JUDGMENT

VERMA, J.—This appeal is against the judgment of Gujarat High Court dated January 12, 1983 dismissing appellants writ petition challenging the constitutional validity of Chapter XX-A of the Income-tax Act, 1961 wherein the question raised was whether immovable property would vest in the Central Government free from all encumbrances under Section 269-1, upon a final order being made under Section 269F(6) and consequently whether a tenant governed by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 can be evicted from such property.

2. The appellants constitute a partnership in the name and style of M/s. Satkar Hotel and Restaurant and for their business had taken on rent the 3-storeyed Shamalaji Kripa building in Sayajigunj, Vadodara from its owner M/s. S. S. Parshottamdas and Company on a monthly rent of Rs. 1,500/- The said M/s. Parshottamdas and Co. incurred huge debts for the repayment of which they executed a Composition Deed in favour of a Committee formed by the creditors for the purpose of management and disposal of the debtors property. A registered sale deed was executed on December 27, 1973 conveying the Shamlaji Kripa building to respondents Nos. 5 to 10 for a consideration of Rs. 4,50,001 / paid by a cheque dated July 12, 1973 for Rs. 50,001 / - and another cheque of Rs. 4 lakhs dated February 4, 1974. According to the recital in the sale deed the purchasers were given constructive possession and the existing tenant was to attorn in favour of the purchaser. By a letter dated February 5, 1974 M/s. S. S. Parshottamdas and Co. informed the appellant of the sale requiring the appellant to attorn to the purchasers - respondents Nos. 5 to 10.

3. The competent authority under Section 269B of the Income-tax Act, 1961 initiated proceedings for acquisition of the said property under Chapter XX-A of the Act by a notice dated August 31, 1974 under Section 269D(l) to that effect published in the Gazette of India dated November 16, 1974. This notice was also served on the appellants as the persons in occupation of the property in accordance with Section 269D(2) of the Act. The appellants did not make any objection to the acquisition proceeding. An order of acquisition of the said property was made under Section 269F(6) on December 12,1975 and that order became final on January 27, 1976.

4. An order under Section 269-1(1) made by the competent authority was served on the appellants on February 5, 1976 directing them to deliver possession of the said property to the Central Government within 30 days. On February 7, 1976, the Inspecting Assistant Commissioner of Income-tax, Range 11, Baroda served an order on the appellants wherein also a direction was given to hand over possession of the property in question within the specified period. In these circumstances, apprehending their eviction, the appellants filed a writ petition in the Gujarat High Court on February 24,1976 challenging the constitutional validity of certain provisions of Chapter XX-A of the Income-tax Act, 1961 and consequently the order under Section 269F(6) of the Act together with consequential notices dated February 5, 1976 and February 7, 1976 issued to the appellants. The Gujarat High Court dismissed the appellants writ petition and other connected matters. The High Court however, granted a certificate of fitness to appeal to the SC under Article 133(l) of the Constitution, in view of the question of law involved being of general importance. This gives rise to the present appeal.

5. The contention of Shri Karanjawala learned counsel for the appellant, in substance, is that the statutory tenancy not being an encumbrance on the property does not get extinguished on acquisition of the property and, therefore, the right of the Statutory tenant to continue in occupation remains unimpaired even after the acquisition made under Chapter XXA of the Income-tax Act. The learned counsel also submitted that tenancy, whether monthly or statutory, is prop