2005 Supreme(SC) 1433

2005(8) Supreme 291
Supreme Court of India
(From Madras High Court)
R.C. Lahoti, CJI, G.P. Mathur & P.K. Balasubramanyan, JJ.
Mylapore Club —Appellant
versus
State of Tamil Nadu and Anr. —Respondents
Civil Appeal No. 4531 of 2003
With
C.A.No. 6385/2993, C.A.No. 6386/2003, C.A.No. 7905/2003, C.A.No. 8853/2003, C.A. No. 9400/2003, C.A. No. 193/2004, C.A.No. 1231/2004, C.A. No. 1232/2004, C.A.No. 5404/2004, C.A. No. 4458/2004, C.A.No. 191/2004
All Decided on : 28-10-2005
Counsel for the Parties :
For the Appellant : R. Sundaravaradan, Sr. Advocate, V. Balachandraran, V. Sundararaj, Mrs. Anjani Aiyagari, K.B. Sandeep, K.K. Mani, S. Ravi Shankar, Advocate (NP), Ramlal Roy, R.N. Keshwani, R. Nedumaran, K.V. Viswanathan, B. Ragunath, K.V. Venkaraman, G. Sivabalamurugan, Y. Arunagiri, L.K. Pandey, K.V. Vijayakumar, Advocate (NP), P. Narasimhan, Advocates.
For the Respondents : K. Ramamoorthy, Sr. Advocate, S. Vallinayagam, Sewa Ram, R. Ayyam Perumal, B. Sridhar, K. Ram Kumar, Subramonium Prasad, Advocate (NP), A.T.M. Sampath, Ms. T.S. Shanthi, Balaji Srinivasan, V. Sudeer, S. Srinivasan, V. Prabhakar, V. Ramasubramanian, Ms. G. Indira, K.R. Sasiprabhu, R. Anand Padmanabhan, Ms. Amritha Sarayoo, Pramod Dayal and V. Balachandran, Advocates.

Important point
Sections 2 and 3 of the Madras City Tenants’ Protection (Amendment) Act, 1994, amending the Madras City Tenants’ Protection Act, exempting tenancies of land owned by religious institutions or religious charities belonging to Hindu, Muslim, Christian or other religions, are held constitutionally valid.

Headnote:Madras City Tenants’ Protection Act, 1921 as amended by Madras City Tenants’ Protection (Amendment) Act, 1994—Sections 1, 2, 3, 9—Validity of provisions exempting tenancies of land owned by religious institutions or religious charities belonging to Hindu, Muslim, Christian or other religions—In some of these cases, landlords, exempt institutions had filed suits for recovery and some of the tenants had sought to purchase rights of the landlord by invoking Section 9 of the Parent Act as earlier amended—Proceedings in that behalf had not become concluded and had stopped midway—Challenge related to validity of the very exemption being granted to such institutions and the provision made for abatement of pending proceedings—Whether High Court was justified in upholding the validity of the Amendment—(Yes)—It could not be held that the Amendment Act lacked either legislative competence or that it is unconstitutional.

       Held : The power to exempt buildings belonging to religious institutions or religious charities is available to the legislature, based on the fact situation arising out of the extension of the Act. Earlier views on such tenancies and the extension of the legislation, cannot be held to be a ground for holding the present withdrawal arbitrary or unconstitutional. Nor can a tenant raise a contention that he had a vested right to the protection of a statute the benefit of which had been extended to him in between and in the absence of any such vested right, it is also not open to him to raise a contention that the Act should not be made inapplicable to tenancies crated by certain religious institutions or religious charities. (Para 7)

       It is a matter for the legislature to balance the object of the parent Act with the object of protecting the rights of religious institutions and religions charities and on the basis of the material available to the legislature, the decision to exempt the buildings of such religious institutions and religious charities has been taken. The power to legislate is a plenary power vested in the legislature and unless those who challenge the legislation clearly establish that their fundamental rights under the Constitution are affected or that the legislature lacked legislative competence, they would not succeed in their challenge to the enactment brought forward in the wisdom of the legislature. Conferment of a right to claim the benefit of a statute, being not a vested right, the same could be withdrawn by the legislature which made the enactment. It could not be said that the Amendment Act lacked either legislative competence or that it is unconstitutional. (Para 9)

       The two main challenges before us, related to the question whether the High Court was right in holding that the withdrawal of the benefit available under Section 3 of the Act to the tenant was valid and constitutional. The second was whether the provision in the Amending Act for abating all proceedings initiated under Section 9 of the Act at the instance of the tenant, did not amount to interference in the decision making process and hence invalid in law. It was submitted that the provision in that behalf was beyond the power of the legislature and was even otherwise arbitrary and unreasonable. Once the power to exempt an institution or entity from the operation of the Act is conceded to the legislature, it cannot be argued that the benefit of one section in that enactment could not be withdrawn. The right under Section 3 itself was extended only by the extension of the Act. (Paras 11 and 12)

       It is open to the legislature to bring in a law that has retrospective operation. That position is not disputed. When it affects the vested rights or accrued rights, that question will have to be considered in that context. But the right to take advantage of a statute has been held to be not an accrued right. (Para 14)

       But Section 3, which was in pari materia with Section 9 of the Amending Act of 1960, the legislature had intended that pending proceedings should be affected. Even otherwise, once the applicability of the Act itself is withdrawn, no relief can be granted to a person who could have been or who was earlier a beneficiary under that enactment, after such withdrawal. Here, the Section provides that even if some steps have been taken pursuant to the claim by the tenant under Section 9 of the Parent Act, the proceeding cannot be continued in view of the exemption enacted in favour of the institutions. But the legislature has taken care to save the concluded transactions by providing that nothing contained in the Section shall be deemed to invalidate any suit or proceeding in which a decree or order passed has been executed or satisfied in full before the said date. Reading Section 3 of the Amending Act 2 of 1966, it could not be said that it is a legislative intervention with a judicial decision. The proviso has saved concluded transactions based on judicial adjudications. All that Section 3 does is to make it explicit that the amendment is intended to apply to pending proceedings. In the context of Section 6 of the General Clauses Act, unless it is shown that any right has accrued to the claimant under Section 6 of the General Clauses Act, unless it is shown that right has accrued to the claimant, such a provision making it clear that the Act could not be applied anymore to pending proceedings is not in any way invalid or incompetent. Unless the proceedings have concluded and the rights of the landlord has passed to the tenant, no right accrues to the tenant. He is only in the process of acquiring a right, the process having been set in motion at his instance. When pending proceedings are affected by an amendment, it is open to the Legislature to provide that the said process cannot continue. That alone has been done by Section 3 of the Amending Act of 1996. As far as concluded judicial proceedings are concerned and cases where orders for possession have been executed or decrees satisfied in full before the date of the amendment, they have been saved by the proviso thereby ensuring that there was no interference by the legislature with judicial proceedings which had reached a conclusion, even though that judicial proceeding related to a religious or charitable institution exempted by the amendment from the purview of the Parent Act. We are, therefore, not in a position to find any merit in challenge to Section 3 of the Amending Act. Having considered anxiously the relevant aspects urged before us and on considering the reasoning adopted by the full bench of the High Court while turning down the challenge to the constitutional validity of Act 2 of 1966, we are satisfied that no grounds is made out for interference with the decision of the High Court. Paras 14 and 15)