M. Varadaraja Pillai vs Salem Municipal Council and another

Ramamurthi, J.—The above three appeals were all heard together, as the dispute arises out of a lease transaction entered into between the

Salem Municipal Council (hereinafter referred to as the Municipality) and one Varadaraja Pillai, on 23rd May 1949. The controversy centers

round the vires as well as the proper interpretation of the provisions of the Madras City Tenants Protection Act (Madras Act 3 of 1922) as well as

the later Amending Act (Madras Act 13 of 1960). There is also controversy between the parties as to the quantum of mesne profits due from

Varadaraja Pillai aforesaid. For convenient reference, Madras Act 3 of 1922 will be referred to as the Act and the Amending Act 13 of 1960 will

be referred to as the Amending Act. The Salem Municipality instituted two suits O.S. No. 95 of 1961 and O.S. No. 96 of 1962 on the file of the

court of the Subordinate Judge, Salem, against Varadaraja Pillai. O.S. No. 95 of 1961 was filed for recovery of mesne profits or damages for use

and occupation A.S. No. 479 of 1963 has been preferred by Varadaraja Pillai in so far as the decision of the trial court went against him, while the

Municipality has preferred A.S. No. 601 of 1963 in so far as the decision of the trial court went against the Municipality. O.S. No. 96 of 1962

was filed by the Municipality against Varadaraja Pillai for recovery of the suit property, land covered by T.S. No. 25/2, of an area of 30,070 sq.

ft. and for damages. The suit was decreed as prayed for and Varadaraja Pillai has preferred the Appeal A.S. No. 455 of 1967.

The facts which led up to these appeals may be briefly stated. The Municipality granted a lease to the defendant of a vacant land (known at

Victoria Market) in T.S. No. 25/2 in Fifth Division, Salem Town, for a period of ten years from 11th August 1938 to 10th August 1948, the area

of the and leased being 28,210 sq. ft. This is evidenced by a registered lease deed, which has been marked as Ex. A-1 in the suit, O.S. No. 96 of

1962. (Note: unless necessary, the documents will be referred to as exhibited and marked in the suit, O.S. No. 96 of 1962.) The lease was

granted for the specific purpose of enabling the defendant, Varadaraja Pillai, to put up a cinema theatre, indeed as per the lease deed he should

complete the construction of the theatre before 15th September, 1939. It is unnecessary to refer to the other conditions; the main condition that is

relevant for discussion is that, on the termination of the lease, the lessee should remove the superstructure, i.e., the theatre building, and hand over

vacant possession of the land to the Municipality. At the time of the termination of the lease, Varadaraja Pillai applied for a fresh lease, offering

certain terms and at the same time some others also applied for the lease of the suit property. But, ultimately the Municipality granted a fresh lease

to Varadaraja Pillai, evidenced by the registered lease deed, Ex.A-2 dated 23rd May 1949. This lease was for a period of ten years from 11th

August 1948 to 10th August, 1958. The extent of the land leased was 30,070 sq. ft. and the annual rent was Rs. 2,500/-. This lease contained an

important condition (different from the earlier lease, Ex. A-1) to the effect that on the termination of the lease the lessee should hand over vacant

possession after removing the superstructure within the time specified by the Municipality and that, if the lessee did not remove the superstructure,

the entire superstructure and all the building put up by the lessee shall belong to the Municipality. The lease further provided that the Municipality

shall give three month''s notice on or before 10th May, 1958 to the lessee to remove the the buildings and deliver vacant possession of the

property. It is not in dispute that such a notice was issued by the Municipality calling upon the lessee to remove the superstructure and hand over

vacant possession. Ex. A-4 dated 9th May, 1958 is the first notice issued by the Municipality calling upon the lessee to remove the superstructure

and hand over vacant possession of the land, Ex. A-5 is the resolution of the Municipality that the vacant site was required by the Municipality for

its purposes, that no further renewal or fresh lease could be granted to the lessee and that appropriate proceedings would be taken for recovery of

possession of the land from Varadaraja Pillai. Ex. A-6 is another notice dated 1st October, 1958 issued by the Municipality to Varadaraja Pillai

calling upon the latter remove the superstructure and hand over vacant possession of the property. To this the lessee appears to have sent a reply

dated 23rd October 1958 in which he objected to vacate and also claimed rights under the Madras City Tenants Protection Act. To this the

Municipality sent a reply, Ex. A-8, dated 1st November, 1958, the contention being that the Act was inapplicable to the lands belonging to the

Municipality. The Municipality claimed that, as the lessee had failed to vacate and hand over possession within three months as specified in the

lease, in pursuance of the notice, Ex. A-4 dated 9th May, 1958 the Municipality had become the owner of the superstructure and that the lessee

should therefore hand over possession of the site and the superstructure to the Municipality within twenty-four hours of the receipt of the notice.

The lessee did not comply with this demand and he moved the Government to direct the Municipality to extend the lease for a period of twenty

years. The Government asked the plaintiff to consider the suggestion of granting such a lease, but the Municipality by its resolution dated 24th

March, 1961 resolved that there could not be any extension of the lease as the land in question was adjacent to the existing bus stand, that the land

was required for extending the bus stand and for constructing a workshop in a portion of the site to repair lorries and other vehicles maintained by

the Municipality and that it was not possible to allow others to have use of the land even on payment of rent. The lessee thereupon initiated

proceeding in the High Court, W.P. No. 295 of 1961, and obtained a temporary injunction on 16th September, 1961 restraining the Municipality

from taking proceedings against him for eviction from the land. That writ petition was ultimately disposed of and dismissed by this court on 3rd

November, 1961 and all attempts on the part of the lessee to secure either a fresh lease or renewal proved futile. During the pendency of the writ

petition the Municipality instituted the first suit, O.S. No. 95 of 1961 on the file of the Court of the Subordinate Judge, Salem, on 10th August,

1961 for recovery of damages for use and occupation from 11th August, 1958 to 10th August, 1961 at the rate of Rs. 833-23 per month. At the

same time the Municipality reserved its right to file a suit for possession after the disposal of the writ petition (W.P. No. 295 of 1961).

Before referring to the defence of the lessee, it will be convenient at this stage to refer to the Madras City Tenants Protection Act III of 1922) as

amended by the Amending Acts (19 of 1955 and 13 of 1960 Act (III of 1922 came into force in February, 1922 and was published in the

Gazette on 21st February 1922. The Act applied to all leases created before its commencement and it applied only to the City of Madras. In the

definition section (S. 2) building is defined as including a house, out-house, etc., taking within its ambit, without any distinction, a residential of

nonresidential building. S. 3 provides that a tenant on ejectment shall be entitled to be paid as compensation the value of any building which may

have been erected by him or by his predecessor-in-interest. It also provided�vide, Amendment of 1926 that the tenant will also be entitled to the

value of any improvement which may have been made by him. S. 9 provides that any tenant who is entitled to compensation under S. 3, and

against whom a suit or proceedings in ejectment have been instituted, will be entitled to a direction from the court directing the landlord to sell the

land for a price to be fixed by the court. Act 6 of 1926 introduced certain data for fixing the fair market value of the land. S. 9 (3) provides that on

payment by the tenant of the price so fixed, the court shall pass a final order directing the conveyance of the land by the landlord to the tenant S.

12 provides that nothing in any contract made by the tenant shall take away or limit his rights under the Act, subject to the proviso that any

stipulation made by the tenant in writing registered as to the erection of buildings in so far as they relate to buildings erected after the date of the

contract would be binding on the tenant. S. 13 provides that in the City of Madras the Transfer of Property Act, 1882, shall be deemed to have

been repealed or modified to the extent necessary to give effect to the provisions of Madras Act 3 of 1922.

The amending Act 19 of 1955 came into force on the 12th of September, 1955. The effect of the amendment was that the State Government

may by notification in the Gazette extend the Act to any other municipal town and any specified village within five miles of the City of Madras or

such municipal town. It also declared that the Act shall apply to tenancies created before the commencement of the Amending Act, 19 of 1955,

i.e., the Act shall have no application to tenancies created after 12th September 1955. The Amending Act of 1955 contained other provisions

carrying out consequential verbal and other amendments in the Act of 1922. From December 1955 the Government issued notifications from time

to time extending the Act to various municipal towns and villages. The Act was extended to Salem Municipal Town by a notification of the

Government dated 11th September 1966. The result of the Amending Act of 1955 and the notification of the Government aforesaid was that the

Madras City Tenants Protection Act applied to leases of lands in other areas including lands belonging to municipalities, created before the

commencement of the Act, of 1955, i.e. 12th September 1955. The Act applied to all buildings alike, whether residential or non-residential.

Throughout, the definition of ""tenant"" included a tenant who continued in possession of the land after the determination of the tenancy agreement.

As Varadaraja Pillai became a lessee under the registered lease deed, Ex. A-2, dated 23rd May 1949, he became entitled to the protection of the

Madras City Tenants Protection Act, (as amended by Act 19 of 1955) on 11th September 1956, when the Act was extended to Salem.

Next, we come to the Amending Act, 13 of 1960, which introduced certain far-reaching changes. The main controversy in all the three appeals

relates to the vires of the provisions introducing such changes and the proper interpretation thereof. S. 2 of Act 13 of 1960 introduced a proviso to

sub-S. (3) of S. 1 of Act 3 of 1922 to the effect that the Act shall not apply to tenancies of land owned by the Corporation of Madras, by the

Municipalities and by the local panchayats and other public bodies, like the Madras City Improvement Trust, etc. Under S. 3 of Act 13 of 1960 a

new definition of building was substituted in the place of the old definition of building in the Act of 1922. The effect of the Amending Act of 1960 is

that building will include a building for residential or non-residential purposes in the City of Madras, the Municipal Towns of Coimbatore, Madurai,

Salem and Tiruchirapalli, and any village within five miles of the towns aforesaid, and building for residential purposes only in any other area. In

other words, the effect of the amendment is that the Madras City Tenants Protection Act of 1922 would apply whether the building is for

residential or non-residential purposes in the aforesaid five towns, while the Act would only to buildings for residential purposes in all other areas.

Under S. 6 of Act 13 of 1960, S. 9 of Act 3 of 1922 was amended to the effect that the landlord shall be directed to sell for a price to be fixed by

the court the whole or part of the extent of the land specified in the application. There is also a further provision in S. 6 that the court shall fix the

minimum extent of the land to be conveyed by the landlord as pertaining to and connected with the buildings put up by the tenant and not the entire

area of land comprised in the tenancy agreement. S. 9 of the Act of 1960 contains a special provision in respect of pending proceedings and in

respect of rights and privileges which may have accrued to the tenant immediately before the commencement of the Act 13 of 1960.

From the foregoing, it will be seen that the important changes introduced by Madras Act 13 of 1960 are to make the Act not applicable to

tenancies of lands owned by the Corporation of Madras and Municipal authorities and village panchayats. A special and restricted definition of

building has been given: building means a building for residential or non-residential purposes in the City of Madras and four other municipal towns,

including Salem, and for residential purposes only in all other areas. There is a special provision with respect to pending proceedings to the effect

that any proceeding pending in any court other than a proceeding relating to any property in the City of Madras and the four municipal towns

aforesaid, shall abate so far as such proceedings relate to non-residential buildings and that all rights and privileges which may have accrued

immediately before the commencement of that Act in respect of any property situated in any area other than the City of Madras and the four

municipal towns aforesaid shall cease and determine in so far as they related to non-residential buildings.

In the first suit the defendant raised, among others, the objection that Madras Act 13 of 1960 offended Art. 19 (1) (f) and Art. 31 of the

Constitution and also Art. 14, inasmuch as the exemption of lands belonging to the Municipality from the operation of the Madras City Tenants

Protection Act was arbitrary and discriminatory. On the merits the defendant also contended that the plaintiff was not entitled to claim anything

more than Rs. 2,500 per annum towards mesne profits.

The learned Subordinate Judge overruled all the objections and held that after Madras Act 13 of 1960 the defendant was not entitled to claim

any protection under the Madras City Tenants Protection Act. With regard to mesne profits, on a consideration of the oral and documentary

evidence, the learned Subordinate Judge passed a decree against the defendant for a sum of Rs. 12,000/- at the rate of Rs. 4,000 per annum for

three years from 11th August 1958 to 10th August 1961.

In the second suit (O.S. No. 96 of 1963) which was filed on 11th July 1962, the plaintiff asked for a decree directing the defendant to deliver

vacant possession of the land after removing the superstructure and also damages of Rs. 9,700 odd at the rate of Rs. 833.33 per mensem for the

period 11th August 1961 to 10th July 1962 and damages at the same rate for the future from the date of the suit till delivery of possession. The

period for which mesne profits were claimed was the period left over in the earlier suit upto the date of the second suit and future. In this suit too,

the defendant raised the same objection about the vires and the scope and operation of Act 13 of 1960. On the merits the defendant raised the

same objection that he was not liable to pay anything more than Rs. 2,500 per annum towards damages for use and occupation.

The learned Subordinate Judge overruled all the objections of the defendant and decreed the suit as prayed for. There is no discussion in the

Judgment regarding the quantum of mesne profits, and, as the suit was decreed as prayed for, the defendant became liable under the decree to pay

mesne profits to the plaintiff at the rate of Rs. 833.33 per mensem from 11th August, 1961 upto the date of delivery of possession. The amount in

dispute in the connected appeal with regard to the mesne profits is a sum of Rs. 40,000 odd, after adjusting the admitted amount at the rate of Rs.

2,500 per annum, out of the amount of Rs. 52,000 odd, decreed by the trial court.

In the light of the arguments advanced before us, the following are the main points which arise for determination.

(1) Whether the amendment introduced by Madras Act 13 of 1960 by way of proviso to Sec. 1, sub-Sec. (3) to the effect that none of the

provisions of the Act would apply to tenancies of land owned by the Corporation of Madras, by the municipal councils concerned and local

panchayats Act, is Ultra Vires, unconstitutional and vocative of Article 14, Article 19 (1) (f) read with sub-Sec. (5) and Article 31 of the

Constitution?

(2) Even if the amendment aforesaid is legal and valid, will it have retrospective operation in respect of tenancies of land which had not expired but

were current and subsisting?

(3) Even if the tenant is entitled to the benefits of the Act, is the stipulation in the lease deed that at the determination of the lease the tenant shall

remove the superstructure and deliver vacant possession within a specific period or in default thereof, the superstructure put up by the tenant will

become property of the municipality, covered or saved by the proviso to Sec. 12 of the Act as being a stipulation made by the tenant in writing and

registered as to erection of buildings.

(4) What is the relief to which the municipality is entitled with regard to the site leased and/or in regard to the superstructure put up by the tenant?

and (5) what is the amount which the municipality is entitled to recover as mesne profits or damages for use and occupation from the tenant?

On behalf of the tenant it was urged that as per the second lease (Exhibit A-2) which would expire only on 10th August, 1958, a valuable right

was vested in and accrued to the tenant under the provisions of the main Act by reason of the Notification of the Government dated 11th

September, 1956 extending the provisions of the Act to Salem municipal town and the tenant had become entitled to the benefits conferred under

Ss. 3 and 9 of the Act. It is further urged that the Act of 1960, in so far as it excluded from its purview tenancies of land owned by municipal

councils, is arbitrary, discriminatory and not based upon any valid legal classification and that, to the extent to which the amendment took away the

benefits which had accrued to the tenants concerned, the amendment constitutes an arbitrary illegal deprivation of tenants'' property or an

unreasonable restriction upon the tenants'' right thereby offending Art. 14, Art. 19 (1) (f) and sub-clause (5) and Article 31 of the Constitution. The

further contention of the learned counsel, (though independent) which is inseparably linked up with the other contention aforesaid is that this

particular provision in the Act of 1960 excluding the tenancies of lands held by municipal councils from the purview of the Act is not retrospective

in operation, that there is nothing in the Act, either express or by necessary implication, to hold that the exemption would apply to prior tenancies.

On this aspect of the matter, arguments were advanced by counsel on both sides as to the precise ambit, nature and incidents of the rights

conferred upon the tenant under the main Act, whether it is property or right to property or whether it is vested or accrued right, or whether it is

merely a privilege and a bare right to take advantage of a provision of the Statute only on a particular contingency when a suit for eviction was filed

against the tenant, etc. Learned counsel for the tenant placed considerable reliance upon S. 9 of the Amending Act of 1960 as supporting his

contention that the Amending Act is to have retrospective operation with regard to tenancies of non-residential buildings to all places except the

city of Madras, municipal towns of Coimbatore, Madurai, Salem and Tiruchirapalli. In substance, the argument is that by reason of the specific

provision in S. 9 of the Act of 1960, the law prior thereto continues to be in force without any break and charge relating to properties situate in the

city of Madras and in the municipal towns of Coimbatore, Madurai, Salem and Tiruchirapalli, regardless of the question to whom the property

belongs, i.e., who the landlord is.

There is absolutely no substance in the contention that exclusion of tenancies of lands belonging to public authorities is discriminatory and

offending Art. 14. Except a mere legal argument in the abstract, there has been no pleading and no materials have been placed to establish this

contention. The Act had been in force for thirty-eight years and when the amendment was introduced exempting tenancies of lands owned by local

authorities it has to be presumed that there was ample justification for introducing such a change. In the Statement of Objections and Reasons, it is

stated:

The Act as it now stands applied to tenancies of lands owned by local authorities. As it is considered necessary that the Act should not apply to

such tenancies, it is proposed to amend the Act suitably for the purpose."" The local authorities must have experienced considerable hardship and

inconvenience and the Government ought to have received representations and complaints about the effect and operations of the Act in relation to

lands owned by local authorities. There is a strong presumption that the Legislature understands and correctly appreciates the needs of its own

people and that its laws are directed to problems arising by experience and that its discriminations are based on adequate grounds. At this stage

we may refer to the decision of the Supreme Court reported in Swami Motor Transport (P) Ltd. and Another Vs. Sri Sankaraswamigal Mutt and

Another, which has considered in detail the circumstances under which the Act of 1922 came into force along with the amendment and the Act of

1955 and the circumstances under which the Act of 1960 was enacted based upon the difficulties and the problems facing the public bodies. The

following extract of the select Committee''s Proceedings as extracted at page 870 of the same decision shows the considerable inconvenience

which was caused to public bodies when the Act applied to lands leased by Public Bodies. It is to remedy this serious defect that public bodies

and municipal bodies had to be excluded from the purview of the Act:

....... on the reports received from Collectors, the Act was extended to certain Municipalities. But it was found that such extension caused

inconveniences to public bodies and other institutions which owned the lands in as much as they were not able to get sufficient returns from these to

carry on their activities under present conditions."" It is for the party impugning a law as offending Art. 14 to place sufficient material before Court to

show that the discrimination is not justifiable on any rational basis. There is a strong presumption that when the Legislature makes a classification, it

does so in good faith and with full knowledge of, and familiarity with, the existing local conditions and the problems in the light of the needs of the

public authorities so as to make the classification. The burden is heavy on the other side to establish that the classification is hostile and

unwarranted. The law on the subject is well settled and it is sufficient to refer to the enunciation of the legal principles by the Supreme Court in Ram

Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, observations at pages 547 and 548, which have been adopted and followed in all the

subsequent decisions. Vide: also head note (d). The courts, therefore, proceed on the basis of the strong presumption that the legislature has

understood and appreciated the needs of its own people and an amendment was introduced exempting properties belonging to local authorities in

order to solve problems which had arisen by experience of the working of the Act for over three decades. That apart, it is settled law that

Government and public authorities and private individuals cannot be treated alike and will have to be treated differently for paramount reasons of

public welfare. Reference may first be made to the decision of the Supreme Court reported in Baburao Shantaram More Vs. The Bombay

Housing Board and Another, in which the question arose whether the Notification issued under the Bombay Rent Control Act exempting the

operation of the Act in regard to properties belonging to the Bombay Housing Board offended Art. 14 as discriminatory. S. 4 of the Bombay Rent

Control Act contained the provision that the Act shall not apply to any premises belonging to the Government or local authority and the argument

was that such a provision singling out the Government or local authority was unconstitutional as offending the equal protection clause of the

Constitution. The Supreme Court negative the contention holding that the two classes of tenants, under the Government and the local authority, are

not placed on equal footing with the other tenant and that there is intelligible classification underlying the exemption. The Supreme Court observed

at page 154:

There can be no question that this exemption is given by S. 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 in 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 Beard 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, complaint

of any denial of equality before the law or of equal protection of the law. There is here no real discrimination, for the two classes are not similarly

situated. Neither S. 4 of the Bombay Rent Act, nor S. 3-A of the Bombay Housing Board Act, can therefore, be challenged as unconstitutional on

the ground of contravention of Art. 14 of the Constitution.

We may next refer to the Bench decision of the Mysore High Court reported in M.R. Puttiah v. Mysore City Municipality AIR 1955 Mys.

121 in which the Government Notification exempting houses belonging to local bodies from the purview of the provisions of the Mysore House

Rent. Control Act was upheld on the same principle differentiating the Government, i.e., properties belonging to the Government. It was held that

such exemption excluding from the purview of the Act buildings belonging to local bodies is not unguided or arbitrary, but it has a rational basis as

the object of the exemption was clearly to enable local bodies to discharge their functions unhampered by the restrictions of the Rent Control Act.

The ground of the discrimination was that the local bodies, in the interests of the general public, ought to have the freedom to deal with the buildings

owned by them in conformity with the general law, only when they can efficiently function and discharge their public duties. The same view was

taken in Venkatadri v. Tenali Municipality AIR 1956 AP 61, following a Bench decision of the Bombay High Court in Rampratap Jaidayal Vs.

Dominion of India, That case was governed by the Madras Buildings (Lease and Rent Control) Act and the Government issued a Notification

exempting buildings belonging to municipal councils and local boards from the operation of the provisions of the Act. The objection that such an

exemption offended Art. 14 was rejected in the view that classification of properties belonging to municipal councils and local boards from the

operation of the Act is based upon a rational and intelligible basis. It is obvious that what applied to the exemption introduced by the Notification

would a fortiori apply to a provision in the Act itself. In the Bench decision of the Bombay High Court Rampratap Jaidayal Vs. Dominion of India,

S. 4 of the Bombay Rent Control Act contained the provision that the provisions of the Act shall not apply to any premises belonging to the

Government or a local authority, and when the Central Government sought to evict the tenant, the tenant who claimed protection under the Act

contended that his exemption of properties belonging to Government and local authorities was vocative of Art. 14. The Bench consisting of

Chagla, C.J. and Justice Gajendragadkar, as he then was, rejected this argument. One of the points urged was that the exemption must be such

that it must necessarily advance the object of the legislation ''quae'' the class exempted from its operation. But this argument was not accepted, on

the ground that such a view would involve the absurd result that no class can ever be exempted from the operation of any legislation.

What this principle emphasizes is that there must be a reasonable and just relation to the object sought by the Legislature to be attained in the

legislation, and that the classification must not be without any relationship to that object whatsoever. This principle does not lay down that the

relationship must be such that it must necessarily advance the object of the legislation ''quae'' the class exemption from its operation. It is impossible

to understand how in any conceivable case when a class is exempted from the operation of law the object of that legislation am 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 uphold 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 practice, 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. In our opinion in the judgment from which this was an appeal to the Supreme Court we have

laid down the same principles and they are to be found in ''Fram Nusserwanji v. State of Bombay 52 Bom. L.R. 799 (F.B.). This is what the

judgment says (P. 820):

......Although it is for the Legislature to determine what classification to make, the classification must have a reasonable and just relation to the

subject of the particular legislation, or, as it has been differently put, differences made by the Legislature must be pertinent to the subject in respect

of which the classification is made.

Therefore, what is emphasised is 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 the exclusion of that class. Therefore, really that is the substantial test. Can it be said in

this case that there is no reasonable basis for the exclusion of the Government from the operation of this Act, and the burden must lie upon the

appellant to satisfy us that the exemption is so arbitrary and so capricious that the Legislature, knowing the problem it had to deal with, being the

representatives of the people, indulged in an illogical and irrational classification and not a classification which was based on any true principle.

Now, it is clear that in this case the Legislature was not in any sense exempting the Government from the operation of the Act in order to permit the

Government to do the very thing which the Legislature was prohibiting in the case of landlords who were not a local authority or Central or State

Government. It is not too much to assume, as the Legislature did in this case assume, that the very Government whose object was to protect the

tenants and prevent the rent being Increased and prevent people being ejected, would not itself, when it was the landlord, do those very things

which it sought to prohibit its people from doing, and therefore the underlying assumption of this exemption is that Government would not increase

rents and would not eject tenants unless it was absolutely necessary in public interests and unless a particular building was required for a public

purpose.

It is unnecessary to multiply decisions and it is sufficient to refer to a recent decision of the Punjab High Court reported in Sahaj Ram v. State

of Punjab AIR 1962 P&H. 298 in which the same view was taken following the principle enunciated by the Supreme Court in Baburao Shantaram

More Vs. The Bombay Housing Board and Another, In that case, S. 51 of the Pepsu Tenancy and Agricultural Lands Act of 1955 exempted from

the operation of the Act, amongst other things, lands belonging to Government and local authorities, panchayats, etc. It was observed that tenant of

the Government or local authority are not by force of circumstances placed on equal footing as tenants of other properties and that there is a

rational classification between the two categories of tenants. In this connection it may also be mentioned that there is specific entry No. 3 in List II

of Seventh Schedule�as follows:-

Local government, that is to say, the constitution and power of municipal corporations, improvement trusts, district boards, mining settlement

authorities and other local authorities for the purpose of local self-government or village administration.

This shows that local authorities and municipal corporations and public bodies and district boards, etc., constitute a separate class by itself. We

have, therefore, no hesitation whatever in rejecting the objection under Article 14 of the Constitution as to tally devoid of substance.

We shall next take up the question as to whether the provision of the exclusion of tenancies of land owned by municipal councils from the

purview of the Act is retrospective in operation. The law is well settled that no statute should be construed as to take away the rights which have

become vested or accrued unless the language in the statute is express or by necessary implication as plainly to require such a construction. Unless

there is strong indication to the contrary, the new law ought to be construed so as not to interfere with vested and accrued rights. Even so, it is not

an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the Section which has to be construed but the

question in each case is whether the Legislature has sufficiently expressed that intention. We must look to the general scope and purview of the

statute and the remedy sought to be achieved, the former state of the law, the mischief or evil sought to be rectified, the benefits sought to be

achieved, the former state of the law, the mischief or evil sought to be rectified, the benefits sought to be achieved for the benefit of the community

or the public in general and such other relevant aspects in interpreting the provisions in the statute, while determining whether the presumption that

no statute should be retrospective in operation has been clearly and satisfactorily rebutted. The inference that a statute will have retrospective

operation may rest upon unambiguous express provision to that effect in that statute itself or by necessary implication from the language employed

in the light of the attendant and surrounding circumstances. The presumption against retrospective operation taking away vested rights would apply

only if there is a vested right in the strict sense in order to raise the presumption, for, there is no presumption that an Act of Parliament is not

intended to interfere with the existing rights. Most Acts of Parliament in fact do interfere with the existing rights and the adoption of a general rule,

to rule out the operation of statutes with regard to transactions prior thereto would make legislation impossible and futile. (Vide: Craies on Statutes,

6th Edition, pages 397 and 398). At this stage it is necessary to refer to the note of warning given by Buckley, L.J. in West v. Gwynne (1911) 2.

Ch. 1 (at pages 11 and 12) where it was observed that the word ''retrospective'' is very often used loosely, that a good deal of confusion had been

caused by the fact that the word is used in more senses than one and that a statute is not retrospective merely because it affects existing rights nor

is it retrospective merely because a part of the requisites for its action is drawn from a time antecedent to its passing. (Vide also: 36 Halsbury, page

423, para 643). In West v. Gwynne (1911) 2. Ch. 1 (at pages 11 and 12) the question arose about the applicability of Cl. 3 of the Conveyancing

and Law of Property Act, 1892 which contained a provision that in all leases containing a covenant against assignment, under letting or parting with

possession of the property leased without the consent of the lesser shall be deemed to be subject to a proviso that no fine or a sum of money in the

nature of fine shall be payable in respect of such consent of the lesser. In that case, the lease was of the year 1874 and the argument was that Sec.

3 of the Conveyancing and Law of Property Act, 1892 would not apply to a lease which had come into existence prior to that Act. This objection

was not accepted. Buckley, L.J. stated the law in these terms:

During the argument the words'' retrospective ''and ''retroactive'' have been repeatedly used, and the question has been stated to be whether Sec.

3 of the Conveyancing Act, 1892, is retrospective. To my mind the word ''retrospective'' is inappropriate, and the question is not whether the

Section is retrospective. Retrospective operation is one matter. Interference with existing rights is another. If an Act provides that as at a past date

the law shall be taken to have been that which it was not, that Act, I understand to be retrospective. That is not this case. The question here is

whether a certain provision as to the contents of leases or is addressed to the case of all leases only of some, namely, leases executed after the

passing of the Act. The question it as to the ambit and scope of the Act and not as to the date as from which the new law, as enacted by the Act, is

to be taken to have been the law. Numerous authorities have been cited to us. I shall not travel through them. To my mind they have but little

bearing upon this case. Suppose that by contract between A and B there is in a event to arise a debt from B to A., and suppose that an Act is

passed which provides that in respect of such a contract no debt shall arise. As an illustration, take the case of a contract to pay money upon the

event of a wager, or the case of an insurance against a risk which an Act subsequently declares to be one in respect of which the assured shall not

have an insurable interest. In such a case, if the event has happened before the Act is passed, so that at the moment when the Act comes into

operation a debt exists, an investigation whether the transaction is struck at by the Act involves an investigation whether the Act is retrospective.

Such was the point which arose in Moon v. Durden 2 Ex. 22, and in Knight v. Lee (1893) I.Q.B. 41. But if at the date of the passing of the Act

the event has not happened, then the operation of the Act in forbidding the subsequent coming into existence of a debt is not a retrospective

operation, but is an interference with existing rights in that it destroys A''s right in an event to become a creditor of B. As matter of principle an Act

of parliament is not without sufficient reason taken to be retrospective. There is, so to speak, a presumption that it speaks only as to the future. But

there is no like presumption that an Act is not intended to interfere, with existing rights. Most Acts of Parliament, in fact, do interfere with existing

rights. To construe this Section, I have simply to read it, and, looking at the Act in which it is contained, to say what is its fair meaning.

At this juncture, we may notice that this rule of presumption against retrospective operation is also embodied in Sec. 38 of the English

Interpretation Act of 1889, (52 and 53 Victoria Chapter 63) and the same principle is also adopted and embodied in Sec. 6 of the General

Clauses Act (Central Act X of 1897), corresponding to Sec. 8 of the Madras General Clauses Act (I of 1891). Sec.6 of the General Clauses Act

(Central Act X of 1897) is in these terms:

Sec. 6:

Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to

be made, then, unless a different intention appears, the appeal shall not�

(a) revive anything not in force or existing at the time at which the repeal takes effect; or

(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment

as aforesaid;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, any such penalty, forfeiture or punishment may be

imposed as if the Repealing Act or Regulation had not been passed.

Even though S. 6 deals only with the effect of repeal, it is settled law that the principle underlying thereunder applies not only to repeal, but also

applies to amendments of prior enactments. Reference may be made to the Bench decision of the Allahabad High Court in New Singhal Dal Mill

Vs. Firm Sheo Prasad Jainti Prasad, in which it was observed that in a vast majority of cases, the Repealing Acts re-enact the law with

amendments or introduce amendments in the pre-existing law and that there is no distinction between such laws and laws which merely profess to

amend. If the amendment of the existing law is small, the Act professes to amend the prior enactment. If it is extensive, it repeals the old law and

re-enacts it. In whichever form the new law is introduced, S. 6 would apply, provided that no different intention appears in the context. We shall

now examine the pre-existing rights and obligations between the landlord and the tenant with regard to the superstructures put in by the tenant on

the property leased (at before the Act was extended to Salem Municipal town by Notification of the Government dated 11th September 1956, (b)

from 11th September 1956 till 27th June 1960 when the Madras Act, XIII of 1960 came into force and (c) after Madras Act XIII of 1960 came

into force. Before the Act of 1922 the rights and obligations between the landlord and the tenant with regard to superstructure put in by the tenant

were governed by the provisions of S. 108 of the Transfer of Property Act subject to an express contract to the contrary between the parties. S.

108 sub-Cl. (h) of the Transfer of Property Act provides that the lessee may, after the determination of the lease, remove, at any time whilst he is

in possession of the property leased, but not afterwards, all things which he has attached to the earth; provided he leaves the property in the state

in which he received it. The option is entirely with the lesser and the lessee cannot compel the lesser to take the building and pay compensation to

the lessee. Again, the lessee may enter into a contract to the contrary not to remove the superstructure which he has put up on the land leased and

leave the leased property along with the superstructure for the benefit of the lesser without claiming any compensation or agree, as in the instant

case, to remove the superstructure and hand over vacant possession within a particular time failing which the lesser to take the land along with the

superstructure without any liability for compensation. The matter is entirely regulated by S. 108 sub-Cl. (h) coupled with the particular stipulations

if any, between the landlord and the tenant. Vide: the Statement of the Law in Mulla''s Transfer of Property Act (V Edition) page 694 and Dr.

K.A. Dhairyawam v. J.R. Thakur AIR 1958 S.C. 739 - Paras. 3, 7 and 10 Vide also (1970) 1 M.L.J. 573 at 582, 583. This was the position

with regard to the tenancies prior to 1922. When the Act came into force it introduced important changes. By the Act of 1955, the Act was made

applicable to all tenancies prior to 1955. In the instant case, till the Government Notification in September, 1956 extended the Act to Salem

Municipal town, the rights of the parties were regulated by the provisions of the Transfer of Property Act and by the contract (Ex. A-2). Cl. (3) of

the lease deed expressly provides that the lessee should remove the superstructure on or before 10th May, 1958 and hand over vacant possession

and that in default the superstructure, i.e., the entire cinema building etc., would become the property of the Municipality and that the Municipality

can also give a prior notice of three months directing the lessee to remove the superstructure and hand over vacant possession on or before 10th

May, 1958.

In the first place, it is necessary to bear in mind the vital fact that in all the places where the Act comes into operation either by reason of the

provisions of the Act of 1922 or the Act of 1955 or by reason of the Notification by Government extending the Act to other areas, the provisions

of the Act would apply retrospectively to tenancies which had come into existence before the Act came into operation in any particular area and, at

the same time, the Act would not apply to tenancies which came into being after that date. The legislation itself is quite a special kind and the object

of the Act is to protect tenants who had constructed buildings on the lands leased out to them in the hope that they would not be evicted and would

not be obliged to demolish the superstructure. After the Act had come into force, no such protection is necessary to tenants because there is no

question of the tenants, putting up superstructures in the hope that they would not be evicted. The beneficial object of this enactment is apparent on

the face of it, that the provisions apply only to prior tenancies.

After the Act of 1922, certain amendments were introduced by Madras Act 16 of 1926 and what is relevant in the instant case is that S. 3 was

amended so as to entitle the tenant to include the value of the improvement which may have been made by him in the matter of compensation

payable. Certain important amendments were introduced in the amending Act (Madras Act 19 of 1955). The Act was made applicable in the city

of Madras in respect of tenancies prior to 1955, instead of 1922.

The State Government was also given power to extend the Act by a notification to Municipal towns and other areas and in those notified

areas, the Act would come into force with regard to tenancies created prior to that notified date. Other amendments were made in the other

Sections to indicate that the concerned provisions of the Act would apply only to tenancies created before the date on which the Act came into

force. It is in pursuance of the Act of 1955 that the Government notified areas, in all nineteen. In all these places the Act applied without any

distinction between residential and non-residential buildings and to whomsoever the property belonged. It did not make any difference whatever,

whether the land belonged to the Government or a Municipal authority or a private individual; the tenant was entitled to the benefits of the

provisions of the Act. In view of the problems and the difficulties experienced in the working of the Act in all these places, Act 13 of 1960

introduced various important amendments. The first amendment is the provision that the Act shall not apply to tenancies of land owned by the

Corporation of Madras, other Municipal councils and other public bodies. The Act contained the further provisions that the Government would

have the power to cancel any prior notification issued by the Government in extending the provisions of the Act to any particular area. The

important thing to notice is that there is a specific provision in the Act XIII of 1960 (S. 2 sub-clause (5) of Act XIII of 1960) that if the

Government issued a subsequent notification cancelling a prior notification with the result that the Act ceased to apply to any particular area, such

notification of cancellation will have retrospective effect in the sense that if any proceeding it pending (instituted under the provisions of the Act as

extended by virtue of a prior notification which had been since cancelled) that proceeding shall abate and all rights and privileges which might have

accrued immediately prior to such date to any person by virtue of the Act as extended, shall cease and determine and shall not be enforceable.

The next important amendment is that the building would include residential or non-residential in the city of Madras, and in the municipal towns

of Coimbatore, Madurai, Salem and Trichinopoly, while the building would mean only building for residential purposes in any other area. The result

is that the Act would apply to residential and nonresidential buildings in the city of Madras and municipal towns of Coimbatore, Madurai, Salem

and Trichinopoly, while, in other cases, the Act would apply only to residential buildings. In S. 6, the Act was amended to the effect that the fair

rent for the land which the Court may fix shall not be enhanced by more man twenty five naya paise in the rupee. This provision obviously will have

retrospective operation in respect of all tenancies. In S. 9 an important was introduced by the Act of 1960 to the effect that the landlord can be

directed to sell only that minimum portion or extent of the land which may be necessary for the convenient enjoyment by the tenant with regard to

the building put up by him. Previously, the provision was very wide and general and the tenant could have applied for a conveyance of the entire

land leased. There are certain other consequential amendments introduced in S. 9. Here again, it has to be emphasized that the amendment

introduced in S. 9 is retrospective and it applies to all tenancies. In other words, it will not be open to a tenant to contend that a vested right has

accrued to him to ask for the conveyance of the entire land leased and that his right should not be restricted to the minimum extent of land

necessary for the convenient enjoyment of the building. The retrospective operation is implicit even though in the amendment introduced, there is no

specific provision to that effect. S. 9-A is introduced providing for a right of appeal in respect of orders passed under Ss. 6, 7, 7-A or S. 9 and

contains the provision that the provisions mentioned earlier would apply to suits in ejectment and other proceedings which are pending. This does

not mean that S. 9 would not apply if no proceeding has been instituted. If any proceeding is instituted and pending, S. 10 contains the specific

provision that the Act will have retrospective operation. If no proceeding has been initiated and if a dispute arises after 1960, it is S. 9 which would

apply irrespective of the fact that the lease had been created before the amendment was introduced and the tenant cannot insist that he should have

the right to obtain a conveyance of the entire land. The next important Section is S. 9 of Act XIII of 1960 which is in these terms:

Every proceeding pending before any court, other than a proceeding relating to any property situated in

(i) the City of Madras,

(ii) the municipal towns of Coimbatore, Madurai, Salem and Tiruchirapalli, and

(iii) any village within five miles of city of Madras or of the municipal towns aforesaid,

on the date of the publication of this Act in the Fort St. George Gazette, and instituted Under the provisions of the principal Act, shall, in so far as

such proceeding relates to non-residential buildings, abate, and all rights and privileges which may have accrued immediately before such date to

any person in respect of any property situated in any area other than the areas referred to above by virtue of the principal Act, shall, in so far as

they relate to non-residential buildings, cease and determine and shall not be enforceable.

Provided that nothing contained in this Section shall be deemed to invalidate any suit or proceeding in which the decree or order passed has been

executed or satisfied in full before the date mentioned in this Section

The obvious purpose of this section is to declare that the provision excluding the operation of the Act to non-residential buildings in all the

notified areas excepting the City of Madras, Municipal towns of Coimbatore, Madurai, Salem and Tiruchirapalli would have full retrospective

operation in the sense that in all the areas other than the aforesaid five Towns, the tenants of non-residential buildings would not be entitled to

invoke the provisions of the Act and the provision is all-embracing to the effect that if any proceeding had been instituted by the tenant in respect of

any notified area other than the aforesaid five towns, in respect of non-residential buildings, the proceeding would abate and all rights and privileges

which might have accrued earlier to the tenants concerned so far as they related to non-residential buildings would cease and determine and shall

not be enforceable. This does not mean that any other amendment will not have retrospective operation. From what we have mentioned above, it

will be noticed that all the provisions introduced under the Act XIII of 1960 are necessarily retrospective in character. It is difficult to visualize how

the amendments can be prospective in character when once the important fact is borne in mind that, whether it is a particular provision of the

original Act or a particular area or an amendment, every one of these things is to apply to tenancies prior thereto. This important characteristic of

this legislation should always be borne in mind. With regard to tenancies of lands belonging to the municipal authorities, there is a general provision

in S. 2 that nothing contained in the Act shall apply to tenancies of land owned by the Corporation of Madras and the Municipal Councils. That is

an overriding provision and that provision, by itself, is sufficient to hold that prior tenancies of such lands will not be affected by the provisions of

the Act. That is necessarily implicit in the statutory provision excluding lands of public bodies. The view that the Act would still continue to apply to

tenancies of land owned by the public authorities would render the important amendment introduced under S. 2 nugatory and purposeless. The

argument of the learned counsel for the tenant overlooks the important fact that the amendments introduced under the various Section, i.e., Ss. 2,

3, 4, 5, 6, 7 and 8 are all amendments which are to be incorporated in the main Act itself so that, whenever a problem arose, the Act will have to

be applied as such. S. 9 alone is an independent provision which cannot be incorporated in the Act of 1922 and will have to remain as a separate

provision in Act XIII of 1960. The difference in the applicability of the Act with regard to residential and non-residential buildings is introduced in

S. 2 of the principal Act by S. 3 of Act XIII of 1960, and S. 9 of Act XIII of 1960 is intended to deal with the retrospective character of the

operation of the amendment introduced under S. 3 of Act XIII of 1960. Because there is such a specific provision like S. 9, it is meaningless to

contend that the provision in S. 2 of Act XIII of 1960 is not retrospective in operation when the very provision says in express language that

nothing contained in the Act shall apply to tenancies of land owned by the Corporation of Madras or the Municipal authorities.

At this stage, reference may be made to the decision of Justice Srinivasan in Gnanaprakasan and Another Vs. Mahboob Bi and Others, In that

case, there was a proceeding pending under S. 9 of the City Tenants'' Protection Act under which the tenant would be entitled to conveyance of

the entire land leased and the market price has to be ascertained according to the lowest market value prevalent within seven years. Under the

Amending Act XIII of 1960 which came into force during the pendency of the proceeding, the tenant had only the minimum right to get the

conveyance of the minimum extent of land necessary for the convenient enjoyment of the tenant and the price shall be the average market value of

three years immediately preceding. The tenant contended that the rights which had accrued to him before the amendment of 1960 are vested rights

and the amendment of 1960 will not have retrospective operation. The learned Judge rejected this argument observing that the Amending Act of

1960 is not one which repealed the existing Act and replaced it with another. He applied the well established rule that in the absence of an express

provision to the contrary, the presumption is that an amendment of a provision in an existing Act is deemed to have been part of the Act since the

date of the passing of the original Act.

In this view the learned Judge held that it is the Act as amended that will govern the rights of the tenant. In the instant case, the principle in that

decision, directly applied because, at the time the action was instituted, the Act as amended would apply and would not cover land owned by

municipal council.

The right conferred upon the tenant under S. 9 depends upon various contingencies and cannot be regarded as a vested or accrued right the

moment the Act was extended to Salem Municipal town, so as to invoke the doctrine that Act XIII of 1960 will have no retrospective operation

by invoking the presumption against retrospective operation. The tenant merely is entitled to a bare statutory right under S. 9 to apply for the sale

of the land provided a suit in ejectment has been instituted or a proceeding under S. 41 of the Presidency Small Causes Courts Act has been taken

by the landlord. Unless the landlord had commenced an action in ejectment, the tenant hat no right whatever. The statutory right under S. 9 is

solely contingent upon the landlord filing a suit in ejectment. Further, the tenant should have applied within the period of one month specified under

S. 9. This limited nature of the right of the tenant as a mere statutory right depending upon the contingency provided under S. 9 came up for

consideration before a Bench of this Court consisting of S. Ramachandra Iyer, C.J. and Anantanarayanan, J. (as he then was) in Sundareswarar

Devastanam v. Marimuthu AIR 1939 Mad. 369 in which it was held that S.9 is, in nature, expropriatory and should be confined only to suits or

applications in terms asking for possession and that the tenant cannot file a suit for a declaration of title on the basis of S. 9. From this decision it is

clear that from the period when the Act Was extended to Salem Municipal Town and till the Amending Act of 1960, came into force the tenant

could not be said to have acquired a vested or perfected right and everything was contingent upon the landlord instituting a suit in ejectment and the

tenant having applied within one month for the conveyance of the land. These are two important contingencies and before those Contingencies bad

occurred and at a time when the tenant could not have come to court to seek a declaration of the right, the Act has been amended. In that context,

the rule regarding the presumption against retrospective operation taking away vested and accrued rights cannot have application. The same view

was taken about the contingent nature of the right of the tenant under S. 9 in Natesa Mudaliar v. S.B.K.P.K. Bhajana Matam (1966) 1 M.L.J.

It is sufficient to set out the following portion of the head-note in that decision of of Justice Natesan:

It cannot be said that the tenant has acquired any vested right in the matter. Under the common law and the Transfer of Property Act, the only,

right of a tenant who had put up a superstructure is only to remove the structure on the expiry of the lease. The right to exercise an option of

purchase of the land is given to the tenant only under the Act. It is a privilege conferred on him by the Act.

The object of the Act was to afford protection to the tenant from eviction, and the right of purchase that was conferred upon him was only to that

limited extent. No valuable right of the tenant can be said to be taken away when the Amended Act limits the extent of the land that has to be

conveyed to him and for a prevailing price.

Vide also observations at page 137 of the same decision, where the learned Judge has followed and applied the principle enunciated by

Srinivasan, J. in Gnanaprakasan and Another Vs. Mahboob Bi and Others,

It will be convenient, at this stage to refer to the decision of the Supreme Court reported in Swami Motor Transport (P) Ltd. and Another Vs.

Sri Sankaraswamigal Mutt and Another, in which the view taken by the Bench of this court in Trilochan Singh Vs. The Director, Small Industries

Service Institute, was referred to with approval. In Trilochan Singh Vs. The Director, Small Industries Service Institute, the question directly arose

whether the Amending Act of 1960, by which the tenants of nonresidential buildings in areas other than the city of Madras and the Municipal towns

of Coimbatore, Madurai, Salem and Tiruchirapalli were excluded from the purview of the Act offended Art. 14, Art. 19 or Art. 31 of the

Constitution. That case arose out of a dispute raised by a tenant who had put up a non-residential building on a leased land in Tanjore. The Bench

overruled all the objections and held that the amendment did not violate Art. 14, Art. 19 or Art. 31. The Bench has adverted to the fact that the

various amendments introduced in the Act of 1960 were made on the basis of the experience gained by the working of the enactment up till then.

On behalf of the tenant it was contended that the rights which accrued in favour of the tenant under the statute prior to 1960 are valuable vested

rights and the amendment introduced under the Act 13 of 1960 amounted to deprivation of property and therefore was invalid. But this argument

was not accepted. The Bench rejected this argument holding that the Legislature has an undoubted right to notify, amend or repeal its enactments

and that a deprivation of a statutory right from a subject cannot be said to amount to taking property or deprivation of property."" This decision

clearly brings out that what the tenant was entitled to under the Act is merely a statutory right and not property as such. In the decision in

Gnanaprakasan and Another Vs. Mahboob Bi and Others, (above referred to), the same problem arose about the vires of the amendment

introduced by Act 13 of 1960. By the amendment, Tanjore and other places were excluded from the purview of the Act in respect of tenants who

had put up non-residential buildings on the land leased. Subba Rao, J. (as he then was) has traced the entire history of the legislation right up to the

Act 13 of 1960 with all the details. In this decision it has been clearly held that the Act does not offend Art. 14 or Art. 19 (1) (f) or Art. 31. In

paragraph 29 the Supreme Court has held following its previous decision in Kavalappara Kottarathil Kochuni and Others Vs. The State of Madras

and Others, that there can be a law which deprives a person of his property provided it amounts to a reasonable restriction in the interests of the

general public of for the protection of the interests of Scheduled Tribes. The amendments introduced in the City Tenants'' Protection Act from time

to time are undoubtedly for regulation of right of landlord and tenant and are in the interests of the general public and clearly satisfy the conditions

of Art. 19 (1) (f). This decision is clear authority and it is no longer open to argument that the Act and the amendments offend Art. 14 or Art. 19 or

Art. 31. Vide also the observations in Kavalappara Kottarathil Kochuni and Others Vs. The State of Madras and Others, Subba Rao J. (as he

then was) deals with the incidents of the right of the tenant under the Act in paragraph 30 of the judgment. The learned Judge observed as

follows:�

The question that falls to be considered is whether the second right, namely, the right of a tenant to apply to the court for an order directing the

landlord to sell the land to him for a price to be fixed by it, under S. 9 of the principal Act is a right to property. The law of India does not

recognise equitable estates. No authority has been cited in support of the contention that a statutory right to purchase land is, or confers, an interest

or a right in property. The fact that a right is created not by contract but by a statute cannot make a difference in the content or the incidents of the

right, that depends upon the nature and the scope of the right conferred. The first conferred is a right to purchase land. If such a right conferred

under a contract is not a right of property, the fact that such a right stems from a statute cannot obviously expand its content or make it any the less

a non-proprietary right. In our view, a statutory right to apply for the purchase of land is not a right of property. It is settled law that a contract to

purchase a property does not create an interest in immovable property.

Different consideration may arise when a statutory sale has been effected and title passed to a tenant; that was the basis of the judgment of this

court in Maharana Shri Jayvantsinghji Ranmalsinghji etc. Vs. The State of Gujarat, on which Mr. Viswanatha Sastry relied. But we are not

concerned here with such a situation. It is said that the appellants have acquired a right under the 1965 Act to hold and enjoy the buildings erected

by them by exercising their right to purchase the site of the said buildings and that the impugned Act indirectly deprived them of their right to hold

the said buildings. This argument mixed up two concepts, namely, (i) the scope and content of the right, and (ii) the effect and consequence of the

deprivation of that right on the other properties of the appellants. S. 9 of the principal Act, extended by the Act of 1955, only confers a right in

respect of the land and not of the superstructure. If that Act held the field, the appellants could have purchased the land, but by reason of the 1960

Act, they could no longer do so. Neither the 1955 Act conferred any right as to the superstructure under S. 9 of the principal Act nor did the 1960

Act take that right away. If this distinction between the land and the superstructure is borne in mind the untenability of the arguments would become

obvious. The 1960 Act does not in any way affect the appellants'' fundamental right.

From this it is clear that the tenant''s right is not property and there is no deprivation of property consequent upon the amendment and the

presumption against retrospective operation of the statute will not apply to such a right, which merely stems from the statute.

We may also refer to a recent decision of justice Ismail in Syed Ibrahim v. Jalma AIR II M.L.J. 83, in which the limited and the inchoate nature

of the right under S. 9 of the Act was emphasized. In that case a suit for ejectment had been filed against the tenant and the tenant lost his right

under the Act on account of failure to apply under S. 9 within the time limited by the Act. After the expiry of the time the tenant died and his Legal

representatives, defendants 2 to 7 in the action, claimed a fresh opportunity to prefer an application under S. 9. The claim of these defendants was

negatived. The learned Judge observed that the right of the tenant was an inchoate right to apply for purchasing the landlord''s interest under S. 9

and that right would become a completed right only when an application has been made under S. 9 within the time prescribed by law. The same

view was taken by justice Natesan in Kuppa Bai v. Rajagopalan Nadar (1969) II M.L.J. 541. The learned Judge had to deal with the question of

retrospective operation with reference to the definition of ''tenant'', as it originally stood, include which the heirs of the tenants as well as assignees

and persons deriving title from the original tenant. But, under the definition as amended in 1960, assignees and persons deriving title from the tenant

had been omitted and the question arose whether this provision will have retrospective operation. The argument was that a vested right had

accrued to the tenant under the original Act so as to let in his assignees and the Amending Act should not be understood as having retrospective

operation to deprive the tenant of such a right. That argument was rejected by the learned Judge in the view that the crucial point of time ""is when

the action in ejectment was filed"" and that at that time the assignee was not a tenant entitled to the benefits of the Act and that it is only a tenant as

defined in the Act then in force against whom a suit in ejectment has been filed that is entitled under S. 9 of the Act to apply to the court within one

month for an order directing the landlord to sell the land for a price to be filed by the court. The argument that certain rights have become vested in

and accrued to the tenant under the original Act and that the amendment could not be construed to have retrospective operation so as to deprive

those existing rights unless there are express words to that effect in the statute is dealt with at pages 546 to 551. The learned Judge has referred to

the principle enunciated in the English and Indian decisions and in particular, the observations of Subba Rao, C.J. (as he then was) in Swami Motor

Transport (P) Ltd. and Another Vs. Sri Sankaraswamigal Mutt and Another, already referred to. He has also referred to the Statement of the law

in the leading decision in Abboti v. The Minister for lands (1965) A.C. 425 as to what is meant by ''a right accrued'' within the meaning of a

statute. The learned Judge also referred to the provisions of S. 8 of the General Clauses Act. With great respect, this decision lays down the

correct law and the principle of this decision clearly applied to the instant case. After analysing the nature of the right of the tenant at page 549,

Natesan, J. has observed that the right under S. 9 is merely just an option or privilege given to the tenant to ask for a direction for the conveyance

of the land and that that option can be exercised only if the landlord files an action in ejectment and that, so long as the landlord does not seek to

evict him the option for the purchase of the land cannot and does not arise. The learned Judge has further emphasized that the right of the tenant is

an inchoate, doubly contingent right, that is, (a) the landlord must commence an action in ejectment and (b) the tenant must exercise the option

under S. 9 within the period specified under the Act. It was further observed that if, before the Act of 1960 came into force, no action in ejectment

had been filed and the provision was repealed, the result was only that a right to take advantage of the provisions of the statue had been

extinguished and that is not sufficient to attract the rule against retrospective operation of the amendment. It is also observed that the right is

doubly contingent"" because the landlord had the option, his own unilateral option, to institute or not to institute a suit in ejectment and the tenant

also had such an option to claim or not to claim benefit of the section. It is also necessary to bear in mind that the amount of compensation payable

to the tenant is not a fixed, unalterable amount representing his cost of construction or the value of the building on the day when the building was

put up, but the amount of compensation will have to be ascertained only on a future date based upon the value as on the date of the proceedings in

ejectment with an allowance for depreciation. Thus, looked at from any point of view, till proceedings in ejectment are initiated, nothing has vested,

no right had accrued and everything is imperfect and non contingent. If, in that nebulous, inchoate stage, the amendment is introduced excluding the

operation of the Act in a particular area, there is no question of deprivation of property or accrued rights so as to invoke the presumption against

retrospective operation. At page 551, after referring to the same view expressed by Justice Srinivasan, and Justice Anantanarayanan (as he then

was) in the cases referred to therein, the learned Judge (Justice Natesan) emphasizes that the right of the tenant was merely a privilege conferred,

to be availed of on a particular contingency and nothing more. We may also refer to the decision in Ramachandra Naidu v. Parameswaran Nair

(1970) I. M.L.J. 578 (of one of us, Justice Ramamurti) (observations at pages 586 and 587) in which it was held that the right conferred under the

statute is merely in exercise of an option and a mere privilege and cannot be regarded as a right to property and that this privilege can be exercised

only on a particular contingency of the landlord filing a suit in ejectment and cannot be regarded as a right vested in the tenant or a right accrued to

the tenant within the meaning of the provisions of S. 8 of the General Clauses Act, so as to attract the presumption against retrospective operation.

It will be convenient, at this stage, to refer to the oft-quoted leading decision of the Privy Council in Abbott v. The Minister for Lands 1895

A.C. 425 in which the question arose whether the saving clause would keep alive a mere right to take advantage of a statutory provision. The

saving clause was in these terms (like the provisions of S. 6 of the Indian Act X of 1897, the General Clauses Act):

Provided always that notwithstanding such repeal�

(b) All rights accrued and obligations incurred or imposed under or by virtue of any of the said repealed enactments shall subject to any express

provisions of this Act in relation thereto remain unaffected by such repeal.

In that case, the appellant before the Privy Council had purchased certain area of Crown land and the sale was carried put under S. 23 of the

Crown Lands Alienation Act of 1861. Later, he invoked S. 22 of that Act and applied for the sale of further extents of land which adjoined the

land which he had already purchased under S. 25. There was ft conditional purchase in terms of S. 22 of the Act. The Crown Lands Alienation

Act of 1861 was repealed by the Crown Lands Alienation Act of 1884 and the repeal was subject to the saving provision extracted above. The

Act of 1884 did not contain a similar provision or counterpart of S. 22 of the Act of 1861, and there was no provision relating to the conditional

purchase of adjoining lands by a holder in fee simple of lands granted by the Crown. The policy of the later enactment was to exclude such holders

from the purview of the Act of 1884. The argument on behalf of the appellant was that the provisions of the Act of 1884 extracted above

preserved the right of the appellant under the Act of 1861. The argument was that the right to make the conditional purchase was a right accrued at

the time when the Act of 1884 was passed and remained unaffected despite the repeal of the Act of 1861. The Privy Council, rejecting the

argument, observed as follows:-

Their Lordships think not, and they are confirmed in this opinion by the fact that the words relied on are found in conjunction with the words

''obligations incurred or imposed''. They think that the mere right (assuming it to be properly so-called) existing in the members of the community or

any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly

be deemed a ''right accrued'' within the meaning of the enactment.

The aforesaid statement of law has been applied and followed or distinguished in several cases in England and in India in varying contexts of

different statutes whenever the question arose whether a right or a privilege to take advantage of a provision in a statute would or would not

amount to a right accrued so as be saved by S. 6 of the General Clauses Act or so as not to attract the doctrine of the presumption against

retrospective option of a statute. It is unnecessary to refer to the several decisions. Justice Natesan, in the decision referred to above in Kuppa Bai

v. Rajagopal Nadar (1969) II M.L.J. 541 at pages 546 to 550 has referred to the relevant decisions. We may, however, refer to the recent

decision of the Judicial Committee in Director of Public Works v. Ho Po Sang (1961) 2 All E.R. 721= 1961 A.C. 901 as of direct relevance to

the instant case. The facts of that case were: One K held a Crown lease in respect of certain premises in Kowloon. Hong Kong, which expired in

December 1951. There were tenants and sub-tenants of the premises. K applied for the renewal of his lease, and by a written agreement In June

1955, it was agreed between K and the Director of P. Works that K was to develop the site by erecting buildings on it within a certain time, and

K was to have a new lease on terms which effectively would give him a period of seventy-five years from December, 1951. The erection of the

new buildings required the demolition of the then existing building which were subject to the provisions of the Hong Kong Landlord and Tenant

Ordinance. The scheme underlying this Ordinance was that when a Crown lessee wished to demolish existing building subject to the Ordinance, he

could recover vacant possession of the premises after obtaining a re-building certificate from the Director of P Works. Under S. 3-B (2) of the

Ordinance, when the Director of P. Works gave notice of his intention to grant a re-building certificate, the lessee should serve a notice in the

prescribed form on the tenants who could, within three weeks of such notice, appeal by way of petition to the Governor in Council against the

proposal of the Director of P Works to give a rebuilding certificate. In that event the lessee could present a cross petition under S. 3-D (2); every

petition and cross-petition will have to be taken into consideration by the Governor who had an absolute discretion to direct whether or not to give

a re-building certificate.

In 1956 K applied to the Director of P Works for re-building certificate and notice of these proceedings were served upon the tenants and

sub-tenants of the premises who had preferred petitions of appeal to the Governor in Council. By April 1957, no decision had been taken by the

Governor in Council in regard to these proceedings between the Crown lessee on the one side and the tenants and subtenants on the other. On 9th

April, 1957, the relevant provisions of the Landlord and Tenant Ordinance were repealed and there was no specific provision which provided the

machinery for the consideration to be given to any pending petitions or cross petitions or granting of re-building certificate subsequent thereto. S.

10 of the Interpretation Ordinance contained the provision corresponding to S. 6 of the General Clauses Act in India and the question arose

whether the right of K, the Crown lessee, was saved by the following provision: ""By the Interpretation Ordinance, S. 10, the repeal of any

enactment was not to (b) affect the previous operation of......anything duly done......under any enactment so repealed; or (c) affect any

right......acquired...under any enactment so repealed."" In October 1957, the Governor directed a re-building certificate to be given and this was

questioned by the tenants and sub-tenants on the ground that by the repeal of Ss. 3-A and 3-E of the Landlord and Tenant Ordinance there was

no question of any re-building certificate being issued to the Crown lessee to enable him to obtain vacant possession of the premises. The claim of

the tenants and sub-tenants was upheld by the Privy Council which held that in April 1957, when the Landlord and Tenant Ordinance was

repealed, no right or privilege had accrued to K and that the fact that the Director of P Works had given notice of intention to grant a re-building

certificate did not confer any right thereto and that K had nothing more than a hope that it will be granted. The Privy Council also held that the right

of K to have the matter considered by the Governor in Council was not an accrued right or privilege within S. 10. The relevant observations are to

be found in pages 730, 731 and 733. It will be noticed that at the time the Ordinance was repealed, the Crown lessee had no accrued right and he

had no more than a hope that the Governor in Council would give a re-building certificate and it was a mere expectation. In the instant case, the

same principle applied because the right under Ss. 3 and 9 of the Act was not an accrued right; it is merely a stage of expectation and hope that ""as

and when"" the landlord took proceedings in ejectment the tenant could take advantage of these statutory provisions. The whole thing rested upon

the hope or expectation on the landlord taking proceedings in ejectment which are only contingent. A hope based upon such a contingency cannot

be regarded as an accrued right or privilege. If the relevant provisions ceased to be applicable by the amendment of Madras Act XIII of 1960, the

hope or expectation of working out these rights on a particular contingency which had not accrued would perish and would not survive. Reference

may be made to the following observations at page 730 in the Privy Council case, which sets up the rival contentions:

At the time of the repeal, all the procedure under S. 3 and S. 13 had been followed, and it can properly be said that the stage had been reached

when the lessee could expect and was entitled to have the petitions and cross petitions considered in the course by the Governor in Council and to

have a decision reached. Could such expectation or entitlement be regarded as a right or a privilege ,either acquired or accrued, within the meaning

and intendment of the interpretation Ordinance? Or was such expectation or entitlement something that necessarily came to an end at the time of

the repeal? There might have been some express provision in the 1957 repealing Ordinance by which it could have been ordained that the petitions

and cross petitions awaiting consideration should receive such consideration in spite of the repeal, and that, subsequently an effective re-building

certificate could be given.

After posing the problem as extracted above, Lord Morris stated the Law in these terms:

Was the lessee, therefore, possessed on 9th April, of a ''right'' (or privilege) within the meaning of the Interpretation Ordinance? In their Lordships''

view, the entitlement of the lessee in the period prior to April 9 to have the petitions and the cross-petition considered was not such a ''right''. On

19th April the lessee was quite unable to know whether or not he would be given a rebuilding certificate, and, until the petitions and the cross-

petition were taken into consideration by the Governor in Council, no one could know. The question was open and unresolved. The issue rested in

the future. The lessee had no more than a hope or expectation that he would be given a rebuilding certificate, even though he may have had

grounds for optimism as to his prospects. It is to be observed that, under S. 10 (e), a repeal is not to affect any investigation, legal proceeding or

remedy ''in respect of any such right''. The right referred to is the right mentioned in S. 10 (c), i.e., right acquired or accrued under a repealed

enactment. This part of the provisions in para (e) of S. 10 does not and cannot operate unless there is a right as contemplated in para (c). It may

be therefore, that, under some repealed enactment, a right has been given but that, in respect of it, some investigation or legal proceeding is

necessary. The right is then unaffected and preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest

distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given.

On a repeal, the former is preserved by the interpretation Act. The latter is not Their Lordships agree with the observation of Blair-Kerr, J., that:

It is one thing to invoke a law for the adjudication of rights which have already accrued prior to the repeal of that law; it is quite another matter to

say that, irrespective of whether any rights exist at the date of the repeal, if any procedural step is taken prior to the repeal, then, even in order to

determine whether he shall be given a right which he did not have when the procedure was set in motion.

From this it is clear that unless there is a saving provision the right would not prevail.

Our attention was also drawn to a further decision of the Privy Council reported in Free Lanka Insurance Co. v. Ranasinghe (1964) 1 A.E.R.

457= 1964 A.C. 541 (P.C.) in which the principle in the earlier decision in Director of P. Works v. Ho. Po. Sang (1961) 2 All. E.R. 721= 1961

A.C. 901 was applied. In the latter decision of the Privy Council, the scope of the repealing of the Ceylon Motor Car Ordinance, 1938 by the

ordinance of 1951 came into question and, on a consideration of the scope of the two provisions the Privy Council held that the right acquired by

the respondent in that case was saved despite the repeal of the earlier ordinance. The decision turned upon the particular provisions of the

Ordinance in holding that on the facts of the case, a right had vested and so preserved despite the repeal by subsequent legislation. It is significant

to notice in that case, the accident had occurred while the prior Ordinance was in force and the party injured in the accident had acquired a right to

claim compensation and the liability as against the other party also had arisen. That is a clear case of a right accrued and a corresponding liability

having arisen under a prior law.

We may refer to a Full Bench decision of the Punjab High Court in Amar Singh v. R.L. Aggarwal AIR 1960 P&H 312 in which the Full Bench

had to consider as to when a right could be said to have accrued or vested as well as the question of the effect of an unqualified repeal of a statute.

The facts in that case are a little involved and it is sufficient to refer to the crucial facts which called for a discussion as to when a right could be said

to be accrued or vested as different from inchoate and unperfected right. The relevant facts in that case were: A., the owner of a land sold it to S, a

Muslim non-agriculturist, some time before 1947. Under the provisions of the Punjab Alienation of Land Act which was then in force, the said sale

could not become absolute until it had been sanctioned by the Deputy Commissioner under S. 14 of the Act. No such sanction had been applied

for or given and in 1947, S., the purchaser migrated to Pakistan. Thereafter, collateral of A applied in May 1948 for permission to purchase the

land treating it as evacuee property, but no orders had been passed on the application until October 1951, when the Punjab Alienation of Land

Act ceased to exist by repeal. After the repeal of the Act, the Deputy Commissioner passed an order holding that the sale in favour of S must be

deemed a usufructuary mortgage. That Act (repealed) contained a provision that if no permission was given by the. Deputy Commissioner the sale

would become a usufructuary mortgage. The question was whether, despite the repeal of the Punjab Alienation of Land Act, the land could be

redeemed treating the transaction as usufructuary mortgage under the provisions of the Act which were repealed. The Full Bench held that the

repealed Punjab Alienation of Land Act put an end to whatever interests contingent or inchoate, which the owner of the land had in it and that

there remained nothing to which the Deputy Commissioner could give sanction. Tek Chand, J. stated the law in these terms:

An unqualified repeal of a statute, conferring civil rights or powers operates to deprive the citizen of all such rights or powers which, at the time of

the repeal, are inchoate, incomplete or unperfected or which have not accrued or become vested.........If the right accrued under a repealed Act

has not developed into a jus in rem and has not yet fully matured, and is merely continuing as a jus ad rem, not having progressed beyond an

inchoative state, it cannot survive the repealed Act, and must fall with it, unless expressly saved.

Further, the learned Judge observed that the right of the appellant could not be deemed a matured or vested right and that it could be said to

be vested only when it is complete and consummated so that nothing remained to perfect it. Quoting from Crawford on Statutory Construction, the

learned Judge observed:

A vested right has been defined as ''some right or interest in property'' that has become fixed and established and is no longer open to doubt or

controversy.

In that decision it was also pointed out that nobody has a vested right in a statute and an Act may be beneficial to a particular person, or its

repeal may affect him injuriously, but the right of the Legislature to abrogate an Act by repealing it is absolute; we are clearly of the view that the

above statement of the law in the Full Bench decision aforesaid clearly governs the instant case.

We do not think it necessary to refer to all the decisions relied upon by learned counsel for the tenant: no useful purpose will be served thereby

because those cases are easily distinguishable turning upon the particular provisions of the statute. We must, however, advert to one aspect which

was repeatedly stressed in the course of the argument that the decision of the Supreme Court in Swami Motor Transport (P) Ltd. and Another Vs.

Sri Sankaraswamigal Mutt and Another, already referred to does not conclude the matters as in that case, the Supreme Court dealt with only the

rights of the tenant under S. 9. It is true that the Supreme Court stated that it was not expressing any opinion on the vires of Act XIII of 1960 in so

far as it deprived the tenant''s right under S. 3. Based upon this reservation, learned counsel urged that there are certain differences between the

right under S. 3 and the right under S. 9 and the deprivation of the tenant''s right under S. 3 would be unconstitutional as offending Art. 19.

Learned counsel urged that under S. 3 the superstructure belongs to the tenant, that there was no need for the tenant to file any application for

conveyance under S. 9, that the moment the tenant put up the building he became the owner of it, but his right to claim compensation was

postponed till an action in ejectment was filed by the landlord. Learned counsel further urged that under S. 9 the tenant is to acquire the landlord''s

land and that right, even if taken away, is different from the right under S. 3 and the extinguishment of the tenant''s right to his own property which

he had put up with his own money. We are not impressed with this argument and we are not prepared to hold that there is any difference in the

principle so far as the effect of the repeal is concerned, whether it is a right under S. 3 or a right under S. 9.

Let us examine what the rights of the tenant are in relation to superstructure and where an unconstitutional deprivation of property or rights to

property comes in. In the instant case, the lease deed expressly provides that on the termination of the lessee the lessee will remove the

superstructure without any right to claim compensation and in default to do so the lesser would be entitled to take the superstructure again, without

any liability for compensation. Till 1956, under the general law taken along with the express bargain embodied in the lease deed, the tenant had no

right to claim compensation. It is only in September 1956, as a result of the notification extending the Act to Salem Municipal town that the tenant

became entitled to the right to claim compensation. In other words, it is the right created under the statute by which alone the tenant became

entitled to claim compensation. It is beyond question and well established law that nobody has got any vested right in a statute and the Legislature

has undoubted power to repeal a statute, however beneficial it may be and whatever rights it may have conferred. Again the power of the

Legislature to enact such a repealing statute with retrospective operation cannot be questioned. The only condition is that it must satisfy the

condition in Art. 19 (1)(f) as amounting to reasonable restriction in the interests of the general public. After the Constitution that is the only

limitation. Prior to the Constitution, the right of repeal with retrospective operation was unqualified like the original power to enact a particular

legislation. Again, the power to extend by notification carried with it the power to cancel the notification. Here again, no subject has a right to claim

that the notification issued by the Government could be enforced all time and should never be cancelled. This cancellation can be in part or in

whole. For instance, instead of introducing this provision in the main enactment by Act XIII of 1960, the Government could well have issued a

notification cancelling the applicability of the Act to lands owned by municipal councils in the fifteen towns. That power to issue a cancellation in

that modified form cannot be questioned. The position is a fortior where it takes place in the form of a legislative enactment. We have already

emphasized that the City Tenant''s protection Act (the Original Act of 1922 and the amendments from time to time) notifies the conditions of Art.

19 (1) (f) as a legislation to regulate the rights between the landlord and tenant clearly conceited in the interests of the general public. These are all

rights conferred and obligations created under the special statute. If the Legislature is satisfied, by experience of the working of the Act, that certain

provisions do not serve the public interests and do not serve the purposes of the Act, it is open to the Legislature to amend the Act to achieve the

object and to prevent the mischief of the original enactment which was detrimental to the interests of the public in so far as it went. Thus, it will be

seen that the amendment itself easily satisfies the conditions in Art. 19 (1) (f). The inclusion of tenancies of lands in Salem town within the purview

of the Act in Sep. 1956 is, in one sense, (virtually) an exemption of tenancies of lands in Salem Town from the purview of the general provisions of

the Transfer of Property Act and from the express stipulation which the parties entered into. The power to introduce such exemption carries with it

the power to cancel that exemption. The original Act and the extension to Salem are clear infringements of the rights of the Landlord, serious

inroad and curtailment of his rights. The Act is justified as being in the public interests and as satisfying the test laid down in Art. 19. The same test

has been satisfied when the Legislature introduces an amendment cancelling the extension in part or in whole. From the forgoing it will be seen that

the tenant cannot complain of an unlawful deprivation of property when it is noticed that prior to the notification he had no such property right and

it is the Legislature that gave him some rights, and it is open to the Legislature to take away those rights. At this stage we may refer to the Bench

decision of Rajamannar, C.J., and Justice Panchapakesa Ayyar in Globe Theatres v. State of Madras ILR (1954) Mad. 616. In that case the

Government issued a notification under Sec. 13 of the Madras Buildings (Lease and Rent Control) Act 1949 exempting certain buildings from the

provisions of the Act. The tenant contended that under the Act aforesaid he had become a statutory tenant and certain rights had accrued to him

and that he has been deprived of those rights and therefore the exemption offended Act, 19 (1)(f) of the Constitution. The learned Chief Justice

rejected this argument observing that no fundamental right of the tenant was violated because the tenant, before the enactment, had no fundamental

right to remain in possession of the building for all time, that whatever rights he relied upon were rights accrued and conferred by the very Act, that

a statutory tenant is the creation of the Act, with certain rights and restrictions and when those rights are taken away there is no violation of Art. 19.

We have no hesitation in rejecting the argument of the learned counsel for the tenant, as acceptance of such an argument would lead to absurd and

anomalous results that a statute which creates rights for the first time (not available under the general law or under the contract) can never be

repealed on the ground that it would amount to unlawful deprivation infringing Art. 19 (1)(f). No subject can claim an unqualified vested right that a

statute which confers rights upon him should be in force for all time ad infinitum regardless of all circumstances.

We may refer to two decisions of the Supreme Court on which considerable reliance was placed by learned counsel. These decisions turn

upon the particular provisions of the statute and they are easily distinguishable. The first decision is Maharana Shri Jayvantsinghji Ranmalsinghji etc.

Vs. The State of Gujarat, in which the vires of a particular tenancy legislation in Bombay Land Tenure Abolition Laws (Amendment) Act of 1958

came up for consideration. That Act contained provision that after mere lapse of time without anything more the tenants became permanent tenants

almost by reason of a fiction of law. After examining the provisions of the statute the Supreme Court held that such a provision was unconstitutional

and the creation of such a right without any enquiry of the points of view and of the contentions of the landlord, was vocative of Art. 19. We do

not think that that decision is of any assistance. The other decision is Sakharam @ Bapusaheb Narayan Sanas and Another Vs. Manikchand

Motichand Shah and Another, . In that case, the question that arose for decision was the effect of a repeal of an enactment, the Bombay Tenancy

Act of 1939 which was repealed by a later Act of 1946. The landlord had granted a lease to the tenant of certain land for a period of ten years

from 1939, the lease to expire by 30th October, 1949. The land leased was within two miles of the limits of Poona Municipality. In October, 1949

the landlord gave a notice terminating the tenancy and as the lessee did not vacate the land, the lesser filed a suit in ejectment. The Bombay Act of

1939 has later on been applied to Poona with effect from April, 1946. Under S. 3 of the Act of 1939 a tenant shall be deemed to be a protected

tenant in respect of a land if he had held such tenancy continuously for a period of not less than six years immediately preceding the 1st January,

1938, and in respect of Poona, the Amending Act of 1946 provided that a tenant of a land in Poona will also become a protected tenant if he has

been in possession of the land continuously for a period of six years immediately preceding 1st January, 1945. The combined operation of the Act

of 1939 and the Act of 1946 was that in other areas a tenant will be protected tenant if he held the land continuously for a period not less than six

years preceding 1st January 1938 while, in Poona area, a tenant would be a protected tenant if he held that land continuously for a period of not

less than six years preceding the 1st January, 1945. The Act contained a further provision that within one year after the amending Act of 1946

came into force, it will be open to the landlord to obtain a declaration that the tenant was not a protected tenant. In that case no proceeding

appears to have been taken by the landlord with the result that the tenant became a protected tenant within the meaning of the Act. While matter

stood thus, this tenancy legislation was repealed by an Act of 1948 and the landlord relied upon this repeal to evict the tenant from the land. The

repealing, enactment contained the saving clause like. S. 6 of the General Clauses Act that the Act shall not affect any right, title or interest,

obligation or liability, acquired, accrued or incurred. On behalf of the landlord, reliance was placed before the Supreme Court on the case in

Abbott v. Minister for Lands, 1895 A.C. 425 (already referred to above) to the effect that the tenant''s right under the Bombay Act was merely to

take advantage of a statutory provision that would not be saved by the saving clause. This argument was not accepted by the Supreme Court. The

Supreme Court held in that case the right in favour of the tenant had accrued, and had become perfect and he had become an accomplished,

unqualified, protected tenant and that there was no need for the tenant after 1946 to take any proceeding. The tenant became a protected tenant

with certain rights over the land not liable to be evicted after the expiry of the period of one year within which the landlord did not initiate any

proceeding for declaration that the tenant was not a protected tenant. The observations at page 357 distinguishing the decision of the Privy Council

bring out the distinguishing feature of the case Sakharam @ Bapusaheb Narayan Sanas and Another Vs. Manikchand Motichand Shah and

Another, In the instant case it is governed by a different principle altogether, because the right of the tenant is doubly contingent, incomplete and

imperfect in every sense tad depended upon the landlord initiating proceedings in ejectment. As observed already, no useful purpose will be served

by discussion of the cases relied upon by learned counsel for the tenant either on the question of the saving of the rights of the tenant or the

presumption against retrospective operation of the applicability of S. 6 of the General Clauses Act. We are clearly of the view that it is not a right

accrued or right vested within the meaning of S. 6 of the General Clauses Act and in any event, there is abundant material in the context and the

purposes of the amendment and the provisions in the Amending Act themselves to show a clear ''different intention'' within the meaning of S. 6 of

the Central Act corresponding to S. 8 of the Madras Act. Looking into the general scope and purview of the statute and the remedy sought to be

applied, the former state of the law and the mischief that was contemplated by the Legislature to be rectified, we have no doubt that the

amendment will have no retrospective operation and tenants of lands of Municipal Councils would not be entitled to invoke the protection of the

Act. As observed by the Supreme Court in Abdul Hakim Quraishi and Others Vs. The State of Bihar, following the statement of the law in Mohd.

Hanif Quareshi and Others Vs. The State of Bihar, the test whether a particular legislation satisfies Art. 19 (5) as a reasonable restriction in the

interests of the general public cannot be formulated as a general test in the abstract, but the test of reasonableness should be applied to each

individual statute impugned and no abstract stand or general pattern of reasonableness can be laid down as applicable to all cases. The nature of

the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied

thereby, the disproportion of the imposition the prevailing conditions at the time of the legislation are all matters to be taken into account. Reference

was made to the decision of the Supreme Court in the Bank National section Case reported in Rustom Cavasjee Cooper Vs. Union of India

(UOI), In that case, the majority of the Judges held that Art. 19 (1) (f) and Art. 31 are not mutually exclusive and that the acquisition of property

for a public purpose has to satisfy the conditions of Art. 19 (1) (f) and it is not enough if the legislation impugned merely satisfies Cls. (1) and (2) of

Art. 31. In this decision the Supreme Court has examined in detail the entire case law and has referred to with approval the decision of the

Supreme Court in Kavalappara Kottarathil Kochuni and Others Vs. The State of Madras and Others, and the decision in Swami Motor Transport

(P) Ltd. and Another Vs. Sri Sankaraswamigal Mutt and Another, already referred to, to the effect that there can be a valid law to deprive a

person of his property provided the law satisfies the test that such a law is necessary in the interests of the general public. This decision reiterates

the same well-established view that a law can deprive a person of his property provided such a law is a permissible restriction on the rights of the

owner in the interests of the general public. The following observations may be extracted�

The Courts recognise in the Legislature some degree of elasticity in the matter of making a classification between persons, objects and transactions

Provided the classification is based on some intelligible ground, the courts will not strike down that classification, because, in the view of the court,

it should have proceeded on some other ground or should have included the class selected for special treatment some other persons, objects or

transactions which are not included by the legislature. The legislature is free to recognise the decree of harm and to restrict the operation of a law

only to those cases where the need is the clearest. The legislature need not extend the regulation of law to all cases it may possibly reach, and may

make a classification founded on practical grounds of conveniences. Classification to be valid, must, however, disclose a rational nexus with the

object sought to be achieved by the law which makes the classification. Validity of a classification will be upheld only if that test is independently

satisfied. The court in examining the validity of a statute challenged as infringing the equality clause makes an assumption that there is a reasonable

classification and that the classification has a rational relation to the object sought to be achieved by the statute.

After this clear pronouncement, it is not open to the tenant to urge that the exclusion of tenancies of lands belonging to municipal councils is

discriminatory and arbitrary or that the deprivation of the rights of the tenant under Ss. 3 and 9 with retrospective operation is an unreasonable

restriction and not in the interests of the general public, being vocative of the conditions in Art. 19 (5).

In the course of the hearing we repeatedly put the question to the learned counsel for the appellant that the amendment of 1960 should serve

some purpose and must have application at least in a limited category of cases seeing that the amendment applies to all tenancies of lands owned

by municipal councils prior to September 1956 (the period when the Act was extended to Salem by Government notification). Mr. Vedantachari

recognising that the Act must have some limited application urged that the amendment would have application only to buildings which were put by

the tenant between September 1956 and July 1960 when Act XIII of 1960 came into force. We see no substance whatever in this contention, as

there is a great fallacy involved in the same. If the superstructure has been put up by the tenant before 1956 he would get the protection under the

Act, if the presumption against retrospective operation were to be applied, the rights of the tenants who put Up superstructures before September

1956, will have to be enforced and they will not be extinguished. Till Act XII of 1960 came into force, the tenant can put up a building even after

September 1956, and such tenant or tenants would equally get the protection of the Act, so long as the tenancies were created prior to September

1956. In other words, till July 1960, the tenants would be entitled to the protection of the Act, regardless of the question when the superstructure

was put up, whether before September 1956 or during the period from September 1956 to July 1960, provided, the tenancies had come into

existence before September 1956. The crucial factor is the date of the creation of the tenancy and not when the superstructure was put up by the

tenant. For instance, let us assume that the Act XIII of 1960 had not been enacted at all. Every tenant whose tenancy had commenced, prior to

September 1956 will be entitled to protection of the Act, whether the superstructure was put up by him before 1956 or subsequently thereafter.

When once the notification was issued by the Government in September 1956, the tenants of all tenancies prior thereto became entitled to the

statutory rights. To put it differently, if retrospective operation were denied to the Amending Act of 1960, there will be no prior tenancy whatever

to which the amendment could apply, i.e., the amendment will be futile and will serve no purpose whatever. The rights of tenants who have put up

superstructure before September 1956 are in the same character executory as the rights of tenants who might have put up superstructure between

September 1956 and July 1960. The precise ambit and nature of the right, the conditions to be satisfied for the enforceability of that right, the

contingency to which these rights are subjected are all the same and it is impossible to distinguish between one category of tenant and another. The

acceptance of the argument of the learned counsel for the appellant would result in the absurd consequence that the Act will serve no purpose and

the public authorities will not be able to carry out their obligations even though the very object of the amendment is to rectify the serious defect and

enable them to resume the land for putting the same for purpose of the public. We see no warrant whatever for interpreting the provision of Act

XIII of 1960 in such a manner as to completely defeat the very purpose and object of the enactment. To sum up, the whole argument is founded

on a fallacy that by reason of S. 9 of Act XIII of 1960 a limited retrospective operation alone has been given and that in the case of tenancies of

lands owned by the municipality, the intention of the legislature is otherwise. As we have already observed, the argument overlooks the important

fact that the amendment with regard to lands owned by the Municipality is incorporated in the main Section itself as forming part of the statutory

provisions in S. 1 sub-S. (3) and (4) (a) proviso, while S. 9 is an independent provision with regard to non-residential buildings in the areas other

than the City of Madras and the four Municipal towns. The amendment introduced in S. 1 of Act XIII of of 1960 is to completely exclude from the

purview of the Act, lands owned by municipal councils while the saving provision in S. 9 is with regard to a different aspect, viz, lands in which

non-residential buildings have been put up by tenants in certain areas. In this connection, we may also refer to the Bench decision of the Bombay

High Court in Cooverje Jethabhai Shah Vs. Amir Abdulali Kachwala and Co., in which the Bombay High Court held that S. 4 (2) of the Bombay

Rent Control Act, which exempted all premises belonging to Government would apply to all buildings of the Government irrespective of the date

when the tenancy has been created. The Bench observed that once this condition was satisfied that the property belonged to the Government, the

Act ceased to apply and the tenant lost his rights irrespective of the question when the tenancy was created. Vide observations of Chagla C.J. in

paragraphs 5 and 6 of the judgment. For all these reasons, on points No. 1 and 2 we hold against the tenant and in favour of the landlord.

We shall now take up for consideration the third question as to how far the stipulation in the lease deed to hand over vacant possession on the

termination of the lease after the removal of the superstructure or in default, the municipality will be entitled to take the superstructure is saved by

the proviso to S. 12. S. 12 is in these terms:�

Nothing in any contract made by a tenant shall take away or limit his rights under this Act, provided that nothing herein contained shall affect any

stipulations made by the tenant in writing registered as to the erection of buildings in so far as they relate to buildings erected after the date of the

contract.

There is a wealth of case law as to the precise scope of the proviso and the import of the words ""stipulations as to the erection of buildings

found in the proviso. The Supreme Court has rendered five decisions in quick succession during the period 1965 to 1972, in all of which, on the

particular facts of the respective cases, the Supreme Court bad to deal with the problem. The later decisions indicate that the strict and harrow

view taken in the majority judgment in the earliest decision in Varjapani Naidu''s case reported in (1965) 1 M.L.J. 47 S.C. has not been adhered

to and the later decisions have taken a more liberal view taking note of not only the criticism in the dissenting judgment, but also the crucial

concessions made in the course of the arguments by Mr. Setalvad who appeared for the landlord in Vajrapani Naidu''s case (1965) 1 M.L.J. 47

S.C. In M.H.P. Fund Ltd. v. Subramania AIR 1970 S.C. 1583 while reversing the Bench decision of the Madras High Court in K.S. Subramania

Iyer Vs. Mylapore Hindu Permanent Fund Ltd., a portion of the Supreme Court''s judgment is expressly based upon the concessions of Mr.

Setalwad aforesaid. In Vajrapani Naidu''s case (1965) 1 M.L.J. 47 S.C. (which affirmed the Bench decision of the Madras High Court reported

in (1969) 2 M.L.J. 469 the lease deed contained the stipulation that the lessee, on the termination of the lease, would dismantle the construction

and hand over vacant possession and in default, the lesser will be entitled to take possession of the site through court after dismantling the

constructions and demolishing the buildings. Shah J. (as he then was) delivered the majority judgment on behalf of himself, Gajendragadkar C.J.

and Sikri J. (as he then was). The majority judgment was to the effect that such a stipulation would not be saved by the proviso and that the

stipulations which are saved by the proviso are stipulations containing restrictions about the size and nature of the building constructed, the

materials to be used for the building and the purpose for which the building was to be utilised and that a wider meaning should not be given to the

expression ''as to the erection of buildings''. Rajagopala Ayyangar J. delivered the dissenting judgment on his behalf and on behalf of Wanchoo J.

The learned Judge observed that the proviso or the particular stipulation will have to be construed in the light of the preamble and, if so done, it is

obvious that the tenant who had entered into a contract with the stipulation as in that case, could not be said to have constructed the building in

another''s land in the hope that he would not be evicted so long as he paid rent for the land, and that the preamble would, therefore, indicate that it

was not the intention of the Act to afford protection to a tenant who in an express term in a registered lease deed, had agreed to deliver vacant

possession after demolishing the building which he had erected on the site. At page 55, the learned Judge has recorded the concession made by

Mr. Setalvad that the stipulation by which the tenant agrees to limit the quantum of compensation payable in respect of the buildings constructed by

him would be saved by the proviso to S. 12 as being in respect of the erection of buildings. The learned Judge again referred to a further

concession made by Mr. Setalvad that if a tenant undertakes not to build and despite that undertaking, puts up a building, such stipulation not to

build would be saved by the proviso and such a tenant who puts up a building contrary to the stipulation would not be entitled to compensation.

Rajagopala Ayyangar, J. relying upon these two concessions observed that if a stipulation forbidding erection of buildings and requiring their

removal before surrendering possession is one in respect of erection of buildings, a stipulation permitting the tenant to put up a building and to

remove the building on the termination of the lease and surrender vacant possession would be governed by the same rule, there being no basis for

drawing a distinction between one stipulation and another, as such a construction would reconcile the proviso with the preamble which sets out the

object sought to be achieved by the Act, i.e., giving protection to the tenant who has built in the hope that he would not be evicted and the object

of the enactment is not to give protection to the tenant who has not built in the hope that he would not be evicted, but who has built knowing full

well that he would be evicted and that he was putting the building on his own choke and volition without any hope of expectation extended by the

landlord. The learned Judge further pointed out that if a lease is granted on favourable rent and the lessee undertakes to construct buildings and

deliver the site with the buildings at the expiry of the term without any claim for compensation, such a condition would be saved by the proviso. In

the concluding portion of the judgment, Rajagopala Ayyangar, J. says that there cannot be any distinction between a covenant by which the tenant

agrees to reduce the compensation and a covenant by which the tenant agrees to demolish the superstructure and hand over vacant possession.

Before referring to other cases, we think it necessary to emphasise that the minority judgment is based upon the crucial concessions made by the

counsel, Mr. Setalvad, and also upon the fact that the stipulation which is covered by the proviso to S. 12 is a stipulation which should be in

conformity with the object of the enactment as set forth in the preamble, i.e., a construction put up by a tenant on the land in the hope that he

would not be evicted and that a tenant who built without any such hope or expectation is not intended to be benefited by the operative portion of

S. 12.

The next case to be referred to is Venkatasami v. Narasram Naraindas AIR 1966 S.C. 261 which reversed the Bench decision of this court in

Narasram Naraindas alias Purushotham das v. Venkataswami Naidu ILR 1963 Mad. 649. In that case, the tenant uthup a building in breach of a

covenant not to build and the question arose whether he was entitled to compensation under S. 3. This court took the view that in view of the

stipulation he would not be entitled to compensation under S. 3. The Supreme Court did not agree with this view. What is important to be

mentioned is that the Supreme Court reserved its opinion with regard to the effect of such a covenant if contained in a registered lease deed so as

to attract the proviso to S. 12. For this reason the Supreme Court did not consider further the scope of the decision in Vajrapani Naidu''s, case

referred to above. Hidayatullah, J. who delivered a concurring but a separate judgment, observed that if the lease deed had been registered such a

stipulation would have been saved by the proviso and the tenant would not be entitled to compensation.

In V. Sanjeevaraya Mudaliar Vs. N.A. Raghavachary, the problem which arose in Venkatasami v. Narasam Naraindas AIR 1966 S.C. 261

(referred to above) arose for direct decision. In that case there was a registered lease deed; under the terms of the lease the tenant agreed to put

up only 2 temporary structures and hand over vacant possession on the expiry of five years and the tenant also expressly stipulated that he would

not erect permanent structures on the site so as to entitle him to claim in future the value thereof. The stipulation by the tenant in the registered lease

deed was that he would not claim any compensation if he had put up any permanent building. Reliance was placed upon Vajrapani Naidu''s case

by both sides as well as on the decision in Venkatasami v. Narasram Naraindas AIR 1966 S.C. 261. The claim of the tenant was disallowed by

the Supreme Court. This is clear authority for the position that the precise import of the stipulation and whether it would be saved by the proviso is

to be determined not by mere reference to the form of the stipulation, but the substance of the matter should be taken into account, and if the

stipulation is such that the tenant has bound himself by the stipulation which would disentitle him from claiming compensation, such a stipulation

would be saved by the proviso, for the obvious reason that he cannot claim to be a tenant who put up a building in the hope that he would not be

evicted. The further important aspect which emerges from this decision is that such a stipulation which disentitles him from claiming compensation is

a stipulation in respect of ""erection of the building"" within the terms of the proviso.

The next decision to be referred to is the decision in The Mylapore Hindu Permanent Fund Ltd., Madras Vs. K.S. Subramania Iyer, In

understanding the ratio of this decision of the Supreme Court, it is necessary to mention at the threshold that the Bench decision of the Madras

High Court which is reported in K.S. Subramania Iyer Vs. Mylapore Hindu Permanent Fund Ltd., followed the decision of the Supreme Court in

Vajrapani Naidu''s case (1965) 1 M.L.J. 47 but the Supreme Court reversed the Bench decision of the Madras High Court, expressly pointing out

that the Madras High Court has not properly understood the scope of the decision in Vajrapani Naidu''s case and had overlooked the import of

the concessions made by Mr. Setalvad (who appeared for the landlord) in Vajrapani Naidu''s case. In the Mylapore Permanent fund case, there

was a registered lease deed and amongst other things there was a covenant by which the lessee was permitted to put up a building at a cost of not

more than Rs. 10,000, and the lessee also agreed to surrender possession of the site with the construction on the termination of the lease on receipt

of compensation representing the value on the date of surrender or a sum of Rs. 5000 whichever is less. There was a further provision that if the

lessee committed breach of the condition mentioned above, the lesser may take possession of the property without any liability for compensation.

The Bench negatived the claim of the landlord in the view that the decision of the Supreme Court in Vajrapani Naidu''s case was to the effect that a

stipulation to surrender possession of the property with the superstructure or to accept as compensation any value other than the value to be

determined under S. 3, would not be a stipulation as to erection of buildings within the meaning of the proviso to S. 12, and that the stipulation

comprehended by the proviso would only relate to the size and nature of the buildings to be constructed, the materials to be utilised for the building

and the purpose for which the building is to be put. The Supreme Court did not accept this view and reversed the same. After setting out the rival

contentions based upon the decision in Vajrapani Naidu''s case, the legal position is discussed from paragraph 23 onwards in the judgment of

Justice Vaidyalingam who delivered the judgment on behalf of the Bench. In paragraph 23 of the judgment, while referring to the minority

judgment, Vaidyalingam J. has referred to the two concessions made by Mr. Setalvad in Vajrapani Naidu''s case already referred to. In paragraph

24, the Supreme Court has observed that Vajrapani Naidu''s case should not be understood as laying down exhaustively and completely as to

what stipulation would be protected by the proviso to S. 12 and the observations in Vajrapani Naidu''s case should not be taken out of the context

in which they occur. In paragraph 29 the Supreme Court has referred to the decision in V. Sanjeevaraya Mudaliar Vs. N.A. Raghavachary, in

which the ratio decidendi is that any stipulation which would disentitle the tenant from claiming compensation would be a stipulation as to ''erection

of buildings''. If both the landlord and the tenant had bestowed thought about the question of the building and the tenant had entered into a

particular kind of stipulation with reference to a particular contingency, he would not be entitled to claim compensation. A careful examination of

the judgment in Mylapore Permanent fund case shows that the strict and narrow view taken in Vajrapani Naidu''s case would no longer hold the

field and that later trend is definitely towards a liberal view, and there cannot be any exhaustive enumeration of stipulations which would be

protected by the proviso and the question in each case is whether both the landlord and the tenant entered into a bargain by which the landlord

obtained a stipulation the effect of which would be either to reduce the compensation or to disentitle the tenant from claiming compensation in a

particular contingency. In this connection, it is necessary to emphasise that under Cl. (9) of the lease deed in the Mylapore Permanent Fund case,

the landlord had stipulated and the tenant had agreed that if the tenant commits breach of any of the conditions on the termination of the lease, the

lesser would be entitled to take the property without any liability for compensation. It is significant to mention that the Supreme Court did not say

that clause (9) would not be a stipulation that would be protected by the proviso. As already observed, the majority view and the minority view in

Vajrapani Naidu''s case came up for very careful scrutiny before the Supreme Court in the above case. If the Supreme Court had intended to

affirm that a stipulation by the tenant to hand over vacant possession after demolishing the superstructure would not be saved by the proviso to S.

12 and the tenant would still be entitled to compensation, the Supreme Court would have expressly overruled the Bench decision of this High

Court in Palaniappa Gounder v. Sridharan Nair (1963) 2 M.L.J. 559 to which pointed reference was made in paragraph 31 of its judgment. In

Palaniyappa Gounder v. Sridharan Nair (1963) 2 M.L.J. 559, the term in the contract was that on the termination of the lease the building would

become the property of the lesser, and the Bench of this court held that such a stipulation would be saved by the proviso. If the stipulation, as in

the case of Palaniyappa Gounder v. Sridharan Nair (1963) 2 M.L.J. 559, was also to be construed as the stipulation in Vajrapani Naidu''s case

the Supreme Court would have certainly observed in paragraph 31 that the view taken in Palaniappa Gounder v. Sridharan Nair (1963) 2 M.L.J.

559, would no longer be law. On the other hand, they did not express any opinion. This indicates that the stipulation in each case will have to be

taken and no rule of a general pattern would be saved by the proviso. One thing, however is clear, that the narrow view taken in Vajrapani

Naidu''s case, no longer holds the field and the crucial question in each case is whether there is a registered lease deed and whether the stipulation

is with regard to ''erection of buildings'' and whether the stipulation is of a kind in which it could not be said that the tenant built in the hope that he

would not be evicted.

The next case to be referred to is the latest decision of the Supreme Court in Haridas Girdhardas and Others Vs. Varadaraja Pillai and

Another, Before we refer to the case, it will be convenient to refer to the Bench decision of this court in Palaniappa Gounder v. Sridharan Nair

(1963) 2 M.L.J. 559 already referred to. In that case the lease was evidenced by a registered lease deed dated 27th September 1945 for a period

of 12 years and the covenant was that the lessee should put up the building as per the specifications contained in the lease deed, enjoy the building

for 12 years and that at the termination of the lease, surrender possession of the site along with the building to the lesser without any claim for

compensation. The lease expired on 27th September 1957 and the Act was extended to Coimbatore on 19th February 1958. The Sub-Court

negatived the claim of the landlord for recovery of possession of the site and the building, but on appeal, a Bench of this court reversed the

decision and decreed the landlord''s suit, holding that the particular stipulation was saved by the proviso to S. 12. The important point to notice is

that in this case the Bench decision of the Madras High Court in N. Vajrapuri Naidu and Another Vs. The New Theatres Carnatic Talkies Ltd.,

which was affirmed by the Supreme Court was relied upon on behalf of the tenant. After discussing the scope of that decision and some of the

relevant decisions of the Supreme Court, the Bench held that the provision that the transfer of ownership of the building on the expiration of the

lease, to the lesser would be saved by the proviso to S. 12. The Bench also adverted to the fact that at the time the lease was granted both the

parties knew that a cinema theatre was going to be put up and in that context, the landlord stipulated a particular amount of rent and also the

condition that on the termination of the lease the ownership of the building should pass on 10 the landlord. This decision is binding upon us and

clearly governs the instant case. We may reiterate that in the Mylapore Permanent fund case, the Supreme Court pointedly referred to this decision

and did not say that it is bad law and would not hold the field after the decision of the Supreme Court in Vajrapani Naidu''s case.

In that case, 1971 S.C. 2366, there was a registered lease deed dated 17th November 1938, for a period of 15 years and 3 months, to take

effect from 1st March 1939 on a rent of Rs. 560 and there was a renewal of the lease as provided in the lease deed for a further period of ten

years from 1st March 1954 on an enamored rent of Rs. 630. The lease contained a stipulation that the lessee should put up a cinema theatre for

exhibition of films and for staging dramas, etc. at a cost of not less than Rs. 50,000. The renewed lease contained the further provision that at the

expiration of the tenancy the lesser shall have the option of buying the buildings to be erected on a fixed valuation of Rs. 50,000, irrespective of the

actual cost of construction with an allowance for depreciation in favour of the lesser at 3 per cent per annum, the period of depreciation being

calculated with effect from 1st March 1939. There was a further condition that if within a week from such termination of the tenancy the lesser

does not signify his willingness to purchase the building, the lessee shall within three months thereafter remove the building and shall hand over

vacant possession to the lesser. In February 1964, the lesser exercised the option and sent to the lessee a cheque for Rs. 50,000 for the value of

the superstructure without deducting any amount for depreciation and claimed possession of the site and the theatre. The lessee declined to do so

seeking protection of the Act. The Supreme Court (reversing the Bench decision Of the Madras High Court) upheld the claim of the landlord and

in the judgment, had referred to its own earlier decision in Vajrapani Naidu''s case and now the scope of that decision had been explained in the

later decision in the Mylapore Hindu Permanent Fund case in AIR 1970 S.C. (sic). What is very significant to notice is that in paragraph 11 of the

judgment the Supreme Court has clearly emphasised that the scope of the proviso and the scope of the stipulation will have to be understood in the

light of the object of the enactment that tenants who had constructed the buildings on other''s land in the hope that they would not be evicted should

get protection while at the same time it was not the object of the Act to cover a hope if the hope was entertained contrary to the express

stipulations as to the erection of buildings. It will be seen that in that case, in the actual working, allowing depreciation at 3 percent for about 30

years, the tenant may not be entitled to any compensation at all and, at any rate, the compensation that he may get would be illusory or a very

insignificant fraction of the whole investment which the tenant had made in putting up the theatre in a locality like Mount Road, Madras. From the

foregoing, it will be seen that the ratio underlying this decision indicates that a wide meaning should be given to the words ''in relation to erection of

buildings"" in the proviso to S. 12 and a tenant is not intended to be protected by the Act when, not only no expectation or hope was extended by

the landlord that he would not be evicted, but the tenant was warned and was fully alive that at the termination of the lease, he cannot claim

compensation for the building, and that if he put up a building it was his�tenant''s own choice and volition We are unable to see any distinction

between a case in which both the landlord and the tenant discuss the terms of the lease and the landlord expressly stipulates and the tenant agrees

(either because the landlord has no money to purchase or the landlord has no need for the building). That if the lessee puts up a building the lessee

would not claim any compensation and would demolish and hand over vacant possession without claiming any compensation and a case in which

the lessee agrees to hand over possession receiving some reduced or illusory compensation which has no relation whatever either to his cost of

investment or to the actual market value at the time of the ejectment; but some figure arrived at by simple arithmetic which is illusory and amounts

to practically nothing. We have noticed that the decision of the Supreme Court in the Globe Theatre case has upheld the covenant as being saved

by the proviso to S. 12. Either on principle or in substance, we are wholly unable to see any difference between one case and another. At this

juncture, it is necessary to reiterate the principle underlying the decision of the Supreme Court in V. Sanjeevaraya Mudaliar Vs. N.A.

Raghavachary, to which reference has already been made. That case is clear authority for the position that if the landlord stipulates with the tenant

that he was prepared to grant the lease provided the, the landlord, would not be burdened with an obligation to pay compensation and the tenant

agrees, it will be binding upon the tenant under the proviso. To achieve that object, in that case, the landlord stipulated that the tenant should not

put up a permanent building. That is merely a question of words to emphasise that the landlord should not be burdened with an obligation to pay

compensation. The stipulation may be not to build as in V. Sanjeevaraya Mudaliar Vs. N.A. Raghavachary, or the lease may be for a short period

like ten years or 15 years, which itself carries with it the implication that the building which the tenant puts up should be of a temporary character

and if the lease is by a public authority, it is implicit in it that the public authority is not prepared to grant a lease with an obligation to pay

compensation. An analysis of the later decision of the Supreme Court leads to the clear conclusion that the right of the landlord to enter into a

stipulation not to be burdened with an obligation to pay compensation is saved by the proviso. Thus, the question in each case will be in what form

the stipulation is couched in the lease deed so as to achieve this object of the landlord subject to which alone the lease had been granted. We are

clearly of the view that it is not feasible or advisable to formulate any such formula or to exhaustively enumerate the stipulation within the strait

jacket of an inflexible formula.

There is yet another crucial and significant feature in this case to justify the same inference that the lease in question would be governed by the

proviso. The first lease, Ex. A. 1, was from 11th August 1938 to 10th August 1948 and the second lease, Ex. A. 2 from 11th August 1948 to

10th August 1958. The second lease cannot be said to be a mere renewal of the first lease, because, with regard to the area and other terms and

conditions of the lease, the later lease contains terms entirely different from the earlier lease. In the earlier lease, the tenant was to remove the

superstructure within period fixed and in default, the Municipality would become the owner. A comparison of the terms and conditions of the two

leases shows that the second lease is not a simple renewal of the earlier lease. The resultant position is that in 1948, when the Act was in force, the

Municipality was proposing to lease the same site. In fact, there were other competing offers on a rent of of Rs. 4,000 and Rs. 5,000 (vide Ex. A-

1 and Ex. A-2 and the evidence of P. Ws. 1 and 2, showing that there was an offer for Rs. 5,000). But, yet, the Municipality granted the lease to

the defendant at a very concessional rate of Rs. 2,500 and at that time the defendant has already put up a building. Under those circumstances, the

only covenant in relation to erection of buildings which the Municipality can enter into is to stipulate that if a fresh lease were to be granted from

1948, it should not be held liable for compensation. We cannot understand in what other manner the Municipality can enter into a stipulation with

regard to erection of buildings. How can it be postulated that in 1948, at the time of the second lease, the tenant put up a building in the hope that

he would not be evicted ? The acceptance of the contentions of the other side would result in the absurd consequence that the Municipality granted

the second lease being obliged to take the cinema theatre and the furniture, etc, and carrying on business of exhibition of films which certainly is not

the normal activity of a Municipal Council. It will be appropriate at this stage to refer to the dubious conduct pursued by the lessee. It is admitted

by the learned counsel for the tenant and is beyond dispute that the tenant did not file any application under S. 9 for the conveyance of the land.

Again, it is admitted and it is not in dispute that the tenant did not raise specific plea asking for payment of compensation expressing his willingness

that the superstructure may be taken by the Municipal Council. He did not examine himself, and he did not adduce any evidence, as to what

amount he claimed as the value of the superstructure. It is true that under S. 3, the tenant shall, on ejectment, be entitled. That does not mean that

when the tenant does not ask for that relief and deliberately assumes a dubious conduct merely questioning the vires of the statute the court is

bound to make an enquiry suo motu, the tenant being utterly indifferent about that aspect. S. 3 only means that the tenant is entitled to

compensation, but he is bound to ask for that relief and adduce evidence for determining the actual amount of compensation. The additional issue

framed in these terms, which says nothing about the quantum ""Whether the right to compensation given under S. 3 of the Madras City Tenants

Protection Act would validly be taken away by the Madras Act 13 of 1960 ?"" itself shows the dubious attitude pursued by the tenant. Throughput

the written statement he has raised in several places pleas concerning the vires of the Act on one ground or another, and nowhere has he asked

that he should be paid compensation under S. 3. Even in his memorandum of appeal which he has filed in this court against the decree for

possession passed by the trial court, the appellant has made no complaint that the trial court has not awarded compensation to him. It is clear

beyond doubt that the tenant was content to take the extreme position about the vires and scope of the amendment and did not seek any relief

relying upon either S. 3 or S. 9. On a consideration of all the aspects of the matter, we are also of the further view that having regard to this

deliberate course adopted by the tenant in not having asked for any relief as per S. 3 or S. 9, as prescribed by the Act, the contentions of the

tenant will have to be rejected.

It only remain to consider points 4 and 5 (sic) out above.

.... .... .... .... ....

(Discussion of facts is omitted: Ed.).

As already observed, the plaintiff has asked for mesne profits upto the date of delivery of possession and on the findings, the plaintiff would

certainly be entitled to mesne profits with regard to the land as well as the building and the fact that the plaintiff did not ask for the relief of

possession of the theatre, would not disentitle the plaintiff to mesne profits in respect of the superstructure during the interim period till delivery of

possession. All the necessary averments to entitle the plaintiff to mesne profits in respect of the superstructure as well as to the relief of recovery of

possession of the superstructure are found in the pleadings and the judgment of the trial court also has clearly upheld the right of the plaintiff to the

superstructure from September, 1958. In the notice Ex. A-4, the plaintiff has asserted his right to the superstructure. The omission to ask for the

relief of possession of the superstructure is inadvertent: the amendment asked for does not alter the nature and character of the suit. Even though

the plaintiff is entitled to the amendment as asked for, allowing of the amendment is a question of discretion of the court and we desire to impose

certain conditions in the interests of justice, particularly to avoid imposing a huge burden upon the defendant who, no doubt, has not been well

advised in indulging in such protracted proceedings. Taking an over-all view of the matter, we are of the view that the ends of justice will be met by

allowing the plaint to be amended subject to this condition that the plaintiff will be entitled to a decree for possession of the superstructure besides

the land, with effect from 1st July 1972 in the event of the defendant not removing the superstructure and delivering vacant possession before that

date. We are alive to the fact that the relief which we are awarding in this manner does not logically follow from conclusion that the plaintiff has

become entitled to the superstructure from September 1958. Even so, we are imposing this condition taking a sympathetic view of the predicament

of the defendant. The result is that we fix the mesne profits at the rate of Rs. 500 per mensem from 11th August 1958 upto 30th June 1972 within

which time the defendant should hand over vacant possession after removing the superstructure. In default, the plaintiff will be entitled to recover

the land along with the superstructure and the plaintiff also will be entitled to mesne profits which will have to be determined in further proceedings

both with regard to the land and with regard to the superstructures till such time the plaintiff obtains delivery of possession. C.M.P. 5450 of 1971,

C.M.P. 4004 of 1971 and C.M.P. 3873 of 1971 are all ordered accordingly, subject to the conditions mentioned above. As regards the costs,

we think that costs one set in all the appeals would be sufficient. A.S. No. 601 of 1963 is allowed, no costs in the appeal. A.S. 479 of 1963 is

dismissed; no costs in the appeal. In both the matters, the costs as awarded by the trial court shall stand. The appeal A.S. 455 of 1967 is

dismissed. The municipality will be entitled to its costs on the valuation in the appeal as valued in A.S. 455 of 1967 and the costs in the trial court

as taxed.