The exemption of co-operative societies from rent control provisions is constitutionally valid as it does not violate Article 14, based on their distinct purpose and non-profit nature.

Judgment

TULZAPURKAR, J. :- By these three writ petitions filed under Art. 32 of the Constitution the petitioners, who are tenants in a building belonging to respondent No. 2 Society, have challenged the validity of the exemption granted to all buildings owned by all Co-operative Societies in the State of Tamil Nadu from all the provisions of the T. N. Act 18 of 1960 under Sec. 29 thereof.

2. The facts giving rise to the aforesaid challenge lie in a narrow compass. The petitioners are tenants in different portions on the ground floor of the building bearing Door No. 188, Mount Road, Madras belonging to second respondent which is an Apex Society registered under the Tamil Nadu Co-operative Societies Act 1961. It appears that the property was purchased in 1961 by the second respondent from its previous owners M/s. Mohammed Ibrahim and Company. and soon thereafter the second respondent applied to the State Government under Sec. 29 of the Act and sought exemption for it from all the provisions of the Act. But on hearing the objections raised by the petitioners and other tenants the application was rejected. Respondent No. 2 thereupon made two attempts to evict the petitioners from their respective premises. The first was on the ground that the premises are required by it for its own occupation but at the end of a long drawn out litigation respondent No. 2 failed to obtain possession; the second was on the ground that it required the premises for demolition and new construction and it was during the pendency of this litigation that the State Government issued its Notification No. II( 2) H. C. 6060/76 dated 21-11-1976 under Sec. 29 of the Act whereby the State Government exempted the buildings belonging to all co-operative societies in the State of Tamil Nadu from all the provisions of the Act. On the issuance of this Notification respondent No. 2 withdrew its eviction petitions preferred on the ground of demolition and new construction and served notices upon the petitioners under Sec. 106 of the Transfer of Property Act terminating their tenancies and filed civil suits against them in the City Civil Court, Madras for recovery of vacant possession of the premises in their respective occupation The petitioners have filed their written statements and suits are awaiting trial But since the protection available to them has been withdrawn the petitioners are facing the imminent prospect of suffering eviction decrees against them and therefore, have approached this Court by means of these writ petitions challenging the constitutional validity of the Notification in question on the ground that the same is violative of Art. 14 of the Constitution and have obtained stay of further proceedings in the suits.

3. The impugned Notification dated 21st November 1970 runs thus :

"No. II (2) H. O. 6060/76 - in exercise of the powers conferred by Sec 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act 1900 (Tamil Nadu Act 18 of 1960), the Government of Tamil Nadu hereby exempts the buildings owned by all Government Undertakings including Government Companies registered under the Indian Companies Act 1950 (Central Act I of 1956) and by all the Co-operative Societies from all the provisions of the said Act."

4. As was done in the earlier case dealing with I the total exemption granted in favour of all buildings belonging to public religious trusts and public charities, here also Counsel for the petitioners fairly stated that treating the buildings owned by all the Co-operative Societies in the State of Tamil Nadu as falling into one group while exercising the power under Sec 29 of the Act will have to he regarded as a rational classification based on an intelligible differentia inasmuch as Co-operative Societies while carrying on their activities in various fields do serve a great public purpose of attaining the social and economic welfare of a large Section of the people belonging to the middle class and the rural class by encouraging thrift, self