K.N.
SHAH, J.C.
AYYANGAR, N. RAJAGOPALA
CITATION:
1963 AIR 864 1963 SCR Supl. (1) 282
CITATOR INFO :
RF 1970 SC 564 (43,44)
MV 1975 SC1146 (62)
RF 1986 SC 63 (25)
RF 1987 SC1272 (10)
ACT:
Landlord and Tenant-Tenant building on leased land Right of
purchase-Whether property-Withdrawal of protection of non-
residential building to certain towns-Whether discriminatory
or a restriction right of property-Meaning of Property
Madras City Tenants’ Protestant Act, 1921(III of 1922), s.9,
as amended by Act XIX of 1955 and Act XIII of 1960-Constitu-
tion of India, Arts. 14, 19 and 31.
HEADNOTE:
Each of the appellants in the two appeals who were tenants
of land in Tanjore on which non-residential premises had
been constructed by them, applied to the Munsif under s. 9
of the Madras City Tenants Protection Act, 1921 (111 of
1922) to have the respective sites conveyed to them after
fixing the sale price as contemplated by the Act. Pending
the decision of he applications by the Munsif, the
protection and rights given to the tenants who had
constructed buildings on leased and by the Principal Act was
withdrawn by Act XIII of 1960, in respect of non-residential
buildings in Tanjore but with regard to the cities of
Madras, Salem, Madurai, Coimbatore and Tiruchirappalli the
protection and rights were retained both as regards
residential buildings and non-residential buildings. The
appellants applied under Art. 226 of the Constitution to the
High Court of Madras praying for a mandamus directing the
Munsif to determine their applications under s. 9 of the
Principal Act as extended to the town of Tanjore by
Notification and the Act of 1955 ignoring Act XIII of 1960
which was impugned as offending Arts. 14, 19 and 31 of the
Constitution. The High Court upheld the validity of the Act
following the earlier decision of that Court.
Held that confining the protection to residential buildings
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only in the town of Tanjore while giving protection to
tenants of both residential and non-residential buildings in
the other
283
towns was based upon real differences between Tanjore and
the other towns regarding the pressure on non-residential
accommodation and other relevant factors including
population and that the differentiation was related to the
object namely protecting tenants of residential buildings
principally and also of nonresidential buildings where the
need was most felt.
Shri Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar
[1959] S.C.R. 279, Bhudan Choudhury v. State of Bihar,
[1955] 1 S.C.R. 1045 and The State of West Bengal. v. Anuwar
Ali, [1952] S.C.R. 284, referred to.
Held, further, that Art. 19(1) (f) guarantees both abstract
as well as concrete rights of property and that property has
the same meaning in Art. 19(1) (f) and Art. 31 (1).
State of West Bengal v. Subodh Gopal Bose [1954] S.C.R. 587,
The Commissioner Hindu Religious Endowments, Madras v. Sri
Lakshmindra Thirtha Swamiar of Sri Shirur Nutt, [1954]
S.C.R. 1005 and Chiranjit Lal Choudhury v. Union of India,
[1950] 869, referred to.
Held, further, that law’ under Art. 31 must be a valid law
and to be valid it must stand the test of other fundamental
rights including Art. 19(1) (f) of the Constitution.
Kavalappara Kottarathil Kochuni v. State of Madras, [1960] 3
S.C.R., 887 referred to.
Held, further, that the right to purchase property conferred
by a Statute is in its nature the same as the right of
purchase conferred by contract and in neither event could it
amount to a right of property.
Maharana Shri Jayvantsinghji Ranmalsinghji etc. v. The,
State of Gujrat, [1662] Supp. 2 S. C. R. 41 1.
Held, also that the principal Act did not confer a right on
the tenant to the superstructure and therefore, the impugned
Act did riot take away any such right.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 228 and 229
of 1962.
Appeals from the judgment and order dated June 26, 1961 of
the Madras High Court in W. P. Nos. 829 and 833 of 1960.
A. V. Viswanatha Sastri, G. Ramaswami, J. B. Dadachanji,
O. C. Mathur and Ravinder Narain, for the appellants.
284
S. Kothandarama Nayanar and M. S. K, Aiyanyar,for the
respondent No. 1.
A. Ranganadham Chetty and A. V. Rangam,for Intervener No.
1 (iii both the appeals.)
R.Thiagarajan, for Intervener No. 2 (in C. A. No. 228 of
1962).
1962. September 26. The judgment of the Court was
delivered by
SUBBA RAO, J.-These two appeals, on certificate raise the
same points and arise out of a common order made by the High
Court. of judicature at ’Madras in Writ Petitions Nos. 829
and 830 of 1960. Both of them may conveniently be disposed
of together.
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
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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 ;is 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
responder 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 the appellant
company from the site; and on July 30, 1954 a compromise-
decree for eviction was made therein giving six month’s time
for the appellant-company to vacate the site. The decree-
holder filed an execution petition
285
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 confer-red 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 obstructive tactics
adopted by the respondents in anticipation of ,-an expected
legislation withdrawing the benefits conferred on tenants of
non-residential buildings in the Town of Tanjore. As
anticipated the State Legislature passed Act XIII of 1960,
amending the Principal Act : the effect of the amendment was
to withdraw the protection given to tenants of non-resi-
dential 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 to non-residential 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 1960.
In Civil Appeal No. 229 of 1962 the subject matter is a
site, being survey No. 74, Railway Road, Tanjore belonging
to the first respondent to this
286
appeal. The appellant’s 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 appellant’s father had
erected substantial structures at heavy cost on the site
even before the said lease as he was in possessions of the
said site as a tenant under the predecessor of the first
respondent. After the expiry of 10 years, the appellant’s
father. exercised the option and continued to be in
possession of the property as tenant. The first respondent
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filed a suit (O. S. No. 315 of 1950) in the Court of the
District Munsif, Tanjore, for evicting the appellant from
the property, and obtained 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 appellant’s father
filed O. P. No. 43 of 1956 in the Court of the District
Munsif, 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 case, in this case
also the proceedings dragged on till the Act of 1955 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
Munsif, Tanjore, to dispose of the application in accordance
with the provisions of the Principal Act prior to its
amendment by Act XIII of 1960.
In both the petitions the appellants attacked the
constitutional validity of Act XIII of 1960. The High
Court, by a common order, upheld the
287
constitutional validity of the said Act following the
decision of a, division Bench of the same Court, in
Suaminathan v. Sundara (1). These two appeals, as
aforesaid, have been preferred on certificate issued by the
High Court.
Mr. A. V. Viswanatha Sastri, learned counsel for the
appellants in both the appeals, raised before us the
following points: (1) The 1960 Act infringes the fundamental
right of the appellants under Art. 14 of the Constitution
for two reasons, namely, (i) while the object of enacting
the 1960 Act was for safeguarding’ tenants from eviction
from residential buildings, its provisions introduce a
classification between non-residential buildings in
different municipal areas and gives relief to tenants of
non-residential buildings in some towns and refuses to give
the same relief to similar tenants of such buildings in
other towns in the State and such a classification has abso-
lutely no relevance to the object sought to be achieved by
the Act; and (ii) the 1960 Act makes a distinction between
non-residential buildings in Madras, Salem, Madurai,
Coimbatore and Tiruchirappalli on the one hand and those in
other towns, including Tanjore, on the other and gives
protection to the tenants of such buildings in the former
group and denies the same to tenants of similar buildings in
the latter group, though the alleged differences between the
two sets of localities have no reasonable relation to the
object sought to be achieved, namely, the protection of
tenants who have built substantial structures from eviction.
(2) The 1960 Act also offends Arts. 19 (1)(f) and 31(1) of
the Constitution as it is not a reasonable restriction in
the interest of the public on the proprietary rights
acquired by the appellants under the earlier Act XIX of
1955.
Mr. Nayanar, appearing for the first respondents in both the
appeals, contends that ss. 3 and 9 of the Principal Act
could not be invoked by the appellants, as the lease deeds
executed by them contain a
(1) I. L. R. 1961 Mad. 976.
288
clear covenant that they would vacate their lands within a
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prescribed period and as they had put up their buildings
subsequent to the execution of the lease deeds. He sustains
the constitutional validity of the 1960 Act on the ground
that it neither offends Art. 14 nor Art. 19 of the
Constitution.
Mr. A. Ranganadham Chetty, appearing for the State of
Madras, to which notice was given, elaborates the second
contention advanced by learned counsel for the respondents
by placing before us some statistical data which, according
So him, affords a reasonable basis for the classification.
As regards the contention based on Art. 19, he contends that
the rights conferred under Act XIX of 1955, namely, right to
compensation on eviction under s. 3 of the said Act and the
right to obtain a sale deed under s. 9 thereof, are only
analogous to a right to sue or a right to purchase a
property and they could not in any sense of the term be
equated with property rights.
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 non-residential. 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
289
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 stipulations
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 pending 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), 2(1-A), 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 or non-residential 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,
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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 it.
The Principal Act was amended by the Madras Act XIX of 1955
empowering the State Government
290
to extend, by notification in the Official Gazette, the
protection given by the Principal Act to tenants of
any other municipal town in the State of Madras and any
specified village within five miles of the City of Madras or
such municipal towns who have constructed buildings in
others’ lands with the hope that they would not be evicted
so long as they paid fair rent. In exercise of the power so
conferred, the State Government issued on March 28, 1956, a
notification extending the Principal Act to the municipal
town of Tanjore. The result of the notification was that
tenants like the appellants who were tenants of land over
which they had put up non-residential buildings acquired a
right to ask for compensation for the buildings so erected
on ejectment or to apply to court for directing the
decree-holder. to sell the land to the tenants after fixing
the price in the manner prescribed in the Act. This Act was
also extended to various other towns like Madurai,
Coimbatore, Salem and Tiruchirappalli.
The Legislature again changed its mind and passed Act XIII
of 1960. By s. 3 of that Act the following amendments were
made in s. 2 of the Principal Act:
"(i) for clause (1), the following clause
shall be
substituted, namely:-
(1) ’Building’ means any building, hut or
other structure, whether of masonry, bricks,
wood, mud, metal or any other material
whatsoever- used-
(i)for residential or non-residential
purposes, in the City of Madras, in the
municipal towns of Coimbatore, Madurai, Salem
and Tiruchirappalli and in any village within
five miles of the City of Madras or of the
municipal towns aforesaid and
291
(ii) for residential purposes only, in any
other area, and includes the appurtenance
thereto."
Section 9. Every proceeding pending before any
Court, other than a proceeding relating to any
property situated in-
(i)the City of Madras,
(ii)the municipal towns of Coimbatore,
Madurai, Salem and Tiruchirappalli, and
(iii)any village within five miles of the
City of Madras or of the municipal towns
aforesaid,
on the date of the publication of this Act in
the Fort St. George Gazette, and instituted
under the provisions of the Principal Act,
shall in so far as such proceeding relates to
non-residential buildings, abate, and all
rights and privileges which may have accrued
immediately before such date to any person in
respect of any property situated in any area
other than the areas referred to above by
virtue of the Principal Act, shall, in so far
as they relate to non-residential buildings,
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cease and determine and shall not be
enforceable:
Provided that nothing contained in this section shall be
deemed to invalidate any suit or proceeding in which the
decree or order passed has been executed or satisfied in
full before the date mentioned in this section.
The result of this amending Act in respect of non-
residential 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
292
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 predecessorsin-in-
terest, (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 of non-residential buildings in places
other than the City of Madras and the specified municipal
towns lost the said rights after the 1960 Act came into
force.
The first question is whether the 1960 Act, in so far as it
withdrew the rights conferred upon the tenants of non-
residential buildings in Tanjore, offends Art. 14 of the
Constitution, or whether it can be justified on the doctrine
of classification. The law on the subject is so well
settled that it does not call for an extensive restatement :
it would be enough if the relevant propositions in the
judgment of this Court in Shri Ram Krishna, Dalmia v. Shri
Justice S. R. Tendolkar(1) are noticed, and they are :
"(1) there is always a presumption in favour
of the constitutionality of an enactment and
the burden is upon him who attacks it to show
that there has been a clear transgression of
the constitutional principles
2 it must be presumed that the legislature
understands and correctly appreciates the need
(1) [1959] S. C. R. 279, 297-298.
293.
of its own people, that its laws arc directed
to problems made manifest by experience and
that its discrimination are based on adequate
grounds ;
(3) in order to sustain the presumption of
constitutionality the court may take into con-
sideration matters of common knowledge,
matters of common report, the history of the
times and may assume every state of facts
which can be conceived existing at the time of
legislation ; and
(4) while good faith and knowledge of the
existing conditions on the part of a
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legislature are to be presumed, if there is
nothing on the face of the law or the
surrounding circumstances brought to the
notice of the court on which the
classification may reasonably be regarded as
based, the presumption of constitutionality
cannot be carried to the extent of always
holding that there must be some undisclosed
and unknown reasons for subjecting certain
individuals or corporations to hostile or
discriminating legislation."
All the said propositions are subject to the main principle
of classification, namely, that classification must be
founded on intelligible differential and the differential
must have a rational relation to the object sought to be
achieved by the statute in question ; and that the
classification may be founded on different bases, such as,
geographical, or according to objects or occupations or the
like : see Budhan Chaudhry v. The State of Bihar(1) and The
State of West Bengal v. Anwar Ali Sarkar. (2)
Bearing the said well settled principles in mind, let us now
proceed to consider them in relation to the facts of this
case. The first contention is that the object of the Act is
to safeguard the tenants from eviction from residential
quarters, but it affords
(1) [1955] 1 S. C. R. 1045.
(2) [1952] S. C. R. 284.
294
protection to tenants of non-residential buildings in the
City of Madras, in the municipal towns of Coimbatore
Madurai, Salem and Tiruchirappalli and in any village within
five miles of the aforesaid City and municipal towns, and
there is no rational relation between the said
classification and the object of the Act. The object of the
Act, the argument proceeds, is to protect the tenants of
residential buildings, whereas the Act protects also the
tenants of non-residential buildings in the aforesaid City
and municipal towns. So stated the argument appears to be
plausible, but a closer scrutiny reveals that the object of
the Act is to protect not only tenants of residential
buildings but also of other buildings, though it is mainly
conceived to protect the tenants of residential buildings.
The following is the statement of objects and reasons
attached to Act XIII of 1960:
"’The Madras City Tenants’ Protection Act,
1921, was enacted with the main object of
safeguarding the tenants from eviction from
residential quarters. In consistence with
this object it is proposed to restrict the
application of the Madras City Tenants’
Protection Act, 1921 (Madras Act III of 1922)
to residential buildings only."
It will be noticed from the above that the main object of
the Act is to safeguard ’the tenants of residential
buildings from eviction but it is not the sole object of
that legislation. The objects of the 1960 Act only refer to
the objects of the Principal Act. The objects and reasons
of the Principal Act are given in the Fort St. George
Gazette dated July 26, 1921, at p. 1491. The relevant part
of the objects reads thus :
"In many parts of the City of Madras dwelling
houses and other buildings have, from time to
time, been erected by tenants on land
belonging to others in full expectation that
subject to
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295
payment of fair ground rent, they would be
left undisturbed in possession, notwithstanding
the absence of any specific contract as to the
duration of the lease or the terms on which
the buildings were to be erected. Recently
attempts made or steps taken to evict a large
number of such tenants, have shown that such
expectations are likely to be
defeated...........................
The Bill provides for the payment of compensation to the
tenant in case of ejectment for the value of any buildings
which may have been erected by him or by his
predecessors-in-intercst. It also provides for settlement
of fair rent at the instance of the landlord."
The object of the said Act was to protect the tenants not
only of dwelling houses in the City of Madras but also of
other buildings in that City. The provisions of the
Principal Act also, it is not disputed, apply both to
residential and non-residential buildings. So too the 1955
Act. Therefore, when in the " objects and reasons" attached
to Act XIII of 1960 the authors of that Act stated that it
was enacted with the main object of safeguarding the tenants
from eviction from residential quarters, they were only
emphasizing upon the main object but were not excluding the
operation of that Act to non-residential buildings. So it
is not correct to state that the object of the Act is only
to protect the tenants of residential buildings. There are
no merits in this contention.
The more serious contention is that there is no rational
basis for classifying the tenants of non-residential
buildings in the City of Madras and the municipal towns of
Madurai, Goimbatore Salem and Tiruchirappalli and those of
similar buildings in other towns like Tanjore. It is said
that if protection is necessary for the tenants of non-
residential buildings in the said City and towns, the same
protection is equally necessary for tenants of similar
buildings
296
in Tanjore and other towns. To state it differently, the
argument is that there are no intelligible differences
between the non-residential buildings located in the City of
Madras and the municipal towns of Madurai, Coimbatore, Salem
and Tiruchirappalli and those situated in other towns. The
learned judges of the High Court in Swaminathan v. Sundara
(1),which was followed in’ the present case, adverting to
this argument observed at p. 987 :
"It is apparent that having regard to the
large population in the first five areas and
the large scale commercial activities in these
areas, the Legislature thought fit that non-
residential quarters occupied by tenants on
lands belonging to others should also be
offered relief from being evicted summarily
and arbitrarily."
This passage was criticized by learned counsel for the
appellants and it was asked, what was the relevancy between
the population of the different towns in the matter of
eviction of tenants from non-residential buildings ? The
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 purposes, so the argument proceeds. Mr. A.
Ranganadhm Chetty, appearing for the state of Madras,
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attempted to place before us statistics to establish that
towns preferred under. the Act are highly populated
industrial and commercial centers of the State compared to
other towns like Tanjore and, therefore, there would
necessarily be high pressure on non residential buildings in
the said localities and consequently a spate of evictions.
Before looking into the statistics it would be convenient to
notice the allegations made in the affidavits. On behalf of
the State of Madras, J. Sivanandam, Secretary to Government,
has filed an affidavit, wherein he says in paragraph 8 :
(1) 1. L. R. 1961 Mad. 976.
297
"’On facts the position is that these four
towns of Madurai, Tiruchirappalli, Salem and
Coimbatore ranked the first four next to the
City of Madras in population, income and
commercial activities and a very large number
of tenants had been enjoying the protection
afforded by the then existing provision of
this Act, in respect of residential and non-
residential buildings as well. It was
therefore thought that it would not be proper
to deprive these tenants of the protection in
respect of non-residential buildings.
It may at once be noticed that the industrial potential of
the preferred towns is not specifically mentioned. But it
appears to us that the expression "commercial activities" is
used in a comprehensive sense so as to take in industrial
activities. This statement is sought to be supported in the
affidavit by the proceedings of relevant authorities and the
correspondence that passed between the State and the Union
Governments. The following extract from the Select
Committee’s proceedings throws further light on the subject
:
"................ on the reports received from
Collectors, the Act was extended to certain
Municipalities. But it was found that such
extension caused inconvenience to public
bodies and other institutions which owned the
lands inasmuch as they were not able to get
sufficient returns from these to carry on
their activities under present
conditions........................... However
it was represented that in the case of Madras
City such a restriction would cause
considerable hardship to the large number of
small business establishments and the
privilege and concession enjoyed by them over
such a long period should not be interfered
with. While the Government felt the
reasonableness of this demand that in the City
non-residential buildings should not be
excluded from the protection afforded by the
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Act, they were of the view that in place where
the provisions were being extended they should
apply only to residential buildings."
"............ having regard to the wishes of
certain Hon. members that not only in the City
but in other municipalities also there should
be no distinction between residential and non-
residential buildings, he (the Chairman)
proposed to add the four municipalities of
Madurai, Tiruchirappalli, Salem and
Coimbatore, in sub-clause (1) of the proposed
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clause (1)."
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 town 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 question. It is stated therein
"Most of the tenancies of non-residential
buildings which enjoyed protection from
eviction are in the City of Madras and the
Municipal towns of Madurai, Coimbatore’ Salem
and Tiruchirappalli which have been classed as
Special Grade or Selection Grade
municipalities on the basis of income and
population ;
"This concession is considered necessary
because in the City of Madras and in the said
four Municipal towns there are a large number
of such tenants to whom denial of the
protection will cause great hardship. They
have been enjoying this protection for some
time past and they have invested large sums of
money in the hope
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that they will not be evicted so long as they
pay the rent due."
This again emphasizes the fact that the preferred towns are
of special importance and that comparatively a large number
of non-residential buildings are situated in the said City
and towns. G. O. No. 331, L. A., dated February 18, 1953,
passed by the Government of Madras also shows the com-
parative importance of the said towns. It is stated therein
:
"They (Government) consider, however, that in
view of the size and importance of the thre
e
municipalities (Tiruchirappalli, Coimbatore
and Vijayawada) referred to above and also of
those of the Salem Municipality, the four
municipalities stand distinctly apart from the
other first grade municipalities, excluding of
course Madurai Municipality which stands in a
class by itself. The Government accordingly
direct that with effect from 1-4-1953 the
municipalities of Coimbatore, Salem and
Tiruchirappalli And Vijayawada be classified
as selection grade
municipalities........................ ".
In the reply affidavit many of the factual assertions made
in the counter-affidavit have been denied. It is alleged
that the number of tenants of non-residential buildings who
enjoyed the benefit of the provisions of the Act in
municipal towns like Tanjore, Vellore and Connors is also
large. It is denied that the preferred towns other than the
City of Madras have been enjoying the protection for a long
time, for the amending Act itself was passed only in 1955.
It is pointed out that the population of a town is irrele-
vant but density of population matters and that the density
of population in Tanjore, Coimbatore, Madurai and Salem is
the same. Out of the allegations and counter-allegations
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the following facts emerge (1) Madras is a city of large
population and
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commercial importance; (2) Madurai is classified as a
special grade municipality and the municipalities of
Coimbatore, Salem and Tiruchirappalli as selection grade
municipalities on account of their size and importance: they
have comparatively larger population and commercial
potentialities; (3) in the said towns there are a large
number of nonresidential buildings; and (4) except for some
vague averments made in the reply affidavit, there is
nothing on record to establish that the number of non-
residential buildings in Tanjore compares favorably with
that in the preferred towns. These facts are, to some
extent, supported by the statistical data furnished before
us from authorized Government publications. In ",Madras
District Gazetteers, Madurai" it is stated at p. 172:
"Madurai is one of the very few districts in
this State in which a comparatively large
portion of the population, about 37 per cent.,
lives by industries, trade and other
avocations. I This is no wonder, seeing that
it has never had, in spite of irrigation
works, any facilities like Tanjore for
absorbing the great bulk of its population in
agriculture. In fact it stands next to the
Coimbatore district in possessing a
considerable proportion of the non-
agricultural population".
Though the statement refers to the districts as a whole, it
is well known that most of the industries are concentrated
in the municipal towns of Madurai and Coimbatore. In
"India, 1962" the following figures of population in some
Towns of Madras State are given:
Madurai .. 4,24,975
Coimbatore 2,85,263
Tiruchirappalli..... 2,49,933
Salem 2,49,084
Tuticorin 1,24,273
Vellore... 1,13,580
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Tanjore ... ... 1,10,968
Nagercoil ... ..1,06,497
It is not necessary to pursue the matter further. it is true
that population alone cannot be a basis for the
classification made under the Act, but concentration of
large population is generally found only in towns where
there are commerce and industries. Though it is possible
that a smaller town with a lesser population may also ’have
heavy industries and commercial activities, that is an
exception rather than the rule. But in this case the
Gazetteer supports the averment made by the State in the
affidavit that the municipal towns selected for preferential
treatment are more advanced commercially than other towns in
the State. Though the Government, at the earlier stages ’of
this litigation or even before the 1960 Act was passed, did
not bring out these differences based upon commercial and
industry as prominently as its counsel now seeks to do
before us, we cannot brush aside the argument as an
afterthought. That apart, the Government of Madras was not
a party in the High Court and it had no opportunity to put
forward its case before that Court. On the basis of the
allegations made in the affidavit filed on behalf of the
State of Madras, supported as it is by the statistical data
furnished before us, we hold that there are real differences
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between non-residential buildings in the towns of Madurai,
Coimbatore, Salem and Tiruchirappalli and those in other
towns of the Madras State which have reasonable nexus to the
object sought to be achieved by the Act.
The more difficult point is the impact of Arts. 19 (1) (f)
and 31 (1) of the Constitution on the impugned provisions of
the Act. The relevant Articles of the Constitution read
thus:
Article 19 (1) (f). All citizens shall have
the right to acquire, hold and dispose of
property.
302
Article 31. (1). No person shall be deprived
of his property save by authority of law.
To seek the protection of either of these Articles it must
be established that the tenants of residential buildings in
Tanjore had acquired a right to property, for unless they
had acquired such a right, the 1960 Act could not have
deprived them of such a right or imposed any restrictions
thereon. The question, therefore, is whether the rights
created by the 1955 Act by extending the provisions of ss. 3
and 9 of the Principal Act to such tenants had given them a
right to property. The argument of learned counsel for the
State of Madras may be summarized thus: Art. 19(1) (f) deals
with abstract rights of property, while Art. 31 (1) with
concrete rights; under Art.31(1) there is no limitation on
the power of the appropriate Legislature to make a law
depriving a person of his property; the only restriction in
the case of deprivation of property by a State is that it
can be done only by a statutory law; if so, on the
assumption that the Act of 1955 conferred a concrete right
of property on the appellants, they have been validly
deprived of it by the 1960 Act and, therefore, no
fundamental right of the appellant had been infringed; if,
on the other hand, the argument proceeds, Arts. 19 (1) (f)
and 31(1) are both held to relate to concrete rights of
property, it would lead to two anomalies, namely, (i) Art.
31(1) would become otiose, and (ii) as deprivation of
property cannot possibly be a restriction on the right to
hold property, every law depriving a person of his property
would invariably infringe Art.19 and, therefore, would be
void. In support of his contentions he relies upon the
observations of Patanjali Sastri, C. J., and Das, J., as he
then was, in The State of West Bengal v. Subodh Gopal
Bose(1). In that case Patanjali Sastri, C. J., made the
following observations:
"’I have no doubt that the framers of our
Constitution drew the same distinction and
classed
(1)...[1954] S. C. R. 587. 597.
303
the natural right or capacity of a citizen
"’to acquire hold and dispose of property"
with; other natural rights and freedoms
inherent in the status of a free citizen and
embodies them in article 19(1), while they
provided for the protection of concrete rights
of property owned by a person in article 31."
These observations no doubt support learned counsel’s
contention, but this Court in a later decision in The
Commissioner, Hindu Religious Endowment’3, Madras v. Sri
Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(1) considered
the said observations and remarked:
"This, it may be noted, was an expression of
,Opinion by the learned Chief justice alone
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and it was not the decision of the court; for
out of the other four learned judges who
together with the Chief justice constituted
the Bench, two did not definitely agree with
this view, while the remaining two did not
express any opinion one way or the other.
This point was not raised before us by the
Advocate-General for Madras, who appeared in
support of the appeal., nor by any of the
other counsel appearing in this case. The
learned Attorney-General himself stated
candidly that he was not prepared to support
the view taken by the late Chief justice as
mentioned above and he only raised the point
to get an authoritative pronouncement upon it
by the court. In our opinion, it would not be
proper to express any final opinion upon the
point in the present case-when we had not the
advantage of any arguments addressed to us
upon it. We would prefer to proceed, as this
court has proceeded all along, in dealing with
similar cases in the past, on the footing that
article 19 (1) (f) applies equally to concrete
as well as abstract rights of property."
(1) [1954] S. C. R. 1005, 1020.
304
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 Chowdhuri v. The
Union of India(1), Mukherjea, 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 The State of
West Bengal v. Subodh Gopal Bose(2). dealing
with this point observed at pp. 668-669:
"To me, it appears, that article 19(1) (f),
while probably meant to relate to the natural
rights of the citizen, comprehends within its
scope also concrete property rights. That, I
believe, is how it has been generally
understood without question in various cases
these nearly four years in this Court and in
the High Courts".
The phraseology used in Art. 19(1)(f) is wide and prima
facie it takes in its sweep both abstract and concrete
rights of property. To suggest that abstract rights of a
citizen in property cannot be infringed by the State but his
concrete rights can be, is to deprive Art. 19(1)(f) of its
real content. It would mean that the State could not make a
law declaring generally that a citizen cannot acquire, hold
and dispose of property, but it could make a law taking away
the property acquired or held by him and preventing him from
disposing it of It would mean that the Constitution-makers
declared platitudes in the Constitution while they gave
unrestricted liberty to the Legislature to interfere with
impunity with property rights of citizens. If this meaning
was given to Art. 19(1)(f), the same meaning would have to
be given to other clauses of Art. 19(1) with the result that
the Legislature cannot make a law preventing generally
citizens from expressing their views, assembling peacefully,
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forming associations, and moving
(1) [1950] s. C. R. 869.
(2) [1954] S. C. R. 587, 597.
305
freely throughout the country, but can make a law curbing
their activities when they are speaking, when they are
assembling and when they are moving freely in the country.
Such an intention shall not be attributed to the
Constituent-Assembly, unless the Article is clear to that
effect. Indeed, the words, as we have stated, are
comprehensive and take in both the rights. Though there is
no final expression of opinion by this Court on this
question, as has been pointed out, this Court and the High
Courts all through since the date of promulgation of the
Constitution proceeded on the assumption that Art. 19
applied to both the rights. We hold that Art. 19 applies
both to concrete as well as to abstract rights of property.
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 imp limit in Art. 19(1)(f) of the Constitu-
tion. The law in Art. 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
Kottarathil Kochuni v. The State of Madra’s(1), 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
later decisions. We, therefore, hold that a law depriving a
person of his property would be bad unless it amounts to a
reasonable restriction in the
(1) [1960] 3 S. C. R. 887.
306
interest of the general public or for the protection of the
interests of Scheduled Tribes.
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
non-residential 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
thereunder. 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 Act. This Court’s
opinion on the question of the constitutional validity of
the Act in so far as it deprived the appellants of their
right under s. 3 of the Principal Act is not called for :
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that will have to be decided in an appropriate case. The
question that falls to be considered is whether the second
right, namely, the right of a tenant to apply to the court
for an order directing the landlord to sell the land to him
for a price to be fixed by it, under s. 9 of the Principal
Act is a right to property. The 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
307
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 non-proprietary
right. In our view, a statutory right to apply for the
purchase 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 judgment of
this Court in Jayvantsinghji v. State of Gujarat(1), on
which Mr. Viswanatha Sastri 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 superstructure 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 Munsif should be directed to proceed with the
(1)..[1962] Supp. 2 S. C. R. 41 1.
308
disposal of the applications filed by them under s. 9 of the
Principal Act could not be granted.
In this view it is not necessary to express our opinion on
the question whether the appellants., by reason of the
specific stipulation in their lease deeds, would not be
entitled to any relief even under the 1955 Act. In the
result, the appeals fail and are dismissed with costs. One
hearing fee.
Appeals dismissed.