Supreme Court of India
SATYAWATI SHARMA (DEAD) BY LRS.versusUNION OF INDIA AND ANR.
- Citation
- 2008 INSC 495
- Decided
- 16 April 2008
- Disposal
- Appeal(s) allowed
- Bench
- B N AGRAWAL
Holding
Section 14(1)(e) is unconstitutional to the extent it discriminates between residential and non‑residential premises; the discriminatory clause is struck down, and the remaining provision is saved.
Summary
The appellant, Satyawati Sharma, purchased a house in Delhi and sought eviction of tenants who were using the premises for a watch shop and a clinic, invoking the landlord's bona‑fide need under the Delhi Rent Control Act, 1958. The Act’s Section 14(1)(e) permits eviction only when the premises are let for residential purposes, thereby denying the landlord relief for non‑residential premises. The Delhi High Court upheld the provision, but the Supreme Court allowed the appeal, holding that the discrimination between residential and non‑residential premises violates Article 14 of the Constitution. The Court observed that the original rationale for the classification, rooted in post‑Partition refugee resettlement, no longer exists after almost five decades of changed circumstances. Applying the doctrine of severability, the Court struck down the discriminatory portion of Section 14(1)(e) while preserving the remainder, which now applies to any premises required bona‑fide by the landlord without the residential restriction.
Issues considered
- The constitutionality of Section 14(1)(e) of the Delhi Rent Control Act, 1958 under Article 14 of the Constitution.
- Whether the classification of premises as residential versus non‑residential remains a reasonable classification in view of changed circumstances and the lapse of time.
- Whether the offending portion of the statute can be severed without affecting the rest of the provision.
Legislation cited
- Constitution of Indias. Article 14
- Delhi Rent Control Act, 1958s. 14(1)(e)
- East Punjab Urban Rent Restriction Act, 1949
Subjects
Article 14EqualityReasonable classificationRent controlEvictionBona fide requirementDelhi Rent Control ActSeverabilityLegislative intentChange of circumstances
Judgment
[2008] 6 S.C.R. 566
+- ..
A SATYAWATI SHARMA (DEAD) BY LRS.
v.
UNION OF INDIA AND ANR.
(Civil Appeal No. 1897 of 2003)
APRIL 16, 2008
B
[B.N. AGRAWAL AND G.S. SINGHVI, JJ.]
Delhi Rent Control Act, 1958:
s.14(1)(e) - Constitutionality of - Held: s.14(1)(e) is
c violative of doctrine of equality embodied in Article 14 of
Constitution insofar as it discriminates between premises let
for residential and non-residential purposes when same are
required bona fide by landlord for occupation for himself or for
any member of his family dependent on him, and restricting
D latter's right to seek eviction of tenant from premises let for
residential purposes only- Discriminatory portion of s. 14(1 )(e)
struck down - While adopting this course, well recognized rule
kept in view that offending portion of statute can be severed
without doing violence to remaining part thereof - Legislation
E - Delhi Rent Control Act, 1995- s.22(r)- Constitution of India,
1950 - Article 14.
s.14(1)(e) - Classification of premises with reference to
purpose of their user - Reasonableness of - Held: The 1958
Act which was reasonable at the time of enactment has. with
F lapse of time or changed circumstances become unreasonable
- Period of almost 50 years has elapsed from enactment of
~ ..
1958 Act - During this long span of time those who came from
West Pakistan as refugees and even their next generations
have settled down in different parts of country and occupying
G prime positions in various fields and earned wealth - Not only
this, availability of premises which can be let for non-residential
purposes has substantially increased - Therefore, reason to
sustain classification of premises with reference to purpose of
their user, is no longer available for negating challenge to
H 566
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 567
INDIAANDANR.
• -I
s. 14(1)(e) on ground of violation of Article 14 of the Constitution A
- Legislation - Delhi Rent Control Act, 1995 - s. 22(r) -
Constitution of India, 1950 - Article 14.
Rent Control and eviction~ History of Rent Control
Legislation discussed - Punjab Urban Rent Restriction Act,
1941 - Delhi Rent Control Ordinance, 1944 - Delhi and Ajmer- B
Marwara Rent Control Act, 1947 - Delhi and Ajmer Rent
Control Act, 1952 - Delhi Rent Control Act, 1958 - Delhi Rent
Control Act, 1995
Judicial notice - Delhi Rent Control Act, 1995 - Makes
no distinction between premises let for residential and non-
c
residential purposes for seeking eviction on ground of bona
fide need - Although 1995 Act is yet to be enforced, judicial
notice taken of fact that legislature has removed implicit
embargo on landlord's right to recover possession of premises
if same are bona fide required by him/her, after taking note of D
developments which took place in the last 37 years i.e.
substantial increase in availability of commercial and non-
residential premises or premises which can be let for
commercial or non-residential purposes and meteoric rise in
prices of land and rentals of residential as well as non- E
residential premises.
Constitution of India, 1950:
Article 14 - Doctrine of equality - Applicability of -
Reasonable classification - Theory of. F
.. ~ Article 14 - Changed circumstances/Lapse of time -
Legislation- Constitutionality of- Held: Legislation which may
be quite reasonable and rationale at the time of its enactment
may with the lapse of time and/or due to change of
circumstances become arbitrary, unreasonable .and violative G
of the doctrine of equity and even if the validity of such
legislation may have been upheld at a given point of time, the
Court may, in subsequent litigation, strike down the same if it
is found that the rationale of classification has become non-
existent. H
568 SUPREME COURT REPORTS [2008) 6 S.C.R.
~ ~
A In the writ petition filed by landlords before the High Court,
prayer made was that s.14(1)(e) of Delhi Rent Control Act, 1958
was violative of equality clause embodied in Article 14 of the
Constitution insofar as it differentiated between the premises
let for residential and non-residential purposes in the matter of
B eviction on the ground of bona fide requirement of the landlord
and restricts the landlord's right only to the residential premises. t
The writ petitions were heard by the Full Bench of High
Court along with the other writ petitions involving challenge to
the vires of s.14(1)(e). After referring to **H.C. Sharma's case
c and ***Amarjit Singh's case, the Full Bench of High Court
dismissed the writ petitions. Hence these appeals.
Allowing the appeals and partly striking down
s.14(1)(e) of Delhi Rent Control Act, 1958, the Court
D· HELD: 1. S.14(1)(e) of the Delhi Rent Control Act, 1958
is violative of the doctrine of equality embodied in Article
14 of the Constitution of India insofar as it discriminates
between the premises let for residential and non-
residential purposes when the same are required bona
E fide by the landlord for occupation for himself or for any
member of his family dependent on him and restricts the
latter's right to seek eviction of the tenant from the
premises let for residential purposes only. However,
s.14(1)(e) is not totally struck down because it is neither
F the pleaded case of the parties nor the argument that
s.14(1)(e) is unconstitutional in its entirety and ends of ;. ..
justice would be met by striking down the discriminatory
portion of s.14(1)(e) so that the remaining part thereof may
read as : "that the premises are required bona fide by the
landlord for himself or for any member of his family
G
dependent on him, if he is the owner thereof, or for any
person for whose benefit the premises are held and that
the landlord or such person has no other reasonably
suitable accommodation." While adopting this course,
well recognized rule is kept in view that if the offending
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 569
."' INDIAAND ANR.
portion of a statute can be severed without doing violence A
to the remaining part thereof, then such a course is
permissible. [Paras 38, 39] [620-G; 621-A, 8, C, D, E]
R.M.D. Chamarbaugwal/a v. Union of India AIR (1957)
SC 628; Bhawani Singh v. State of Rajasthan (1996) 3 SCC
-+ 105.- relied on. B
2. An analysis of Rent Control Legislation which were
made applicable from time to time show that till 1947 no
tangible distinction was made between the premises let
for residential .and non-residential purposes. The implicit c
restriction on the landlord's right to recover possession
of the non-residential premises was introduced in the
Delhi an.d Ajmer-Marwara Rent Control Act, 1947 and was
continued under the 1958 Act. However, the 1995 Act does.
not make any distinction between the premises let for
D
~ residential and non-residential purposes in the matter of
eviction of tenant on the ground that the same are required
by the landlord for his/her bona fide use or· occupation.
I
Even though, the 1995 Act is yet to be enforced and in
*Common Cause v. Union of India this Court declined to
issue a writ of mandamus to the Central Government, for E
that purpose, judicial notice can be taken of the fact that
the legislature has, after taking note of the developments
which took place in the last 37 years i.e. substantial ·
increase in the availability of the commercial and non-
.., ·-<I
residential premises or the premises which can be let for F
commercial or non-residential purposes and meteoric rise
in the prices of land and rentals of residential as well as
non-residentiat premises, removed the implicit embargo
on the landlord's right to recover possession .of the
. . premises if the same are bona fide required by him/her. G
[Para 9] [588-F, G; 589-A, 8, C]
-+ Malpe Vishwanath Acharya and Ors. v. State of
Maharashtra & Anr. (1998) 2 SCC 1; Prabhakaran Nair v. State
of Tamil Nadu (1987) 4 SCC 238; Mohinder Kumar and Ors.
~
H
1
570 SUPREME COURT REPORTS [2008] 6 S.C.R.
. i, •
A v. State of Haryana and Anr. (1985) 4 SCC 221; 0. C. Bhatia
and Ors. v. Union of India and Anr. (1995) 1 SCC 104; C.N.
Rudramurthy v. K. Barkathulla Khan (1998) 8 SCC 275;
*Common Cause v. Union of India and Ors. (2003) 8 SCC
250 - referred to.
B 3. Article 14 declares that the State shall not deny to
any person equality before the law or the equal protection
of the laws. The concept of equality embodied in Article
14 is also described as doctrine of equality. The doctrine
of equality means that there should be no discrimination
c between one person and another, if having regard to the
subject matter of legislation, their position is the same.
The plain language of Article 14 may suggest that all are
equal before the law and the State cannot discriminate
between similarly situated persons. However, application
D of the doctrine of equality embodied in that Article has
not been that simple. The debate which started in 1950s
on the true scope of equality clause is still continuing. In
last 58 years, the courts have been repeatedly called upon
to adjudicate on the constitutionality of various legislative
E instruments including those meant for giving effect to
the Directive Principles of State Policy on the ground
that same violate the equality clause. It has been the
constant refrain of the courts that Article 14 does not
prohibit the legislature from classifying apparently
F similarly situated persons, things or goods into different
groups provided that there is rational basis for doing ~ ,.
so. The theory of reasonable classification has been
invoked in large number of cases for repelling challenge
to the constitutionality of different legislations. [Para 14]
[595-A, 8, C, D, E]
G
Ram Krishna Dalmia and Ors. vs. Shri Justice S.R.
Tendo/kar and Ors., AIR 1958 SC 538; Mohd. Shujat Ali vs.
Union of India 1975 (3) SCC 76; L. I. C. of India and Another
vs. Consumer Education & Research Centre and Others 1995
H (5) sec 482 - relied on.
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 571
INDIAAND ANR.
~ + Gian Devi Anand vs. Jeevan Kumar & Ors. 1985 (2) SCC A
683; Motor General Traders vs. State of Andhra Pradesh 1984
(1) SCC 222; Mohinder Prasad Jain vs. Manohar Lal Jain
(2006) 2 SCC 724; State of Haryana vs. Ved Prakash Gupta
(1999) 1 Rent Law Reporter 689 - referred to.
4. In the instant case, Full Bench of High Court upheld B
t the validity of s. 14(1 )(e) mainly by relying upon the
judgment of the Division Bench in **H. C. Sharma case and
of this Court in ***Amarjit Singh case and by observing
that legislature has the right to classify persons, things,
and goods into different groups and that the Court will c
not sit over the judgment of the legislature. The Full Bench
did not, at all, advert to the question whether the reason/
cause which supplied rationale to the classification
continued to subsist even after lapse of 44 years and
whether the tenants of premises let for non-residential D
purposes should continue to avail the benefit of implicit
exemption from eviction in the case of bona fide
•I
""' requirement of the landlord despite sea saw change in
the housing scenario in Delhi and substantial increase
in the availability of buildings and premises which could E
(
be let for non-residential or commercial purposes.
[Para 27] (612-G; 613-A, B, C]
**H. C. Sharma v. Life Insurance Corporation of India &
Anr. ILR (1973) 1 Delhi 90; ***Amarjit Singh v. Smt. Khatoon
Quamarin (1986) 4 sec 736 - referred to. F
_, ~ 4.2. In the rent control legislations made applicable
to Delhi from time to time, residential and non-residential
premises were treated at par for all purposes. The scheme
of the 1958 Act also does not make any substantial
G
distinction between residential and non-residential
premises. Even in the grounds of eviction set out in
proviso to s.14(1), no such distinction has been made
except in Clauses (d) and (e). In **H.C. Sharma, the Division·
Bench of the High Court, after taking cognizance of the
H
572 SUPREME COURT REPORTS [2008) 6 S.C.R.
A acute problem of housing created due to partition of the
country, upheld the classification by observing that the
Government could legitimately restrict the right of the
landlord to recover possession of only those premises
which were let for residential purposes. The Court felt that
B if such restriction was not imposed, those up-rooted from
Pakistan may not get settled in their life. As of now a period
of almost 50 years has elapsed from the enactment of the
1958 Act. During this long span of time much water has
flown down the Ganges. Those who came from West
C Pakistan as refugees and even their next generations
have settled down in different parts of the country, more
particularly in Punjab, Haryana, Delhi and surrounding
areas. They are occupying prime positions in political and
bureaucratic set up of the Government and have earned
huge wealth in different trades, occupation, business and
D similar ventures. Not only this, the availability of buildings
and premises which can be let for non-residential or
commercial purposes has substantially increased.
Therefore, the reason/cause which prompted the Division
Bench of the High Court to sustain the differentiation/
E classification of the premises with reference to the
purpose of their user, is no longer available for negating
the challenge to s.14(1)(e) on the ground of violation of
Article 14 of the Constitution, and such arbitrary
classification cannot be upheld the discrimination which
F was latent in s.14(1)(e) at the time of enactment of 1958
Act has, with the passage of time (almost 50 years) has
become so pronounced that the impugned provision
cannot be treated intra vires Article 14 of the
Constitution by applying any rational criteria. [Para 28]
. G [613-F, G; 614-A, 8, C, D, E, F, G]
Harbilas Rai Bansal v. State of Punjab & Anr. (1996) 1
SCC 1; Rattan Arya v. State of Tamil Nadu (1986) 3 SCC 385;
Joginder Pal v. Naval Kishore Behal (2002) 5 SCC 397;
Rakesh Vij v. Dr. Raminder Pal Singh Sethi (2005) 8 SCC
H 504 - referred to.
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 573
INDIAANDANR.
5. It is trite to say that legislation which may be quite A
reasonable and rationale at the time of its enactment
may with the lapse of time and/or due to change of
circumstances become arbitrary, unreasonable and
violative of the doctrine of equity and even if the validity
of such legislation may have been upheld at a given B
point of time, the Court may, in subsequent litigation,
strike down the same if it is found that the rationale of
classification has become non-existent. [Para 29]
[614-G; 615-A]
State of Madhya Pradesh v. Bhopal Sugar Industries AIR c
(1964) SC 1179; Narottam Kishore Dev Verma v. Union of
India AIR (1964) SC 1590; H.H. Shri Swamiji Shri Admar Mutt
Etc v. The Commissioner, Hindu Religious & Charitable
Endowments Department (1979) SCC 642; Chintapa/li
Achaiah v. P. Gopa/a Krishna Reddy AIR (1966) AP 51; D
Pasupuleti Venkateswarlu vs. Motor & General Traders (1975)
1 SCC 770; Hasmat Rai v. Raghunath Prasad (1981) 3 SCC
103 - referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1897 of 2003 E
From the Judgment and Order dated 27 .8.2002 of the High
Court of Delhi at New Delhi in C.W.P. No. 1092/1999
WITH
t~ Civil Appeal No. 1898 of 2003 and Civil Appeal No.
5622 of 2006.
F
C.S. Rajan, T.S. Doabia, A.C. Gambhir, P.O. Sharma,
Mohan Pandey, Shish Pal Laler, Balbir Singh Gupta, Sadhana
Sandhu, R.C. Kathiam, P. Parmeswaran, D.S. Mahra, B.V. G
Bairam Das, Manu Nayar, K.K. Sharma, Hameed S. Shaikh,
.. -J A.L. Trehan, Praveen Swarup and Ashwani Kumar for the
appearing parties.
The Judgment of the Court was delivered by
H
574 SUPREME COURT REPORTS [2008] 6 S.C.R.
A G.S. SINGHVI, J. 1. Whether Section 14(1)(e) of the Delhi t "
Rent Control Act, 1958 (for short 'the 1958 Act') is ultra vires the
doctrine of equality enshrined in Article 14 of the Constitution of
India is the question which arises for determination in these
appeals.
B 2. For the sake of convenience, we have noted the facts
from Civil Appeal No.1897 of 2003:
(i) On August 18, 1953, Delhi Improvement Trust leased
out a plot of land measuring 184 sq. yards situated
at Basti Reghar, Block 'R', Khasra Nos.2942/1820
c to 2943/1820 to Shri Jagat Singh son of Pt. Ram
Kishan. In terms of Clause 4(c) of the lease deed,
the lessee was prohibited from using the land and
building (to be constructed over it) for any purpose
other than residence, with a stipulation that in case
D of breach of this condition, the lease shall become
void.
(ii) After constructing the building, the lessee inducted
Shri Jai Narain Sharma and Dr. Ms. Tara Motihar, as
E tenants in two portions of the building, who started
using the rented premises for running watch shop
and clinic respectively.
(iii) Smt. Satyawati Sharma (appellant herein), who is
F
now represented by her LRs, purchased property
i.e. house bearing No.3395-3397, Ward No.XVI, ...
Block R, Gali No.1, Reghar Pura, New Delhi from ;..
legal heirs of the lessee.
(iv) After purchasing the property. the appellant filed
Petition Nos.184 of 1980 and 187 of 1980 for eviction
G of the tenants by claiming that she needed the house
for her own bona fide need and also for the use and
occupation of the family members dependant upon
her. The appellant further pleaded that she wanted to
demolish the building and reconstruct the same. She
H also alleged that tenants have been using the
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 575
IN DIA AND ANR. [G.S. SINGHVI, J.]
premises in violation of the conditions of lease and, A
therefore, they are liable to be evicted.
(v) The tenants contested the eviction petitions by
asserting that the so called need of the landlord was
not bona fide; that there were no valid grounds for
permitting the landlord to demolish the building and B
reconstruct the same and that they had not violated
the conditions of lease. They further pleaded that the
previous owner let out the premises for non-
residential purposes; that the appellant was also
issuing rent receipts by describing the rented c
portions as shop/clinic and that in view of order dated
11.12.1978 issued by the Government of India,
Ministry of Housing and Urban Development, Delhi
Development Authority was condoning violations of
the lease conditions. D
(vi) By an order dated 17.5.1991, Additional Rent
Controller, Delhi dismissed the eviction petitions. He
held that the appellant is owner and landlady of the
suit premises, but she has not been able to prove
that portions thereof were l~t for residential purposes; E
that the appellant and her dependent family members
do not have suitable alternative accommodation
except the one occupied by her elder son, who was
under the threat of eviction and that the need of the
appellant is bona fide. The Additional Rent Controller F
...
further held that the tenants are guilty of violating
clause 4(c) of deed dated August 18, 1953. He,
however, declined to pass order for recovery of
possession by observing that under Section 14(1 )(e)
of the Act, such an order can be passed only in G
respect of premises let for residential purposes. The
...,_ Additional Rent Controller also rejected other grounds
of eviction put forward by the appellant.
3. The appeal preferred by the appellant was dismissed
H
576 SUPREME COURT REPORTS [2008] 6 S.C.R.
A by Rent Control Tribunal, Delhi vide its judgment dated
10.11.1998. The Tribunal agreed with the Additional Rent
Controller that an order of eviction of the tenant can be passed
under Section 14(1)(e) only if the premises were let for
residential purposes. The Tribunal then held that the portions
B given to the tenants were being used for non-residential
purposes and, therefore, they cannot be evicted on the ground
of bona fide need of the landlord.
4. The appellant challenged the orders of the Additional
Rent Controller and Rent Control Tribunal in Civil Writ Petition
C No.1093 of 1999. She filed another petition, which was
registered as Civil Writ Petition No.1092of1999, with the prayer
that Section 14(1 )(e) of the Act be declared ultra vires of Article
14 of the Constitution insofar as it does not provide for eviction
of the tenant from the premises let for non-residential purposes.
D Both the writ petitions were heard by the Full Bench of Delhi
High Court along with' other writ petitions involving challenge to
the vires of Section 14(1 )(e) and were dismissed by the order
under challenge. The Full Bench referred to an earlier judgment
of the Division Bench in H.C. Sharma vs. Life Insurance
E Corporation of India & Anr. [ILR 1973 (1) Delhi 90] and large
number of judgments of this Court including Amarjit Singh vs.
Smt. Khatoon Quamarin [1986 (4) SCC 736] and held:-
F
i) Tenants of non-residential premises are a class by
themselves. The Parliament in its legislative wisdom
did not think it fit to make any provision for eviction
)-
-
.
of a tenant from such premises on the ground of
bona fide requirement of the landlord for residential
purpose. Referenced to Section 29(2)(r) of the 1995
Act, in our opinion, cannot be said to have any
G relevance whatsoever for the purpose of determining.
Admittedly, the 1995 Act is yet to come into force. If
the said Act is yet to come into force, the question of
taking recourse to the provisions of the said Act would
not arise more so because this court in exercise of
H its jurisdiction under Article 226 of the Constitution of
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 577
INDIAAND ANR. [G.S. SINGHVI, J.]
, -1
India would not be in a position to direct the A
Government to do so which is a legislative function.
On the other hand, the very fact that said Act is yet to
come into force in an indicia to the fact that the Central
Government does not in its wisdom consider that the
said benefit should be extended to non-residential B
premises also.
ii) Judicial review of legislation is permissible only on
limited grounds, namely when a statute is enacted
by a legislature which had no authority therefor or
when it inter alia violates any of the provisions c
contained in Part Ill of the Constitution. Once it is
held, as we are bound to, that the non-residential
premises having regard to the interpretation clause,
forms a separate class, such classification, having a
reasonable nexus with the ground of eviction, cannot D
be said to be discriminatory in nature. Article 14 of
the Constitution would apply only to persons similarly
situated. Owners of residential and non-residential
premises stand on different footings. In the event,
the legislature in its wisdom thinks it fit to extend its E
protective wing to a class of tenants from being
evicted on a particular ground, the same by itself
cannot be said to be discriminatory so as to attract
- . _..
the wrath of Article 14 of the Constitution of India:
The court in a situation of this nature is only entitled
to see as to whether such classification is valid and
F
rational. Once the rationality in such legislation is
found, the court will put its hands off.
iii) Furthermore, the provisions of the said Act had been
declared intra vi res by the Apex Court in Amarjit Singh G
v. Khatoon Quamarain (supra). In that case, an
,.. .; argument was advanced that unless the second limb
of Section 14(1 ){e) of the Act is read in such a way
that it was in consonance with Articles 14 and 21 of
the Constitution of India, the same would be void as H
578 SUPREME COURT REPORTS [2008] 6 S.C.R.
t
A being unconstitutional. The question raised therein
has been dealt with the Apex Court.
(iv) In the instant case, the Statute itself has indicated
the persons or things to whom its provisions are
recommended to apply. The said Act is a beneficial
B legislation. It seeks to protect the tenants. Tenants
are broadly classified into three categories -
residential, non-residential and/or other tenant. Such
a classification as regards premises or tenancy
cannot per se be said to be unreasonable.
c
(v) In the instant case, so far as Sections 14(1 )(e) and
14(1 )(k) are concerned, the statute itself has
indicated the persons to whom the provisions would
apply. The provision is absolutely clear and
unambiguous. In such a case the Court is only
D
required to examine whether the classification is
based upon reasonable differentia, distinguishing the
person, group from those left out and whether such
differential has reasonable nexus with the objects to
be achieved. The impugned provision indisputably
E was intended to beneficially apply to landlords and
of one class of tenancy viz. tenancy in respect of the
F
residential premises and not non-residential
premises.
5. The Full Bench also noticed the judgment in Harbilas
Rai Bansal vs. State of Punjab & Anr. (1996 (1) SCC 1]
wher~by Section 13(3)(a) of the East Punjab Urban Rent
)
-
I
Restriction Act, 1949, as amended by Punj~b Act No.29of1956,
was struck down but distinguished the same by making the
G following observations :-
"The objects and reasons of the said Act, thus, were
considered having regard to the provisions made at the
time of commencement of the said Act. Such a
contingency does not arise in the instant case. Reasonable
H nexus to the objects to be achieved of the said Act having
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 579
INDIAAND ANR. [G.S. SINGHVI, J.]
regard to the performance for which the building is being A
used must be found out from the legislative intent.
Legislative intent may change from State to State."
6. Learned counsel for the appellants relied on the
judgment of this Court in Harbilas Rai Bansal vs. State of
Punjab & Anr. (supra) and argued that the classification made B
between the premises let for residential purposes and non-
residential purposes in the matter of eviction of tenant on the
ground of bona fide need of the landlord is irrational, arbitrary
and violative of Article 14 of the Constitution. Shri A.C. Gambhir
submitted that even though the constitutional validity of Section C
14(1)(e) oftheActwas:upheld by the Division Bench of the High
Court in H.C. Sharma vs. Life Insurance Corporation of
India & Anr. (supra), that decision cannot, in the changed
circumstances and in view of the later judgments of this Court in
Rattan Arya vs. State of Tamil Nad.u [(1986) 3 SCC 385], D
Harbilas Rai Bansal vs. State of Punjab (supra), Rakesh
Vij vs. Dr. Raminder Pal Singh Sethi [(2005) 8 SCC 504] be
treated as good law. He argued that the reason which prompted
the legislat,ure to exclude the premises let for non residential
purposes from the purview of Section 14(1)(e) of the 1958 Act E
and which found approval of the Division Bench of the High Court
has, with the passage of time, become non-existent and the
classification of the premises into residential and non-residential
with reference to the purpose of leas~ has become totally
arbitrary and irrational warranting a declaration of invalidity qua F
the impugned section. In support of this argument, the learned
counsel relied on the judgmeQt of this Court in Malpe
Vishwanath Acharya and Others vs. State of Maharashtra
& Another [1998 (2) SCC 1]. Shri Gambhir pointed out that in
the Delhi Rent Control Act, 1995 (for short 'the 1995 Act'), which G
was enacted by the Parliament in the light of the National Housing
"-+ Policy, 1992 and observations made by this Court in
Prabhakaran Nair vs. State of Tamil Nadu [1987 (4) SCC
238], no distinction has been made between the premises let
for residential and non-residential purposes in the matter of
H
580 SUPREME COURT REPORTS [2008] 6 S.C.R.
A eviction of the tenant on the grounds of landlord's bona fide need
and argued that even though that Act has not been enforced,
the Court can take cognizance of the legislative changes and
declare the implicit restriction contained in Section 14(1)(e) on
the eviction of tenant from the premises let for non-residential
B purposes as unconstitutional.
+
7. Shri C.S. Rajan, learned senior counsel appearing for
the Union of India emphasized that the purpose of the Act is to
protect the tenants against arbitrary eviction by the landlord and
argued that the classification of the premises with reference to
c the purpose of lease should be treated as based on rational
grounds because the same is meant to further the object of the
enactment. Shri Rajan referred to the judgment of Amarjit Singh
vs. Smt. Khatoon Quamarin (supra) to show that challenge
to the constitutionality of the Section 14(1 )(e) on the ground of
D violation of Article 14 has already been negatived and argued
that the vires of that provision cannot be re-examined merely
because a similar provision contained in the 'Punjab Act' has
been declared unconstitutional in Harbilas Rai Bansal vs. State
of Punjab (supra). Learned senior counsel relied on the
E judgments of this Court In Re The Special Courts Bill, 1978
[1979 (1) SCC 380] and Padma Sundra Rao (Dead) and
Others vs. State of Tamil Nadu and Others [2002 (3) SCC
533] and argued that the Court should not attempt to rewrite
Section 14(1 )(e) so as to facilitate eviction of the tenants from
F the premises let for non-residential purposes. Shri S.P. Laler,
learned counsel appearing for the respondents in Civil Appeal •
Nos.1897 of 2003 and 1898 of 2003 supported the judgment
of the Full Bench of the High Court and argued that the distinction
made by the legislature between the premises let for residential
and non-residential purposes is based on rational ground i.e.
G
acute shortage of non-residential premises/buildings and,
therefore, the same cannot be treated as unconstitutional.
~-
8. We have considered the respective arguments/
submissions. For deciding the question raised in these appeals,
H it will be useful to notice the salient features of rent control
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 581
INDIAAND ANR. [G.S. SINGHVI, J.]
,
.. legislations, which were made applicable to Delhi from time to A
time. These are:-
i) In exercise of the power vested in it under Rule 81 of the
Defence of India Rules, the Government of India promulgated
New Delhi House Rent Control Order, 1939. This order was
made applicable only to residential premises. Section 11 thereof B
provided that a tenant in possession of a house shall not be
evicted therefrom whether in execution of a decree or otherwise
and whether before or after the termination of the tenancy except
on the grounds mentioned therein. Clause (iv) of sub-section 2
of Section 11A was as under: c
"that the landlord was at no time during the twelve months
immediately preceding the date of his application residing
within the limits of the Delhi or New Delhi Municipality or
the Notified Areas of the Civil Station, Delhi or Delhi Fort,
D
that it is essential in the public interest that he should take
up residence in that area and that he is unable to secure
other suitable accommodation, the Controller shall make
an order directing the tenant to put the landlord in
possession of the house, and if the Controller is not so
satisfied, he shall make an order rejecting the application." E
(ii) On 15th October, 1942, the Punjab Urban Rent
Restriction Act, 1941 was made applicable to the Province of
Delhi, except the areas to which the New Delhi House Rent
Control Order was applicable. The definition of the expression F
"premises" in the Punjab Urban Rent Restriction Act made no
distinction between "residential" and non-residential" premises.
Section 10(1) of that Act provided that no order for recovery of
possession of any premises shall be made so long as the tenant
pays or is ready and willing to pay rent to the full extent allowable
G
by this Act and perform other conditions of the tenancy. However,
in terms of proviso to Section 19(1), the Court could make an
~·,. order for recovery of possession if the landlord satisfied that
the prescribed notice had been served on the tenant. Sub-
section 2 of Section.10 provided that where any order mentioned
H
582 SUPREME COURT REPORTS [2008] 6 S.C.R.
A in sub-section 1 has been made on or after the First day of
January, 1939 but not executed before the commencement of
the Act, the Court by which the order was made may if it is of
opinion that the order would not have been made if the Act had
been in operation on the date the order was made, rescind or
B vary the order. The proviso to Section 10(2) enumerated the
other grounds for eviction of the tenants. One of the grounds +
was that the premises are reasonably and bona fide required
by the landlord for his own occupation.
(iii) In 1944, the Delhi Rent Control Ordinance (XXV), 1944
C was promulgated. In this Ordinance, the word 'premises' was
defined to mean any building which is let separately for use as
a residence or for commercial use or for any other purpose.
Clauses (a) to (e} of Section 9 of the Ordinance specified the
grounds on which the landlord could recover possession of the
D premises. One of the grounds was that the landlord requires
)r
the premises for his use as residence. This means the landlord
could not recover possession of the premises if he needed the
same for commercial use.
(iv) In 1947, the Delhi and Ajmer-Merwara Rent Control
E Act was enacted and was made applicable to all the parts of
Delhi. Section 2(b) of the 1947 Act which contained the definition
of the word 'premises' read as under:-
"premises" means any building which is, or is intended to
F be, let separately for use as a residence or for commercial
use or for any other purpose, ....................... "
Section 9(e} which provided for eviction of the tenant on
the ground of bona fide requirement of the landlord was as under:-
"that purely residential premises are required bona fide
G
by the landlord who is the owner of such premises for
occupation as a residence for himself or his family, that he
neither has nor is able to secure other suitable
accommodation, and that he has acquired his interest in
the premises at a date prior to the beginning of the tenancy
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 583
INDIAAND ANR. [G.S. SINGHVI, J.]
or the 2nd day of June, 1944, whichever is later, or if the A
interest has devolved on him by inheritance or succession,
his predecessor had acquired the interest at a date prior
to the beginning of the tenancy or the 2nd day of June,
1944, whichever is later; ............... "
(v) The 1947 Act was replaced by the Delhi and Ajmer 8
+ Rent Control Act, 1952. Section 13 of that Act enumerated
various grounds on which a tenant could be evicted. Clause (c)
of Section 13(1) was as under:-
"that the premises let for residential purposes are required c
bona fide by the landlord who is the owner of such
premises for occupation as a residence for himself or his
family and that he has no other suitable accommodation;
Explanation:- For the purposes of this clause, "residential
premises" include any premises which having been let for D
use as a residence are, without the consent of the landlord,
used incidentally for commercial or other
purposes: ...................... "
(vi) After 6 years, the Delhi Rent Control Act, 1958 was
enacted. The Preamble of this Act shows that it is a legislation E
for the control of rents and evictions and of rates of hotels and
lodging houses, and for the lease of vacant premises to
Government, in certain areas in the Union Territory of Delhi.
Section 2(i) of that Act defines the premises to mean any
building or part of a building which is intended to be or is let for F
use as a residence or for commercial use or for any other
purpose. The definition of the term "standard rent" contained in
Section 2(k) refers to the premises irrespective of its use.
Section 3 which exempts certain premises from the operation
of the Act also does not make any distinction between residential G
and non-residential premises. Clause (c) of that section which
provides for exemption in the context of monthly rent speaks of
residential as well as non-residential premises. Section 6 relates
to standard rent. It deals with residential as well as non-
residential premises. Para A of Section 6(1) specifies the H
584 SUPREME COURT REPORTS [2008] 6 S.C.R.
A standard rent for residential premises and para B specifies such
rent for premises other than residential premises. Sub-section
(2) of Section 6 which provides for fixation of standard rent refers
to premises irrespective of their user. The limitation prescribed
(Section 12) for filing application for fixation of standard rent
B does not make any distinction between the premises let for
residential, commercial and other purposes. Section 14(1) which +
contains prohibition against passing of an order or decree by
any Court or Controller for recovery of possession of any
premises does not make any distinction between the premises
c let for residential, commercial or other purposes. Clauses (a),
(b), (c), (f), (g), U), (k) and (I) of proviso to Section 14(1) specify
different grounds for recovery of possession of the premises
irrespective of its user. Only clauses (d) and (e) speak of
premises let for use as residence or residential purposes.
D Sections 2(i) and 14(1)(d) and (e) of the 1958 Act which
have bearing on the decision of the appeals, read as under:-
2. In this Act, unless the context otherwise requires
E (i) "premises" means any building or part of a building
which is, or is intended to be, let separately for use as a
residence or for commercial use or for any other purpose,
and includes, -
(i) the garden, grounds and outhouses, if any,
F appertaining to such building or part of the building'
(ii) any furniture supplied by the landlord for use in such
building or part of the building;
but does not include a room in a hotel or l9dging house.
G
14. Protection of tenant against eviction. - (1)
Notwithstanding anything to the contrary contained
in any other law or contract, no order or decree for
the recovery of possession of any premises shall be
made by any court or Controller in favour of the
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 585
INDIAAND ANR. [G.S. SINGHVI, J.]
landlord against a tenant: A
Provided that the Controller may, on an application
made to him in the prescribed manner, make an
order for the recovery of possession of the premises
on one or more of the following grounds only, namely:-
B
+ (a) to (c) ................................ .
· (d) that the premises were let for use as a residence
and neither the tenant nor any member of his family
has been residing therein for a period of six months
immediately before the date of the filing of the C
application from the recovery of possession thereof;
(e) that the premises let for residential purposes are
required bona fide by the landlord for occupation as
a residence for himself or for any member of his D
family dependent on him, if he is the owner thereof,
or for any person for whose benefit the premises are
held and that the landlord or such person has no
other reasonably suitable residential
accommodation.
E
Explanation.- For the purposes of this clause,
"premises let for residential purposes" include any
premises which having been let for use as a residence
are, without the consent of the landlord, used
incidentally for commercial or other purposes. F
(vii) The 1958 Act was amended five times between 1960
to 1988, but demands continued to be made by the landlords
and the tenants for its further amendment to suit their respective
causes. In 1992 National Housing Policy was notified. One of
the important features of that Policy was to remove legal G
impediments to the growth of housing in general and renta.1
housing in particular. Both the Houses of Parliament adopted
the Policy. Thereafter, the 1995 Act was enacted. Though the
new Act has not been enforced so far and in Common Cause
vs. Union of India and Others [2003 (8) SCC 250], this Court H
586 SUPREME COURT REPORTS [2008] 6 S.C.R.
A declined to issue a writ of mandamus to Central Government to
notify the same, it will be useful to take cognizance of the
statement of objects and reasons and Section 22(r) of the 1995
Act to which reference was made by the learned counsel during
the course of hearing. The same reads as under:-
B Statement of objects and reasons:
The relations between landlords and tenants in the National
+
Capital Territory of Delhi are presently governed by the Delhi
Rent Control Act, 1958. This Act came into force on the 9th
c February, 1959. It was amended thereafter in 1960, 1963, 1976,
1984 and 1988. The amendments made in 1988 were based
on the recommendations of the Economic Administration
Reforms Commission and the National Commission on
Urbanisation. Although they were quite extensive in nature, it
was felt that they did not go far enough ir:i the matter of removal
D
of disincentives to the growth of rental housing and left many
questions unan\>wered and problems unaddressed. Numerous
representations for further amendments to the Act were received
from groups of tenants and landlords and others.
E 2. The demand for further amendments to the Delhi Rent
Control Act, 1958 received fresh impetus with the tabling of the
National Housing Policy in both Houses of Parliament in 1992.
The Policy has since been considered and adopted by
Parliament. One of its major concerns is to remove legal
F impediments to the growth of housing in general and rental
housing in particular. Paragraph 4.6.2 of the National Housing
Policy specifically provides for the stimulation of investment in :. r
rental housing especially for the lower and middle income groups
by suitable amendments to rent control laws by State
Governments. The Supreme Court of India has also suggested
G
changes in rent control laws. In its judgment in the case of
Prabhakaran Nair vs. State of Tamil Nadu, the Court observed
that the laws of landlords and tenants must be made rational,
+'
humane, certain and capable of being quickly implemented. In
this context, a Model Rent Control Legislation was formulated
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 587
INDIAAND ANR. [G.S. SINGHVI, J.]
~
by the Central Government and sent to the states to enable them A
to carry out necessary amendments to the prevailing rent control
laws. Moreover, the Constitution (Seventy-Fifth Amendment) Act,
1994 was passed to enable the State Governments to set up
State-level rent tribunals for speedy disposal of rent cases by
excluding the jurisdiction of all courts except the Supreme Court. B
3. In the light of the representations and developments
referred to above, it has been decided to amend the rent control
law prevailing in Delhi. As the amendments are extensive and
substantial in nature, instead of making changes in the Delhi
Rent Control Act; 1958, it is proposed to repeal and replace the c
said Act by enacting a fresh legislation.
4. To achieve the above purposes, the present Bill, inter
alia, seeks to provide for the following, namely:-
. (a) exemption of certain categories of premises and D
·~ tenancies from the purview of the proposed
legislation;
(b) creation of tenancy compulsorily to be written
agreement;
E
(c) compulsory registration of all written agreements of
tenancies except in certain circumstances;
(d) limit the inheritability of tenancies;
(e) redefine the concept of rent payable and provide for F
its determination, enhancement and revision;
(f) ensure adequate maintenance and repairs of
tenanted premises and facilitate further improvement
and additions and alterations of such premises;
G
(g) balance the interests of landlords and tenants in the
matter of eviction in specified circumstances;
.• ....
(h) provide for limited period tenancy and automatic
eviction of tenants upon expiry of such tenancy;
H
588 SUPREME COURT REPORTS (2008] 6 S.C.R.
,._
A (i) provide for the fixing and revision of fair rate and
recovery of possession in respect of hotels and
lodging houses;
0) provide for a simpler and speedier system of disposal
of rent cases through Rent Authorities and Rent
B Tribunal and by barring the jurisdiction of all courts
except the Supreme Court; and +
(k) enhance the penalties for infringement of the
provisions of the legislation by landlords and tenants.
c 5. On enactment, the Bill will minimize distortion in the rental
housing market and encourage the supply of rental housing both
from the existing housing stock and from new housing stock.
6. The Notes on clauses appended to the Bill explain the
various provisions of the Bill."
D
22. Protection of tenant against eviction.-
(r) that the premises let for residential or non-residential
purposes are required, whether in the same form or
after re-construction or re-building, by the landlord
E for occupation for residential or non-residential
purpose for himself or for any member of his family
if he is the owner thereof, or for any person for whose
benefit the premises are held and that the landlord
or such person has no other reasonably suitable
F accommodation.
_..
9. An analysis of the above noted provisions would show
that till 1947 no tangible distinction was made between the
premises let for residential and non-residential purposes. The
implicit restriction on the landlord's right to recover possession
G
of the non-residential premises was introduced in the Delhi and
Ajmer-Marwara Rent Control Act, 1947 and was continued under
the 1958 Act. However, the 1995 Act does not make any +'
distinction between the premises let for residential and non-
residential purposes in the matter of eviction of tenant on the
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 589
INDIAAND ANR. [G.S. SINGHVI, J.]
ground that the same are required by the landlord for his/her A
bona fide use or occupation. Even though, the 1995 Act is yet
to be enforced and in Common Cause vs. Union of India
(supra) this Court declined to issue a writ of mandamus to the
Central Government, for that purpose, we can take judicial notice
.. of the fact that the legislature has, after taking note of the B
+ developments which have taken place in the last 37 years i.e.
substantial increase in the availability of the commercial and
non-residential premises or the premises which can be let for
commercial or non-residential purposes and meteoric rise in
the prices of land and rentals of residential as well as non- c
residential premises, removed the implicit embargo on the
landlord's right to recover possession of the premises if the
same are bona fide required by him/her.
10. Section 13(3)(a) of the Punjab Act (unamendeci and
amended), which came up for consideration in Harbilas Rai D
Bansal vs. State of Punjab (supra) reads as under:-
Unamended Section 13(3)(a) of the Punjab Act.
13(3)(a). A landlord may apply to the Controller for an order
directing tenant to put the landlord in possession- E
(i) in the case of a residential or a scheduled building
if-
(a) he requires it for his own occupation;
(b) he is not occupying another residential or a F
scheduled building, as the case may be, in the urban
area concerned; and
(c) he has not vacated such a building without sufficient
cause after the commencement of this Act, in the G
said urban area;
. ~ (ii) . in the case of a non-residential building or rented
land, if-.
(a) he requires it for his own use;
H
590 SUPREME COURT REPORTS [2008] 6 S.C.R.
A (b) he is not occupying in the urban area concerned for
the purpose of his business any other such building
or rented land, as the case may be and
(c) he has not vacated such a building or rented land
without sufficient cause after the commencement of
B this Act, in the urban area concerned;
(iii) in the case of any building, if he requires it for the re-
erection of that building, or for its replacement by
another building, or for the erection of other building;
c (iv) in the case of any building, if he requires it for use as
an office or consulting room by his son who intends
to start practice as a lawyer or as a "registered
practitioner" within the meaning of that expression
as used in the Punjab Medical Registration Act, 1916
D (II of 1916), or for the residence of his son who is
married, if-
(a) his son as aforesaid is not occupying in the urban
area concerned any other building for use as office,
consulting room or residence, as the case may be;
E and
(b) his son as aforesaid has not vacated such a building
without sufficient cause after the commencement of
this Act, in the urban area concerned:
F Provided that where the tenancy is for a specified period
agreed upon between the landlord and the tenant, the
landlord shall not be entitled to apply under this sub-section
before the expiry of such period:
G
Provided further that where that landlord has obtained
possession of a residential, a scheduled or non-residential
building or rented land under the provisions of sub-
+;
paragraph (i) or sub-paragraph (ii) he shall not be entitled
to apply again under the said sub-paragraphs for the
possession of any other building of the same class or
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 591
INDIAAND ANR. [G.S. SINGHVI, J.]
rented land: A
Provided further that where a landlord has obtained
possession of any building under the provisions of sub-
paragraph (iv) he shall not be entitled to apply again under
the said sub-paragraph for the possession of any other
building for the use of or, as the case may be, for the 8
+ residence of the same son.
(b) The Controller shall, if he is satisfied that the claim of
the landlord is bona-fide make an order directing the tenant
to put the landlord in possession of the building or rented c
land on such date as may be specified by the Controller
and if the Controller is not so satisfied, he shall make an
order rejecting the application:
Provided that the Oontroller may give the tenant a
· reasonable time for p1,1tting the landlord in possession of D
the building or rented land and may extend such time so
as not to exceed three months in the aggregate.
Amended Section 13(3)(a) of. the Punjab Act.
13. Eviction of tenants.-:- (1) A tenant in possession of a E
building or rented land shall not be evicted therefrom in execution
of a decree passed before or after the commencement of this
Act or otherwise and whether before or a'fter the termination of
the tenancy, except in accordance with the provisions of this
section, or in pursuance of an order made under Section 13 of F
the Punjab Urban Rent Restriction Act, 1949, as subsequently
amended.
(2) * * *
(3)(a) A landlord may apply to the Controller for an order G
directing the tenant to put the landlord in possession-
(i) in the case of a residential building, if-
•+
(omitted as not relevant)
(ii) in the case of rented land, if-
H
592 SUPREME COURT REPORTS [2008) 6 S.C.R.
A (a) he requires it for his own use;
(b) he is not occupying in the urban area concerned for
the purpose of his business any other such rented
land, and
B (c) he has not vacated such rented land without sufficient
cause after the commencement of this Act, in the
urban area concerned.
11. Before proceeding further we consider it necessary to
observe that there has been a definite shift in the Court's
c approach while interpreting the rent control legislations. An
analysis of the judgments of 1950s' to early 1990s' would indicate
that in majority of cases the courts heavily leaned in favour of an
interpretation which would benefit the tenant- Mohinder Kumar
and Others vs. State of Haryana and Another [1985 (4) SCC
D 221], Prabhakaran Nair and Others vs. State of Tamil Nadu
and Others (supra), D.C. Bhatia and Others vs. Union of
India and Another [1995 (1) SCC 104) and C.N.
Rudramurthy vs. K. Barkathulla Khan [1998 (8) SCC 275).
In these and others case, the Court consistently held that the
E paramount object of every Rent Control Legislation is to provide
safeguards for tenants against exploitation by landlords who
seek to take undue advantage of the pressing need for
accommodation of a large number of people looking for a house
on rent for residence or business in the background of acute
F scarcity thereof. However, a different trend is clearly discernible
in the latter judgments. In Malpe Vishwanath Acharya and
Others vs. State of Maharashtra & Another (supra), this Court
considered the question whether determination and fixation of
rent under the Bombay Rents, Hotel and Lodging Houses, Rates
Control Act, 1947, by freezing or pegging down of rent as on
G
1.9.1940 or as on the date of first letting was arbitrary,
unreasonable and violative of Article 14 of the Constitution. The
_.._ <
three-Judge Bench answered the question in affirmative but
declined to strike down the concerned provisions on the ground
that the same were to lapse on 31.3.1998. Some of the
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 593
INDIAAND ANR. [G.S. SINGHVI, J.]
observations made in that judgment are worth noticing. These A
are:
"Insofar as social legislation, like the Rent Control Act is
concerned, the law must strike a balance between rival
interests and it should try to be just to all. The law ought not
to be unjust to one and give a disproportionate benefit or B
protection to another section of the society. When there is
shortage of accommodation it is desirable, nay,
necessary that some protection should be given to the
tenants in order to ensure that they are not exploited. At
the same time such a law has to be revised periodically C
so as to ensure that a disproportionately larger benefit
than the one which was intended is not given to the
tenants. It is not as if the government does not take remedial
measures to try and off set the effects of inflation. In order
to provide fair wage to the salaried employees the D
government provides for payment of dearness and other
allowances from time to time. Surprisingly this principle is
lost sight of while providing for increase in the standard
rent- the increases made even in 1987 are not adequate,
fair or just and the provisions continue to be arbitrary in E
today's context."
"When enacting socially progressive legislation the need
is greater to approach the problem from a holistic
perspective and not to have narrow or short sighted
parochial approach. Giving a greater than due emphasis F
to a vocal section 9f society results not merely in the
miscarriage of justice but in the abdication of responsibility .
of the legislative authority. Social Legislation is treated
with deference by the Courts not merely because the
Legislature represents the people but also because in G
representing them the entire spectrum of views is expected
to be taken into account. The Legislature is not shackled
by the same constraints as the courts of law. But its power
is coupled with a responsibility. It is also the responsibility
of the courts to look at legislation from the altar of Article H
594 SUPREME COURT REPORTS [2008] 6 S.C.R.
A 14 of the Constitution. This Article is intended, as is obvious
from its words, to check this tendency; giving undue
preference to some over others." •
12. In Joginder Pal vs. Naval Kishore Behal [2002 (5)
sec 397], the Court after noticing several judicial precedents
B on the subject observed as under:
~·-
"The rent control legislations are heavily loaded in favoCir
of the tenants treating them as weaker sections of the
society requiring legislative protection against exploitation
c and unscrupulous devices of greedy landlords. The
legislative intent has to be respected by the courts while
interpreting the laws. But it is being uncharitable to
legislatures if they are attributed with an intention that they
lean only in favour of the tenants and while being fair to the
tenants, go to the extent of being unfair to the landlords.
D
The legislature is fair to the tenants and to the landlords -
both. The courts have to adopt a reasonable and
balanced approach while interpreting rent control
legislations starting with an assumption that an equal
treatment has been meted out to both the sections of the
E society. In spite of the overall balance tilting in favour of
the tenants, while interpreting such of the provisions as
take care of the interest of the landlord the court should
not hesitate in leaning in favour of the landlords. Such
provisions are engrafted in rent control legislations to
F take care of those situations where the landlords too are
weak and feeble and feel humble.
;
[Emphasis added]
13. We shall now deal with the core question whether
G Section 14(1)(e) of the 1958 Act can be treated as violative of
equality clause embodied in Article 14 of the Constitution insofar
as it differentiates between the premises let for residential and
non-residential purposes in the matter of eviction on the ground
....
of bona fide requirement of the landlord and restricts the
H landlord's right only to the residential premises.
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 595
INDIAAND ANR. [G.S. SINGHVI, J.]
+
14. Article 14 declares that the state shall not deny to any A
person equality before the law or the equal protection of the
laws. The concept of equality embodied in Article 14 is also
described as doctrine of equality. Broadly speaking, the doctrine
of equality means that there should be no discrimination between
one person and another, if having regard to the subject matter B
of legislation, their position is the same. The plain language of
Article 14 may suggest that all are equal before the law and the
State cannot discriminate between similarly situated persons.
However, application of the doctrine of equality embodied in
that Article has not been that simple. The debate which started c
in 1950s on the true scope of equality clause is still continuing.
In last 58 years, the courts have been repeatedly called upon to
adjudicate on the constitutionality of various legislative
instruments including those meant for giving effect to the
Directive Principles of State Policy on the ground that same
D
violate the equality clause. It has been the constant refrain of
the courts tha!. Article 14 does not prohibit the legislature from
classifying ap·parently similarly situated persons, things or
goods into different groups provided that there is rational basis
for doing so. The theory of reasonable classification has been
invoked in large number of cases for repelling challenge to the E
constitutionality of different legislations.
15. In Ram Krishna Dalmia and Ors. vs. Shri Justice
S.R. Tendolkar and Ors., [AIR 1958 SC 538], this Court
considered the inter-play of the doctrines of equality and F
classification and held:-
"It is now well established that while Article 14 forbids
class legislation, it does not forbid reasonable
classification for the purposes of legislation. In order,
however, to pass the test of permissible classification two G
conditions must be fulfilled, namely (i) that the classification
} ~
must be found on an intelligible differentia which
distinguishes persons or things that are grouped together
from others left out of the group, and (ii) that that differentia
must have a rational relation to the object sought to be H
596 SUPREME COURT REPORTS [2008] 6 S.C.R.
+
A achieved by the statute in question. The classification may
be founded on different bases, namely, geographical, or
according to objects or occupations or the like. What is
necessary is that there must be a nexus between the basis
of classification and the object of the Act under
B consideration. It is also well established by the decisions
of Supreme Court that article 14 condemns discrimination
not only by a substantive law but also by a law of procedure."
Speaking for the Court, Chief Justice S.R. Das enunciated
some principles, which have been referred to and relied in all
C subsequent judgments. These are:
"(a) that a law may be constitutional even though it relates
to a single individual if, on account of some special
circumstances or reasons applicable to him and not
applicable to others, that single individual may be treated
D
as a class by himself;
(b) that there is always a presumption in favour of the
constitutionality of an enactment and the burden is upon
him who attacks it to show that there has been a clear
E transgression of the constitutional principles ;
(c) that it must be presume that the legislature
understands and correctly appreciates the need of its own
people, that its laws are directed to problems made
manifest by experience and that its discriminations are
F based on adequate grounds;
(d) that the legislature is free to recognize degrees of
harm and may confine its restrictions to those cases where
the need is deemed to be the clearest;
G (e) that in order to sustain the presumption of
constitutionality the Court may take into consideration
matters of common knowledge, matters of common report,
the history of times and may assume every state of facts
which can be conceived existing at the time of legislation;
H and
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 597
INDIAAND ANR. [G.S. SINGHVI, J.]
(f) that while good faith and knowledge of the existing A
conditions on the part of a legislature are to be resumed,
if there is nothing on the face of the law or the surrounding
circumstances brought to the notice of the court on which
the classification may reasonably be regarded as based,
the presumption of constitutionality cannot be carried to B
the extent of always holding that there must be some
undisclosed and unknown reasons for subjecting certain
individuals or corporations to hostile or discriminating
legislation."
16. In Mohd. ShujatAli vs. Union of India [1975 (3) SCC C
76], the Court observed that Article 14 ensures to every person
equality before law and equal protection of the laws. However,
the constitutional code of equality and equal opportunity does
not mean that the same laws must be applicable to all persons.
It does not compel the State to run "all its laws in the channels of D
general legislation". It recognises that having regard to
differences and disparities which exist among men and things,
they cannot all be treated alike by the application of the same
laws. "To recognise marked differences that exist in fact is living
law; to disregard practical differences and concentrate on some E
abstract identities is lifeless logic." The Legislature must
necessarily, if it is to be effective at all in solving the manifold
problems which continually come before it, enact special
legislation directed towards specific ends limited in its
application to special classes of persons or things. "Indeed, the F
greater part of all legislation is special, either in the extent to
which it operates, or the objects sought to be attained by it." At
the same time, the Court cautioned against the readymade
invoking of the doctrine of classification to ward off every
challenge to the legislative instruments on the ground of violation G
of equality clause and observed:
; _1, ''The equal protection of the laws is a "pledge of the
protection of equal laws". But laws may classify. And, as
pointed out by Justice Brawer, "the very idea of
classification is that of inequality". The Court has tackled H
598 SUPREME COURT REPORTS [2008) 6 S.C.R.
A this paradox over the years and in doing so, it has neither
abandoned the demand for equality nor denied the
legislative right to classify. It has adopted a middle course
of realistic reconciliation. It has resolved the contradictory
demands of legislative specialization and constitutional
B generality by a doctrine of reasonable classification. This
doctrine recognises that the legislature may classify for
the purpose of legislation but requires that the classification
must be reasonable. It should ensure that persons or things
similarly situated are all similarly treated. The measure of
c reasonableness of a classification is the degree of its
success in treating similarly those similarly situated."
"A reasonable classification is one which includes all
persons or things similarly situated with respect to the
purpose of the law. There should be no discrimination
D between one person or thing and another, if as regards
the subject-matter of the legislation their position is
substantially the same. This is sometimes
epigrammatically described by saying that what the
constitutional code of equality and equal opportunity
E requires is that among equals, the law should be equal
and that like should be treated alike. But the basic principle
underlying the doctrine is that the Legislature should have
the right to classify and impose special burdens upon or
grant special benefits to persons or things grouped
F together under the classification, so long as the
classification is of persons or things similarly situated with
respect to the purpose of the legislation, so that all persons
or things similarly situated are treated alike by law. The
test which has been evolved for this purpose is - and
this test has been consistently applied by this Court in
G
all decided cases since the commencement of the
Constitution - that the classification must be founded
on an intelligible differentia which distinguishes certain
persons or things that are grouped together from others
and that differentia must have a rational relation to the
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 599
INDIAAND ANR. [G.S. SINGHVI, J.)
object sought to be achieved by the legislation." A
"We have to be constantly on our guard to see that this
test which has been evolved as a matter of practical
necessity with a view to reconciling the demand for equality
with the need for special legislation directed towards
specific ends necessitated by the complex and varied 8
problems which require solution at the hands of the
Legislature, does not degenerate into rigid formula to be
blindly and mechanically applied whenever the validity of
any legislation is called in question. The fundamental
guarantee is of equal protection of the laws and the C
doctrine of classification is only a subsidiary rule evolved
by courts to give a practical content to that guarantee by
accommodating it with the practical needs of the society
and it should not be allowed to submerge and drown the
precious guarantee of equality. The doctrine of D
classification should not be carried to a point where instead
of being a useful servant, it becomes a dangerous master,
for otherwise, as pointed out by Chandrachud, J., in State
of Jammu & Kashmir v. Triloki Nath Khosa the guarantee
of equality will be submerged in class legislation E
masquerading as laws meant to govern well-marked
classes characterised by different and distinct
attainments". Overemphasis on the doctrine of
classification or an anxious and sustained attempt to
discover some basis for Classification may gradually and F
imperceptibly deprive the guarantee of equality of its
spacious content. That process would inevitably end in
substituting the doctrine of classification for the doctrine
of equality: the fundamental right to equality before the law
and equal protection of the laws may be replaced by the G
overworked methodology of classification. Our approach
to the equal protection clause must, therefore, be guided
by the words of caution uttered by Krishna Iyer, J. in State
of Jammu & Kashmir v. Triloki Nath Khosa: (at SCC
p. 42)
H
600 SUPREME COURT REPORTS [2008] 6 S.C.R.
+
A "Mini-classifications based on micro-distinctions are false
to our egalitarian faith and only substantial and
straightforward classifications plainly promoting relevant
goals can have constitutional validity. To overdo
classification is to undo equality."
B [Emphasis added]
17. In L.l.C. of India and Another vs. Consumer
Education & Research Centre and Others [1995 (5) SCC
482], the Court reiterated the above noted principal in the
following words:-
c
"The doctrine of classification is only a subsidiary rule
evolved by the courts to give practical content to the
doctrine of equality, overemphasis on the doctrine of
classification or anxious or sustained attempt to discover
D some basis for classification may gradually and
imperceptibly erode the profound potency of the glorious
content of. equality enshrined in Article 14 of the
Constitution. The overemphasis on classification would
inevitably result in substitution of the doctrine of
E classification to the doctrine of equality and the Preamble
of the Constitution which is an integral part and scheme of
the Constitution. Maneka Gandhi v. Union of India [1978
(1) sec 248] ratio extricated it from this moribund and
put Its elasticity for egalitarian path finder lest the
classification would deny equality to the larger segments
F of the society. The classification based on employment in
Government, semi-Government and reputed commercial
firms has the insidious and inevitable effect of excluding
lives in vast rural and urban areas engaged in unorganized
or self-employed sectors to have life insurance offending
G Article 14 of the Constitution and socio-economic justice."
18. In Gian Devi Anand vs. Jeevan Kumar & Ors. [1985
~
(2) SCC 683] the Supreme Court considered the question
whether the statutory tenancy in respect of commercial premises
H is heritable. The facts of that case were that one Wasti Ram
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 601
INDIAAND ANR. [G.S. SINGHVI, J.]
+ was tenant in respect of Shop No. 20, New Market, West Patel A
Nagar of the respondents at a monthly rental of Rs.110/-. The
tenancy commenced from September 1, 1959. In April, 1970,
the respondent landlord determined the tenancy by serving a
notice to quit. In September, 1970 he filed a petition under
Section 14 of the Act for eviction of Wasti Ram on the grounds B
+ of non-payment of rent, bona fide requirement, change of user
from residential to commercial, substantial damage to the
property and sub-letting. He also impleaded one Ashok Kumar
Sethi, as defendant No. 2 by alleging that he had been unlawfully
inducting a sub-tenant. The Rent Controller negatived all the c
grounds of challenge except the non-payment of rent. He held
. that the premises had been let out for commercial purpose and
as such the ground of bona fide requirement was not available
to the landlord for seeking eviction of the tenant. On the issue of
non-payment of rent, the Rent Controller held that the tenant was
D
liable to pay a sum of Rs.24/- by way of arrears for the·period
~ from March 1, 1969 to February 28, 1970 after taking into
consideration all payments made and a further sum of Rs.90/-
on account of such arrears for the month of September, 1970.
He, accordingly, directed eviction of the tenant. The landlord
challenged the order of the Rent Controller by filing an appeal. E
The tenant, namely Wasti Ram, filed cross objection on the
findings recorded by the Rent Controller on the issue of default.
The Rent Control Tribunal allowed the cross objection of the
tenant and held that there was no default in the matter of payment
of rent. The Tribunal rejected the landlord's plea regarding F
damage to the property but remanded the matter to the Rent
""· Controller for deciding the question of sub-letting afresh after
affording opportunity to the parties to lead evidence. Smt. Gian
Devi Anand, the widow of the deceased tenant appealed against
. the order of the Tribunal. The landlord filed cross objections to G
question the finding recorded by the Tribunal on the issue of
default by the tenant in payment of rent. The High Court held
·r that after the demise of the statutory tenant, his heirs do not
have the right to remain in possession because the statutory
tenancy was not heritable and the protection afforded to the H
602 SUPREME COURT REPORTS [2008] 6 S.C.R.
A statutory tenant was not available to the heirs. This Court
reversed the order of the High Court and held:
"We find it difficult to appreciate how in this country we
can proceed on the basis that a tenant whose contractual
tenancy has been determined but who is protected against
B eviction by the statute, has no right of property but only a
personal right to remain in occupation, without ascertaining
what his rights are under the statute. The concept of a
statutory tenant having no estate or property in the
premises, which he occupies is derived from the provisions
c of the English Rent Acts. But it is not clear how it can be
assumed that the position is the same in this country
without any reference to the provisions of the relevant
statute. Tenancy has its origin in contract. There is no
dispute that a contractual tenant has an estate or property
D in the subject matter of tenancy, and heritability is an
incident of the tenancy. It cannot be assumed, however,
that with the determination of the tenancy the estate must
necessarily disappear and the statute can only preserve
his status of irremovability and not the estate he had in the
E premises in his occupation. It is not possible to claim that
the "sanctity" of contract cannot be touched by legislation.
It is therefore necessary to examine the provisions of the
Madhya Pradesh Accommodation Control Act, 1961 to
find out whether the respondent's predecessors-in-interest
F retained a heritable interest in the disputed premises even
after the termination of their tenancy."
In paragraph 34 of the judgment, the Court highlighted
difference between the residential and commercial tenancies
and concluded that the legislature could never have intended
G that the landlord would be entitled to recover possession of the
premises or the building let for commercial purposes on the
death of the tenant of the commercial tenancies, even if no
ground for eviction as prescribed in the rent Act is made out. In
the concluding part of the judgment, the Court took cognizance
H of the absence of provision for eviction of the tenant of non-
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 603
INDIAAND ANR. [G.S. SINGHVI, J.)
-y
residential premises even when the same are bona fide required A
by the landlord for his use or occupation and observed:
"Before concluding, there is one aspect on which we
· consider it desirable to make certain observations. The
owner of any premises, whether residential or commercial,
+ let out to any tenant, is permitted by the Rent Control Acts B
to seek eviction of the tenant only on the grounds specified
... in the Act, entitling the landlord to evict the tenant from the
premises. The restrictions on the power of the landlords
in the matter of recovery of possession of the premises let
out by him to a tenant have been imposed for the benefit c
of the tenants. In spite of various restrictions put on the
landlord's right to recover possession of the premises
from a tenant, the right of the landlord to recover possession
of the premises from the tenant for the bona fide need of
the premises by the landlord is recognised by the Act, in D
case of residential premises. A landlord may let out the
premises under various circumstances. Usually a
landlord lets out the premises
. when he does not need . it
". for own use. Circumstances may change and a situation
may arise when the landlord may require the premises E
let out by him for his own use. It is just and proper that
when the landlord requires the premises bona fide for
his own use and occupation, the landlord should be
entitled to recover the possession of the premises which
continues to be his properly in spite of his letting out the F
..J.. same to a tenant. The Legislature in its wisdom did
recognise this fact and the Legislature has provided that
bona fide requirement of the landlord for his own use will
be a legitimate ground under the Act for the eviction of
his tenant from any residential premises. This ground is,
G
however, confined to residential premises and is not
made available in case of commercial premises.. A
landlord who lets out commercial premises to a tenant
under cerlain circumstances may need bona fide the
premises for his own use under changed COf!ditions on
H
604 SUPREME COURT REPORTS [2008] 6 S.C.R.
A some future date should not in fairness be deprived of
his right to recover the commercial premises. Bona fide
need of the landlord will stand very much on the same
footing in regard to either class of premises, residential
or commercial. We, therefore, suggest that Legislature
B may consider the advisability of making the bona fide
requirement of the landlord a ground of eviction in respect
of commercial premises as well."
[Emphasis added]
19. What is significant to be noted is that in para 34 of the
C aforementioned judgment, the distinction between residential
and non-residential tenancies was made in the context of the
rights of the heirs of the tenant to continue to enjoy the protection
envisaged under Section 14(1 ). The Court was of the view that
the heirs of the tenants of the commercial premises cannot be
D deprived of the protection else th~ family of the tenant may be
brought on road or deprived of the only source of livelihood.
The Court also opinioned that if the heirs of the individual tenants
of commercial tenancies are deprived of the protection,
extremely anomalous consequences will ensue because the
E companies, corporations and juridical entities carrying on
business or commercial activities in rented premises will
continue to enjoy the protection even after the change of
management, but the heirs of individual tenants will be denuded
of similar protection. At the same time, the Court noted that the
F landlord of a premises let for residential purpose may bona fide
require the same for his own use or the use of his dependent
family members and observed that the legislature should remove
apparent discrimination between residential and non-residential
tenancies when the landlord bona fide requires the same. If the
G observations contained in para 34 are read in any other manner,
the same would become totally incompatible with the
observation contained in the penultimate paragraph of the
judgr:nent and we do not see any reason for adopting such
course., more so, because the later part of the judgment has
H been relied in Harbilas Rai Bansal vs. State of Punjab (supra)
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 605
INDIAAND ANR. [G.S. SINGHVI, J.]
.,
and Rakesh Vij vs. Dr. Raminder Pal Singh Sethi (supra). A
20. In Rattan Arya vs. State of Tamil Nadu (supra), the
Court considered challenge to the constitutionality of Section
30(ii) of the Tamil Nadu Buildings (Lease and Rent Control) Act,
1960 under which residential buildings or part thereof occupied
+ by any tenant paying monthly rent of more than Rs.400/- were B
exempted from operation of the Act. It was urged on behalf of
the appellant that distinction made between the residential and
non-residential buildings in the matter of applicability of the Act
was unreasonable, irrational and arbitrary. The Court referred
to different rent control legislations applicable to the State of c
Tamil Nadu and observed that the scheme of the Act does not
make any distinction between residential and non-residential
buildings insofar as the rights of the tenant's and obligations of
the landlord's are concerned and there are no special rights
attached to the tenancies of the non-residential buildings as D
~ against the tenancies of residential buildings so as to warrant
exemption only to residential buildings. The Court also took
cognizance of enormous increase of rents throughout the country,
referred to the judgment in Motor General Traders vs. State
of Andhra Pradesh [1984 (1) SCC 222] and struck down E
' Section 30(ii) of the Tamil Na du Act on the ground that the same
is violative of Article 14 of the Constitution.
21. In Harbilas Rai Bansal vs. State of Punjab & Anr.
(supra), the Supreme Court examined the constitutionality of
the amendment made in the Punjab Act, whereby the landlord F
was deprived of his right to seek eviction of tenant from non-
residential building on the ground of bonafide requirement for
his own use. This Court referred to the unamended and
amended Section 13(1 )(a) of the Punjab Act and observed:
G
"The Scheme of the Act, unmistakably aims at regulating
the conditions of tenancy, controlling the rents and
+ preventing unreasonable and mala fide eviction of tenants
of the residential and non-residential buildings. For the
advancement of these objects, tenants are invested with
H
606 SUPREME COURT REPORTS [2008] 6 S.C.R.
't
A certain rights and landlords are subjected to certain
obligations. These rights and obligations are attached to
the tenants and the landlords of all buildings, residential or
non-residential. None of the main provisions of the Act, to
which we have referred, make any serious distinction
B between residential and non-residential buildings."
-t
The provisions of the Act, prior to the amendment, were
uniformly applicable to the residential and non-residential
buildings. The amendment, in the year 1956, created the
impugned classification. The objects and reasons of the
c Act indicate that it was enacted with a view to restrict the
increase of rents and to safeguard against the mala fide
eviction of tenants. The Act, therefore, initially provided -
conforming to its objects and reasons - bona fide
requirement of the premises by the landlord, whether
D residential or non-residential, as a ground of eviction of
the tenant. The classification created by the amendment
has no nexus with the object sought to be achieved by the
Act. To vacate a premises for the bona fide requirement
of the landlord would not cause any hardships to the tenant.
E Statutory protection to a tenant cannot be extended to
such an extent that the landlord is precluded from evicting
..
the tenant for the rest of his life even when he bona fide
requires the premises for his personal use and occupation.
It is not the tenants but the landlords who are suffering
F great hardships because of the amendment. A landlord
may genuinely like to let out a shop till the time he bona
fide needs the same. Visualise a case of a shopkeeper
(owner) dying young. There may not be a member in the
family to continue the business and the widow may not
need the shop for quite some time. She may like to let out
G
the shop till the time her children grow up and need the
premises for their personal use. It would be wholly arbitrary
- in a situation like this - to deny her the right to evict the
tenant. The amendment has created a situation where a
tenant can continue in possession of a non-residential
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF· 607
INOIA AND ANR. [G.S. SINGHVI, J]
1
premises for life and even after the tenant's death his A
heirs may continue the tenancy. We have no doubt in our
mind that the objects, reasons and the scheme of the Act
could not have envisaged the type of situation created by
the amendment which is patently harsh and grossly unjust
for the landlord of a non-residential premises." B
-t
22. For taking the aforesaid view, the Court drew support
from the observations contained in the concluding portion of
the judgment in Gian Devi Anand vs. Jeevan Kumar & Ors.
(supra). This is evident from paragraph 17 of the judgment, which
is extracted below:- c
"In Gian Devi case the question for consideration before
the Constitution Bench was whether under the Delhi Rent
Control Act, 1958, the statutory tenancy in respect of
commercial premises was heritable or not. The Bench
D
answered the question in the affirmative. The above-quoted
"' observations were made by the Bench keeping in view
that hardship being caused to the landlords of commercial
premises who cannot evict their tenants even on the ground
of bona fide requirement for personal use. The
observations of the Constitution Bench that "bona fide E
need of the landlord will stand very much on the same
footing in regard to either class of premises, residential or
commercial" fully support the view we have taken that the
classification created by the amendment has no
reasonable nexus with the object sought to be achieved F
by the Act. We, therefore, hold that the provisions of the
amendment, quoted in earlier part of the judgment, are
violative of Article 14 of the Constitution of India and are
liable to be struck down."
G
23. The ratio of Harbilas Rai Bansal vs. State of Punjab
- ~
'
(supra) was noted and approved in Rakesh Vij vs. Dr.
Ravinder Pal Singh Sethi (supra), in the backdrop of the
argument that the amendment made to the Punjab Act 1956
was not applicable to the Union Territory of Chandigarh. While
H
608 SUPREME COURT REPORTS [2008] 6 S.C.R.
A rejecting the argument, the three Judge Bench referred to Article
13(2) of the Constitution, some of the judgments in which that
Article was considered and observed:
"We find sufficient force in the contention raised by the
learned counsel for the respondent landlord. In Harbilas
B Rai Bansal this Court held in very clear terms that the
classification created by the Amendment Act, 1956, by
which the words "a non-residential building or" occurring
in Section 13(3)(a)(ii) were deleted and certain other
amendments had been made, had no reasonable nexus
c with the object sought to be achieved by the Act and
consequently the provisions of the Amendment Act were
violative of Article 14 of the Constitution."
24. The judgment in Harbilas Rai Bansal vs. State of
Punjab (supra) was recently noticed in Mohinder Prasad Jain
D
vs. Manohar Lal Jain [(2006) 2 SCC 724]. The respondent in
;>
that case applied for eviction of the tenant (appellant) from the
shop in question on the ground of bona fide personal requirement
i.e. for the purpose of running wholesale business in Ayurvedic
medicines. The Rent Controller dismissed the application on
E the ground that bona fide requirement of the landlord has not
been proved. The Appellate Authority reversed the order of the
Rent Controller and returned a finding that the landlord has been
able to prove his bona fide requirement. In the revision filed by
the appellant, reliance was placed on the judgment of the Full
F Bench of Delhi High Court in Satyawati Sharma Vs. Union of
India &Ors. (that judgment is under challenge in these appeals)
and it was urged that an application for eviction of the tenant on
the ground of bona fide requirement of the landlord is not
maintainable in respect of non-residential premises. The
G learned Single Judge of Punjab & Haryana High Court referred
to an earlier judgment of the Division Bench of that Court in
State of Haryana vs. Ved Prakash Gupta [(1999) 1 Rent Law
'I -
Reporter 689], wherein the restriction imposed on the landlord's
right to evict the tenant under the Haryana Urban (Control of
H Rent and Eviction) Act, 1973, was struck down and held that the
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 609
IN DIA AND ANR. [G.S. SINGHVI, J.]
judgment of the Full Bench of Delhi High Court cannot be relied A
for granting relief to the appellant. This Court noted that a similar
provision had been declared unconstitutional in Harbilas Rai
Bansal vs. State of Punjab (supra), which was approved by
three Judge Bench in Rakesh Vij vs. Dr. Ravinder Pal Singh
Sethi (supra) and held that the tenant cannot question the B
landlord's right to seek eviction of the tenant from non-residential
premises.
25. We may now advert to the judgment of Delhi High Court
in H.C. Sharma vs. Life Insurance Corporation of India &
Anr. (supra) and the one under challenge. The facts of H.C. C
Sharma's case were that the petitioner had leased out Flat
No.28-E, Connaught Place, New Delhi to National Insurance
Company Limited for non-residential use. Subsequently, the
National Insurance Company Limited became Life Insurance
Corporation of India. The petitioner made efforts to convince D
the Corporation that the premises are required for his bona fide
use and occupation but could not convince the concerned
authorities. He, therefore, filed an application for recovery of
possession. The same was dismissed by the High Court. He
then filed Writ Petition questioning the constitutionality of Section E
14(1)(e) on the ground that the classification of the premises
into residential and non-residential is arbitrary and violative of
Article 14 of the Constitution. The Division Bench of Delhi High
Court traced the history of rent control legislation applicable to
Delhi, the background in which protection was extended to the F
tenants generally and the limited right given to the landlord to
seek eviction of the tenants only from the premises let for
residential purposes and observed:
"In judging whether the restriction imposed by the impugned
provisions is reasonable, the court can look into the G
circumstances under which the restriction came to be
... 1 imposed. Judicial notice can be taken of the fact that in
1947 there was a large influx of refugees into Delhi. A
large number of people who were uprooted from their
hearths and homes in West Pakistan settled in Delhi. This H
610 SUPREME COURT REPORTS [2008] 6 S.C.R.
A resulted in acute shortage of house accommodation and
..
business premises with the result that rents soared to a
high level which necessitated the regulation of relations
between landlords and tenants ......... "
The object in not providing for the eviction of a tenant
B from a non-residential premises on the ground specified
in sub-clause (e) was to give security of tenure to a tenant
of such premises. If a tenant of a non-residential ·
premises was allowed to be evicted on the ground of
personal requirement by the landlord, it would have had
c the effect of completely dislocating the business of the
tenant and this in turn could have grave consequences
on the social and economic fabric of the country, besides
causing untold misery to the tenant."
[Emphasis added]
D
The Division Bench rejected the plea of discrimination and ...
observed:-
"The grievance of the petitioner is that the discrimination
between the two classes of landloFds is without any rational
E basis. World War 11 broke out in 1939 and an acute
shortage of housing accommodation developed. To control
the rents and eviction of tenants, the Rent Control Order
of 1939 was issued. A study of the relevant provisions of
the rent control legislation discussed in the earlier part of
F the judgment would show that the restrictions imposed on
the landlords to recover possession of residential premises
were very stringent upto 1952. Under the Rent Control
Order of 1939 and the Delhi Rent Control Ordinance, 1944
a landlord could recover possession of residential
G premises only when he had not resided within the limits of
Delhi or New Delhi during the twelve months immediately
preceding the date of the application and further satisfied
the conditions that it was essential in the public interest
.. ..,.
that he should take up residence in that area and that he
H was unable to secure other suitable accommodation.
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 611
INDIAAND ANR. [G.S. SINGHVI, J.]
Under the Rent Control Act of 1947, a landlord could A
recover possession of residential premises only if he did
not possess other suitable accommodation and further,
that he had acquired his interest in the premises at a date
prior to the. beginning of the tenancy or the 2nd day of June,
1944, whichever was later. The rigour of the restrictions B
qua residential premises was relaxed in the Act of 1952
and a landlord could recover possession of residential
premises if he required it bonafide for occupation as a
residence for himself or his family and he had no other
suitable accommodation. In comparison to this the Rent c
Control Order, 1939 was not applied to non-residential
premises. The Delhi Rent Control Ordinance did not place
any bar on the right of the landlord to recover possession
of non-residential premises. The only restriction placed
was that the landlord could recover possession of the
0
premises for his residential use. The bar against the
eviction of tenants from non-residential premises was
introduced in the Rent Control Act, 1947 and it has
continued since then. A landlord cannot recover
possession of non-residential premises on the ground of
his personal need. There is a clear object behind . E
classification of the premises into "residential" and "non-
residential". We have earlier observed that in 1947, on
partition of the country, there was a large influx of refugees
into Delhi. The Government was faced with the problem
of resettling the refugees. This necessitated the F
imposition of restrictions on the right to evict tenants
from residential and non-residential premises. The
legislature keeping in view the needs of the people and
other circumstances allowed the landlord to evict tenants
from residential premises for his personal use in case G
he did not have any other suitable accommodation, but
restricted the right of the landlord to recover possession
of non-residential premises on the ground of personal
need. The necessity behind this discrimination is to
assure the security of tenure to the tenants of non- H
612 SUPREME COURT REPORTS (2008] 6 S.C.R.
A residential premises so that they can settle in their
business without the fear of being ejected.
Owners of residential buildings and non-residential
buildings each stand out as a class by themselves. The
impugned provisions make no distinction interse between
B the two classes of properties or their landlords. The t
impugned provisions take within their fold all the persons
similarly situate. So long as there is equality under similar
conditions and among persons similarly situated, there is
no infringement of Article 14."
c [Emphasis added]
26. A critical analysis of the above noted judgment makes
it clear that the main reason which weighed with the High Court
for approving the classification of premises into residential and
non-residential was that by imposing restriction on the eviction
0
of tenants of premises let for non-residential purposes, the
government wanted to solve the acute problem of housing
created due to partition of the country in 194 7. The Court took
cognizance of the fact that as an aftermath of partition many
hundred-thousands of people had been uprooted from the area
E which now forms part of Pakistan; that they were forced to leave
their homes and abandon their business establishments,
industries, occupation and trade and the Government was very
much anxious to ensure resettlement of such persons. It was
felt that if the landlords are readily allowed to evict the tenants,
F those who came from West Pakistan will never be able to settle
in their life. Therefore, in the 1947 and 1958Acts, the legislature
did not provide for eviction of tenants from the premises let for
non-residential purposes on the ground that the same are
required by the landlord's for their bona fide use and occupation.
G
27. Insofar as the judgment under challenge is concerned,
we find that the Full Bench upheld the validity of Section 14(1 )(e)
mainly by relying upon the judgment of the Division Bench in
H.C. Sharma Vs. Life Insurance Corporation of India & Anr.
(supra) and of this Court in Amarjit Singh vs. Smt. Khatoon
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 613
INDIAAND ANR. [G.S. SINGHVI, J.]
Quamarin (supra) and by observing that legislature has the right A
to classify persons, things, and goods into different groups and
that the Court will not sit over the judgment of the legislature. It is
significant to note that the Full Bench did not, at all, advert to the
question whether the reason/cause which supplied rational to
the classification continued to subsist even after lapse of 44 B
years and whether the tenants of premises let for non-residential
purposes should continue to avail the benefit of implicit
exemption from eviction in the case of bona fide requirement of
the landlord despite sea saw change in the housing scenario in
Delhi and substantial increase in the availability of buildings and c
premises which could be let for non-residential or commercial
purposes.
28. In our opinion, the reasons which weighed with the High
Court in H.C. Sharma vs. Life Insurance Corporation of
India & Anr. (supra) and the impugned judgment cannot in the D
changed scenario and in the light of the ratio of Harbilas Rai
Bansal vs. State of Punjab (supra), which was approved by
three-Judge Bench in Rakesh Vij vs. Dr. Raminder Pal Singh
Sethi (supra) and of Rattan Arya vs. State of Tamil Nadu
(supra), as also the observations contained in the concluding E
portion of the judgment in Gian Devi Anand vs. Jeevan Kumar
& Ors. (supra). now be made basis for justifying the
classification of premises into residential and non-residential
in the context of landlord's right to recover possession thereof
for his bona fide requirement. At the cost of repetition, we deem F
it proper to mention that in the rent control legislations made
applicable to Delhi from time to time residential and non-
residential premises were treated at par for all purposes. The
scheme of the 1958 Act also does not make any substantial
distinction between residential and non-residential premises. G
Even in the grounds of eviction set out in proviso to Section
14(1 ), no such distinction has been made except in Clauses (d}
. ~ and (e}. In H.C. Sharma vs. Life Insurance Corporation of
India (supra}, the Division Bench of the High Court, after taking
cognizance of the acute problem of housing created due to
H
614 SUPREME COURT REPORTS [2008] 6 S.C.R.
't
A partition of the country, upheld the classification by observing
that the Government could legitimately restrict the right of the
landlord to recover possession of only those premises which
were let for residential purposes. The Court felt that if such
restriction was not imposed, those up-rooted from Pakistan may
B not get settled in their life. As of now a period of almost 50 years
has elapsed from the enactment of the 1958 Act. During this
long span oftime much water has flown down the Ganges. Those
who came from West Pakistan as refugees and even their next
generations have settled down in different parts of the country,
C more particularly in Punjab, Haryana, Delhi and surrounding
areas. They are occupying prime positions in political and
bureaucratic set up of the Government and have earned huge
wealth in different trades, occupation, business and similar
ventures. Not only this, the availability of buildings and premises
D which can be let for non-residential or commercial purposes
has substantially increased. Therefore, the reason/cause which
prompted the Division Bench of the High Court to sustain the
differentiation/classification of the premises with reference to
the purpose of their user, is no longer available for negating the
challenge to Section 14(1 )(e) on the ground of violation of Article
E 14 of the Constitution, and we cannot uphold such arbitrary
classification ignoring the ratio of Harbilas Rai Bansal vs.
State of Punjab (supra), which was reiterated in Joginder Pal
vs. Naval Kishore Behal (supra) and approved by three-
Judges Bench in Rakesh Vij vs. Dr. Raminder Pal Singh
F Sethi (supra). In our considered view, the discrimination which
was latent in Section 14(1 )(e) at the time of enactment of 1958
Act has, with the passage of time (almost 50 years) has become
so pronounced that the impugned provision cannot be treated
intra vi res Article 14 of the Constitution by applying any rational
G criteria.
29. It is trite to say that legislation which may be quite
reasonable and rationale at the time of its enactment may with >- •
the lapse of time and/or due to change of circumstances become
arbitrary, unreasonable and violative of the doctrine of equity
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION. OF 615
INDIAAND ANR. [G.S. SINGHVI, J.]
and even if the validity of such legislation may have been upheld A
at a given point of time, the Court may, in subsequent litigation,
strike down the same if it is found that the rationale of
classification has become non-existent. In State of Madhya
Pradesh vs. Bhopal Sugar Industries [AIR 1964 SC 1179],
this Court while dealing with a question whether geographical B
classification due to historical reasons could be sustained for
all times and observed:
"Differential treatment arising out of the application of the
laws so continued in different regions of the same
reorganised, State, did not therefore immediately attract c
the clause of the Constitution prohibiting discrimination.
But by the passage of time, considerations of necessity
and expediency would be obliterated, and the grounds
which justified classification of geographical regions for
historical reason may cease to be valid. A purely temporary D
provision which because of compelling forces justified
differential treatment when the Reorganisation Act was
enacted cannot obviously be permitted to assume
permanency, so as to perpetuate that treatment without a
rational basis to support it after the initial expediency and E
necessity have disappeared.
30. In Narottam Kishore Dev Verma vs. Union of India
[AIR 1964 SC 1590] the challenge was to the validity of Section
·, 87-B of the Code of Civil Procedure which granted exemption
to the rulers of former Indian States from being sued except F
-j.
with the consent of the Central Government. In the course ·of
judgment, it was observed as under:
"If under the Constitution all citizens are equal, it may be
desirable to confine the operation of Section 87-B to past
G
transactions and nor to perpetuate the anomaly of the
. -i
distinction between the rest of the citizens and Rulers of
former Indian States. With the passage of time, the validity
of historical considerations on which Section 87-B is
founded will wear out and the continuance of the said
H
616 SUPREME COURT REPORTS [2008] 6 S.C.R.
A section in the Code of Civil Procedure may later be open
to serious challenge."
31. In H.H. Shri Swamiji Shri Admar Mutt Etc, vs. The
Commissioner, Hindu Religious & Charitable
Endowments Department (1979 (4) SCC 642] this Court was
8 called upon to consider the validity of the continued application
of the provisions of the Madras Hindu Religious Endowment
Act, 1951 in the area which had formerly been part of State of
Madras and which had latter become part of the new State of
Mysore (now Karnataka) as a result of the State Re-organisation
C Act, 1956. While declining to strike down the legislation on the
ground of violation of Article 14 of the Constitution, the Court
observed:
"An indefinite extension and application of unequal laws
for all time to come will militate against their true character
D
as temporary measures taken in order to serve a
. temporary purpose. Thereby, the very foundation of their
constitutionality shall have been destroyed the foundation
being that Section 119 of the State Reorganisation Act
serves the significant purpose of giving reasonable time
E to the new units to consider the special circumstances
obtaining in respect of diverse units. The decision to
withdraw·the application of unequal laws to equals cannot
be delayed unreasonably because of the relevance of
historical reasons which justify the application of unequal
F laws is bound to wear out with the passage of time. In
Broom's Legal; Maxim (1939 Edition, page 97) can be
found a useful principle "Cessante Ratione Legis Cessat
lpsa Lex", that is to say, "Reason is the source of the law,
and when the reason of any particular law ceases, so
G does the law itself."
32. In Motor General Traders vs. State of Andhra
Pradesh (supra), validity of Section 32(b) of the A.P. Buildings
(Lease, Rent and Eviction) Control, Act, 1960 was considered.
H By that Section it was declared that the provisions of the main
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 617
INDIAAND ANR. [G.S. SINGHVI, J.]
Act will not apply to the buildings constructed after 25th August, A
1957. The Court noted that exemption had continued for nearly
a quarter century and struck down the same despite the fact
that validity thereon had been upheld by the High Court in
Chintapalli Achaiah vs. P. Gopala Krishna Reddy.[ AIR 1966
AP 51]. Some of the observations made in the judgment are s
worth noticing. These are:
"What may be unobjectionable as a transitional or
temporary measure at an initial stage can still become
discriminatory and hence violative of Article 14 of the
Constitution if it is persisted in over a long period without C
any justification."
"What was justifiable during a short period has turned out
to be a case of hostile discrimination by lapse of nearly a
quarter of century.... We are constrained to pronounce upon D
the validity of the impugned provision at this late stage
because of grab of Constitution which it may have
possessed earlier has become worn out and its
unconstitutionality is now brought to a successful
challenge".
E
"As already observed, the landlords of the buildings
constructed subsequent to August 26, 1957 are given
undue preference over the landlords of buildings
constructed prior to that date in that the former are free
from the shackles of the Act while the latter are subjected F
to the restrictions imposed by it. What should have been
just an incentive has become a permanent bonanza in
favour of those who constructed buildings subsequent to
August 26, 1957. There being no justification for the
continuance of the benefit to a class of persons without G
any rational basis whatsoever, the evil effects flowing from
the impugned exemption have caused more harm to t~e
society than one could anticipate. What was justifiable •
during a short period has turned out to be a case of hostile
discrimination by lapse of nearly a quarter of century. The H
618 SUPREME COURT REPORTS (2008] 6 S.C.R.
~
A second answer to the above contention is that mere lapse
of time does not lend constitutionality to a provision which
is otherwise bad. "Time does not run in favour of legislation.
If it is ultra vires, it cannot gain legal strength from long
failure on the part of lawyers to perceive and set up its
B invalidity. Albeit, lateness in an attack upon the
~
constitutionality of a statute is but a reason for exercising
special caution in examining the arguments by which the
attack is supported."
33. In Rattan Arya and Ors. vs. State of Tamil Nadu
c and Anr. (supra) the Court relied on the ratio of Motor General
Traders vs. State of Andhra Pradesh (supra) and struck down
Section 30(ii) of the Tamil Nadu Buildings (Lease and Rent)
Control Act, 1960 by observing that there was no rational basis
in picking out the class of tenants of residential buildings paying
D a rent of more than Rs.400/- per month and to deny similar right
to tenants of other buildings and residential or non-residential Jr
premises.
34. In Malpe Vishwanath Acharya and Others vs. State
of Maharashtra & Another (supra), the Court found that the
E criteria for determination and fixation of rent by freezing or by
pegging down of rent as on 1.9.1940 or as on first date of letting,
had, with the passage of time become irrational and arbitrary
but did not strike down the same on the ground that extended
period of Bombay Rent Act was coming to an end on 31.3.1998.
F
35. Before parting with this aspect of the case, we may "'
refer to the judgment of Amarjit Singh vs. Smt. Khatoon
Quamarin (supra), on which reliance has been placed by the
Full Bench of the High Court for negating the appellant's
challenge to Section 14(1 )(e). In that case, the respondent sought
G
eviction of the tenant from the first floor of the premises situated
at Maharani Bagh, New Delhi on the ground of personal and
t .
bona fide necessity. The suit filed by the landlady was decreed
by the learned Single Judge of the Delhi High Court and a
direction was issued for eviction of the tenant (appellant). This
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 619
INDIAAND ANR. [G.S. SINGHVI, J.]
Court referred to the earlier judgments in Pasupuleti A
Venkateswarlu vs. Motor & General Traders [1975 (1) SCC
770], Hasmat Rai vs. Raghunath Prasad [1981 (3) SCC 103]
and held that in view of the availability of alternative
accommodation to-the landlady, the High Court was not justified
in ordering eviction of the tenant. B
~
36. A careful reading of the aforementioned judgment
shows that the plea of unconstitutionality of Section 14(1 )(e) of
the 1958 Act was neither raised nor debated with any
seriousness and the observation made by the Court in that
regard cannot be treated as the true ratio of the judgment, which c
as mentioned above, mainly rested on the interpretation of the
expression "reasonably suitable residential accommodation".
The bedrock of the respondent's claim was that she had a right
to comfortable living and availability of alternative
accommodation, by itself not sufficient for declining eviction of D
the tenant. While rejecting this argument, the Court observed:
"17 ....... The logic of the argument of Shri Kacker is
attractive, but the legality of the said submission is
unsustainable. Rent restriction laws are both beneficial
and restrictive, beneficial for those who want protection E
from eviction and rack re_nting but restrictive so far as the
landlord's right or claim for eviction is concerned. Rent
restriction laws would provide a habitat for the landlord or
landlady if need be, but not to seek comforts other than
habitat - that right the landlord must seek elsewhere." F
");
37. Another contention raised on behalf of the landlady was
that Section 14(1 )(e) of the 1958Act should be read in a manner
which will make it in conformity with Articles 14 and 16 of the
Constitution. This is evinced from para 18 of the judgment which
G
is extracted below:-
. -t "18. Our attention was drawn to the decision in the case
of Bishambhar Dayal Chandra Mohan v. State of U.P.[1882
(1) SCC 39] and our attention was drawn to the
observations at p. 66 and 67 of the said case in aid of the H
620 SUPREME COURT REPORTS [2008] 6 S.C.R.
A submission that right to property is still a constitutional
right and therefore in exercise of that right if a landlord or
an owner of a house lets out a premises in question there
was nothing wrong. Shri Kacker submitted that the second
limb of Section 14(1 )(e) of the Act should be read in such
B a way that it was in consonance with Article 14 and Article
21 of the Constitution. Otherwfse it would be void as being
unconstitutional. As a general proposition of law this is
acceptable."
The Court rejected the argument and observed:
c
"The Act in question has the authority of law. There is no
denial of equality nor any arbitrariness in the second limb
of Section 14(1)(e) of the Act, read in the manner
contended for by the appellant. Article 21 is not violated
so far as the landlord is concerned. The rent restricting
D
Acts are beneficial legislations for the protection of the
weaker party in the bargains of letting very often. These
must be so read that these balance harmoniously the rights
of the landlords and the obligations of the tenants. The
Rent Restriction Acts deal with the problem of rack renting
E and shortage of accommodation. It is in consonance with
the recognition of the right of both the landlord and the
tenant that a harmony is sought to be struck whereby the
bona fide requirements of the landlords and the tenants in
the expanding explosion of need and population and
F shortage of accommodation are sought to be harmonised
and the conditions imposed to evict a tenant are that the
landlord must have bona fide need. That is satisfied in this
case. That position is not disputed. The second condition
is that landlord should not have in his or her possession
G any other reasonably suitable accommodation. This does
not violate either Article 14 or Article 21 of the Constitution."
38. In view of the above discussion, we hold that Section i ·
14(1)(e) of the 1958 Act is violative of the doctrine of equality
embodied in Article 14 of the Constitution of India insofar as it
H
SATYAWATI SHARMA (DEAD) BY LRS. v. UNION OF 621
INDIAAND ANR. [G.S. SINGHVI, J.]
discriminates between the premises let for residential and non- A
residential purposes when the same are required bona fide by
the landlord for occupation for himself or for any member of his
family depen9ent on him and restricts the latter's right to seek
eviction of the tenant from the premises let for residential
purposes only. 8
~
39. However, the aforesaid declaration should not be
misunderstood as total striking down of Section. 14(1 )(e) of the
1958 Act because it is neither the pleaded case of the parties
nor the learned counsel argued that Section 14(1 )(e) is
unconstitutional in its entirety and we feel that ends of justice c
will be met by striking down the discriminatory portion of Section
14(1 )(e) so that the remaining part thereof may read as under:-
"that the premises are required bona fide by the landlord
for himself or for any member of his family dependent on
D
him, if he is the owner thereof, or for any person for whose
.,. benefit the premises are held and that the landlord or such
person has no other reasonably suitable accommodation."
While adopting this course, we have kept in view well
recognized rule that if the offendi11g portion of a statute can be E
severed without doing violence to the remaining part thereof,
then such a course is permissible- R.M.D. Chamarbaugwalla
vs. Union of India (AIR 1957 SC 628) and Bhawani Singh
vs. State of Rajasthan (1996 (3) SCC 105].
As a sequel to the above, the explanation appearing below F
Section 14(1)(e) of the 1958 Act will have to be treated as
redundant.
40. In the result, the appeals are allowed. The impugned
judgment is set aside and Section 14(1){e) of the 1958 Act is
G
partly struck down. Section 14(1 )(e) shall now read as indicated
in para 39 above. Consequently, the writ petitions filed by the
- t appellants shall stand allowed and the orders impugned therein
shall stand quashed. The parties are left to bear their own costs.
D.G. Appeals allowed. H
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