1997 Supreme(SC) 1705

1998(1) Supreme 124
Supreme Court of India
(From Bombay High Court)
J.S. Verma, CJI., B.N. Kirpal, M. Srinivasan, JJ.
Malpe Vishwanath Acharya & Ors. -Appellants
versus
State of Maharashtra & Anr. -Respondents
Civil Appeal Nos. 2797-98 of 1992
With
Writ Petition (C) Nos. 17 & 824 of 1996
Decided on 19-12-1997
Counsel for the Parties :
For the Appellants, F.S. Nariman, Sr. Advocate, Mulraj Shah, P.H. Parekh, Jagdish Karia, Subhash Sharma, Ms. Dhun Chapgar, Ms. Sunita Sharma, Nikhil Sakhardande, Sameer Parekh, Advocates.
For the Respondents, M.S. Nargolkar, Sr. Advocate, D.M. Nargolkar, S.M. Jadhav. Advocates.
For the Intervenor, M.N. Shroff, Advocate for K.V. Sreekumar, Advo­cate.

Important Point
The existing provisions of the Bombay Rent Act relating to the determination and fixation of the standard rent can no longer be considered to be reasonable.

Headnote:(i) Standard Rent-Bombay Rents, Hotel and Lodging House Rates Control Act, 1947-Sections 5(10)(B), 11(1) and 12(3)-Constitutional validity of-Challenged on ground that these provisions pertaining to stan­dard rent were ultra vires Arts. 14, 19 and 21 of Constitution-Re­striction on right of landlords to charge rents in excess of standard rent alleged to be no longer a reasonable restriction-Amendments made in 1987-Indicate that State Legislature was conscious of the fact that there was need to increase standard rent-No effective steps taken to strike a balance between interests of landlords and tenants-Tenants are getting an unwarranted benefit-Hardship to landlord-Existing provisions of Bombay Rent Act relating to determi­nation and fixation of standard held unreasonable and arbitrary-High Court upholding validity of impugned provisions was not correct-However, it is not necessary to strike down these as existing Act elapses on 31.3.1998-A new Rent Act will be enacted w.e.f. 1.4.1998 keeping in view observations made-Any further extension of existing provisions without bringing them in line with views expressed-Would be invalid.

       Held that the existing provisions of the Bombay Rent Act relating to the determination and fixation of the standard rent can no longer be considered to be reasonable. The said provisions would have been struck down as having now become unreasonable and arbitrary but we think it is not necessary to strike down the same in view of the fact that the present extended period of the Bombay Rent Act comes to an end on 31st March, 1998. The Government’s thinking reflected in var­ious documents itself shows that the existing provisions have now become unreasonable and, therefore, require reconsideration. The new bill is under consideration and we leave it to the Legislature to frame a just and fair law keeping in view the interests of all concerned and in particular the resolution of the State Ministers for Housing of 1992 and the National Model Law which has been circulated by the Central Government in 1992. We are not expressing any opinion on the provisions of the said Model law but as the same has been drafted and circulated amongst all the States after due deliberation and thought, there will, perhaps, have to be very good and compelling reasons in departing from the said Model law. Mr.Nargolkar assured us that this Model law will be taken into consideration in the framing of the proposed new Rent Control Act. (Para 24)

       Further held that the decision of the High Court upholding the validity of the impugned provisions relating to standard rent was not correct. We however refrain from striking down the said provisions as the existing Act elapses on 31.3.1998 and we hope that a new Rent Control Act will be enacted with effect from 1st April, 1998 keeping in view the observations made in this judgment in so far as fixation of standard rent is concerned. It is, however, made clear that any further extension of the existing provisions without bringing them in line with the views expressed in this judgment, would be invalid as being arbitrary and violative of Article 14 of the Consti­tution and therefore of no consequence. (Para 25)

       (ii) Legislation-Whether with passage of time a legislation which was justified when enacted may become arbitrary and unreasonable with change in circumstances ?-Held, Yes-Can it be said that even though provisions relating to fixation of rent were valid when Bombay Rent Act was passed in 1947, the provisions, as amended, can still be regarded as valid now ?-Held, No-Bombay Rents, Hotel and Lodging House Rates Control Act, 1947-Sections 5(10)(B), 11(1)&12(3).(Paras 9, 14)

       (iii) Social Legislations-Law of interpretation-Law must strike a balance between rival interests and try to be just to all-Rent Control Acts-Such a law has to be revised periodically to ensure that a disproportionately larger benefit than the one which was intended is not given to tenants.

       Held : In so far as social legislation, like the rent control act is concerned, the law must strike a balance between rival interests and it should try to be just to all. The law ought not to be unjust to one and give a disproportionate benefit or protection to another section of the society. When there is shortage of accommodation it is desirable, nay, necessary that some protection should be given to the tenants in order to ensure that they are not exploited. At the same time such a law has to be revised periodically so as to ensure that a disproportionately larger benefit than the one which was intended is not given to the tenants. It is not as if the Government does not take remedial measures to try and off set the effects of inflation. In order to provide fair wage to the salaried employess the Government provides for payment of dearness and other allowances from time to time. Sur­prisingly this principle is lost sight of while providing for increase in the standard rent-the increases made even in 1987 are not adequate, fair or just and the provisions continue to be arbitrary in todays context. (Para 22)

       Further held : When enacting socially progressive legislation the need is greater to approach the problem from a holistic perspective and not to have a narrow or short sighted parochial approach. Giving a greater than due emphasis to a vocal section of society results not merely in the miscarriage of justice but in the abdication of responsibility of the legislative authority. Social Legislation is treated with deference by the Courts not merely because the Legislature represents the people but also because in representing them the entire spectrum of views is expected to be taken into account. The Legislature is not shackled by the same constraints as the courts of law. But it’s power is coupled with a responsibility. It is also the responsibility of the courts to look at legislation from the altar of Article 14 of the Constitution. The article is intended, as is obvious from its words, to check this tendency; giving undue preference to some over others. (Para 23)