Very Important Point
Notifications Nos. 745/92 and 769/96 under Section 25 of Kerala Buildings (Lease & Rent Control) Act, 1965 granting exemption to minority institutions (Churches and Mosques) from certain provisions of Rent Act are constitutionally valid. High Court was wrong in declaring them invalid. Supreme Court thus upholds exemption to Churches and Mosques from Rent Control in Kerala.

Headnote:Kerala Buildings (Lease and Rent Control) Act, 1965—Section 25—Notifications under to grant exemption to Churches and Mosques from various provisions of Rent Control Act—High Court on the basis of ownership of property holding the notifications are invalid being issued without application of mind that some of the Churches and Mosques are used for commercial purpose and is against rule of secularism—Appeal against to Supreme Court—Whether High Court was right in its approach? (No)—Case law referred (Cross Ref. Constitution of India—Art. 14).
Held : The High Court has unnecessarily gone at tangent on various constitutionl and administrative law questions which are wholly unnecessary to be decided in the present case. The High Court ought to have riveted its attention only to the aspect whether there was due application of mind to the issue of notifications in question in terms of the provisions of the Act and, if that aspect was satisfied, no further questions arose for consideration in the present case and thus the observations made by the High Court, in our view with respect, are irrelevant. An argument is sought to be raised on the basis of ownership of property that there should not have been a distinction as is being made in the present case. That was the very basis of distinction made in case of statutory bodies like the Housing Board, local authorities which was noticed in the Jayakaran v. Kerala Health R &W Society case, 1994(1) KLT 24 or registered Wakfs which was considered in Lakshmanan v. Mohamood, 1992(1) KLT 85 (FB). When such bodies or institutions falling to a distinct class by themselves and exemption granted to them would serve a public purpose, namely, to carry out the objects of the trust or the endowment or religious activity in a broad sense, we do not think that the fine distinction sought to be made by the High Court in this regard is justified. Reliance is placed before us on the decision in Rohtas Industries Ltd. v. S.D. Agarwal & Anr., 1969(3) SCR 108, to contend that if there is no material at all upon which the authority could form the requisite opinion, the Court may infer that the authority passed the order without applying its mind to the relevant facts. But, in the present case, we should look at the fact that this Court had in S. Kandaswamy Chettiar case, 1985(1) SCC 290 explained the scope of the provisions similar to Section 25 of the Act and the parameters within which such power could be exercised. Thereafter, the Kerala High Court in Jayakaran v. Kerala Health R & W Society case (supra) had upheld the notification as being in public interest even in the absence of any reasons being stated in the notification. Again, the same Court had upheld a similar notification in relation to property belonging to Devaswom Board in State of Kerala v. Vijayan, 1978 KLT 342, and to a wakf in Lakshmanan v. Mohamood case, 1992(1) KLT 85 (FB). Therefore, we think that the decision of the High Court has to be set aside and the notifications issued impugned in the two writ petitions are held to be valid. The writ petitions deserve to be dismissed by allowing civil appeals. Ordered accordingly. No costs. (Paras 8, 9, 10 & 11)

JUDGMENT

Rajendra Babu, J.—

C.A.Nos. 5628/2000, 5781/2000, 6375/2000, 6376/2000, 6378/2000, 6380/2000, 6381/2000, 6372/2000, 6374/2000 and C. A. No. 4456/2001 (arising out of SLP (C) No. 11259/2000) :

Leave granted in SLP (C) No. 11259/2000.

2. Two notifications were issued under Section 25 of the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short ‘the Act’) one S.R.O. No. 435/92 issued on 7.3.92 published in the Kerala Gazette on 7.4.92, which exempted in public interest the buildings of all Churches/Mosques of all the minority religions from the provisions of Sections 4, 5, 7, 8, 11 and 13 of the Act and another notification S.R.O. No. 769/96 was published exempting buildings of all Dioceses, Archdioceses, Monasteries, Convents, Wakfs and Madarsas also from the provisions of Sections 4, 5, 7, 8, 11 and 13 of the Act and amended earlier notification. A batch of writ petitions was filed in the High Court challenging the validity of these notifications. The High Court held that there is no application of mind by the Government in issuing the impugned notifications resulting in arbitrary exercise of the discretionary powers conferred upon a statutory authority and there is no material before the Government to exercise such exemption. In reaching this conclusion, the High Court took into consideration that the buildings of Churches or Mosques are commercially used and, therefore, granting of exemption under Section 25 of the Act on the basis of ownership is not right. The High Court also proceeded to consider the scope of secular nature of the Constitution and observed that conferment of power upon the Government to grant such blanket exemptions would defeat the very power conferred on it.

3. In the counter affidavit the State supported the exemptions on the basis of the law declared by this Court. This Court in P.J. Irani v. State of Madras1, held that a similar power vested under the Madras Buildings (Lease and Rent Control) Act, 1949 to exempt any building from the provisions of the Madras Act is not violative of Article 14 of the Constitution by holding that the charitable and religious trusts or endowments fall into a separate class. In S. Kandaswamy Chettiar v. State of Tamil Nadu & Anr.2, this Court upheld grant of total exemption in respect of buildings belonging to public trusts, religious or charitable in nature, on the basis that such trusts constituted a well recognised distinct group inasmuch they not only serve public purpose, but the disbursement of their income is governed by the objects with which they are created.

4. On an earlier occasion in Jayakaran v. Kerala Health R&W Society3, the High Court held as follows:-

“Grant of exemption in favour of charitable bodies like the petitioner must be held to be in public interest. Even though no reasons are stated in the notification granting exemption it is enough if it is stated in the counter-affidavit. The notification granting exemption is undisputably being in public interest, the same is not open to challenge on the ground urged in the Original Petition.”

5. The High Court after referring to the said decision held that the exercise of discretionary power is subject to test of reasonableness but observed that by one stroke the entire buildings owned by minority religions in the State have been taken away from the purview of the Act without being supported by any material enabling the Government to consider the issue in a legal and proper manner uninfluenced by any extraneous considerations or acting under the dictation of a third party. The High Court compared the provisions under the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 considered in S. Kandaswamy Chettiar case (supra) and the provisions of the Act under consideration and drew a distinct between the two provisions. The relevant portions of the said two Acts are as follows:

Section 29 of the Tamil Nadu Act

29. Exemption—Notwithstanding anything contained in this Act, the Government may, subje

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2001 Supreme(SC) 963

Cases Referred (6)