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1962 Supreme(SC) 126
SUPREME COURT OF INDIA
30th March 1962
B.P. SINHA, C.J.I., P.B. GAJENDRAGADKAR, K.N. WANCHOO, N. RAJAGOPALA AYYANGAR AND T.L. VENKATARAMA AYYAR, JJ.
State of Madras (now Andhra Pradesh), Appellant
Versus
Kannepalli Chinna Venkata Chalamaya Sastri, Respondent.
Civil Appeal No. 242 of 1960.
Advocates appeared
M/s. R. Ganapathy Iyer, T. V. R. Tatachari, D. Venkatappaya Sastri and P. D. Menon, Advocates, for Appellant; Mr. K. Bhimasankaram, Senior Advocate (Mr. T. Satyanarayana, Advocate with him), for Respondent. 1688
D.V.Sastry, K.Bhimasankaran, P.D.MENON, R.Ganapathy Iyer, T.SATYANARAYANA, T.V.R.TATACHARI
The reduction of rent to prevailing ryotwari levels is a reasonable restriction on the right to hold property. Reasonableness is determined by the basis of the reduction, not by the percentage of income lost, provided the landholder is not entirely deprived of income.
Headnote:(A) Madras Estates Land (Reduction of Rent) Act, 1947 - Constitution of India - Article 19(1)(f) - Government of India Act, 1935 - Section 299 - Reduction of rents in estates to ryotwari levels - Constitutionality of the Act - Whether reduction of rent to the level of prevailing rents in neighboring ryotwari areas constitutes an unreasonable restriction on the right to hold property - If the basis for reduction is reasonable, the fact that the resulting net income falls below a certain percentage of the previous income does not render the restriction unreasonable. (Paras 7, 9)
(B) Right to Property - Article 19(1)(f) - Reasonableness of restriction - A restriction is reasonable if it is based on a rational and equitable standard, such as aligning rents with prevailing rates in neighboring areas - The disparity in the impact of such reduction between a rack-renter and a humane landlord does not invalidate the reasonableness of the underlying basis. (Para 9)
Facts of the case:
A landholder challenged a notification issued under an Act providing for the reduction of rents payable by tenants in estates to levels comparable to neighboring ryotwari areas. The landholder contended that the reduction was so drastic that it deprived him of the right to enjoy his property, violating the fundamental right to hold property under Article 19(1)(f) of the Constitution. The High Court had held that a reduction resulting in net income falling below 25% of the previous income was an unreasonable restriction.
Findings of Court:
The Act is constitutional as it aims to prevent rack-renting and improve the condition of agricultural tenants. The basis of reducing rents to the level of prevailing ryotwari rents in neighboring areas is reasonable.
Issues: Whether the reduction of rents to ryotwari levels under the Act constitutes an unreasonable restriction on the right to hold property under Article 19(1)(f) of the Constitution, and whether the percentage of income retained is a valid measure of reasonableness.
Ratio Decidendi: The court held that if the basis for the reduction of rent is reasonable (i.e., aligning it with prevailing ryotwari rates), the resulting ratio between previous and current income is irrelevant to the determination of reasonableness. A rack-renter would naturally experience a steeper decline than a humane landlord, but the reasonableness depends on the basis of the reduction, not the individual result, provided the landholder is not left with no income at all.
Result: Appeal allowed; writ petition dismissed.
WANCHOO, J. : This appeal on a certificate granted by the Andhra Pradesh High Court raises a question of the constitutionality of the Madras Estates Land (Reduction of Rent) Act, No. XXX of 1947, as amended (hereinafter referred to as the Act) and a notification issued thereunder. The brief facts necessary for present purposes are these. The respondent was the sole inamdar of village Chinnavenkatapuram in the Parlakimidi Zamindari in the district of Srikakulam. The legislature of the composite State of Madras passed the Act, which came into force from January 7, 1948, to provide for the reduction of rents payable by ryots in estates governed by the Madras Estates Land Act, No. 1 of 1908, approximately to the level of the assessments levied on lands in ryotwari areas in the neighbourhood and for the collection of such rents exclusively by the State Government. The Act applied to all estates as defined in S. 3(2) of the Madras Estates Land Act, Section 2 provided for the appointment of a special officer for any estate or estates for the purpose of recommending fair and equitable rates of rent for the ryoti lands in such estate or estates and laid down the procedure to be followed by the special officer for such purpose, and gave power to the special officer to determine after necessary enquiries the extent if any to which the rates of rent payable for each class of ryoti lands should in his opinion be reduced and to fix the rates of rent payable for each class of ryots after such reduction. Under S. 3, the special officer had to submit a report after completion of his inquiry to the State Government on the two points mentioned above and after considering the recommendations of the special officer and the remarks of the Board of Revenue thereon, the State Government was empowered by order published in the gazette to fix the rates of rent in respect of each class of ryoti land in each village in the estate, and the order so passed by the State Government was to take effect from the commencement of the Fasli year 1357. Section 3(4) then provided for the recovery of rents so fixed by the State Government and the amount so recovered in respect of each year, after deducting therefrom the cost of such recovery as may be determined according to the Rules to be framed and also after deducting the peshkash, cesses and other moneys due from the landholder to the State Government , was to be paid to the landholder. Section 3(7) laid down that the landholder shall not be the entitled to collect rents thereafter. Sections 5 and 6 made special, provisions with regard to religious, educational and charitable institutions. Section 7 provided for the framing of rules and sections 4, 8, 9 made incidental provisions which are however not material for our purposes.
2. In pursuance of the provisions of the Act, a notification was issued by the State Government with respect to the estate of the respondent fixing the rates of rent for various classes of ryoti lands in the estate. In the case of wet and dry lands the rate was reduced to half of the then existing rates and in the case of dry land (when agraharam well water was used) the rate was reduced to one-sixth of the exiting rate. Thereupon the respondent filed a writ petition on March 21 1952 challenging the above notification. The first challenge was on the ground that the estate of the respondent was not an estate within the meaning of the Madras Estates land Act and therefore the Act was not applicable to it. Secondly, it was contended that the reduction in the rents made by the notification was so drastic as to result virtually in depriving the respondent of his right to hold and enjoy his property, as the outgoing were far in excess of the income after the reduction in rents. Consequently, the notification amounted to an unreasonable restriction on the right of the respondennt to hold property under Art 19(1)(f) of the Constitution.
3. The petition was opposed on behalf of the State and
