1971 Supreme(SC) 580

SUPREME COURT OF INDIA
S.M. SIKRI, C.J.I., J.M. SHELAT, I.D. DUA, S.C. ROY AND G.K. MITTER, JJ.
Vivian Joseph Ferreira and another (In W.P. No. 187 of 1970) and Dr. Jehangir Rustom Sethna and others (In W.P. No. 188 of 1970), Petitioners
Versus
The Municipal Corporation of Greater Bombay and others (in both the Petitions), Respondents.
Writ Petitions Nos. 187 and 188 of 1970, D/- 4-11-1971.
The Narayanan Investment Trust Pvt. Ltd., Bombay (In W.P. No. 187 of 1970), Intervener.

Headnote:(A) Constitution of India, Art.19(1)(f) and Art.19(5) - Reasonable restriction - Levy of cess under Section 27 of the Bombay Buildings Repairs and Reconstruction Board Act (47 of 1969) on residential buildings even though they are in sound and good condition and even though they will not require structural repairs for the entire period of the Act does not amount to an unreasonable restriction and therefore does not violate Article 19 (1)(f).

       X-Ref.:- Constitution of India, Art.246(3), Art.265, Sch.7, List 2, Entry 49

       X-Ref.:- Bombay Buildings Repairs and Reconstruction Board Act (47 of 1969), S.27.

       The purpose of a tax would not be regarded as private merely because some persons might receive more benefits from the use of its proceeds than others. A law, not only exempting from taxation the limited means of poor and afflicted persons but providing public funds to ameliorate their conditions, is undoubtedly one for public purpose. The principle that funds raised by taxation cannot be expended for private use does not prevent the Legislature from looking at the ultimate rather than the immediate result of the expenditure, and incurring an expense or creating, a liability on the part of the public which it was under no constitutional obligation to incur or create if the ultimate effect will be beneficial to the public, the test is not as to who receives the money but the character of the purpose for which it is to be expended. (Para 21)

       Both the purpose of the cess and its use are without doubt for public purpose, the purpose is to prevent collapses and the suffering they must cause including rendering several persons homeless, a condition accentuated by the demand for accommodation outrunning the supply. The use is for preservation and prolonging the life of the buildings existing at the date of the enactment of the Act by carrying out structural repairs where owners due to diverse reasons refuse or are reluctant to spend their capital on such preservation, jeopardising the life of their properties and due to the peculiar conditions in the property market find it profitable to render buildings into vacant plots. If in implementing the purpose, which, as aforesaid, is demonstrably public, some benefit reaches particular individuals, the statute, which does not 846 directly purport so to do, cannot be invalidated. (Para 23)

       (B) Constitution of India, Art.14 - Equality before law - Imposition of tax under Sec.27 and exemption under Sec.28 of the Bombay Buildings Repairs and Reconstruction Board Act (47 of 1969) does not contravene Art. 14.

       X-Ref.:- Bombay Buildings Repairs and Reconstruction Board Act (47 of 1969), S.27, S.28.

       The Act makes three kinds of classification, (1) by confining the tax to the residential tenanted buildings, it classifies buildings which are used for residential purpose and are tenanted, from the rest; (2) by confining the tax to such existing buildings it classifies them from those built after the date on which the Act is brought into force, and (3) by dividing those which are liable to tax into three categories according to the three periods in which they were constructed. (Para 24)

       The classification of residential premises from the rest and that between those existing at the time when the Act was brought into force from the new ones which might be built thereafter can be regarded as based on intelligible differentia and related to the objectives and their feasibility which the Legislature had in mind while undertaking the questioned legislation. (Para 26)

       The division of such existing structures into three categories was evidently made in the light of the survey of buildings by the Corporation and the report of Bedekar Committee and the classification of buildings made therein on the basis of age and the kind of construction in vogue in the respective periods in which they were erected. That being so it is impossible to say that the aforesaid groupings of buildings was unprinciple, whimsical or arbitrary. (Para 27)

       The primary object of the Act is not to repair all buildings subject to cess but to prevent the annually recurrent mischief of house collapses and the human tragedy and deprivations they cause. The cess being thus levied to prevent such disasters, there is no question of unequal treatment between one class of owners and another. The classification of buildings into three categories is based on their age and the construction current during the periods of their erection. It is, therefore, based on an intelligible differentia and is closely related to the objects of the legislation. There is, therefore, no question of unequals being treated as equals, as each building in respect of which the cess is payable falls within the surveillance of the Board and has to be structually repaired if the need were to arise. (Para 30)

       The objections to exemptions under Section 28 can be met by the fact that the buildings in each group as set out in the section form a distinct class by themselves from the tenanted residential premises. (Paras 31, 32, 33)