In the result, the Writ Petitions are disposed of, on the followingterms,(i) Sections 4 and 4A of the Tamil Nadu Regulation of Rights andResponsibilities of Landlords and Tenants Act, 2017 (Tamil Nadu Act 42 of2017) are read down to restrict their operation only for the purposes of the Act(Tamilnadu Act 42 of 2017) as delineated in paragraph 15.2 supra ;(ii) The rest of the provisions of the impugned enactment are declaredto be valid.(iii) There shall be no order as to costs. Consequently,W.M.P.Nos.4728, 8860 of 2020; 16530, 18266, 22579, 22582, 22588, 22590,26521, 26523, 27596, 27597, 28342, 28519, 28525 of 2021; 7703, 7708, 1731, 16864, 23302, 23303, 23304 of 2022; 991 and 1718 of 2023 are closed.(S.V.G., CJ.) (D.B.C., J.)23.04.2024Index : YesSpeaking orderNeutral Citation : YesJerTo
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Orders reserved on: 11.03.2024
Orders pronounced on: 23.04.2024
CORAM :
THE HON’BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE
AND
THE HON’BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.P.Nos.3985 and 7400 of 2020;
15611, 21340, 21347, 25151, 26143,
26893, 27055 and 27061 of 2021;
1595, 4856 and 24311 of 2022;
1005 and 1611 of 2023
In W.P.No.3985 of 2020 :
Balaji … Petitioner
Versus
- Principal Secretary to Government,
Government of Tamil Nadu,
Housing and Urban Development Department, Fort St. George, Chennai – 9. - Secretary to Government,
Government of Tamil Nadu,
Secretary to Government (FAC), Law Department,
Fort St. George, Chennai – 9. … Respondents
Prayer in W.P.No.3985 of 2020 : Writ Petition filed under Article 226 of the Constitution of India praying for a Writ of Mandamus directing the respondents to amend or to include the indispensible guidelines of Building Plan Approval and in the TNRRRLT Act.
In W.P.No.3985 of 2020 :
For Petitioner : Mr.A.Asokan
For Respondents : Mr.P.S.Raman,
Additional Advocate General
Assisted by Mr.C.Harsha Raj, Additional Government Pleader
and batch cases
COMMON ORDER
(Order made by the Hon’ble Mr Justice D.Bharatha Chakravarthy)
The Petitions:
The petitioners in all these Writ Petitions are either tenants or
landlords in respect of the buildings let out for residential or commercial purposes. They are challenging the constitutional validity of the Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 (Tamil Nadu Act 42 of 2017) as amended. Various provisions of the Act are challenged on the grounds of repugnancy with central enactments, being arbitrary or taking away the vested rights of the parties. The parties herein are facing proceedings under the Act before the Rent Authority/Rent Court etc.. Thus, while keeping the merits of the matter and the interpretation of all or any of the provisions with reference to their facts situation open to be contested in their respective matters, they are challenging the vires of the Act before us. As such all these petitions are taken up, heard together, and disposed of by way of this common order.
Prelude:
- In the immediate aftermath of the Second World War, especially in the urban areas, the landlords started exploiting the demand for
accommodation, which necessitated the State to step in. To exercise control and ameliorate the situation, the Madras Buildings (Lease and Rent Control) Act, 1949 was enacted. Thereafter, to further regulate the letting, control the rents payable and prevent unreasonable eviction of tenants, the State of Tamil Nadu enacted the Tamil Nadu Building (Lease and Rent Control) Act 1960 (Act 18 of 1960) Irani Vs. State of Madras .
2.1. It is held by this Court in Messrs.Raval & Company Vs. K.G.Rama-chandran (minor) and Ors. that the said Act was brought into force in respect of urban buildings, considering the rents, the conditions of scarce accommodation, and perhaps considerable hardship to tenants occasioned by evictions strictly under the law.The legislature seems to have intended to regulate these matters by way of a statute. It is held by the Hon’ble Supreme Court of India in Kewal Singh Vs. Lajwanti that this type of legislation was termed as a social reform to protect the tenants from capricious and frivolous eviction and thus conferring the status of statutory tenant who could not be evicted, except under the conditions specified therein and by following the procedures, prescribed by the Rent Control Act.
2.2. The said Act 18 of 1960 governed the field for close to 60
years.There were similar legislations throughout the country. It was felt that the provisions were made long back when the supply of rental accommodation was limited, real estate business had not evolved and properties were vested in the hands of very few people. With the changing scenario, robust real estate and availability of enough housing stock and with the policy of the Government of India making “Housing for All” as its mission, the Government of India circulated a Model Tenancy Act, to be adopted by the States in the year 2015. It was also made a mandatory condition to be fulfilled by the State to implement the “Housing for All” project of the Central Government. In this scenario, the State of Tamil Nadu was the first State to adopt the Model Tenancy Act and passed the impugned legislation, i.e., Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 (Tamil
Nadu Act 42 of 2017). The Statement of objects and reasons reads thus,
“While launching “Housing for All’ Mission, Government of India recommended to repeal the Rent Control Act and replace it with new legislation on the line of Model Tenancy Act, suggested by the Government of India as one of the mandatory conditions to be fulfilled by the State. To fulfil this mandatory condition, legislation has to be undertaken. - The purpose of the Tamil Nadu Buildings
(Lease and Rent Control) Act, 1960 (Tamil Nadu Act 18 of 1960) was to regulate the rent as well as give powers to the Government to take certain properties on rent at fair rent even against the wish of the property owner if it was desirable in the interest of the State or required by the Government. These provisions made long back when supply of rental accommodation was limited, real estate business had not evolved and properties were vested in the hands of very few people. - Now the scenario has changed. Robust real
estate and availability of enough housing stock makes the existing Rent Control Act out of place. The existing Act has created lot of vested interest against the landlords. Further the supply of the rental housing and growth of rental housing market has been severely affected leading to growth of slums in the absence of sufficient stock of rental houses. To tackle the problem, the new Law has to be enacted for the State, after repealing the existing Tamil Nadu Building (Lease and Rent) Control Act, 1960. - The Government have decided to enact the
Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017, on the lines of the model bill suggested by the Government of India. The new Law aims to regulate the rent as per the terms and conditions of the agreement to be entered into between the owner of the premises and the tenant. It also aims to balance the rights and responsibilities of the landlord and the tenant and provide regulation of the rent as per the agreement. - The Bill seeks to give effect to the above
decision.”
2.3. Act 42 of 2017 was published in the Tamil Nadu Government Gazette Extraordinary, Part IV Section 1 on 14.07.2017 and received the assent of the Governor on 04.08.2017. The Act was to come into force from the date on which it was notified by the Government. Before the new Act could be notified, the Central Government again circulated a revised Model Tenancy Act in the year 2017 with modifications to the earlier Act of 2015, as such the State of Tamil Nadu enacted amendments to the above Act 42 of 2017 vide Act 18 of 2019 and only thereafter, the Act was notified to come into force with effect from 22.02.2019.
2.4. The State of Tamil Nadu had framed the Tamil Nadu Regulation
of Rights and Responsibilities of Landlords and Tenants Rules 2019 vide
G.O.(Ms) No.36, H & UD (HB4) dated 22.02.2019. The Act repealed the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 with certain savings. It can be seen from the statement of objects and reasons that the above Act departs from the actual control of rent to mere regulation of rent (as the entire concept of fair rent is given a go-by). It makes a paradigm shift from the rights of tenants as statutory tenants, being controlled /governed by the Statutory prescriptions to the terms and conditions of the agreement to be entered into between the owner of the premises and the tenant.
2.5. It is said that the Act aims to balance the rights and
responsibilities of the landlord and tenant and is enacted to provide regulation of the rent as per the agreement. Therefore, it can be seen that the major thrust is upon the State to step back from control and fall back to the contractual regime. Further, from the provisions of the Act, it can be ascertained that the Act also aims to provide a fast mechanism to quickly resolve the disputes between the landlords and tenants, and matters connected with and incidental thereto by establishing the authorities, Rent Courts and Appellate Tribunals, etc.. It is necessary to state here that, unlike the earlier Act of 1960, the State did not endeavour to get the assent of the Hon’ble President of India.
The Case of the Petitioners: - The contentions of the petitioners overlap and are summarised as
follows. The earlier Act of 1960 was enacted, keeping in view the Directive Principles contained in Articles 37 to 39A and the present Act which gives a go-by to the avowed principles leading to an unprotected contractual relationship, forcing any unconscionable terms on the tenants cannot stand the scrutiny of Articles 14, 19 (1) (g) and 21 of the Constitution of India. The petitioners who had become statutory tenants under the erstwhile Act are entitled to protection, but, Section 47 of the present Act offers no substantive protection and as such, takes away the vested rights and therefore, the impugned enactment is bad in law. The impugned legislation in the guise of balancing the rights and responsibilities, intrudes into the fields occupied by other legislations and trespasses beyond the domain of the legislative power and as such is a colourable legislation.
3.1. The petitioners contend that in pith and substance, the impugned
enactment is traceable to the legislative power of the State to Entries 6, 7, 13 and 46 of List III of the Seventh Schedule of the Constitution of India. Sections 4 and 4A providing for a special agreement and registration process are repugnant to Sections 106 to 108 of the Transfer of Property Act. They are also repugnant to Parts II and VI of the Registration Act, 1908 more particularly Sections 17 and 48 of the Registration Act, 1908.
3.2. The Registration Act, 1908, is a complete code in itself in so far
as the registration of documents is concerned. Similarly, Sections 7 to 11 and 1,2 to 29 are all directly repugnant to the various provisions of the Transfer of
Property Act. Section 30 is again is repugnant to the provisions of the
Registration Act, more specifically to Section 6 of Part II. Sections 32, 39 and
40 are repugnant to the provisions of the Specific Relief Act and Transfer of Property Act.Sections 32 (3) and 43 providing the conditions of service also violates Article 234 of the Constitution of India, since no consultation is provided with the Union Public Service Commission. Section 31 of the Act that vests with the Rent Authority judicial powers is liable to be struck down as violative of Article 14 read with Article 50 of the Constitution of India.
3.3. It is more specifically pleaded that when Section 21 enables
eviction of the tenant on the ground that no written agreement is entered into with the landlord, the same confers unbridled and unconscionable options on
the landlord, even to demand unimaginable figures and refusing to enter into a written agreement on any premise whatsoever. Thus it runs counter to the very object of balancing the rights between the landlords and tenants and it makes a weapon in the hands of the landlords to unduly influence the tenants and violate their rights. As such, the same cannot stand the scrutiny of Article 14 of the Constitution of India.
3.4. On behalf of the landlords, firstly, it is contended that when the
rights and liabilities of the parties are to be determined as per the provisions of the Act, the mere absence of a written tenancy agreement registered as per Section 4 of the Act should not oust the very jurisdiction of the Tribunal provided under the Act. It is the further contention that Section 25 of the Act which provides for deposit of arrears of rent as a pre-condition to contest the petition for eviction, arbitrarily excludes the default in payment of rent. It should be more appropriate that in case of default of rent, the tenant be mandated to deposit the arrears of rent to contest the eviction petition, as such the provision is arbitrary.
Case of the Respondents:
- The Writ Petitions are resisted by the respondents by filing counter
affidavits with identical stands, in all the cases.
4.1. It is the case of the respondents that the replacement of the
erstwhile Act was necessitated given the changing socio-economic patterns, the demands for urban tenancy, the availability of space for tenancy, etc., which necessitated having an enactment balancing the rights of the landlords and tenants and to fast track the dispute resolution process. Considering the said aspects and the Model Tenancy Act, 2015 circulated by the Government of India, the State came up with the impugned legislation. The Model Tenancy
Act was also modified from time to time and the recently approved Model
Tenancy Act, 2021 is also required to be adopted by the various States and Union Territories.
4.2. The Act of the State of Tamil Nadu adopts the framework under
the Model Tenancy Act to achieve the objectives stated under the legislation. The various grounds of attack under Article 14 cannot stand the scrutiny of law. The legislative policy is based on substantial factors and the rights of these tenants and landlords in respect of the buildings to which the Act is applicable stand on a completely different footing and therefore the classification and treatment meted out is reasonable and has a rationale. Under the present times, the tenants occupy the premises as mutually agreed with the landlord. The contractual regime is given effect as the tenant is always entitled to seek any other property, which is affordable to him. The Act balances the rights of the landlords, who are the owners of the property. Their right is also guaranteed under Article 300A of the Constitution of India. As regards the contention relating to repugnancy, firstly, Section 106 of the Transfer of Property Act itself starts with the phrase ‘in the absence of contract or local law or usage of the contrary’ and therefore, the Act itself enacted by making itsubject to local law. The present Act is enacted by the State legislature under Entry 18 of List II of the Seventh Schedule of the Constitution of India. Therefore, the entire arguments related to repugnancy cannot stand.
4.3. The legislative power in pith and substance is traceable only to
Entry 18 of the State List and therefore, the provisions of Article 254 of the Constitution of India will not be applicable. The contentions regarding the purposes of the Act are liable to be rejected in view of the Judgment of the Hon’ble Supreme Court of India in Malpe Vishwanath Acharya & Ors. Vs.
State of Maharashtra & Anr. in which it is stated that the socio legislations like, the Rent Control Act should strike a balance between the rival interests and it should be tried to be just to all. The Hon’ble Supreme Court of India had commented that the existing similar act (the Bombay Rent Act) had given rise to unlawful tendencies. The legislature has consciously decided to give a go-by to the statutory tenancy or tenancy without a written agreement which has proven to be a menace.
4.4. On a reading of Section 34, it would be clear that in the
applications relating to tenants and premises, Central legislation or any other substantial law will be applied in the same manner as if a dispute has been brought before a civil court by way of a suit. In respect of the other matters the Tribunal is empowered to take into account the substantial rights of the parties and decide the matter following the law. Merely because the Act balances the rights, provides for a speedy mechanism and enforces a written agreement regime, the same cannot be termed as unconstitutional or illegal.
Submissions of the Petitioners: - We have heard the submissions of the learned Senior Counsel and
other counsel, who argued on behalf of the petitioners on various dates and the learned Advocate General on behalf of the State. - Mr.P.V.S.Giridhar, the learned Senior Counsel leading the
arguments on behalf of the petitioners would submit that the impugned enactment is traceable only to Entries 6, 7 and 13 of the Concurrent List and not to any State List. The impugned enactment has not received the assent of the Hon’ble President. Therefore, to the extent of repugnancy, the laws made by the Parliament/Central laws will prevail and to that extent, the provisions of the impugned enactment shall be void.
6.1. He would submit that Sections 4 (1) and 4 (2) relating to the
tenancy agreement are repugnant to Section 106 of the Transfer of Property
Act which occupies the field. Sections 4 (3) and 4 (4) are repugnant to Section 107 of the Transfer of Property Act and Section 17 of the Registration Act which occupy the field. Sections 4 (5) and 4 (6) providing the procedure for registration are repugnant to Sections 11 and 12 of the Registration Act occupying the field. Section 4 (2), regarding non-registration of the agreements, is repugnant to Section 49 of the Registration Act which occupies the field.
Section 5 relating to the period of tenancy is repugnant to Section 106 of the Transfer of Property Act which occupies the field.
6.2. Mr.P.V.S.Giridhar, learned Senior Counsel made detailed
submissions contending every provision of the impugned legislation is repugnant to the Central legislations viz., the Transfer of Property Act, Registration Act, Indian Succession Act, the Specific Relief Act, 1963, Code of Civil Procedure as either the subject matter is a field occupied by these legislations or the provisions are in direct conflict so that both cannot co-exist.
6.3. The learned Senior Counsel also has succinctly tabulated his submissions, which are reproduced as follows:-
SEC. RRRLT ACT, 2017 SEC. REPUGNANT
PROVISION NATURE OF
REPUGNANCY –
OCCUPIED
FIELD (OF) OR
CONFLICT (C)
4(1) &
(2) Tenancy Agreement 106 Transfer of Property
Act, 1882 OF
4(3) &(4) Tenancy Agreement 17
107 Registration Act, 1908
Transfer of Property
Act, 1882 OF
OF
4(5) &
(6) Procedure on
Registration Part and XII XI Registration Act, 1908 OF
4A Effect of non-
registration 49 Registration Act, 1908 OF
5 Period of tenancy 106 Transfer of Property OFAct, 18826 Inheritability of tenancy Indian Succession Act,
Hindu Succession Act,
Muslim Personal Law
(Shariat Act) 1937 C
7 Restriction on sub-
letting 108(j) Transfer of Property
Act, 1882 –
Sub-Lease C and OF
8 Rent 108(i) Transfer of Property
Act, 1882 OF
9 Revision of Rent 108(c) Transfer of Property
Act, 1882 OF
10 Fixation of rent-by-
Rent Authority 108(c) Transfer of Property
Act, 1882 OF
11 Security Deposit 108 Transfer of Property
Act, 1882 OF
Chapter
IV – 12 to 20 Obligations of
Landlord and tenant 108 Transfer of Property
Act, 1882 OF
21&22 Repossession of
premises by landlord 111
5 Transfer of Property Act, 1882
Specific Relief Act,
1963 OF
C
23 to 27 Rent and Additional
Structures 108 Transfer of Property
Act, 1882 OF and C
28 Vacant Possession to landlord 5
109&115 Specific Relief Act, 1963
Transfer of Property
Act, 1882 C OF
29 Notice by tenant of giving up possession Chapter V Transfer of Property
Act, 1882 OF
30 Appointment of Rent
Authority Part II (sec 3 to
16A) Registration Act, 1908 OF and Cparticularl y sec 631 Power and Procedure of Rent Authority Art 50
5 Indian Constitution Separation of judiciary from executive
Specific Relief Act,
1963 –
Recovery of specific immovable property C
32 Constitution of Rent
Courts 5
Entry 13 of List III –
Entry 46 of List III
- Specific Relief Act, 1963 – Recovery of specific immovable property
Civil procedure, including all matters included in the Code of Civil Procedure at the commencement of this Constitution, limitation and arbitration.
Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the mattes in this List. C and OF
33 Appeals Part VII Code of Civil Procedure, 1908 – Appeals C and OF
34 Jurisdiction of Rent
Courts 5 Specific Relief Act, 1963 – Recovery of specific immovable property C
35 Constitution of Rent
Tribunals 5 Specific Relief Act, 1963 – Recovery of specific immovable property C
36 Procedure of Rent
Court and Rent
Tribunal 5 Specific Relief Act, 1963 – Recovery of specific immovable property C
37 Powers of Rent Court and Rent Tribunal 5 Specific Relief Act, 1963 –
Recovery of specific immovable property
Code of Civil
Procedure, 1908 OF
OF
38 Appeal to Rent
Tribunal 96-99
Order XLI Code of Civil
Procedure, 1908
Code of Civil
Procedure, 1908 OF
C and OF
39 Execution of Order 5 Order 21 Specific Relief Act, 1963 – Recovery of specific immovable property
Code of Civil
Procedure, 1908 C
OF
40 Jurisdiction of Civil
Courts 5 Order 21 Specific Relief Act, 1963 – Recovery of specific immovable property
Code of Civil
Procedure, 1908 C
OF
43(2) Officers and other Art 234 The Indian
employees of Rent Court, Rent Tribunal and the Rent Authority Constitution – Control over sub-ordinate
courts
45 Power to make Rules Chapter V (Sec 105 to 116)
5 Transfer of Property Act, 1882
Specific Relief Act,
1963 OF
OF
47(1)&
(2) Repeal and Savings Since most of the operative provisions of the Act are unconstitutional and invalid, this provision which is integral to the other provisions of the enactment will also cease to operate. (The
Rent Control Act,
1960 obtained the assent of the President to come into force as noted by the Supreme Court as Dhanapal
Chettiar v Yesodai
Ammal (1979) 4 SCC 214. OF
6.4. In support of his submissions, the learned Senior Counsel would
firstly rely upon the Judgment of the Supreme Court of India in Accountant and Secretarial Services Pvt Ltd and Anr., Vs. Union of India more specifically relying upon paragraphs Nos.5, 22, 23, 24 and 27 to contend that the impugned legislation is traceable only to Entries 6, 7 and 13 of List III of the Seventh Schedule and neither the Entry 18 of List II nor in Entry 3 of List II of the Seventh Schedule of the Constitution of India. The said Judgment also specifically holds that the Constitution Bench in Indu Bhushan Bose Vs. Rama Sundari Debi lays down the said proposition. The said Judgment also considered the other decisions in detail and rendered a finding that the legislative entry would only be traceable to Entry Nos.6, 7 and 13 of the Concurrent List.
6.5. The learned Senior Counsel would then take this Court through
the Judgment of the Constitution Bench of the Supreme Court Indu Bhushan Bose’s case (cited supra) more specifically paragraphs nos.13 and 14 to submit that as a matter of fact, the Constitution Bench has categorically held in paragraph No.14 that the power is traceable only to Entries 6, 7 and 13 of the Concurrent List. The learned Senior Counsel would rely upon the Judgment of a Co-ordinate Division Bench of this Court in Thirubuvanam Silk Handloom
Weavers, etc, Vs. State of Tamil Nadu , more specifically relying upon paragraphs Nos.49, 51, 52, 55 and 58 to contend that this Court while examining the constitutional validity has to consider whether the legislature has transgressed its power by adopting an oblique or covert manner to encroach upon other fields and fundamental rights of the parties and in such a case would strike down the legislation as violative of Article 14 of the Constitution of India. He would further rely upon the Judgment of the Supreme Court of India in P.G.Gupta Vs. State of Gujarat and Ors. , more specifically by placing reliance on paragraph No.11 to buttress his submission that a right to residence and settlement is a fundamental right under Article 19 (1) (e) and is also a facet of the right to life under Article 21 of the Constitution of India. Therefore, the impugned legislation subjecting the tenants to the whims of the landlords would be impinging upon the fundamental rights of the tenants.
6.6. The learned Senior Counsel would rely upon the Judgment of the
Hon’ble Supreme Court in Saghir Ahmad Vs. State of Uttar Pradesh and Ors. , to contend that if the scheme of legislation results in disproportionate curtailment of rights, the same would be violative of Article 19 (1) (g) of the
Constitution of India. He would then rely upon the Judgment of the Supreme Court of India in Director of Settlements, A.P ., and Ors. Vs. M.R.Apparao and Anr. , more specifically relying upon paragraph No.7, to contend that only the law declared by the Supreme Court of India would be binding on this Court under Article 141 of the Constitution of India and the Judgment of the Hon’ble Supreme Court of India has to be read in the context of questions which arose for consideration in the case and therefore, the Judgment of the Constitution Bench in Rajendra Diwan Vs. Pradeep Kumar Ranibala cannot be a Judgment declaring the law as the power is traceable to Entry 18. In the said case, the Hon’ble Supreme Court of India was concerned with a question as to whether or not the state legislature is competent to make an enactment which provides for a direct appeal to the Supreme Court from the Appellate Tribunal bypassing the High Court. The learned Senior Counsel would rely upon the Judgment of the Constitution Bench of the Supreme Court of India in Raval and Co. Vs. K.G.Ramachandran and Ors. , more specifically paragraph No.15 to contend that the Constitution Bench while dealing with the scheme of the erstwhile Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 and held that unless the question arose to reconcile the Act with the Transfer of Property act, the observations made in some of the decisions regarding the same, cannot be taken into account. The learned Senior Counsel would rely upon the Judgment of the Hon’ble Supreme Court of India in Rekha Mukherjee Vs. Ashish Kumar Das and Ors. , by placing reliance on paragraph No.29 to contend that the statutes providing different procedures should ultimately yield to the humanist rule that procedure should be the handmaid of justice and should not be wholly inequitable to the tenants.
6.7. The learned Senior Counsel would also rely upon the Judgment of the Supreme Court of India in Thirumuruga Kirupananda Variyar
Thavathiru Sundara Swamigal Medical Educational & Charitable Trust Vs. State of Tamil Nadu and Ors. , by placing specific reliance on paragraph No.26 to contend that if two legislations contained contradictory provisions then repugnancy may also arise even though obedience to each of them is possible without disobeying the other if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field.
6.8. The learned Senior Counsel would also rely upon the Judgment
of the Hon’ble Supreme Court of India in Forum for People’s Collective Efforts (FPCE) and Anr., Vs. State of West Bengal and Anr. , by relying upon paragraphs Nos.79 to 81 to stress the grant for presidential assent and to plead that it is abundantly clear that the State has to seek the assent of the President. The learned Senior Counsel would then rely upon the Judgment of the Hon’ble Supreme Court of India in V.Dhanapal Chettiar Vs. Yesodai Ammal , by pointing out paragraph Nos.5, 8, 9, 11 to 18 of the said Judgment to contend that the Rent Act essentially restricts the rights of parties concerning their contractual obligations traceable to the rights under Section 105 and 106 of the transfer of Property Act and thus in the absence of the assent of the President, would be repugnant. The learned Senior Counsel would specifically take this Court through paragraphs Nos.4, 6 and 22 of the Constitution Bench Judgment in Rajendra Diwan’s case (cited supra) to demonstrate that the
Court was mainly concerned with the reading of the Articles 323 (b), 245 and 246 and only in that context, the competency of the state legislature was decided and the said Judgment was not concerned as to the question whether the power would be more properly traceable to Entry 18 in the State List or to Entries 6, 7 and 13 of the Concurrent List and neither the earlier Constitution Bench Judgment of Indu Bhushan Bose’ case (cited supra)was placed before it. Therefore, the said Judgment cannot be said to be laying down the law in that regard. Adverting to the Judgment of the Division Bench of Bombay High Court in Labshetwar and Sakkarwar Constructions Vs. State of
Maharashtra whereunder the validity of certain provisions of the Maharashtra Rent Control Act, 1999 was tested and held to be not repugnant to the provisions of the Transfer of Property Act,he would submit that the present Act and its scheme has to be tested in the light of the provisions contained herein and the said Act was not based on the model legislation of the Government of India and therefore, the same is not parimateriaand therefore, would submit that uninfluenced by the same this Court has to consider the legislative competence of the present enactment.
- Ms.Tanya Kapoor, learned counsel appearing for the petitioner in W.P.No.27055 of 2021 etc., would submit that the impugned enactment is covered under Concurrent List under Entries 6, 7 and 13. She would submit thatthe Hon’ble Supreme Court of India in Ram Krishan Grover and Ors., Vs. Union of India and Ors. , have categorically reiterated that the legislative source in respect of rent control legislation is traceable only to Entries 6, 7 and
13.The Hon’ble Supreme Court of India in paragraph No.23 has compared
Entries 17, 18 and 19 of List I, Entry 18 of List II and after considering the
Judgment in Jaisingh Jairam Tyagi and Ors. v. Mamanchand Ratilal Agarwal and Ors , Dhanapal Chettiar’s case (cited supra) and Accountant and Secretarial Services Pvt Ltd’s case (cited supra) had categorically held in paragraph No.28 that it will not fall under Entry 18 of List II and would only fall in the Concurrent List. She would submit that Section 4 (1) and 21 (2) (a) of the impugned legislation is repugnant to Section 107 of the Transfer of Property Act in as much as oral tenancy it has been given due recognition under central law. She would submit that Section 4 A read with Section 21 (2) (a) is directly in conflict with Section 17 of the Registration Act, 1902.
7.1. Ms.Tanya Kapoor, would further contend that Section 4 (2) of
the impugned enactment distinguishes the tenancy created before the commencement of the Act and after the commencement of the Act under Section 5 (3), there is no intelligible differentia to discriminate between the two, as for failing to renew the lease under Section 5 (3) of the Act, a month to month tenancy is acknowledged for six months and there is no mention of consequence thereafter. The Act completely yields in favour of the landlords to impose their will on the tenants and therefore does not stand the scrutiny of Articles 14, 19 (i) (g) and 21 of the Constitution of India. She would submit that the impugned enactment places a premium on the arbitrary action of the landlord in refusing to enter into an agreement or invoking the jurisdiction of the rental authority having entered into a usufructuary mortgage / pagadi / othi. The entire provisions in Sections 4 to 40 impinge upon the fundamental rights of the tenants. The landlord is permitted to take advantage of his own inactions of not entering into an agreement and thus the impugned enactment runs counter to the legal maxims “Nullus commodum capere potest de injura sua propria”.
7.2 The impugned enactment in as much as not dealing with the oral
tenancy, giving a go-by to the fair rent mechanism in the erstwhile Act is illegal. Section 6 of the impugned enactment is ambiguous in respect of tenancy by a company partnership firm, etc and does not take care of the situations, where the death of the Managing partner or the Managing Director, etc., takes place and as such is ambiguous. Even the gap of a one-month rental advance which was earlier fixed under Section 7 of the repealed enactment is now given up thereby enabling the landlords to fleece the tenants in the form of the interest-free security deposit and thus the entire enactment is unconstitutional, discriminatory and ultravires.
7.3. In support of her contentions, the learned counsel would rely
upon the Judgment of the Hon’ble Supreme Court of India in State of Tamil Nadu and Anr. Vs. National South Indian River Interlinking Agricultural Association to stress upon the principles of reasonable nexus and proportionality, to test the impugned legislation violating Article 14 of the Constitution of India. She would rely upon the Constitution Bench Judgment of the Supreme Court of India inState of West Bengal Vs. Anwar Ali Sarkar more specifically in paragraphs Nos.22, 24 and 100 contend that the impugned statute is discriminatory and that there is no intelligible differentia in discriminating between the tenants. The Judgment of the Hon’ble Supreme
Court of India in Ashok Kapil Vs. Sana Ullah (dead) and Ors. , more specifically in paragraph No.7 is relied upon to contend that no man can take advantage of his own wrong and the said principle is one of the salient tenets of equity.
7.4. The learned counsel would rely upon the Judgment of the Hon’ble Supreme Court of India in M.K.Shah Engineers and Contractors Vs. State of Madhya Pradesh. , for the same proposition that no person can be permitted to take advantage of their own wrong. The Judgment in Navuji Lalji Vaghela and Ors Vs. State of Gujarat and Ors. , is also relied upon for the same proposition.
7.5. Mr.G.Rajagopalan, the learned Senior Counsel and Mr.M.Rajasekhar, learned counsel appearing on behalf of the landlords, pointing out to Section 25 would submit that even under the erstwhile Act if the eviction petition is filed alleging wilful default unless the tenant deposits the entire amount on application by the landlord, the tenant will not be permitted to contest the eviction petition by an order under Section 11 (4) of the Repealed Act. While a similar provision is made, it is nothing but absurdity on the part of the legislature to have left the ground of wilful default alone while making the condition of deposit/payment to contest the eviction petition. To the said extent, the said provision has to be held to be arbitrary. Further arguing on behalf of the landlords, a combined reading of Section 4 read with Section 21 leads to an impression that whenever there is no written registered agreement, the parties are left only to the remedy of suit, which is not intention even as per the statement and objects. If the position is left as such majority of the landlords and tenants would not be covered under the Act. While the Rent Authority and the Tribunals / Appellate Tribunal established as per the Act, the special provisions make the majority of the cases not to come within the purview of the act and as such against the very object of the enactment and therefore have to be accordingly read down. - Mr.P.S. Raman, learned Advocate General made his submissions
on behalf of the State. He would submit that even though the earlier Constitution Bench in the State of Kerala and Ors. Vs. Mar Appraem Kuri Co.Ltd. And Anr. , has taken a contra view that even in respect of the legislation, traceable to List II also would fall within a mischief of repugnancy, the view taken in M.Karunanidhi Vs. Union of India restricting it only to the legislations traceable to the Concurrent List alone, appears to be the correct position. He would submit that in yet another Constitution Bench Judgment of the Hon’ble Supreme Court in Rajiv Sarin and anr. Vs. State of Uttarakhand and ors. which was also delivered on the same day, takes a view in paragraph No.3 that if only both the legislations fall under the Concurrent List of Seventh Schedule of the Constitution of India, the question of repugnancy and invocation of Article 254 would be relevant.
8.1. He would submit that the law has been recently restated in the Forum for People’s Collective Efforts’s case (cited supra), by which it would be clear that unless the legislative power is traceable to the entries in the Concurrent List the State law cannot be held to be void on the ground of repugnancy and would be valid. He would submit that as far as the present legislation is concerned, a similar Rent Control Act enacted by the State of Chattisgarh viz., the Chattisgarh Rent Control Act, 2011, a question arose as to the legislative competence and while answering the said question, the Constitution Bench of the Hon’ble Supreme Court of India in Rajendra Diwan’s case (cited supra) in paragraph No.42 had categorically held that the legislative competence to enact the Rent Control Act is traceable to Entry 18 of the State List. Again in paragraph No.46, the same is reiterated and on reading of paragraph Nos.52 and 53 of the said Judgment would confirm the finding.
Therefore, when there is an authoritative pronouncement of the Constitution
Bench of the Hon’ble Supreme Court of India, that the power is traceable to Entry 18 in the State list, there is no question of any repugnancy. Even otherwise it can be seen that as per Article 254, if the State is entitled to send the legislation for assent of the President and upon there being a presidential assent, the State law will over-ride as far as the said State is concerned. Only because of the authoritative pronouncement of the Constitution Bench, the State of Tamil Nadu was not advised to seek the assent of the President of India. Otherwise, the legislation is based only on the Model Tenancy Law as circulated by the Government of India. The impugned enactment only operates in the field of the tenancies of buildings so as to provide a speedy and efficacy mechanism in the matter of disputes between the landlords and tenants and nothing else. The Registration provided under Section 4 is for the purposes of the Act. The Act does not in any manner rewrite or meddle with the rights of the parties and as per Section 34, the substantial provisions of the other central enactments would still be applicable. No case is made out by the petitioners to point out that the central enactments viz., the Transfer of Property Act, the Specific Relief Act or the Registration Act and the present Act cannot exist together or be implemented at the same time.
8.2. As far as the arguments relating to the occupied field are
concerned even the Transfer of Property Act, Section 106 makes it subject to other local laws. The Act is neither arbitrary nor violates any fundamental rights of the tenants. It is the legislative policy to bring the rights of parties from the statutory tenancy to that of the contractual obligations between the parties. The same by itself is not illegal but is based on sound reasons of the prevalent circumstances in the society. The wisdom of the legislature to enact the law in a particular manner or the legislative policy behind it cannot be called into question before the Court. Therefore, the petitions are liable to be dismissed.
8.3. The learned Advocate General would also add that if required,
the state is willing to obtain the assent of the President. There is no other illegality, that can be pointed out about the impugned legislation.
9. Mr.Anish Gopi, learned counsel for representing M/s
P.B.Ramanujam Associates appearing for the 4th respondent/landlords in
W.P.No.21340 of 2021 supplementing the arguments of the learned Advocate
General would submit that in the teeth of the Constitution Bench Judgment in
Rajendra Diwan’s case (cited supra) and the later Judgment of the Hon’ble Supreme Court in Ram Krishan Grover’s case (cited supra) though there appears to be a moot point, in all fairness it would be traceable under Entries 6, 7 and 13 of the Concurrent List. However, in the instant case, repugnancy will not arise firstly on the doctrine of the occupied field because the Union in the legislation vi., the Transfer of Property Act, 1882 had not expressed its intention to occupy the entire field.On the contrary, it expressly provides for the provisions being subject to local laws in various provisions. Relying upon the Judgment of the Bharat Hydro Power Corporation Limited & Ors. Vs. State of Assam & Anr ,he would submit that even while considering the question of repugnancy there is a presumption in favour of its validity and every effort should be made to reconcile both the legislations and merely because and on a mere possible repugnancy the law cannot be rendered void. Further, repugnancy should be determined by visualising the effect of lawsas held by the Hon’ble Supreme Court in PT. Rishikesh and anr. Vs. Salma Begum . He would submit that the petitioners have failed to demonstrate any inconsistency between the impugned legislation and that of the Transfer of Property Act, 1882, Registration Act, 1908 and the Hindu Succession Act, 1956. He would submit that the standards to adjudicate upon the alleged repugnancy have been laid down in M.Karunanidhi’s case (cited supra) more specifically in paragraph No.24. As per the same, the inconsistency should be direct and clear, it should be irreconcilable and it should be of such nature to bring the Acts into direct conflict with each other and should lead to a situation where it is impossible to obey one, without disobeying the other. By placing reliance upon the Judgment of this Court in S.Muruganandam Vs. J.Joseph . He would contend that Section 4-A of the impugned legislation is pari materia to Section 49 of the Registration Act and can at best limited for applicability to the present Act. Sections 6 and 21 of the impugned legislation merely give effect to the provisions of the Law of Succession and Transfer of Property Act, without any discernible inconsistency between the provisions.
9.1. Adverting to the arguments relating to Article 14, firstly he
would submit that the legislature has to alter the legal landscape by taking into account, the current scenario and the same itself will not be violative of Article 14 of the Constitution of India and the shift in policy should be viewed from the prism of necessity. The impugned legislation only creates a level playing field for both the landlords and the tenants. As far as the attack on Section 4 (2) is concerned, the legislation broadly envisages two types of tenancy, i.e., those created before its commencement and those thereafter. As far as the tenancies created before commencement are concerned, it can be seen that the impugned legislation only seems to rectify the mischief created by the repealed legislation leading to the misuse of the provisions of the old Act by the tenants, thus, providing 575 days to enter into an agreement is in tune of the object sought to be achieved by the legislation and therefore, there is intelligible differentia in the classification. If the rights under the old Act which is repealed or taken away, the argument as to the vested rights cannot be countenanced. In a similar matter, under the Madras City Tenants Protection Act, 1992, the Full Bench Judgment of this Court in N.Sreedharan Nair Vs. Mottaipatti Chinna Pallivasal Muslim Jamat & Ors. has categorically held that the said argument will not be available given the amendment to the legislation itself.
9.2. In one of the decisions arising under the Act, this Court had
already reconciled the provisions with that of the Transfer of Property Act in S.Muruganandam’s case (cited supra). Similarly, the argument relating to failure to enter into a lease agreement has already been considered by a learned Single Judge in Mahendra Kumar Vs. Santosh Kumar (C.R.P.No.4331 of 2022 dated 05.01.2023) and the logic behind the provisions that the Court or any one of the parties cannot compel another person to enter into an agreement has already been pronounced. The question as to how far the Courts can consider in matters where the landlords are not coming forward for tenancy agreement,different views were taken in Ramesh Salunke Vs. Pramila Jain (C.R.P.No.1996 of 2021 dated 25.01.2022 and B.A.Chandrasekhara Setty Vs. Sucharita Gunasekaran (C.R.P.No.1238 of 2022 dated 10.08.2020) and already by an order in Dilip Solanki Vs. Kiran Kumari C.R.P.No.941 of 2023 dated 30.06.2023, the matter has been referred by the learned Single Judge for consideration by a Division Bench. Therefore, it is for the interpretation of the Court to implement the provisions harmoniously and no illegality whatsoever can be attributed to the provision itself. Therefore, he would submit that there is no valid ground for this Court to interfere and the provisions of the Act can be implemented and are not in derogation of the provisions of the Transfer of Property Act or the Registration Act or any other legislation for that matter.
The Questions for Consideration:
- After hearing the submissions of all the learned counsel on either side and after perusing the material records of the case, the following questions arise for consideration of this Court,
(1)Whether the legislative power of the impugned enactment in pith
and substance is traceable to Entry-18 of the State List or to Entries 6,7 and 13 of the Concurrent list?
(2) Whether the impugned enactment is repugnant to the Central
legislations viz., the Transfer of Property Act, 1882 (Act 4 of 1882); the
Specific Relief Act, 1963 (Act 37 of 1963) and the Registration Act, 1908 (Act
16 of 1908), Hindu Succession Act, 1984 etc.?
(3) Whether the provisions of the impugned enactment are
unconstitutional on the grounds of manifest arbitrariness and for violation of the fundamental rights under Articles 14, 19 and 21 of the Constitution of
India?
(4) To what other reliefs, the parties are entitled to?
Question No. 1: - It is the contention on behalf of the petitioners that the legislative
power of the State in enacting the rent control legislation would be traceable to Entries 6, 7 and 13 of the Constitution of India.
11.1. Per contra, it is the contention of Mr.P.S. Raman, learned
Advocate General that the power is traceable to Entry 18 of List – II of the Constitution of India. For ready reference, Entry 18 of List – II reads as follows:-
“18. Land, that is to say, rights in or over land,
land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.”
Entries, 6, 7 and 13 of List III reads as follows:-
“6. Transfer of property other than agricultural land;
registration of deeds and documents. - Contracts, including partnership, agency, contracts of
carriage, and other special forms of contracts, but not including contracts relating to agricultural land.
……………… ……………… - Civil procedure, including all matters included in the Code of Civil Procedure at the commencement of this Constitution, limitation and arbitration.”
11.2. Firstly, it can be seen that Entry -18 of List II relates to Land
and the further explanation is couched with the phrase ‘that is to say’ while explaining the powers under the said entry and therefore, it is difficult to bring the legislation relating to buildings under the same. The Constitution Bench of the Hon’ble Supreme Court of India in Indu Bhushan Bose’s case (cited supra) had while considering the West Bengal Premises Tenancy Act, 1956 (Act 12 of 1956) had opined that the expression ‘land tenure’ in Entry 18 of List – II would not cover the tenancy of building or of house accommodation and would only relate to vacant lands and the law governing the tenancy and leases of buildings would be within the scope of Entries 6, 7 and 13 of List – III. The relevant portion of paragraph 13 of the said Judgment is extracted hereunder:-
“13. On behalf of the appellant, reliance was placed on
some decisions of some of the High Courts in support of the
proposition that the power of Parliament under Entry 3 of List I does not extend to regulating the relationship between landlord and tenant which power vests in the State Legislature under Entry 18 of List II. The first of these cases is A.C. Patel v. Vishwanath Chada [ILR 1954 Bom 434] where the Bombay High Court was dealing with Entry 2 of List I of the Seventh Schedule to the Government of India Act, 1935 and Entry 21 of List II of that Act. The Court was concerned with the applicability of the Bombay Rent Restriction Act No. 57 of 1947 to cantonment areas. Opinion was first expressed that the Rent Restriction Act had been passed by the Provincial Legislature under Entry 21 of List II and reliance was placed on the English interpretation Act to hold that land in that entry would include buildings so as to confer jurisdiction on the Provincial Legislature to legislate in respect of house accommodation. Then, in considering the effect of Act 57 of 1947, the Court said:
“As the preamble of the Act sets out, the Act was passed with a view to the control of rents and repairs of certain premises, of rates of hotels and lodging houses, and of evictions. Therefore, the pith and substance of Act 57 of 1947, is to regulate the relation between landlord and tenant by controlling rents which the tenant has got to pay to the landlord and by controlling the right of the landlord to evict his tenant. Can it be said that when the Provincial Legislature was dealing with these relations between landlord and tenant, it was regulating house accommodation in cantonment areas? In our opinion, the regulation contemplated by Entry 2 in List I is regulation by the State or by Government. Requisitioning of property, acquiring of property allocation of property, all that would be regulation of house accommodation, but when the Legislature merely deals with relations of landlord and tenant, it is not in any way legislating with regard to house accommodation. The house accommodation remains the same, but the tenant is protected quoa his landlord.”
11.3. Though from the above, it can be seen that the Constitution Bench also added a caveat that it need not express a definite opinion in the case. It further concluded in paragraph 14 of the said Judgment as follows:-
“14. The Nagpur High Court in Kewalchand v. Dashrathlal [ILR 1956 Nag 618] proceeded on the assumption that the decision in the case of A.C. Patel v. Vishwanath Chada correctly defined the scope of Entry 2 in List I of the Seventh Schedule to the Government of India Act, and considered the narrow question whether the relationship of landlord and tenant specifically mentioned in Entry 21, in List II of that Act which covered the requirement of permission to serve a notice for eviction in regulating the relation of landlord and tenant and fell within the scope of Entry 21 in List II or in Entry 2 in List I of that Act . The Court held that it substantially fell in Entry 21 in List II and not in Entry 2 in List I. The Court did not consider it necessary to express any opinion on the question whether the expression “regulating of house accommodation” included something besides what Chagla, C.J., had said was its ambit in the case of A.C. Patel v. Vishwanath Chada, but expressed the opinion that the expression could not be stretched to include the aspect of the relation of landlord and tenant involved in that particular case. It is clear that, in that case also, a narrow interpretation of the expression “regulation of house accommodation” was accepted, because it appears that there was no detailed discussion of the full scope of that expression. Similar is the decision of the Patna High Court in Babu Jagtanand v. Sri Satyanarayanji and Lakshmiji through the Shabait and Manager Jamuna Das. [ILR 40 Pat 625] In fact, this last case merely followed the decision of the Bombay High Court in the case of F.E. Darukhanawalla v. Khemchand Lalchand. On the other hand, the Rajasthan High Court in Nawal Mal v. Nathu Lal [ILR 11 Raj 421] held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings is to be found in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and not in Entry 18 of List II, and that that power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I. That is also the view which the Calcutta High Court has taken in the judgment in appeal before us. We think that the decision given by the Calcutta High Court is correct and must be upheld.”
(Emphasis supplied)
11.4. The said view taken by the Hon’ble Supreme Court of India in
the case of Accountant and Secretarial Services Pvt Ltd’s case (cited supra) in paragraph No.5 and the Court had expressly followed the view taken in Indu Bhushan Bose’s case (cited supra) specifically in paragraph No.23 had held that the view taken by the Hon’ble Supreme Court of India in Indu Bhushan Bose’s case (cited supra) cannot be brushed aside as observations, but has to be taken as the law laid down.
11.5. More importantly, yet another Constitution Bench Judgment of
the Hon’ble Supreme Court of India in Ashoka Marketing Ltd. And Ors. Vs. Punjab National Bank and Anr. , reiterated the said view that the rent control legislations enacted by the State Legislatures would fall within the ambit of Entries 6, 7 and 13 of List III of the Seventh Schedule of the Constitution of India. It is essential to extract paragraph 46 of the Judgment, which reads as follows:-
“46. As regards rent control legislation enacted by
the State legislatures the position is well settled that such legislation falls within the ambit of Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution (See : Indu Bhushan Bose v. Rama Sundari Devi [(1969) 2 SCC 289 : (1970) 1 SCR 443] ; V. Dhanpal Chettiar case [(1979) 4 SCC 214 : (1980) 1 SCR 334] ; Jai Singh Jairam Tyagi v. Mamanchand Ratilal Agarwal [(1980) 3 SCC 162 : (1980) 3 SCR 224] and Accountant and Secretarial Services Pvt. Ltd. v. Union of India [(1988) 4 SCC 324] .”
11.6 Thus, being the position, the Constitution Bench of the Hon’ble Supreme Court of India in Rajendra Diwan’s case (cited supra) while considering the validity of Section 13 (2) of the Chhattisgarh Rent Control Act, 2011 which provided for an appeal to the Hon’ble Supreme Court of India as against the Judgment of the Rent Control Tribunal, held that Entry 18 of the State List enables the State Legislature to enact the said law. It is essential to extract the relevant paragraph Nos.42, 46, 52 and 53 thereby viewing that the
Chhattisgarh Rent Control Act, being traceable to Entry 18 of the State List.
The said paragraphs are extracted hereunder for ready reference:-
“42. Entry 18 of the State List enables the State Legislature to enact law with respect to land, including rights in and over land, land tenures including relation of landlord and tenant and the collection of rent. The State Legislature being clothed with power to enact law in respect of land tenures, including the relation of landlord and tenant and the collection of rent, it had legislative competence to enact the Rent Control Act, insofar as the same regulates the relationship of landlord and tenant and the collection of rent.
…………..
…………. - On a conjoint reading of Article 323-B and Articles 245 and 246 of the Constitution of India with Entry 18 of the State List in the Seventh Schedule, there can be no doubt that the State Legislature was competent to enact law to provide for adjudication and trial of all disputes, complaints and offences relating to tenancy and rent, by a Tribunal.
…………..
…………. - Entry 18 of the State List only enables the State Legislature to legislate with regard to landlord-tenant relationship, collection of rents, etc. This Entry does not enable the State Legislature to circumvent Entry 65 of the State List or Entry 46 of the Concurrent List which enable the State Legislature to enact laws with respect to the jurisdiction and powers of Courts, except the Supreme Court, or to render otiose, Entry 77 of the Union List, which expressly confers law-making power in respect of the jurisdiction of the Supreme Court, exclusively to Parliament.
- Entry 18 of the State List, which only enables
the State Legislature to legislate with regard to land, land tenures, landlord-tenant relationship, collection of rents, etc. does not enable the State Legislature to enact law conferring appellate jurisdiction to the Supreme Court in respect of orders passed by an Appellate Rent Control Tribunal, constituted under a State law.”
11.7 The said Judgment of the Constitution Bench of the Hon’ble Supreme Court of India was delivered on 10.12.2019. However, both the Constitution Bench Judgments in Indu Bhushan Bose’s case (cited supra) as well as Ashoka Marketing Ltd.’s case (cited supra) were not brought to the notice of the Hon’ble Supreme Court of India and was neither referred to nor taken into consideration in deciding the Rajendra Diwan’s case (cited supra).
11.8. It can be seen that the question of whether these enactments
relating to Buildings would fall under Entry 18 or Entries 6,7,13 of the Concurrent list was not a question that was considered and answered in
Rajendra Diwan. The Constitution Bench of the Hon’ble Supreme Court of India in the case of Shah Faesal and Ors. Vs. Union of India and Anr. , restated the purpose and importance of the law of precedents and elucidated the nature of a binding precedent. Paragraph 25 needs to be extracted :
“25.In this line, further enquiry requires us to
examine, to what extent does a ruling of coordinate Bench bind the subsequent Bench. A judgment of this Court can be distinguished into two parts : ratio decidendi and the obiter dictum. The ratio is the basic essence of the judgment, and the same must be understood in the context of the relevant facts of the case. The principal difference between the ratio of a case, and the obiter, has been elucidated by a three-Judge Bench decision of this Court in Union of India v. Dhanwanti Devi [Union of India v. Dhanwanti Devi, (1996) 6 SCC 44] wherein this Court held that : (SCC pp. 51-52, para 9)
“9. … It is not everything said by a
Judge while giving judgment that constitutes a precedent. The only thing in a Judge’s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. … A decision is only an authority for what it actually decides. … The concrete decision alone is binding between the parties to it, but it is the abstract ratio decidendi, ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which, when it is clear what it was, is binding. It is only the principle laid down in the judgment that is binding law under Article 141 of the Constitution.”
(emphasis supplied)
11.9 However, we must hasten to add that as far as the High Courts
are concerned, even the obiter and observations of the Hon’ble Supreme Court of India would also be binding. It is essential to extract the relevant portion in paragraph No.11 of the Judgment of the Hon’ble Supreme Court of India in Peerless General Finance & Investment Co. Ltd. v. Commissioner of
Income Tax :-
“11. ……………………… It is, therefore, incorrect to
state, as has been stated by the High Court, that the decision in Peerless General Finance & Investment Co. Ltd. [Peerless General Finance & Investment Co. Ltd. v. RBI, (1992) 2 SCC 343 : (1992) 75 Comp Case 12] must be read as not having laid down any absolute proposition of law that all receipts of subscription at the hands of the assessee for these years must be treated as capital receipts. We reiterate that though the Court’s focus was not directly on this, yet, a pronouncement by this Court, even if it cannot be strictly called the ratio decidendi of the judgment, would certainly be binding on the High
Court……………………..”
(Emphasis supplied)
11.10. When the High Court is faced with situations where there are
conflicting views in respect of the judgments of the Hon’ble Supreme Court of India of equal Bench strength, the course to be adopted by the High Court is no longer res integra. A Constitution Bench of the Hon’ble Supreme Court of India in National Insurance Co. Ltd. v. Pranay Sethi and others , more specifically, in paragraphs 15 to 19 held as under:
“15. Presently, we may refer to certain decisions
which deal with the concept of binding precedent.
- In State of Bihar v. Kalika Kuer [State of Bihar v. Kalika Kuer, (2003) 5 SCC 448] , it has been held : (SCC p. 454, para 10)
“10. … an earlier decision may seem to be incorrect to a Bench of a coordinate jurisdiction considering the question later, on the ground that a possible aspect of the matter was not considered or not raised before the court or more aspects should have been gone into by the court deciding the matter earlier but it would not be a reason to say that the decision was rendered per incuriam and liable to be ignored. The earlier judgment may seem to be not correct yet it will have the binding effect on the later Bench of coordinate jurisdiction. …”
The Court has further ruled : (SCC p. 454, para 10)
“10. … Easy course of saying that earlier decision was rendered per incuriam is not permissible and the matter will have to be resolved only in two ways — either to follow the earlier decision or refer the matter to a larger Bench to examine the issue, in case it is felt that earlier decision is not correct on merits.” - In G.L. Batra v. State of Haryana [G.L. Batra v. State of Haryana, (2014) 13 SCC 759 : (2015) 3 SCC (L&S) 575] , the Court has accepted the said principle on the basis of judgments of this Court rendered in Union of India v. Godfrey Philips India Ltd. [Union of India v. Godfrey Philips India Ltd., (1985) 4 SCC 369 :
1986 SCC (Tax) 11] , Sundarjas Kanyalal Bhatija v. Collector, Thane [Sundarjas Kanyalal Bhatija v. Collector, Thane, (1989) 3 SCC 396] and Tribhovandas Purshottamdas Thakkar v. Ratilal Motilal Patel [Tribhovandas Purshottamdas Thakkar v. Ratilal Motilal Patel, AIR
1968 SC 372] . It may be noted here that the Constitution Bench in
Madras Bar Assn. v. Union of India [Madras Bar Assn. v. Union of
India, (2015) 8 SCC 583] has clearly stated that the prior Constitution Bench judgment in Union of India v. Madras Bar Assn. [Union of India v. Madras Bar Assn., (2010) 11 SCC 1] is a binding precedent.
Be it clarified, the issues that were put to rest in the earlier Constitution Bench judgment were treated as precedents by the later Constitution Bench. - In this regard, we may refer to a passage from Jaisri Sahu v. Rajdewan Dubey [Jaisri Sahu v. Rajdewan Dubey, AIR 1962
SC 83] : (AIR p. 88, para 10)
“10. Law will be bereft of all its utility if it should be thrown into a state of uncertainty by reason of conflicting decisions, and it is therefore desirable that in case of difference of opinion, the question should be authoritatively settled. It sometimes happens that an earlier decision [Dasrath Singh v. Damri Singh, 1925 SCC OnLine Pat 242 : AIR 1927 Pat 219] given by a Bench is not brought to the notice of a Bench [Ram Asre Singh v. Ambica Lal, AIR 1929 Pat 216] hearing the same question, and a contrary decision is given without reference to the earlier decision. The question has also been discussed as to the correct procedure to be followed when two such conflicting decisions are placed before a later Bench. The practice in the Patna High Court appears to be that in those cases, the earlier decision is followed and not the later. In England the practice is, as noticed in the judgment in Gundavarupu Seshamma v. Kornepati Venkata Narasimharao [Gundavarupu Seshamma v. Kornepati Venkata Narasimharao, 1939 SCC OnLine Mad 367 : ILR 1940 Mad 454] that the decision of a Court of Appeal is considered as a general rule to be binding on it. There are exceptions to it, and one of them is thus stated in Halsbury’s Laws of England, 3rd Edn., Vol. 22, Para 1687, pp. 799-800:
‘1687. … the court is not bound to follow a decision of its own if given per incuriam. A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of a coordinate jurisdiction which covered the case before it, or when it has acted in ignorance of a decision of the House of Lords. In the former case it must decide which decision to follow, and in the latter it is bound by the decision of the House of Lords.’
In Katragadda Virayya v. Katragadda Venkata Subbayya
[Katragadda Virayya v. Katragadda Venkata Subbayya, 1955 SCC
OnLine AP 34 : AIR 1955 AP 215] it has been held by the Andhra High Court that under the circumstances aforesaid the Bench is free to adopt that view which is in accordance with justice and legal principles after taking into consideration the views expressed in the two conflicting Benches, vide also the decision of the Nagpur High Court in D.D. Bilimoria v. Central Bank of India [D.D. Bilimoria v.
Central Bank of India, 1943 SCC OnLine MP 97 : AIR 1943 Nag 340] . The better course would be for the Bench hearing the case to refer the matter to a Full Bench in view of the conflicting authorities without taking upon itself to decide whether it should follow the one Bench decision or the other. We have no doubt that when such situations arise, the Bench hearing cases would refer the matter for the decision of a Full Court.” - Though the aforesaid was articulated in the context of
the High Court, yet this Court has been following the same as is revealed from the aforestated pronouncements including that of the Constitution Bench and, therefore, we entirely agree with the said view because it is the precise warrant of respecting a precedent which is the fundamental norm of judicial discipline.”
11.11 The Hon’ble Supreme Court of India, in the latest judgment of
the Union Territory of Ladakh and others Vs. Jammu & Kashmir National Conference and another36, had reiterated the same position and it is essential to extract paragraph 35, which reads as follows:
“35. We are seeing before us judgments and orders
by High Courts not deciding cases on the ground that the leading judgment of this Court on this subject is either referred to a larger Bench or a review petition relating thereto is pending. We have also come across examples of High Courts refusing deference to judgments of this Court on the score that a later Coordinate Bench has doubted its correctness. In this regard, we lay down the position in law. We make it absolutely clear that the High Courts will proceed to decide matters on the basis of the law as it stands. It is not open, unless specifically directed by this Court, to await an outcome of a reference or a review petition, as the case may be. It is also not open to a High Court to refuse to follow a judgment by stating that it has been doubted by a later Coordinate Bench. In any case, when faced with conflicting judgments by Benches of equal strength of this
36 2023 SCC OnLine SC 1140
Court, it is the earlier one which is to be followed by the High Courts, as held by a 5-Judge Bench in National Insurance
Company Limited v. Pranay Sethi, (2017) 16 SCC 6805. The High Courts, of course, will do so with careful regard to the facts and circumstances of the case before it.
(emphasis supplied)”
11.12 Thus the High Courts have to carefully consider the facts and
circumstances of the case and follow the view taken by the earlier Bench. Upon considering the instant situation where we are called upon to consider the source of legislative power, we deem it appropriate to follow the dictum laid down in Ashoka Marketing’s case (cited Supra).
11.13. We are further enjoined to take such a view as the recent
three-judge Bench of the Hon’ble Supreme Court of India in Ram Krishan Grover’s case (cited supra) and in paragraph No.28 reiterated the position taken in Ashoka Marketing’s case (cited supra) that the powers would traceable only to Entries 6, 7 and 13 of the Concurrent List and the expression ‘land’ in Entry 18 cannot be read to mean the building and housing within its ambit and the relevant paragraph No.28 is extracted as under:-
“28. In Accountant & Secretarial Services (P) Ltd. v. Union of India [Accountant & Secretarial Services (P) Ltd. v. Union of India, (1988) 4 SCC 324] , this Court had examined the question of repugnancy and interplay between the Central enactment viz. the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 based on the pattern of the West Bengal Public Land (Eviction of Unauthorised Occupants) Act, 1962 and the West Bengal Premises Tenancy Act, 1956 and the question which of these enactments would prevail. The Court had interpreted Entries 3, 32, 43 and 44 of List I, Entry 18 of List II and Entries 5, 6 and 7 of the List III and the corresponding entries in the Government of India Act, 1935 to hold that all the three legislations were passed in exercise of powers conferred with respect to matters contained in the Concurrent List. In view of the repugnancy and conflict between the Central enactment on one hand and the State law on the other, in terms of Article 254, the Central enactment shall prevail. Further, notwithstanding the earlier precedents, the Court had examined the question of the relevant entry applicable to the tenancy legislation and rejected the contention that Entry 18 of List II should be interpreted as encompassing within its ambit legislation on the relationship of landlord and tenant in regard to housing and buildings. Setting out several reasons it was observed that the power to legislate in respect of tenanted premises would fall within the ambit and scope of Entries 6, 7 and 13 of the Concurrent List and would not be referable to Entry 18 of List II. The expression “land” in Entry 18 of List II should be given as wide a construction as possible, but has to be read with the relevant entries in other Lists to give meaning and content to all of them. Inclusion of buildings and housing in the Concurrent List is appropriate and to place buildings and housing within the ambit of the expression “land” in Entry 18 of List II would denude other entries in Lists I and III concerning transfer of property, devolution and succession of land and buildings, etc. of their vigour and would render them otiose.”
11.14. Thus, we answer the question that the legislative power of the
state in enacting the impugned legislation, in pith and substance, is traceable to Entries 6,7 and 13 of List-III of the Seventh Schedule of the Constitution of
India.
Question No. 2:
- The main ground of attack of the impugned enactment is that its
provisions are repugnant to the provisions of the Central enactments, viz., the Transfer of Property Act, 1882 (Act 4 of 1882); the Specific Relief Act, 1963 (Act 37 of 1963); the Registration Act, 1908 (Act 16 of 1908) and the personnel who are relating to Hindu Succession Act, Indian Succession Act,
etc..
12.1. Though conflicting arguments were advanced at the Bar
relating to law of repugnancy, whether it would attract even if the legislation is in the state list and whether it should be the concurrent list in general or to the particular entry in the concurrent list, according to us, the law in this regard has clearly been laid down by the Hon’ble Supreme Court of India. In this regard, it would be appropriate to first advert to the Constitution Bench Judgment of the Hon’ble Supreme Court of India in M.Karunanidhi’s case
(cited supra) and the relevant portion reads as follows:-
“8. It would be seen that so far as clause (1) of Article 254 is concerned it clearly lays down that where there is a direct collision between a provision of a law made by the State and that made by Parliament with respect to one of the matters enumerated in the Concurrent List, then, subject to the pro- visions of clause (2), the State law would be void to the extent of the repugnancy. This naturally means that where both the State and Parliament occupy the field contemplated by the Concurrent List then the Act passed by Parliament being prior in point of time will prevail and consequently the State Act will have to yield to the Central Act. In fact, the scheme of the Constitution is a scientific and equitable distribution of legislative powers between Parliament and the State Legislatures. First, regarding the matters contained in List I, i.e. the Union List to the Seventh Schedule, Parliament alone is empowered to legislate and the State Legislatures have no authority to make any law in respect of the Entries contained in List I. Secondly, so far as the Concurrent List is concerned, both Parliament and the State Legislatures are entitled to legislate in regard to any of the Entries appearing therein, but that is subject to the condition laid down by Article 254(1) discussed above. Thirdly, so far as the matters in List II, i.e. the State List are concerned, the State Legislatures alone are competent to legislate on them and only under certain conditions Parliament can do so. It is, therefore, obvious that in such matters repugnancy may result from the following circumstances: - Where the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.
- Where however a law passed by the State comes into collision with a law passed by Parliament on an Entry in the Concurrent List, the State Act shall prevail to the extent of the repugnancy and the provisions of the Central Act would become void provided the State Act has been passed in accordance with clause (2) of Article 254.
- Where a law passed by the State Legislature while being substantially within the scope of the entries in the State List entrenches upon any of the Entries in the Central List the constitutionality of the law may be upheld by invoking the doctrine of pith and substance if on an analysis of the provisions of the Act it appears that by and large the law falls within the four corners of the State List and entrenchment, if any, is purely incidental or inconsequential.
- Where, however, a law made by the State
Legislature on a subject covered by the Concurrent List is inconsistent with and repugnant to a previous law made by
Parliament, then such a law can be protected by obtaining the assent of the President under Article 254(2) of the Constitution. The result of obtaining the assent of the President would be that so far as the State Act is concerned, it will prevail in the State and overrule the provisions of the Central Act in their applicability to the State only. Such a state of affairs will exist only until Parliament may at any time make a law adding to, or amending, varying or repealing the law made by the State Legislature under the proviso to Article 254.”
12.2. The Hon’ble Supreme Court of India in Forum for People’s Collective Efforts case (cited supra) had exhaustively considered and restated the entire law relating to the doctrine of repugnancy under Article 254 (1) of the Constitution of India. The constitutional scheme of Article 254 and repugnancy is considered from paragraph No.113 onwards. All the earlier
Judgments of the Hon’ble Supreme Court of India, starting from, Zaverbhai
Amaidas v. State of Bombay , Mar Appraem Kuri Co.Ltd.’s case (cited supra) and M.Karunanidhi’s case (cited supra) are analysed and it is held that the law made by the legislature of a State can be considered to be repugnant, to a provision of law made by the Parliament, concerning the matters in the Concurrent List which the Parliament is competent to enact. For ready reference paragraph No.131 of the Judgment is extracted hereunder:-
“131. Our journey of tracing the precedents of this Court, commencing from Zaverbhai [Zaverbhai Amaidas v. State of Bombay, (1955) 1 SCR 799 : AIR 1954 SC 752 : 1954 Cri LJ 1822] up until Innoventive Industries [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] indicates a thread of thought dwelling on when, within the meaning of Article 254(1), a law made by the legislature of a State can be considered to be repugnant to a provision of a law made by Parliament with respect to one of the matters in the Concurrent List which Parliament is competent to enact. The doctrine of repugnancy under Article 254(1) operates within the fold of the Concurrent List. Clause (1) of Article 254 envisages that the law enacted by Parliament will prevail and the law made by the legislature of the State shall be void “to the extent of repugnancy”. Clause (1) does not define what is meant by repugnancy. The initial words of Clause (1) indicate that the provision deals with a repugnancy between a law enacted by the State Legislature with:
(i) a provision of a law made by Parliament which it
is competent to enact; or
(ii) to any provision of an existing law; and
(iii) with respect to one of the matters enumerated in
the Concurrent List.”
12.3. Thereafter, the Hon’ble Supreme Court of India proceeded to
elucidate what constitutes repugnancy and encapsulated the three tests for repugnancy in paragraphs Nos.132.1, 132.2 and 132.3, the same are extracted hereunder:-
“132.1. The first envisages a situation of an absolute
or irreconcilable conflict or inconsistency between a provision contained in a State legislative enactment with a parliamentary law with reference to a matter in the Concurrent List. Such a conflict brings both the statutes into a state of direct collision. This may arise, for instance, where the two statutes adopt norms or standards of behaviour or provide consequences for breach which stand opposed in direct and immediate terms. The conflict arises because it is impossible to comply with one of the two statutes without disobeying the other.
132.2. The second situation involving a conflict
between State and Central legislations may arise in a situation where Parliament has evinced an intent to occupy the whole field. The notion of occupying a field emerges when a parliamentary legislation is so complete and exhaustive as a Code as to preclude the existence of any other legislation by the State. The State law in this context has to give way to a parliamentary enactment not because of an actual conflict with the absolute terms of a parliamentary law but because the nature of the legislation enacted by Parliament is such as to constitute a complete and exhaustive Code on the subject.
132.3. The third test of repugnancy is where the law
enacted by Parliament and by the State Legislature regulate the same subject. In such a case, the repugnancy does not arise because of a conflict between the fields covered by the two enactments but because the subject which is sought to be covered by the State legislation is identical to and overlaps with the Central legislation on the subject.”
12.4. Thereafter, the Hon’ble Supreme Court of India also laid down
the approach of the Court in the matter of application of the concept of repugnancy and resolving the conflict thereon. It is essential to extract entire paragraph No.133, which reads as follows:-
“The distinction between the first test on the one hand
with the second and third tests on the other lies in the fact that the first is grounded in an irreconcilable conflict between the provisions of the two statutes each of which operates in the Concurrent List. The conflict between the two statutes gives rise to a repugnancy, the consequence of which is that the State legislation will be void to the extent of the repugnancy. The expression “to the extent of the repugnancy” postulates that those elements or portions of the State law which run into conflict with the Central legislation shall be excised on the ground that they are void. The second and third tests, on the other hand, are not grounded in a conflict borne out of a comparative evaluation of the text of the two provisions. Where a law enacted by Parliament is an exhaustive code, the second test may come into being. The intent of Parliament in enacting an exhaustive code on a subject in the Concurrent List may well be to promote uniformity and standardisation of its legislative scheme as a matter of public interest. Parliament in a given case may intend to secure the protection of vital interests which require a uniformity of law and a consistency of its application all over the country. A uniform national legislation is considered necessary by Parliament in many cases to prevent vulnerabilities of a segment of society being exploited by an asymmetry of information and unequal power in a societal context. The exhaustive nature of the parliamentary code is then an indicator of the exercise of the State’s power to legislate being repugnant on the same subject. The third test of repugnancy may arise where both Parliament and the State legislation cover the same subject-matter. Allowing the exercise of power over the same subject-matter would trigger the application of the concept of repugnancy. This may implicate the doctrine of implied repeal in that the State legislation cannot coexist with a legislation enacted by Parliament. But even here if the legislation by the State covers distinct subject-matters, no repugnancy would exist. In deciding whether a case of repugnancy arises on the application of the second and third tests, both the text and the context of the parliamentary legislation have to be borne in mind. The nature of the subject-matter which is legislated upon, the purpose of the legislation, the rights which are sought to be protected, the legislative history and the nature and ambit of the statutory provisions are among the factors that provide guidance in the exercise of judicial review. The text of the statute would indicate whether Parliament contemplated the existence of State legislation on the subject within the ambit of the Concurrent List. Often times, a legislative draftsperson may utilise either of both of two legislative techniques. The draftsperson may provide that the parliamentary law shall have overriding force and effect notwithstanding anything to the contrary contained in any other law for the time being in force. Such a provision is indicative of a parliamentary intent to override anything inconsistent or in conflict with its provisions. The parliamentary legislation may also stipulate that its provisions are in addition to and not in derogation of other laws. Those other laws may be specifically referred to by name, in which event this is an indication that the operation of those specifically named laws is not to be affected. Such a legislative device is often adopted by Parliament by saving the operation of other parliamentary legislation which is specifically named. When such a provision is utilised, it is an indicator of Parliament intending to allow the specific legislation which is enlisted or enumerated to exist unaffected by a subsequent law. Alternatively, Parliament may provide that its legislation shall be in addition to and not in derogation of other laws or of remedies, without specifically elucidating specifically any other legislation. In such cases where the competent legislation has been enacted by the same legislature, techniques such as a harmonious construction can be resorted to in order to ensure that the operation of both the statutes can coexist. Where, however, the competing statutes are not of the same legislature, it then becomes necessary to apply the concept of repugnancy, bearing in mind the intent of Parliament. The primary effort in the exercise of judicial review must be an endeavour to harmonise. Repugnancy in other words is not an option of first choice but something which can be drawn where a clear case based on the application of one of the three tests arises for determination.”
12.5. Thus, it can be seen that to be repugnant, any one of the threetests stipulated should be satisfied and efforts should be made to harmonise the construction to ensure the operation of both the statutes and only if the primary effort fails, declaring the law as being repugnant would arise.
12.6. Thus, it can be seen that to hold the State Legislation as
repugnant to Central Legislation,
(i) The legislative power of both the legislations in pith and substance
should be traceable to the Entries in the Concurrent List III of the Seventh Schedule of the Constitution of India;
(ii) Repugnancy shall be determined by applying the three tests as
encapsulated in Forum for People’s Collective Efforts(Cited Supra);
(iii) There must be irreconcilable conflict so that it is impracticable to
implement both the legislations and the primary approach of the Court should be to reconcile and harmonise;
(iv) If there is the assent of the President of India, the State Law
would prevail in respect of the application to the particular state;
(v) In the absence of the assent of the Hon’ble President of India, to
the extent it is repugnant, the State Legislation would be void.
Overview of the Act:
- It is essential to have an overview of the Act before adverting to
the various aspects of repugnancy as pointed out on behalf of the petitioners. We have already extracted the Statement of Objects and Reasons supra. It can be seen that the impugned enactment is to establish the framework for the regulation of rent, to balance the rights and liabilities of the landlords and tenants and to provide a fast adjudication process for resolution of disputes. The Act was originally extended to all urban areas of the State of Tamil Nadu, thereby to all Municipal Corporations, Municipalities, Town Panchayats and Cantonment Boards. Subsequently, it has been extended to all Villages vide
G.O.Ms.No.28 dated 04.02.2021. The Act is in respect of tenancies of “premises” i.e., any building or part of the building, which is let out for residential or commercial purposes, including gardens, houses, out-houses appertaining the building and any fitting to the building which is for the beneficial enjoyment, but not including Hotels, Lodging house, Dharmashalas,
Inns etc.. The premises registered under the Factories Act are also excluded. The Act is further not applicable in respect of the premises owned or promoted by the Central or State Government or local authority or a Government Undertaking of Enterprise or a Statutory Body or Cantonment Board. The Act is also not applicable to the premises owned by a Company, University or Organisation given on rent to its employees as part of a service contract. It is not applicable for the premises owned by religious or charitable trusts that may be specified by the Government by a notification. It does not applyto the premises owned by Waqf or any Trust registered under the Indian Trusts Act. This apart, the Act will not apply to any building or any category of building specifically exempted in the public interest by the Government by a Notification.
13.1 Chapter II of the Act deals with ‘Tenancy’. Section 4 mandates
that after the commencement of the Act, no person shall let or take on rent any premises except by an agreement in writing. In respect of tenancies created before the coming into force of the Act, the agreement shall be entered into within 575 days from the date of commencement of the Act. Such agreement is to be registered with the Rent Authority by making an application. The Rent Authority shall register the agreement within a period of 30 days and provide a registration number. The Rent Authority is also entitled to reject the application if the same does not confirm the provisions of the Act or the Rules made thereunder. The details of the premises, tenure of tenancy and the details of the parties will be notified in the website to be maintained by the Rent Authority for the said purposes. Section 4 A of the Act declares that if the agreement or document which is required to be registered under Section 4 (3) of the Act is not registered, then the same shall not affect any immovable property comprised therein or confer any power to adopt or be received in evidence in any transaction affecting such property or conferring any right. As per Section 5, all tenancies entered into shall be for the period as agreed between the landlord and tenant, as specified in the tenancy agreement. Before the end of the tenancy period, the tenant has to approach the landlord for renewal or extension of the tenancy. If the tenancy has not been renewed and the premises have not been vacated and the landlord has not demanded possession of the vacant premises at the end of such tenancy, the tenancy shall be deemed to be renewed on a month–to–month basis, on the same terms and conditions, for a maximum period of six months.
13.2 Section 6 provides for the inheritability of tenancy.In the event
of death of a tenant, the tenancies of residential and non-residential premises shall devolve for the remaining period of tenancy to his successors in interest, in the order, firstly, on the spouse; secondly, sons, daughters or daughters-inlaw being the widow of a pre-deceased son; thirdly, either or both of the surviving parents, provided that the successor had been ordinarily living or working in the premises with the deceased tenant upto his death.
13.3 Section 7 imposes an embargo on the tenant to sub-let whole or
part of the premises held by him as a tenant or to transfer or assign his rights in the tenancy agreement, except by entering into a supplementary agreement to the existing tenancy agreement. The parties are also duty-bound to inform the Rent Authority about the sub-tenancy within two months from the date of execution of such supplementary agreement.
13.4 Chapter – III of the Act deals with the Rent. Section 8 postulates
the rent payable at the commencement of the tenancy. In case of tenancies entered into, before the commencement of the Act, the rent may be agreed by them by way of an agreement shall be executed under Section 4 (2) of the Act. Section 9 states that the revision of rent shall be as per the terms agreed by the landlord and tenant. It further enjoins the landlord to give a notice in writing, three months before the revised rent becomes due. If the tenant, who has been given notice of an intended increase of rent, fails to issue a termination notice and remains silent, the tenant shall deemed to acceptwhatever rent as proposed by the landlord. The rent cannot be increased during the currency of the tenancy period if the rent is already fixed for the term or it can only be how the rent increase is provided in the tenancy agreement. The landlord can also increase the rent as agreed by the tenant, whenever he increases or expands the structure of the building on account of addition or structural alteration in the premises. Section 10 also enables the Rent Authority to fix or revise the rent as agreed by the parties in the tenancy agreement and also fix the date on which the revision of rent is payable. Section 11 declares that only three times of monthly rent can be charged as a security deposit and the same shall be refunded, at the time of taking over the possession, after making due deductions of any liabilities from the tenant, if there is no agreement to the contrary.
13.5 Chapter – IV of the Act deals with the obligations of the
landlord and tenant. Section 12 mandates the landlord to give the original signed and registered tenancy agreement to the tenant, within 15 days of the agreement being registered with the Rent Authority. Section 13 mandates that the tenant shall pay the rent and other charges within a stipulated time and the landlord is duty-bound to issue a written receipt for the amount paid by him and whenever the tenant has paid the rent or other charges through an electronic medium, the bank acknowledgement shall be considered as proof of payment. Section 14 prescribes the procedure for deposit of the rent with the Rent Authority. If the landlord refuses to receive the rent, the same shall be sent by postal money order or any other method as may be prescribed and even for a consecutive period of two months, if the landlord does not accept the same, the tenant is entitled to deposit the same before the Court. Even if there is bona fide doubt about to whom the rent is payable, the tenant can deposit the rent with the Rent Authority. Upon such deposit, the Rent Authority shall investigate the case and pass orders based on the facts of the case. The withdrawal of the rent and other charges deposited under this section will not operate as an admission against the person withdrawing it to the correctness of rent or any other facts stated by the tenant.
13.6 Section 15 of the Act deals with the repair and maintenance of
property. Both the landlord and tenant are bound to keep the premises in good condition and are responsible for the respective repairs and maintenance as specified in the Second Schedule. The common facilities shared with the other tenants or with the landlord shall be specified in the tenancy agreement. The consequences of refusal to carryout the scheduled repairs and the premises being uninhabitable due to an event of force majeure are provided. Section 16 provides the duties of the tenant to look after the premises. Section 17 provides for the details as to the landlord entering the property with due notice. Section 18 provides for information about the property manager and Section 19 provides for the duties of the property manager and consequences of violation of duties.
13.7 Section 20 provides that both the landlord and tenant shall not
cut off or withhold the supply of essential services in the premises in contravention of the rules. The parties are entitled to approach the Rent Authority who in turn will conduct the enquiry and pass orders, which would include levying of penalty. The essential services include the supply of water, electricity, lights in passages, lifts and staircases, conservancy, parking, communication links, sanitary services etc..
13.8 Chapter – V deals with the repossession of the premises by the
landlord. Section 21 (1) mandates that the tenant shall not be evicted during the continuance of tenancy except following the provisions of sub-section (2).
On application to Rent Court, the Rent Court is entitled to make an order for recovery of possession of the premises on one or more of the grounds mentioned in Section 21 (2) of the Act. If the landlord and tenant failed to enter into an agreement under sub-section (2) of Section 4; if the tenant has not paid the arrears of rent payable and other charges payable as specified under subsection (1) of Section 13 for two months, including interest for delayed payment as may be specified in the tenancy agreement or as the case may be within one month for the arrears of such rent. But, if the tenant makes the payment to the landlord or deposits in the Rent Courtall arrears of rent including interest within one month from the date of notice, then the tenant will not be vacated on the ground of default. Such relief of payment within one month will not be available for the second time. If the tenant has parted with the possession of whole or part of the premises without obtaining the written consent of the landlord he can be evicted.If the tenant continues to misuse the premises even after receipt of notice from the landlord to stop such misuse or the landlord requires the premises for carrying out repairs or building or rebuilding or additions or alterations or demolition, etc., which cannot be carried out, without the premises being vacated or if the landlord requires the building for carrying out any repairs, building etc., for change of use, consequent to the change of land use by the competent authority or that the tenant has given a written notice to quit and in consequence of that notice, the landlord has contracted to sell the accommodation or taken any other step as a result of which, his interest would seriously suffer or that the tenant has not agreed to pay the rent payable under Section 8 or the tenant has carried out any structural change and erected any permanent structure and let the premises on rent without the written consent of the landlord, the tenant is liable to be evicted.
13.9 Section 22 prescribes that in the event of the death of the
landlord, if there is a bonafide requirement of premises let out on rent by the legal heirs of the landlord during the period of tenancy, such legal heirs may file an application in this behalf, for eviction and recovery of possession of the said premises before the Rent Court in such Form and manner. Section 23 provides that the landlord is entitled to compensation of double the monthly rent for the use and occupation of premises by the tenant, who does not vacate the unit after his tenancy has been terminated by the order, notice or agreement, as the case may be.
13.10 Section 24 provides that the landlord refunds the advance to
the tenant before the recovery of possession and incase of any default, the landlord is also liable to pay interest. Section 25 states that the tenants can only contest the claim for eviction before the Rent Court if only he pays to the landlord,the rent payable under Section 8 except where the eviction is sought under Clause (a) or (b) of the sub-section (2) of Section 21. Section 26 also empowers the Rent Court to permit the landlord to build additional structures, if the same is not permitted by the tenant. Similarly, under Section 27, if any vacant premises are also appurtenant to the tenanted premises and if the landlord is willing to put up any construction as per law, the Rent Court upon finding that such vacant land is separable from the tenanted premises, direct such severance and put the landlord in possession and also determine the rent payable by the tenant in respect of rest of the premises and shall make such other order in the circumstances of the case. Section 28 makes the order of the Rent Court, ordering recovery of possession binding on all the occupants, who may be in occupation of the premises and vacant possession thereof shall be given to the landlord. Section 29 provides that the tenant shall give one month’s notice in the absence of any stipulation if it wants to surrender possession of the premises.
13.11 Chapter – VI deals with the appointment of rent authorities
and their powers and functions. Section 30 states that the Collector, with the prior approval of the Government, to appoint an officer, not below the rank of the Deputy Collector to be the Rent Authority for the area within his jurisdiction to which this Act applies. Section 31 states that the Rent Authority shall have the same powers as vested in the Rent Court, in any proceeding under Sections.9, 10, 14, 15, 19 or 20 of the Act and the procedure laid in Sections 36 and 39 of the Act shall apply in such applications.
13.12 Chapter – VII deals with Rent Courts and Rent Tribunals. Section 32 provides that the Government may by notification, constitute such number of Rent Courts in as many areas. It can also re-designate the Rent Courts for the present Act. The Rent Court shall be headed by a Presiding
Officer appointed in consultation with the High Court. Only members of the State Judicial Service are entitled to be Presiding Officers of the Rent Court. An appeal against the order of the Rent Authority made under the Act will also lie to the Rent Court under Section 33 of the Act. Section 34 provides that only the
Rent Court alone and no Civil Court will have the jurisdiction to hear and decide the applications relating to the disputes between the landlord and tenant and matters connected therewith and ancillary thereto under the Act. It is further provided that in deciding such applications, relating to tenancies and premises, due regard to be given to the provisions of the Transfer of Property Act, the Indian Contract Act or any other substantive law applicable, had the dispute been brought before a Civil Court by way of suit. Section 35 states that the Government, by notification, constitute such number of Rent Tribunals. The Rent Tribunal may consider one or more Benches with each Bench headed by a member. The Government shall appoint the members of the Rent Tribunal in consultation with the High Court. Only persons belonging to State Higher Judicial Services are eligible to be appointed as an Appellate Member of the
Rent Tribunal. Section 36 elaborates the procedure to be followed by the Rent Court and the Rent Tribunal regarding the applications/appeals which shall be filed before them. Section 37 provides the powers of the Rent Court and Rent Tribunal including the powers of the Civil Court under the Code of Civil Procedure, 1908, in respect of the matters enumerated therein, including setting aside exparte orders, examination of witnesses on oath, execution of orders, review of orders etc.. Section 38 provides an appeal remedy before the Rent Tribunal and the procedure to be followed by the Rent Tribunal. Section 39 provides for the execution of the order by the Rent Court and the manner of execution by an Advocate Commissioner or other officers of the Rent Court is provided.
13.13 Chapter – VIII contains the miscellaneous provisions. Section 40 bars the jurisdiction of the Civil Court. Section 41 provides the Court fees and makes the provisions of the Tamil Nadu Court-fees and suits Valuation Act, 1955, applicable and states that the applications and appeals be treated as suits between the landlord and tenant for computation of Court fees. Section 42 declares that the members of the Rent Court, Rent Tribunal and Rent Authority as public servants. Section 43 provides that the Government in consultation with the Rent Court and Rent Tribunal, appoint such officers and employees necessary for the discharge of the functions under the Act. Section 44 states about the protection of action taken in good faith. Section 45 enables the Government to frame rules for carrying out the purposes of the Act. Section 46 enables the Government to do such things, which may be necessary or expedient for removing the difficulties under the Act. Section 47 repeals the existing Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 and the proceedings initiated under the Act are to be continued under the present Act.
13.14 The Act contains the application for registration in the first schedule, the second schedule contains the division of maintenance responsibility between the landlord and the tenants, and the third schedule contains the special category of landlords specified in Section 22 (1) of the Act. Thus, it can be seen that broadly the Act defines ‘tenancy’ and‘premises’ in respect of which the Act would be applicable. Secondly, deals with the rent payable which is essentially contractual. Thirdly, it delineates the rights and responsibilities of the landlords and tenants and more importantly, it provides a mechanism for redressal of the disputes between the landlords and tenants.
Transfer of Property Act, 1882 - The Transfer of Property Act is a pre-constitutional Legislation
enacted in the year 1882. It outlines the legal framework for the transfer of property in India. The Act governs the transfer of property inter vivos i.e., between living persons. The Act covers the transfer of both movable and immovable property. It primarily focuses on the transfer of immovable property and the key provisions of the Act deal with the sale, lease mortgage, gift and exchange of property. It lays down the general principles of property transfer including the rights and liabilities of the parties involved in the transaction. It establishes principles such as part performance, the doctrine of election, lis pendens etc.. Adverting to the question of hand, as the tenancy of buildings covered by the impugned enactment is nothing but a lease, it is contended that the Transfer of Property Act, 1882 occupies the field and is a comprehensive legislation.
14.1 Chapter – V of the Act deals with leases. Section 105 defines
lease. Section 106 lays down the duration of the lease, in the absence of a written contract or local usage. Section 106 starts with the phrase ‘In the absence of a contract or a local law or usage to the contrary..’. Section 107 lays down how the leases are to be made. It states that a lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent can be made only by a registered instrument. It further lays down that all other leases can be made only by a registered instrument or by an oral agreement which is accompanied by delivery of possession. Section 108 lays down the rights and responsibilities of the lessor and lessee. Section 108 also starts with the phrase ‘In the absence of a contract or local usage to the contrary…’. Section 109 deals with the rights of the transferee of the lessor, Section 110 is regarding the exclusion of the day on which the term commences. Section 111 lays down the determination of the lease by efflux of time, etc. Sections 112 and 113 deal with waiver of forfeiture and waiver of notice to quit concerning Section 111. Section 114 enables the Civil Courts to grant relief against forfeiture for non-payment of rent and Section 114A is regarding grant of relief against forfeiture in certain other cases. Section 115 deals with the effect of surrender and forfeiture on under leases. 116 of the Act lays down the effect of holding over. Section 117 enables the State Government by a notification to exempt the leases for agricultural purposes subject to any local law for the time being in force.
14.2 Thus, it can be seen that if one were to advert to the first test of
absolute or irreconcilable conflict and inconsistency, it can be seen that there is no conflict as far as the definition of a lease is concerned. Section 106 applies only in the absence of a contract or local law. As regards the rights and liabilities mentioned under Section 108, if the rights and liabilities of the lessor and lessee prescribed are compared with those of the rights and liabilities which are prescribed by the impugned enactment, it cannot be said that they are irreconcilable or inconsistent. There are minor variations between the two enactments as to the rights and liabilities of the landlord and tenant.
14.3 Similarly, a perusal of the other provisions regarding the
determination of lease, forfeiture, surrender, holding over etc.,it can be seen that both the legislations are not at all at loggerheads. The variations in the procedure are only to provide a speedy remedy to both sides. Much emphasis is made to Section 107 of the Act, whereby it is argued that there can be oral leases also upto the period of one year, whereas, Section 4 makes it mandatory, but the same should be by a written agreement. In our opinion, Sections 4 and 4A have to be read purposively. The agreements have to be presented before the authority to have a record of tenancy for the purpose of providing speedy remedy. Unless it is in writing, it cannot be presented before the authority. The impugned enactment purports to relate to tenancies and provides for remedies for both the tenants and the landlords in respect of disputes. Even under Section 107, leases of less than a year can also be made as a registered instrument and thus, it can be seen that the impugned enactment only restricts the rights of the landlords and tenants, in respect of the tenancies to which the Act applies. Section 107 of the Transfer of Property Act deals with the registration or otherwise under the Registration Act, 1908. Whereas the ‘the agreement in writing’ and ‘registration’ contemplated under the impugned enactment is before the Rent Authority and therefore, this provision is only in addition to and not in derogation of Section 107 and thus, we see no irreconcilable conflict between the two. The other variations as to the nature of remedy, and mode of determination of lease also fall in the same line of reasoning and therefore, upon application of the first test of direct conflict, we do not see any repugnancy.
14.4 The second situation of the parliamentary legislation occupying
the whole field also does not arise as we have already quoted the phrase with which Sections 106 and 108 etc., start, which specifically makes the provisions itself subject to written contract which is otherwise or a local law.Therefore, it is clear that the Central legislation that does not intend to occupy the whole field. Now, coming to the third test of repugnancy whether the field covered by the State Legislation is identical and overlaps with the Central Legislation is concerned, the Transfer of Property Act applies to leases in general and lays down the substantial law which would govern the rights of parties in the absence of a written contract. The entire area of operation of the impugned legislation is to enforce the contractual regime/written contract between the landlords and tenants. The Central Legislation does not prescribe any procedural remedy whereas the primary thrust or field of occupation of the impugned legislation is to provide remedies to the aggrieved parties.
14.5 A perusal of Section 34 of the impugned enactment, clearly
stipulates that the jurisdiction of the Rent Control Court will only be limited to the tenancy agreement submitted as per First Schedule and the question of title and ownership of premises will be beyond its jurisdiction. Similarly, under Section 40, the jurisdiction of the Civil Court is barred in respect of the matters which fall within the Rent Court. Thus, there is no overlap as to the field of operation. Thus, there is no conflict even when applying the third test.
14.6 Section 34 (2) of the impugned enactment expressly provides
that in deciding applications relating to tenancies and premises, the Rent Court should give due regard to the provisions of the Transfer of Property Act, Indian Contract Act or any other substantive law, applicable to such matter in the same manner as if the matter is before the Civil Court. Thus, it can be seen that the substantive law as contained in Chapter – V of the Transfer of Property Act would still be applicable. The majority of the provisions, under the impugned enactment, relate to the procedure of registering the agreement with the Rent Authority, collection of rent, provisions for depositing rent into Court, providing essential mandates and for getting vacant possession etc. Therefore, on closer scrutiny, none of the provisions of the impugned enactment overlap or supplants the Transfer of Property Act. The conflict thatis pointed out is superficial and on a harmonious construction, it can be ensured that both statutes can be operated and can co-exist. There is no need to violate any of the provisions of the Transfer of Property Act to implement the impugned enactment. Therefore, we hold that the provisions of the impugned enactment are not repugnant to that of the provisions of the Transfer of Property Act.
The Registration Act, 1908: - As far as the Registration Act, 1908 is concerned, it is a
comprehensive legal framework that governs the registration of various documents in India. It aims to ensure the authenticity and reliability of such documents, particularly those related to immovable property. The Act creates an establishment of Registration Authority including the Inspector General of Registration and Registrars and Sub-Registrars for managing registrations district-wise. It provides for compulsory registration of certain documents, especially those related to the transfer of immovable property. The same is to validate the documents legally and ensure that they are public records.
15.1 The Registration Act also provides for optional registration of
certain documents. The Act lays down detailed procedures in respect thereof. While considering the arguments relating to the repugnancy of the impugned enactment with the Registration Act, it can be seen that the impugned enactment does not in any manner deal with the registration before the Registrar and the Sub-Registrars under the Act. It does not deal with or meddle with in any manner, the compulsory registration of the documents or its procedure and the duty payable etc. It only provides that such registered documents be also placed before the Rent Authority, to maintain the record of tenancy. The purpose is to provide a speedy remedy under the Act. There is no conflict, as the field of operation is neither identical nor overlaps. It can be seen that the Registration before the Rent Authority under Section 4 and the consequences provided thereof under Section 4-A exceed the purpose for which the provisions were introduced and read as if they are general in nature. To read the provisions harmoniously alongside the Central Enactments of Transfer of Property Act and the Registration Act, it is necessary to read down the provisions restricting its scope only in respect of the impugned enactment alone and their applicability only concerning Rent Authority/Rent Court/Rent Tribunal alone. We do so accordingly.
15.2. Section 4 (1) opens with the phrase “Notwithstanding anything
contained in this Act or any other law for the time being in force” is read down to mean “For the purposes of this Act” and the same would control the rest of the provisions in Section 4. Similarly Section 4-A which opens up as “No document required to be registered under sub-section (3) of Section 4 shall, unless it has been registered ..” is read down to mean as “ For the purposes of this Act, no document required to be registered under subsection (3) of Section 4, shall, unless it has been registered,-…”. As a matter of fact even though the term ‘Registration’ is used, it is in the sense of the term ‘presentation’ before the authority for the purposes of upkeep of the tenancy record and providing remedy under the Act. Once the said provisions are read down, there would be no conflict whatsoever.
15.3 Similarly, contentions were also raised in respect of Section 5 (3) of the impugned enactment. Sections 5 (1) and 5 (3) provide for situations as to when the tenant should get evicted. In effect it provides deadlines for the tenants to vacate the premises. Section 5 (3) only limits the time for holding over for a period of six months, thereby enabling/granting an additional option, the landlord to approach the Rent Court and seek eviction, even if he had chosen to receive the rents after the expiry of tenancy, without opting to renew the tenancy agreement. This is also in the realm of enforcing the contractual regime and more in the nature of providing remedy to the landlord and does not stand in conflict with the provisions of the Transfer of Property Act.
The Specific Relief Act, 1963 - The Specific Relief Act, 1963 is a piece of legislation designed to
provide remedies for the enforcement of individual civil rights. It focuses inter alia on remedies, such as possession of immovable property and enforcement of rights, based on title. It lays down when persons will not be entitled to specific reliefs, when the specific performance of contracts can be insisted upon and how the discretion should be exercised. It addresses remedial aspects of law claiming to supplement the rights and duties with effective legal mechanisms for enforcement.
16.1 Reliance is placed on Section 5 of the Specific Relief Act.
Section 5 lays down that a person entitled to possession of specific immovable property may recover it in the manner provided by the Code of Civil Procedure, meaning thereby, the aggrieved party to file a plaint under Order VI with appropriate prayer, upon which the Civil Court of competent jurisdiction will try the suit as provided under the Code and grant the relief. It is pertinent to state here that while the CPC has special provisions relating to suits against the Government or public officers, suits involving substantial questions of law, suits by or against military or naval men, suits by or against Corporations, suits by or against firms and persons carrying on business in other names, suits by or against trustees, executors or administrators, suits by or against minors and persons of unsound mind, suits relating to matters concerning the family, suits by indigent persons, suits relating to mortgages of immovable property and Interpleader suits etc., there is no special provision regarding the filing of suits for recovery of possession from the tenants by the landlords.
16.2 Thus, Section 5 of the Specific Relief Act does not provide any
specific remedy relating to landlords and tenants to which it can be contended the impugned enactment is at variance. There is no contradiction.
Hindu Succession Act, 1956 etc. - It is argued that Section 6 of the impugned enactment which
provides for inheritability of the tenancy, is at variance with the respective succession legislation, such as the Indian Succession Act, 1925, Hindu Succession Act, 1956, etc. A reading of Section 6, it would be clear that it only provides for the order in which the persons are to be recognised as tenants and the same will not in any manner negate the claims of the others if any substantial rights are granted under the respective Acts.It is more a rule of procedure recognising the tenant with whom the landlord can deal rather than creating or extinguishing any substantial right.If the are rights under the respective succession laws enabling any person in a given case, it would be still open for the person to claim the right with the landlord and in case of any dispute, the Rent Control Court will apply the substantial law and the above provision harmoniously to safeguard the rights of parties as per Section 34 (2) of the Act. - Thus, we hold that the impugned enactment is not repugnant to
any of the provisions of the Central Legislations as contended and operates in its field and as stated supra and we had already read down Sections 4 and 4-A to operate only for the purposes of this Act and not beyond.
Question No. 3 - The next contention is that the Act takes away the protection so
far enjoyed by the tenants. Even if the landlord fails to enter into an agreement or agree on fixing any reasonable rent, he can still take advantage of his default. At the outset, the said contentions are unacceptable. Firstly, about the protection that was hitherto granted to the tenants in Ram Krishan Grover’s case (cited supra) the Hon’ble Supreme Court of India has held as follows:-
“46. The following observations in Ravi Dutt Sharma [Ravi Dutt Sharma v. Ratan Lal Bhargava, (1984) 2 SCC 75] relating to the right given to the landlords for eviction in context of the rent control legislation are pertinent: (SCC p.
79, para 7)
“7. … Tenants cannot complain of any discrimination because the Rent Act merely gave certain protection to them in public interest and if the protection or a part of it afforded by the Rent Act was withdrawn and the common law right of the tenant under the Transfer of Property Act was still preserved, no genuine grievance could be made.”
19.1 Thus, it can be seen that the legislature in its wisdom has
considered the prevailing socio-economic condition and the availability of the properties for rent and has decided to balance the conflicting rights of landlords and tenants. In any event, the said policy underneath the legislation cannot be termed as manifestly arbitrary. The Hon’ble Supreme Court of India in Shayara Bano v. Union of India , had laid down when a legislation can be interfered by the Court on the ground of Manifest Arbitrariness and it is useful to extract the relevant portion which reads as follows:
“101 …..Manifest arbitrariness, therefore, must be
something done by the legislature capriciously, irrationally and/or without adequate determining principle. Also, when something is done which is excessive and disproportionate, such legislation would be manifestly arbitrary. We are, therefore, of the view that arbitrariness in the sense of manifest arbitrariness as pointed out by us above would apply to negate legislation as well under Article 14.”
19.2 Thus, it can be seen that the conditions for the availability of the
buildings and the present conditions have been specifically taken into consideration by the Legislature. More specifically, the policy of the Government of India to provide housing to every single family is also taken into account. Therefore, we do not find anything capricious, excessive or disproportionate. In light of the above reasons, the shift in policy cannot be said to be violative of Article 21 or 19 (i) (g) of the Constitution of India.
19.3 The learned counsel appearing for the petitioners would caution
that unscrupulous and greedy landlords would take advantage of the situation especially in commercial premises like restaurants etc., in which it takes time to get established in a particular area and develop local customers and once the business picks up, the landlords would insist upon their being inducted as partners in the business by taking undue advantage of the situation. In this regard, the mere possibility of an abuse cannot render a legislation invalid. The Constitution Bench of the Hon’ble Supreme Court of India in R.K. Garg Vs.
Union of India , observed and the relevant portion reads thus:
“8. …..There may even be possibilities of abuse,
but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation. That is the essence of pragmatic approach which must guide and inspire the legislature in dealing with complex economic issues.”
(emphasis supplied)
19.4 The repealed Tamilnadu Buildings (Lease & Rent Control) Act, 1960 which was brought into force with the avowed purpose of protecting the tenants and providing affordable housing on fair rent, it is experienced that it was abused by unscrupulous tenants to frustrate the landlords. It can be seen that the Act by itself or the objects behind the Act were not at fault. If the stakeholders at large constantly indulge in misuse, then the legislature in question steps in and that is how there is a policy shift from a control regime to a contractual regime. This apart, if any alarming situation arises in respect of such commercial tenancies, the legislation itself in Act 3(e) vests the Government with the power to exempt any other building or category of
buildings in the public interest by a notification. It must also be seen that in the absence of the impugned enactment, it is not as if the Transfer of Property Act, creates any obligation on the lessor to renew the lease. Renewal of lease is always by mutual consent. Therefore, we are unable to hold that Section 21 (2)
(a) is manifestly arbitrary.
19.5 As regards the argument as to the rights of the existing tenant
being taken away, it must be seen that the substantially the parties would be governed by their Contract or the provisions of the Transfer of Property Act, 1882, in the absence of the Repealed enactment. Thus, the legislature conferring a special status to these tenants is entitled to take away such rights. The right to be treated as a Statutory Tenant is not an inherent human right a common law right or a fundamental right. Accordingly, when there is a shift to a contractual regime, such a plea cannot be countenanced. In any event, the impugned enactment grants sufficient time to the parties to enter into an agreement.
19.6 Section 25 of the Act is attacked on behalf of the landlords,
contending that in respect of Section 21 (2) (b) also payment of rent during eviction proceedings is dispensed with. In this regard, it can be seen that the statute in the repealed enactment had granted protection to the landlords, thereby making it mandatory to the tenants to deposit the rental arrears, if they choose to contest the petition for eviction. While continuing the said provision under Section 11 of the erstwhile Act, in Section 25, the legislature has consciously excluded the applicability in respect of eviction proceedings pending on two grounds i.e., under Section 21 (2) (a), i.e., failure to enter into an agreement and Section 21 (2) (b) i.e., in case of default. Though it could have been logical to impose the liability of payment of arrears of rent, in case of an eviction petition under default, it can be seen that Section 9(3) states that if a tenant who has been given a notice of intended increase of rent under subSection 2, fails to give the landlord notice of termination of tenancy, the tenant shall be deemed to have accepted the rent increase proposed by the landlord. Therefore, considering the new scenario, wherethe concept of fair rent is given a go-by and the concept of agreed rent is imposed, the legislature in its wisdom has not given that additional protection to the landlords. It cannot be said that merely because in the erstwhile Act such a right was available to the landlords, the same should still be preserved. No grievance could be made out for this Court to interfere in Judicial Review. Overall we do not find any illegality whatsoever except reading down Sections 4 and 4A as stated above for the purposes of this Act.
19.7 It is to be noted that the validity of a similar enactment was also
considered by a Division Bench of the Bombay High Court in Labshetwar and Sakkarwar Constructions’ case (cited supra) and the validity of the Act has been upheld.
The Result:
- In the result, the Writ Petitions are disposed of, on the following
terms,
(i) Sections 4 and 4A of the Tamil Nadu Regulation of Rights and
Responsibilities of Landlords and Tenants Act, 2017 (Tamil Nadu Act 42 of
2017) are read down to restrict their operation only for the purposes of the Act
(Tamilnadu Act 42 of 2017) as delineated in paragraph 15.2 supra ;
(ii) The rest of the provisions of the impugned enactment are declared
to be valid.
(iii) There shall be no order as to costs. Consequently,
W.M.P.Nos.4728, 8860 of 2020; 16530, 18266, 22579, 22582, 22588, 22590,
26521, 26523, 27596, 27597, 28342, 28519, 28525 of 2021; 7703, 7708, 1731, 16864, 23302, 23303, 23304 of 2022; 991 and 1718 of 2023 are closed.
(S.V.G., CJ.) (D.B.C., J.)
23.04.2024
Index : Yes
Speaking order
Neutral Citation : Yes
Jer
To - The Principal Secretary to Government,
Government of Tamil Nadu,
Housing and Urban Development Department, Fort St. George, Chennai – 9. - The Secretary to Government,
Government of Tamil Nadu,
Secretary to Government (FAC), Law Department, Fort St. George, Chennai – 9.
THE HON’BLE CHIEF JUSTICE
AND D.BHARATHA CHAKRAVARTHY, J.
Jer
W.P.No.3985 of 2020 etc., (batch cases)
23.04.2024
