Dasari Venkatadri and others vs Tenali Municipality and another

Umamaheswaram, J.—The petitioners in both the applications are the lessees of the municipal market godowns and the Gandhi Market in Tenali. The main question raised by the petitioners is that the notification issued by the Government of Madras in G. O. Ms No. 3741 dated 30-9-1946 exempting all buildings owned by municipal councils under S. 13, Madras Buildings (Lease and Rent Control) Act 1948 (Madras Act 15 of 1946) violates the principles of equality before law and equal protection of the law laid down in Art. 14 of the Constitution.

The respondents contended that the questions sought to be raised in the applications are concluded by two decisions of the Madras High Court in - Dr. K.C. Nambiar Vs. State of Madras and Others, and Globe Theatres Ltd. and Others Vs. State of Madras and Others,

So the question for consideration is, whether the exemption of the Municipal Buildings under S. 13 of the Madras Buildings (Lease and Rent Control) Act of 1946 is inconsistent with Article 14 and therefore void under Article 13 of the Constitution.

In Dr. K.C. Nambiar Vs. State of Madras and Others, Subba Rao J. (As he then was) held that an order of the Government exempting a house from the operation of the provisions of the Madras Buildings (Lease and Rent Control) Act is an administrative order not open to judicial review and that such an order does not affect the fundamental rights of a tenant under Art. 14 of the constitution or violate the provisions of Article 19.

Subsequent to this decision, a Bench of the Madras High Court held i Globe Theatres Ltd. and Others Vs. State of Madras and Others, that the discretion given to the Government under S. 13 is not an unguided and arbitrary discretion and that if it be shown in any given case that the discretion has been exercised in disregard of the standard or contrary to the declared policy and object of the legislature or arbitrarily or mala fide, then such exercise of discretion can be challenged and declared void under Art. 14 of the Constitution.

Having regard to this Bench decision, it must be held that the view of Subba Rao J. (as he then was) that the order of the Government under S. 13 of the Madras Buildings (Lease and Rent Control) Act, 1946 is not open to judicial review and is not liable to the challenged as violating Arts. 14 and 19 of the Constitution, is no longer right and each case has to be examined on its merits.

Under the notification issued by the Government of Madras on 30-9-1946. exemption is granted to all buildings owned by (i) Municipal Councils (ii) Local Boards and (iii) the Corporation of Madras. The petitioners who challenge the notification have to satisfy me that the discretion give to the Government was exercised arbitrarily, or mala fide.

The allegations in the affidavits do not disclose that in exempting the buildings belonging to the Municipal Councils or Local Boards, the State of Madras abused its powers or acted arbitrarily or mala fide. What is contended is that by exempting the municipal buildings from the operation of the Madras Buildings (Lease and Rent Control) Act of 1946, the municipal council is enabled to lease out the Godowns in open auction under the rules framed under the District Municipalities Act and thereby realise rents higher than what the petitioners were paying.

It, is also urged that the tenants occupying the municipal buildings are discriminated against the tenants occupying the other buildings and that the benefits conferred by the Madras Buildings (Lease and Rent Control) Act, 1946 upon the other tenants are taken away or denied to them by reason of the exemption. A similar contention was raised before the Supreme Court in - Baburao Shantaram More Vs. The Bombay Housing Board and Another, and was negatived by Das. J. in the following terms:

The contention is that Section 4 discriminates against the tenants of properties belonging to the Government, local authority or the Board in that these tenants are denied the benefits of the Bombay Rent Act which are available to all other tenants in Bombay. There can be no question that this exemption is given by Section 4 to certain classes of tenants and this classification is based on an intelligible differentia which distinguishes them from other tenants and this differentia has a rational relation to the object sought to be achieved by the Act.

It is the business of the Government to solve the accommodation problem and satisfy the public need of housing accommodation. It was for the purpose of achieving this object that the Board was incorporated and established. It is not to be expected that the Government or local authority or the Board would be actuated by any profit-making motive so as to unduly enhance the rents or eject the tenants from their respective properties as private landlords are or are likely to be.

Therefore, the tenants of the Government or local authority or the Board are not in need of such protection as the tenants of private landlords are and this circumstance is a cogent basis for differentiation. The two classes of tenants are not by force of circumstances placed on an equal footing and the tenants of the Government or local authority or the Board cannot, therefore, complain of any denial of equality before the law or of equal protection of the law.

Those observations apply with equal force to the present case and the exemption of the buildings belonging to the municipal councils and local boards is in my view based on a reasonable classification, and that discretion cannot be said to have been exercised arbitrarily or mala fide. It was observed by Sutherland, J. in - ''Gorieb v. Fox,'' (1926) 71 Law Ed 1229 at p. 1230 (D), that "exceptions may be made without subverting the general purposes of the ordinance.

Following those observations, I hold that under S. 13 it was open to the State to exempt the buildings belonging to Municipal councils and local boards. I am therefore unable to hold that the notification issued by the Government violates the terms of Art. 14 or Art. 19 of the Constitution.

It was next contended that the exemption of the buildings u/s 13 does not promote the policy and object of the Act namely the control of rents and the regulation of letting with a view to prevent unreasonable eviction of tenants, as the municipality is enabled to lease the buildings in open auction and thereby realize higher rents and evict the tenants already in occupation of the godowns.

The observations of Rajamannar C. 3. at pages 697, 698 and 699 in Globe Theatres Ltd. and Others Vs. State of Madras and Others, were relied on in support of this contention. In my view, this contention is also not tenable. The observations of Chagla G. J. in - ''Rampratap Jaidayal v. Dominion of India, Rampratap Jaidayal Vs. Dominion of India, clearly afford a complete answer to this objection and they are as follows:

It is impossible to understand how in any conceiveable case when a class is exempted from the operation of a law the object of that legislation can ever be advanced ''quae'' the exempted class. If Mr. Javeri''s contention were right, then no class can ever be exempted from the operation of any legislation. Take the very Prohibition case which the Supreme Court was considering. The question that fell for determination was whether the Legislature was justified in exempting the Army from the operation of the Prohibition Act.

If what Mr. Javeri says was correct, then the exemption could not have been upheld because it is impossible to contend that the policy of Prohibition was furthered and the moral principle underlying that legislation was advanced by the Army being permitted to consume liquor as against the civilians who could not do so. But the Supreme Court upheld the classification on the ground that it was a reasonable classification, that the Army had a discipline of its own, that the Army, looking to its traditions, its past and the dangerous profession which it had to practise, was entitled to certain relaxations which the civilians as a class were not entitled to, and it is from this point of view that the Supreme Court came to the conclusion that there was a reasonable and just relation to the class exempted to the object sought by the legislation to be attained.

Therefore, what is emphasised is the relevancy between the class exempted and the object of the legislation, or, in other words, the logical connection between the two. What is emphasised is not the fact that in exempting a class the Legislature must carry out the entire legislation ''quae'' the exempted class. It is further pointed out in that judgment that whenever a class is excluded from the operation of the law, it must be possible for the Court to say that there must be some reasonable basis for exclusion of that class.

Adopting those observations, I hold that there is a reasonable basis for the exclusion of this class of buildings, viz., the buildings, belonging to municipal councils and local boards and the Corporation of Madras in the State of Madras.

The learned advocate for the petitioners invited my attention to the orders passed by Government on 24-11-1948 directing the Municipal Councils not to lease out the godowns in open auction but to lease them out on reasonable rents for periods extending to three years. It was contended on behalf of the petitioners that the Government erred in going behind those orders and issuing fresh instructions on 23-1-1954 directing the Commissioner to lease out the godowns by open auction for 1954-55 with a view to increase the revenues of the council.

When I asked the Government Pleader under what rule or provision the instructions were being issued by the Government, he was unable to point out any rule or section of the District Municipalities Act. My attention was drawn to R. 12 (f) of the rules framed under the District Municipalities Act and it provides that all leases of buildings: and of lands belonging to the municipal Councils the rents of which are expected to exceed Rs. 200/- per annum should be effected by public auction.

So the procedure adopted by the municipal council for 1955, in leasing out the godowns by public auction is perfectly justified. The instructions issued by the Government D/- 23-1-1954 are also in accordance with that rule. The object of holding the auction, viz., to increase the revenues of the councils, is certainly in the interests of the Municipality and the public. The notice issued by the Municipality to the petitioners D/- 16-3-1955 calling upon them to deliver possession on 31-3-1955 is therefore not open to attack.

I hold that by reason of the exemption of the godowns from the provisions of the Madras Buildings (Lease and Rent Control) Act, the Municipality was entitled to hold an open auction and lease out the buildings.

In the result the applications fail and are dismissed with costs. Advocate''s fee in both the Writs to the 1st Respondent is Rs. 100/- and to the 2nd Respondent is Rs. 100/-.