The conversion of a Panchayat to a Municipality does not require a new notification under the Rent Act; the Act continues to apply to all areas defined in its Schedule regardless of subsequent changes.

ORDER

Sushrut Arvind Dharmadhikari, J

The reference to the Full Bench arises out of the order passed by the Division Bench of this Hon’ble Court in the present matter (O.P.(R.C.) No. 16/2025 - Vadavathi Rajeevan & Anr. vs. K. Vanaja & Anr.). The Division Bench found itself in disagreement with the earlier judgement of the Co-ordinate Division Bench dated 25.11.2024 passed in O.P.(R.C.) No. 154/2024 ( Koorantakath Kamaludeen vs. Kannyath Divakaran ), and, after recording its reasons, referred the matter for consideration by the Full Bench.

2. The Full Bench presided over by the Hon’ble the Chief Justice, by order dated 16th July 2025, directed all parties to file their written submissions, along with the statutory provisions and judgments relied upon by them.

2.1. The moot question to be considered, addressed, and answered by this Full Bench is as follows:

“Whether consequent upon a Panchayat becoming a Municipality, a further notification under Section 1 (3) of the Kerala Buildings (Lease and Rent Control) Act, 1965 (for short, ‘the Rent Act’) is required or not?”

Ancillary to the above are the following questions as well:

(i) Whether the Schedule to the Rent Act remains static until amended by the State Government in exercise of its power under Section 1 (3); or

(ii) Whether it is subject to automatic variation, amenable to constant modification depending upon changes in the status of the concerned local authority or body, such as from Panchayat to Municipality or Municipal Corporation, or upon delimitation of the territories of a Panchayat, Municipality, or Municipal Corporation.

Necessary facts leading to the present reference

3. We find it condign to briefly spell out the relevant facts in a nutshell. The Kerala State Legislature enacted the Kerala Buildings (Lease and Rent Control) Act in the year 1959, which was brought into force in 1965 after receiving the Presidential assent under Article 254 of the Constitution of India. The Presidential assent was necessitated since certain provisions of the Rent Act were in partial conflict with the provisions of the Transfer of Property Act, 1882 (for short, “the TPA”), a Parliamentary enactment. Therefore, in order to overcome the inconsistency between the Central and State enactments, Presidential assent was sought and granted, whereafter the Rent Act was enforced throughout the State.

3.1 In terms of Section 1 (2) of the Rent Act, Schedule I was appended to the enactment, enumerating various Panchayats and Municipalities in different districts of the erstwhile State of Kerala to which the provisions of the Act were made applicable. We shall advert to the provisions of the Rent Act in greater detail a little later. It is relevant to note that the name of “Koothuparamba Panchayat”, to which the present dispute pertains, was included at Serial No. 60 under the District of Cannanore.

3.2 Thereafter, with effect from 05.03.1990, Koothuparamba Panchayat was upgraded and declared a Municipality under the provisions of the Kerala Municipality Act, 1960 , (for short, ‘Municipality Act’) consequent upon the issuance of the requisite notifications. The conversion into a Municipality was effected through two separate notifications, both dated 05.03.1990, one by which Koothuparamba ceased to be a Panchayat, and the other by which it was constituted as a Municipality under the Municipalit