# VIVIAN JOSEPH FERREIRA & ANR v. MUNICIPAL CORPoRATION OF GREATER BOMBAY & ORS

- **Citation:** [1972] 2 S.C.R. 257
- **Court:** Supreme Court of India
- **Decided:** 1971-11-04
- **Bench:** S. M. Sikri, J. M. Shelat, I. D. DuA, S. C. Roy, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vivian-joseph-ferreira-anr-v-municipal-corporation-of-greater-bombay-ors-5643
- **Pages:** 22

## Headnote

Constitution
of India,
1950, Articles 14 and
19(1) (/)-Bombay
Building Repairs and Reconstruction Board Act, XLVll of 1969-Ss. 27;.
28, 29-Enactment to solve /rousing protJ/em in the city and the danger
arising from coj/apse of old buildings-Tax on all reside/Ilia/ buildings.-
occupied by tenants at tire time of tire commencement of tire Act-Classification of buildings according to age and type of construction-Varying
percentage of the rateable value of buildings charged as basic /evy-Cotistitutlona/ validitv of.
Bombay B11iJding Repairs and Reconstruction Board Act XLVll of
1969-Constitu!lona/ validity of.
I
Taxing Statute-Principle for determination of the· validity of.
The Bombay Building Repairs and Reconstruction Board Act, XL VII
of 1969 was brought into force on October I, 1969. It was enacted as
a temporary measure and was to expire on December 31,
1970. The
preamble of the Act recites collapses of residential buildings, acute short·
age of housing accommodation and the problem of law and order arising
from the increa_sing influx of persons iQto the city of Bombay in search
of work as having necessitated its enactment.
It also recites the recommendations, suggestions and objections received by the government in
response to the proposals made by it and its conclusion after consi<!ering
them, as to t~e necessity for establishing a Board to deal with the prob·
!ems. The Act is confined to residential buildings occupied by tenants at
the time of the commencement of the Act.
Section 28 els. ·(a) (O (J)
exempts buildings exclusively occupied by the owners,
buildings
exclu·
sively used for non-.residential purposes, buildings exclusively o::cupied on
leave and licence, open land not built upon, buildings vesting in or leased
to cooperative societies and buildings which might be erected after the
commencement o_f the Act.
Section 27 provides for the levy of tax on
buildings and lands, save those exempted under s. 28, at rates of percentum
of the rateable value of the properties as laid down in the Schedule to the
Act. Section 29 divides the buildings so taxed into categories A, B and
C. Buildings built prior to September- I. 1940 fall into c~egory A; those
built between September 1. 1940 and December 31. 1950 fall into cate·
gory B; and those built be!ween lanuary I. 1951 and the date on which
the Act was brought into force fall into category C. Varying percentage
of the rateable value of the buildings is charged as a basic levy and at a
higher rate when any such building is structurally repaired. The Act thus
makes three kinds of classif.
0 atioos namely, ( ll by confining the iax t<>
the. resi~·~ntial t~nantcd buildings it classifies buildings which are used for
res1dent1al purposes and am tenant•d, from the rest; (2) bv confirming
the tax to such existing building it classifies them from those built after the
date on which the Ad is !>rough! into force and (3) by dividing tho·e
which are liable to tax into lbree cate~ories according to the three periods
in which they were constructed.
The amount recovered under the levy
258
SUPREME COURT REPORTS
[1972] 2 S.C.R.
is to be first credited to the Consolidated Fund of the State, and, there·
after, to be transferred by a suitable appropriation to the fund designated
as the Bombay Building Repairs and Reconstruction Fund. An owner
who is required to pay the tax pays only 10% of the ra~>able veilue of
the building and is entitled to recover the balance from the tenant by
making a corresponding increase in the rent payable
by
such tenant.
During the life of the Act such an owner is not bound to keep the premises
let in good and tenantable repair.
Owners of two residential buildings in the city of !3ombay neither of
which was, by reason of its having been recently constructed, either dilapidated or in dangerous condition challenged the constitutiorolity of the
Act on the grounds ( i) the tax amounted to unreasonable restriction and
could not be said to be for a public purpose in that

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257
VIVIAN JOSEPH FERREIRA & ANR.
v.
MUNICIPAL CORPoRATION OF GREATER BOMBAY &
ORS.
November 4, 1971
[S. M. SIKRI, C.J., J. M. SHELAT, I. D. DuA, S. C. Roy AND
-G. K. MITTER, JJ.]
Constitution
of India,
1950, Articles 14 and
19(1) (/)-Bombay
Building Repairs and Reconstruction Board Act, XLVll of 1969-Ss. 27;.
28, 29-Enactment to solve /rousing protJ/em in the city and the danger
arising from coj/apse of old buildings-Tax on all reside/Ilia/ buildings.-
occupied by tenants at tire time of tire commencement of tire Act-Classification of buildings according to age and type of construction-Varying
percentage of the rateable value of buildings charged as basic /evy-Cotistitutlona/ validitv of.
Bombay B11iJding Repairs and Reconstruction Board Act XLVll of
1969-Constitu!lona/ validity of.
I
Taxing Statute-Principle for determination of the· validity of.
The Bombay Building Repairs and Reconstruction Board Act, XL VII
of 1969 was brought into force on October I, 1969. It was enacted as
a temporary measure and was to expire on December 31,
1970. The
preamble of the Act recites collapses of residential buildings, acute short·
age of housing accommodation and the problem of law and order arising
from the increa_sing influx of persons iQto the city of Bombay in search
of work as having necessitated its enactment.
It also recites the recommendations, suggestions and objections received by the government in
response to the proposals made by it and its conclusion after consi<!ering
them, as to t~e necessity for establishing a Board to deal with the prob·
!ems. The Act is confined to residential buildings occupied by tenants at
the time of the commencement of the Act.
Section 28 els. ·(a) (O (J)
exempts buildings exclusively occupied by the owners,
buildings
exclu·
sively used for non-.residential purposes, buildings exclusively o::cupied on
leave and licence, open land not built upon, buildings vesting in or leased
to cooperative societies and buildings which might be erected after the
commencement o_f the Act.
Section 27 provides for the levy of tax on
buildings and lands, save those exempted under s. 28, at rates of percentum
of the rateable value of the properties as laid down in the Schedule to the
Act. Section 29 divides the buildings so taxed into categories A, B and
C. Buildings built prior to September- I. 1940 fall into c~egory A; those
built between September 1. 1940 and December 31. 1950 fall into cate·
gory B; and those built be!ween lanuary I. 1951 and the date on which
the Act was brought into force fall into category C. Varying percentage
of the rateable value of the buildings is charged as a basic levy and at a
higher rate when any such building is structurally repaired. The Act thus
makes three kinds of classif.
0 atioos namely, ( ll by confining the iax t<>
the. resi~·~ntial t~nantcd buildings it classifies buildings which are used for
res1dent1al purposes and am tenant•d, from the rest; (2) bv confirming
the tax to such existing building it classifies them from those built after the
date on which the Ad is !>rough! into force and (3) by dividing tho·e
which are liable to tax into lbree cate~ories according to the three periods
in which they were constructed.
The amount recovered under the levy
258
SUPREME COURT REPORTS
[1972] 2 S.C.R.
is to be first credited to the Consolidated Fund of the State, and, there·
after, to be transferred by a suitable appropriation to the fund designated
as the Bombay Building Repairs and Reconstruction Fund. An owner
who is required to pay the tax pays only 10% of the ra~>able veilue of
the building and is entitled to recover the balance from the tenant by
making a corresponding increase in the rent payable
by
such tenant.
During the life of the Act such an owner is not bound to keep the premises
let in good and tenantable repair.
Owners of two residential buildings in the city of !3ombay neither of
which was, by reason of its having been recently constructed, either dilapidated or in dangerous condition challenged the constitutiorolity of the
Act on the grounds ( i) the tax amounted to unreasonable restriction and
could not be said to be for a public purpose in that it benefited neglectful
and
defaulting
owners, and, therefore, violated Art. 19(1) (f) of the
Copstitution; (ii) the Act was discriminatory and, therefore, infringed
Art. 14 because, (a) the classification of bμildings into tbree categories and
imposition of different rates of tax was not based on any rational principle;
and (b) the exemption given to buildings under els. (g), (h), (i) -and (j)
of s. 28 and the classification between buildings constructed before the Act
and those constructed thereafter was irrational without being founded on
any principle.
HELD : The Act is valid and the petitions unsustainable.
( 1) The principles arising from the decisions of tbis Court wherein the
question of validity of taxing statutes have arisen are : (i) in order tbat
a tax may be valid it must be, first, within the competence of the Legislaiure imposing it, secondly, it must be for a public purp0se and thirdly, it
should not \iolate the fundamental rights guaranteed by Part III of the
Constitution. (iil a taxing statute is as much subject to Art. 14 as any
other statute; but in view of the inherent complexity of fiscal adjustment of
diverse elements a larger discretion has to be permitted to the legislature
for classification ~ long as there is no· tralll\gression of the fundamental
principle underlying the doctrine of classification; (iii) a taxing statute is
not invalid on the ground of d'scrimination merelv because other objects
could have been, but are not taxed by tbe legislature; (iv) when a statute
divides the objects of tax into groups or categories so fong as there is
equality and uniformity within each group the tax cannot be attacked on
the ground of i.ts being discriminatorv: and (vl the mere fact that a tax
falls more heavilv on some in the same group or category is by itseJ( not
a ground for its invalidity. (268 E-269 D.l
K. T. Moopil Nair v. Slate of Kera/a, (1961] 3 S.C.R. 77, Raja Jagannath v. U.P., (1963] I S.C.R. 220, East India Tobacco Co. v. Andhra
Pradesh, [1963] 1 S.C.R. 404, Khandige Sham Bhatt v. Agricultural In·
Come-tax Officer, (1963] 3 S.C.R. 809,
Andhra Pradesh v.
Na/la Raia
Reddy, [1967] 3 S.C.R. 28, Ravi Varma v. Union of India. [1969] 3 S.C.R.
827, and Twyford Tea Co. Ltd. v. State of Kerala, [1970] 3 S.C.R. 282,
referred to.
Where the object of a tax is directly private, indirect and , incidental
benefits which mar. result to the public do· not make a public purpose.
But the purpose of a tax would not be regarded as private merely because
some persons might receive more benefits from the use of its proceeds
than others or. is imposed for a purpose other than Tevenue.
But. the
principle that funds raised by taxation cannot be expended for private
use does not prevent the legislature from looking at the ultimate rather
than the immediate result of the expenditure, and incurring an expense
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VIVIAN JOSEpH V. MUNIC. CORP, BOMBAY
259
or creating a liability on the part of the public which it was under no
conslltullorial obugatJon to incur or create if the ultmlate effect will be
benefkial to the public. The fact that a statute auihonsing an expenditure ol puolic tunas for a public purpose may foster another enterprise
which is not a public one does not invalidate the statute if the purpose
of the expenditure is legitimate because it is public. The test is not as
to who receives the money but the character of the purpo~e for which it
is expended. What is to be borne in mind is the distmction between the
purpose -and the method of its implementation. [272 B-E)
Cooley on Taxation (4th ed.), Vol. 1, Ch. 4, Arts. 174 to 221; American Jurisprudence Vol. 51, paras 321 and 329. Ibid, para 330 at p,
381; and Carmichael v. Southern Coal & Coke Co. 81 L. Ed, 1245 and
American Jurisprudence, Tr.xation, Vol. 51 p-ara 353 at 396.
The incidence of tax may fall upon a class or indi\iduals who derive
no benefit from its expenditure or who are not responsible for the mischief to remedy which the tax is imposed. Besides, in the present case
the doctrine of benefits cannot apply first, because the cess goes directly
to the Consolidated Fund and, secondly, because the legislature has the
power to authorise expenditure out of the consolidated fund on any public
purpose. [272 GI
Carmichael v. Southern Coal & Coke Co., 81 L. ed 1245, -at pp. 1261
and 1265, referred to.
Both the purpose of the tax and its use are, without doubt, for public
purpose. The pm pose is to prevent collapses and the suffering they must
cause. The use is for pr•Jservation and pr01onging the life of t.1.0 buildings
existing at the date of the enactment. If. in implementing the purpose,
which is demonstrably public, some benefit reaches particular individuals,
the statute which does not directly purport so to do, cannot be invalidated.
(273 CJ
(ii) When a combination of various factors raised problems which
are of imminent concern to the state as well as the municipal authorities, if
the legislature took a policy. decision to give priority to the residential
tenanted premises, in respect of which in its opinion, the. danger was
graver and imminent no challenge to the division between residential and
non-residential premises can be sustainable particularly when dealing with
a part of the problem and confining its treatment to residential premises
only was considered feasible.
In the light of the studW. undertaken by
the government and the corporation if legislature thought it best to preser\'e and prolong the life of existing structures no challenge on the ground
of discrimination or arbitrariness can legitimately be made.
Therefore
the classification of residential premises from the rest and that between
those existing at the time when the Act was brought into force from the
new ones whicti might be built thereafter can ·be regarded as based on
intelligible dilferentia and related to the objectives and their
fe-asibility
which the legislature had in mind while undertaking the questioned legislation. [275 A-GI
The classification of buildings into three categories is based on their age
and the construction current during the period of their erection. It is
therefore b-ased on intelligible ditferentia and
is closely
rela~!d to the
objects of the legislation.
There is, therefore, no question of unequals
being treated as eauals as earh building in respect of which the tax
is payable falls within the surveillance of the Board and bas to be structurally repaired if the need were to arise. Further, the tax is payable on
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SUPREME COURT REPORTS
(1972] 2 S.C.R.
the rateable value of each bullding which di1ters froin bliildlng to b~ilding
and ii is distributed beiween o'Wnei's and the ie11ants, the former b~~tiilg
10% of it only. 1275 H, 276 C, 277DJ
The grievaqce that individual tax-payers get more or less return from
the tax proceeds would not be a sustainable ground for a challenge against
.its constitutional validity. The primary object of the Act is not to repair
all buildings subject to cess but to preveni the annually recurrent mischief
of house colla~ses and the human tragedy and deprivations they cause.
The tax being thus levied to prevent such disasters, there is no question of
unequal treatment between one class of owners and another .. [276 Fl
Moopil Nair v. State of Kera/a, [1961] 3 S.C.R. 77, New Manek
Chowk Spinning & Weaving Mills Co. Ltd. v.· Municipal Corporation of
the City of Ahmedabad, [1967] 2 S.C.R. 679 al!d Railroad Retirement
Board v. Alton Railroad Co., 79 L.ed., 1468, held inapplicable.
The buildings in each of the categories exempted under s 28, form
a distinct class by themselves., Buildings in els. (a) to (f) are buildings
to which Rent Act does not apply a.nd therefore the consider~tions for
which the cess is levied do not appfy to them. Buildings used for nonresidential purposes do not fall within the scope of the Act and therefore
had to be excluded from the levy of the cess. Buildings vesting in or
leased to cooperative societies form a class by themselves and cannot be
equated with buildings built by individuals.
The relation between a
society and its members are not the same as those between landlords and
tenants and besicles, there is considerable control b.¥
the Regi;trar over
the administration of the funds of the societies and overall si.pervision
over their affairs. The premises occupied by licences form a distinct class
by themselves, and could not have been lumped together with tenanted
premises without the danger of a challenge under Art. 14.
The circumstanc~s which led to the imposition of the cess do not apply to premises in
the OCCU1'3tion of licensees because such licensees have no rights such as
the tenants have. namely, irremovability and
the freezing of rents, and
the consequential reluctance or inability of the landlords to mamtain their
premises tenantabie repairs.
If buildings used for non-residential purposes on the basis of leave and licence are validlv treated differently,
buildings, if used partly for one and partlv for another such purpose or
purposes can also be similarly treated provided that no part or narts thereof are occupied or used for a purpose other than those soecified in the
three clauses'.
Since these buildine:s form separate classes bv
lhernselves
from the tcnantS!f residential premises, the provisions for exempting tloiern
cannot be held "" violative of the equal protection clause. [277 F-278 G]
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ORIGINAL JURISDICTION
of 1970.
Writ Petitions Nos. 187 and 188
G
Peti1ion under Art. 32 of th.~ Constitution of India for enforcement of the fundamental rights.
S. J. Sorabjee and B. R. Aganvala, for the petitioner (in both
the petitions).
M. C. Bhandare, P. C. Bhartari,
J. B. Dadachanji and
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VMAN J'OSEPH V. MU~l'C. CO.J.P. BOMBAY (She/at, J.) 261
Ravituier ~.
for respondent no. 1 (in W.P. No.
187 of
1970).
P. C. Bhartari, J. B. Dadachanji and .Ravinder Narain,
for
respondent no. 1 (in W.P. No. 188 of 1970).
M. C. Setalvad, P. K. Chatterjee and B·. D. Sharma, for respondent no. 3 (in W.P. No. 187 of 1970).
M. C. Bhandare and B. D. Sharma, for respondent no. 3 (in
W.P. No. 188 of 1970).
S. J. $orabjee, R. D. Diwan and I. N. Shroff, for the interveneiC
(in W.P. No. 187 of 1970).
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The Judgment of the Court was delivered by
Sbelat, J. These petitions by owners of two residential buildings in the city of Bombay, neither of which is, by reason of its
having been recently constructed, either dilapidated or in dangerous -condition, challenge the validity of the Bombay Building Repairs and Reconstruction Board Act, XLVII of 1969.
The preamble of the Act recites collapses of residential buildings, acute shortage of housing accommodation, and the problems
of law and order arising from the unceasing influx of persons into
the city of Bombay in search of work as having necessitated its
e.nactment. It also recites the recommendations, suggestions and
objections received by Government in response to the proposals
made by it and its conclusion after considering them as to the·
necessity for establishing a Board to deal with the said problems
by carrying out structural repairs to dangerous buildings, by acquiring and reconstructing buildings which are beyond repair and
by providing for the rehousing of occupiers, who, because of such
repairs would be dishoused, and to provide for the temporary levy
of an additional cess on buildings an!! lands to meet the expenditure for the aforesaid purposes. The Act was brought into force
on October l, 1969 and the cess payable thereunder became
operative as from November 1, 1970.
The Act by s. 1 ( 4) is declared to be a temporary one and·
would expire on December 31, 1979. Structural repairs are defined bys. 2(s) as meaning repairs or replacement of decayed, cracked, or ~t of plumb structural components of a building or any
substantial part thereof or any part to which the occupiers have
common access, by new ones of the like materials, or of different
materials including change in the mode of -construction such as
converting load bearing wall type or timber framed structure to
an R.C.C. one, which repairs or replacement, if not carried out
expeditious!y, may res\llt in the collapse of the building or any
262
. SUPREME COURT REPORTS
[1972] 2 S.C.R .
pc.rt thereof. Ss. 3 and 4 provide for the establishment and coinposition of the Bombay Building Repairs and Reconstruction
Board. Ss. 21 and 22 lay down the duties, powers and functions
of the Board including the power to carry out structural as also
tenantable repairs, to move the State Government to acquire old
and dilap!dated properties in respect of which the cess is levied
and which, in the opinion of the Board, are beyond repair and to
reconstruct new buildings thereon, to establish transi1 camps to
temporarily accommodate persons dishoused and to demolish
dangerous and dilapidated buildings incapable of being repaired
at reasonable cost. S. 27 provides that subject to the provisions
of s. 28 there shall be levied a tax on buildings and lands called
the Bombay Buildings Repairs and Reconstruction Cess at the
rate of so many percentum of the rateable value of the concerned
property as is prescribed therefor under the Schedule to the Act.
Sub-s. 4 of s. 27 provides that the share of the owner shall be 10
per cent. of the rateable value of the property and confers a right
on such owner to recover the balance from the tenant by making
a proportionate increase in rent and recovering it as such. S. 28
enumerates various classes of buildings which are exempted from
the enforcement of the levy. S. 29 lays down three categories of
buildings to which the Act applies. The Schedule to the Act
provides different rates at which buildings falling in each category
would be subject to the cess. The Schedule also provides in respect of each category of buildings different rates at which the cess
would be payable if structural repairs are carried out to such
building. The proceeds of the cess would be first credited to the
consolidated fund of the State and thereafter under an appropriation duly made by law in that behalf would be transferred to a
fund, the amount of which would be placed at the disposal of the
Board for carrying out its several functions. (s. 31 ). Lastly, s.
71 provides that in the case of any building subject to the cess,
the owner shall not be bound to keep the premises . let to any
occupier in good and tenantable repair and accordingly s. 23 of
the Bombay Rents, Hotel and Lodging House Rates Control Act,
194 7 shall be deemed to have been suspended and the provisions
of the Transfer of Property Act, 1882 relating thereto shall apply.
Counsel for the petitioners challenged the validity of the Aci
principally under three heads : (1 ) that in the context of the
existing legislation, i.e., the Bombav Municipal Corporation Act,
III of 1888 and the Bombay Rent Control Act, 1947, the imposition of a cess on residential buildings, which are in sound and
good condition, and which would not require structural repairs
for the entire period of the Act, amounts to an unreasonable .restriction, and therefore, violates Art. 19( 1 )(f) of the Cons•1tution; (2) that the Act is al<o violative of Art. 14, in that, it fails
to recognise the material differences between various buildings
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V1VIAN JOSEPH V. MUNIC. CORP, BOMBAY (She/at, /,) 263
with regard to their physical conditions and treats unequals as
equals; and (3) that the exemption provided by s. 28 are arbitrary and without any principle, and therefore, violate Art. 14.
Counsel argued that by subjecting residential buildings in sound
condition to the cess, the Act in substance and effect provides
bounties for those owners who have been neglectful of their
buildings and have infringed requisitions issued to them by the
Municipal Corporation.
Counsel for the respondents, on the
other hand, urged
( 1) that the imposition of the tax was by
virtue of power under Art. 246 ( 3) read with entry 49 in List II
of the Seventh Schedule of the Constitution, and being for a
public purpose cannot be challenged as an unreasonable restriction, (2) tbat there is an intelligible classification of the buildings
and such classification having a rational nexus with the objects of
the Act and the mischief it seeks to avert, it is nO'I challengeable
on the ground of its being discriminatory; and ( 3) that the exemptions in s. 28 are provided for in the light of the objects and
the scope of the Act and being in consonance with them, s. 28 is
not open to such a challenge.
The argument of Mr. Sorabji, however, was that the cess
amounted to unreasonable restriction and could not be said to
be for a public purpose, in that, it benefits ueglectful and defaulting owners at the cost of owners who have been looking after
their properties and consistently carrying out tenantable repairs,
thus preventing their buildings from being reduced to dangerous
conditions. In this connection, he relied on certain passages from
Cooley on Taxation (4th ed.), vol. 1, American Jurisprudence,
vol. 51 on Taxation and the Commissioner, Hindu Religious
Endowments v. Lakshmindra.( 1) The argument was that the tax
was objectionable as it equated buildings in dangerous and dilapidated conditions with those in good and sound condition, thus,
laying down a fictional equality in the teeth of factual and physical
inequality.
Counsel relied for that argument on K. T. Moopil
Nair v. The State of Kera/a(') and urged that the tax should be
declared invalid on the principles laid down therein. He also
argued that the classification of buildings into three categories
imposing different rates of tax was not based on any rational
principle as even recently constructed buildings and buildings not
needing or likely to need structural repairs were brought into the
class of buildings subject to the cess. There was next an assumption, he argued, not based on realities, that a building constructed
before a certain number of years would need structural repairs
although it has been kept in proper condition and therefore not
needing such structural reoairs.
A building constructed several
years ago might be in better condition if consistently taken care
(I) (1954) S.C.R. lllOS, 1040.
(2) [1961) 3 S.C.R. 77.
..
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SUPREME COURT REPORTS
(1972] 2 S.C.R.
-0f than the one built later but not taken care of, yet such a building, only because it was built earlier, is subjected to a higher rate
of tax. Sec. 27 and the Schedule created discrimination between
properties (a) inter se in the same category, (b) between buildings in different categories, and ( c) in imposing the same percentage on buildings in the same ca<tegory though •their actual conditions ap~ totally different and also between buildings in different
categones. Thus, buildings in category· A, built say in 1900 and
those built in 1939 are treated as equals. Even buildings erected
at about the same time need not be equal in condition, as, in the
case of one tenantable repairs might have been consistently carried
out or structural repairs might have recently been carried out
than the one in which no such repairs, tenantable or structural,
have so far been carried out. Even if such a tax was necessary,
its levy should have been made dependable on the actual conditions of the buildings and after a survey of the necessity and the
extent of structural repairs required. Further, buildings in sound
condition and not needing structural repairs ought to have been
exempted. The Act, thus, does not take notice of the actualities
in the sense that though a building built in 1939 but wherein extensive repairs have been carried out in 1968 would be a better
building than another built in 1950, yet the former has to pay
the tax at a higher percentage than the latter. The categorisation
of the buildings, therefore, was arbitrary and not based on any
rational principle.' Counsel also attacked the exemptions given
to buildings falling under els. (g), (h), (i) and (j) of s. 28 as
being irrational and without being founded on any principle.
Lastly, he urged that the classification between buildings constructed before the Act and those constructed thereafter was not
valid since there was no nexus between the date fixed under the
Act and the objects of the Act. Even assuming that the Act were
to bf' found to be valid, those buildings which were sound in condition and were likely to remain S-O throughout the life of the Act
could be separated from the rest and a restraint against tax being
enforced in respect of them can be imposed. The attack against
the validity of the Act thus falls under two heads : (a) that the
cess is not for a public purpose as it results in bounties to owners
whose buildings need structural repairs at the expense of those
whose buildings are sound and are not likely to need any such
repairs, and (b) that it suffers from arbitrariness and is violative
of Art. 14.
Before these contentions are examined it is necessary to consider the background in which the Act was passed as that would.
throw \ight upon the targets which the Legislature had in mind
while enacting it.
Prior to the iast World War. buildings had been one of the
major investments in the city of Bombay, The cost of construeA
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tion, owing to the easy availability of building materials,
was
fairly reasonable and the cost of upkeep and maintenance correspondingly low.
It was then a tenant's market as there was
then no pressure of population on the city as it is now due to
rapid industrialisation, concentration of industries and other allied
reasons. The owners of properties then had sufficient incentives
to keep their properties in satisfactory repairs. The situation,
however, was completely reversed at the end of the last World
War as the gap between the demand and supply had by then
widened at an alarming rate. The result was the emergence of
the Rent Control Act which froze the rent at the pre-war level and
gave security to the tenants by conferring on them the status of
irremovabilitv. The building materials in the meantime became
scarce, and consequently, with the freezing of rents and the rising
costs of materials, the incentive to maintain properties in good
repair gradually vanished. As the gap between demand and
supply of accommodation grew wider, the pressure on the existing
premises substantially increased. The situation got worsened by
reason of the reluctance of the owners of the buildings to maintain
their properties in tenantable repairs as they found carrying out
the repairs uneconomical. A more comprehensive Rent Control
Act then replaced in 1947 the existing 1939 Act which had by
them been found inadequate. But while it guaranteed to the
tenants security of tenancy rights it generated an increasing reluctance on the part of the owners to invest any more capital
on. their buildings as that type of investment was found to be less
and Jess attractive.
One of the features of the city is that a large percentage of the
existing residential buildings in it had been constructed several
years ago. Being almost an island city with limited construction
space, the buildings had to expand vertically, a feature not then
prevalent in other cities. These buildings were built on timber
frames as R.C.C. construction had not then come into vogue.
Several of them .had been built upto five or six storeys having
mostly one or two rooms tenements, each of which was habited
by a large number of persons. The saline atmosphere of the city
coupled with the absence of repairs carried out on this type of
structures began to have its inevitable consequences. Collapses of
houses which were almost unknown in pre-war days began to
occur in increasing numbers till the figures rose to about 125 on
an average per year. These collapses had their toJJ in the loss
of human life, physical injuries to the residents of those buildings
and the dishousing of a large number of persons from amongst the
teeming population residing in them.
'Tue problem became so alarming that the city Corporation
carried out in 1956 a comprehensive survey of buildings in all its
266
SUPREME COURT REPORTS
(1972] 2 S.C.R.
seven wards. The survey was confined mainly to buildings used
for resideJ!tial purposes. That was not due to the absence of
likelihood of human loss, suffering and deprivation of accommodation occurring in non-residential premises, but presumably be·
cause the need for such a survey of residential premises was found
to be of a more urgent character. The survey revealed that there
were within the city 36,000 residential buildings, of which 17,490
were built prior to 1905. The survey showed that residential
buildings fell into six categories, namely, 7 .48 % being buildings
in steel or R.C.C. frame, 1.58 % with external masonry walls and
steel or R.C.C. frame, 33% with timber frames, 42% with external masonry walls and internal timber frames, 1 % with masonry
walls and jackarch floors and 15 % temporary tin sheds. The report further revealed that of the said 17,490 buildings, (a) 5,081
of them had a future life of five years only, (b) 3,549 a future
life of six to ten years, ( c) 3,286 a future life of eleven to fifteen
years, (d) 3,583 a future life of sixteen to twenty-five years, (e)
1,716 a future life of more than twenty-six years, and (f) 275 in
a sound condition. Therefore, by 1969 when the impugned legislation was undertaken, buildings in (a), (b) and (c) and partly
in ( d) classes had already outlived the period of their survival.
The total number of families living in buildings which imminently
required substantial repairs, if they were to survive, came to
1,04,270, 80%of whom were occupying one room tenements.
The Report on the development plan for Greater Bombay,
submitted to the State Government in 1964, stated that out of
about seven lacs tenements in Greater Bombay as on March 31,
1961, 23% of them containing 18,000 buildings would need extensive repairs in the next fifteen years and about 1,000 of them
would have to be immediately demolished. 10,000 buildings would
have a life of about ten years, and 7,000 a life of fifteen years.
With such a situation it was no wonder that collapges of build·
ings became almost an annual occurrence particularly during
rainy seasons. In 1965, the State Government . appointed the
Bedekar Committee to examine the problem.
The Committee
reported the following principal causes of collapses;
1. Indifference of owners to repair due to the freezing of rents, on the one hand, and the rise in the
cost of building materials, on the other;
2. Resulting leakages in sanitary blocks;
3. Failure to demolish buildings even where they
were incapable of being sustained with repairs only;
4. Overcrowding in the tenements, and the consequent increasing pressure on sanitiny
services
therein, and
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VIVIAN JOSEPH V; MUNIC. CORP. BOMBAY (She/at, !.)
267
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5. Soarini: land values tempting owne_rs to let their
buildings collapse rather than contmue to have
them let out on frozen rents.
Amongst the difficultie6 presented by the current law, the Committee found one of them in the absence of an independent ageRcy
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to finance and execute repairs on behalf of owners or _ten~ts
who have no means to carry them out .even when otherw1s7 willing to do so.
Such was the reluctance of the owners to m~t
capital in these buildings that though 1. 8 ,000 nouces for ma1_or
repairs were issued by the Corporation smce 1 ~60, only one third
of them were complied with.
The Committee also noted that
C
according to the Municipal engineering _st~ff incharge of the several wards in Greater Bombay, 386 bmldmgs had already been
declared unsafe and by_l970 and 1980 751 and 2416 more
buildings would respectively be due for
demolitfon.
'!'~us, . a
total of 3,600 buildings having about 2 lacs of people hvmg m
them would be threatening collapse and would have either to be
demolished or repaired in time to prolong their lives.
On the
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several recommendations made by the Committee, one Was to
have a separate department to deal with problems connected with
the demolition of old structures, construction of new
buildings
replacing old ones, and annual and special inspection of buildings.
For prevention of collapses it suggested, (a) timely demolition
where collapses were inevitable, (b) special repairs where it was
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possible to prolong the life of old structures, ( c) acquisition of
old buildings and replacing them with new ones, ( d) provision
for temporary transit accommodation for persons dishoused in
this process, and ( e) encouragement to local bodies and housing
cooperatives to construct residential accommodation, since that
was the only way of augmenting residential premises.
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The problem confronting the State Legislature as appearing
from these reports was that of the 17,490 buildings out of the
tot~! _36,000 surveyed by the Corporation, barring only 1991 such
buddmgs, the rest of them would have outlived their lives
by
about 1980. On June 3, 1968 the Government published certain
proposals for eliciting public opinion for a legislation to prevent
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c?lla?ses and salvaging dilapidated structures, It was after considenng the recommendations, suggestions and objections received by th_e Government that the impugned Act was brought before
the ~egislature. The Act was confined to the problem of resid~ntial houses only. 'J!iat ~as n?t _because there was no danger
o __ collapses. of non-residential bmldmgs, but because it was conH
s1d~red _feasible _to d~al with a limited problem, namely, that of
residential. ~rem1ses m respect of which the distress was accuter.
As ~he ~mister for Housing said during the oassage of the bill,
the mtention of the Government was "to hit the evil where it is
4-L500Sup.Cl/72
268
SUPREME COURT REPORTS
[1972] 2 S.C.R.
greatest". It is also clear that following the reports, such as the
survey report, and the report of Bedekar Comn1;ittee,
the; Act
placed the residential buildings into three categones accordmg to
the periods durin_g which they were constructed and the construction in vogue dunng those periods. The. date, September 1, 1940,
in resoect of category A was chosen as 1t was from that date that
the rents were frozen under the Rent Control Act.
The life of the Act upto 1979 only, restricting it to residential
buildings only, their division into three categories, the raising of
the fund for implementing the purpo= of the Act from three
agencies immediately concerned with the problem, the Government, the O~rporation and the owners and occupiers, the exemptions from the operation of the Act in s. 28, all these emerge from
the earlier investigations and reports of which the Legislature and
the Government were aware of. As aforesaid, the mischief which
the Legislature intended to avert applied -also to non-residential
premises.
But the L!.'gislature was entitled to choose priorities
according to the degree of danger apprehended by it, and ·therefore, no infirinity, constitutional or otherwise, can be attributed to
such priority if it chose a part of the problem which it thought
should be dealt with immediately, not because it was blind to the
larger problem but because it considered dealing with a part of it
as feasible.
·
The question of validity of taxing statutes has arisen before
this Court in a number of cases.
The principle emerging from
them is that in order that a tax may be valid, it is firstly, within the
competence of the legislature imposing it, secondly, that it is for
a public purpose, and thirdly, that it does not violate the fundamental rights guaranteed by Part III of the Constitution. The
taxing statute is as much subject to Art. 14 as any other statute.
(K. T. Nfoopi/ Nair v. Kerala(I), Raja Jagannath v. U. P.('),
East India Tobacco Co. v. Andhra Pradesh(1 ), Khandige Sham
Bhatt v. Agricultural Income TaJG Officer(') and Andhra Pradesh
v. Nalla Raia Reddy(").
Bat in view of the inherent complexity
of fiscal adjustment of diverse elements a larger discretion has to
be pennitted to the Legisla:ure for classification so long as there
is no transgression of the fundamental principles underlying the
doctrine of classification.
(cf. Khandlge Sham Bhatt v. Agricultural Income Tax Officer(').
Thesii principles are that the classification must be based on an intelligible differentia which distinguishes persons or objects grouped together from others left out of
the )!roun, and that differentia must have a rational nexus with
the object of the statute. So long as these principles are properly
(!) [19611 3 SC R 77.
(2) [1963) ! S.C.R. 220.
(3) [1963] l S.C.R.404.
(4) [1963)S.C.R. 809.
(5) [1967) 3 S.C.R. 28.
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VIVIAN JOSEPH v. MUN!C. CORP. BOMBAY (She/at;/.) 269
followed in classifying persons or objects for taxation, the power
to classify must be wide and flexible so as to enable the Legislatilre
to adjust its system of taxation in all proper and reasonable ways.
(see Khandige Sham Bhatt v. Agricultural Income Tax Officer(')
It is well recognised that a Legislature does not have to tax
everything in order to tax something. It can pick and choose
districts, objects, persons, methods and even rates of taxation as
long as it does so reasonably( 2 ). A taxing statute is not invalid
on the ground of discrimination merely because other objects
could have been, but are not taxed by the . Jegislature.
(Ravi
Varma v. Union of India(')]. When a statute divides the objects
of tax into groups or categories, so long as there is equality and
uniformity within each grol!P· the tax cannot be attacked on the
ground of its being discriminatory, although due to fortuitous
circumstances or a particular situation some included in a class
or group may get some advantage over others, provided ofcourse
they are not sought out for special treatment.
Khandige Sham
Bhatt v. Agricultural Income Tax Officer('). Likewise, the name
fact that a tax falls more heavily on some in the same group or
category is by itself not a ground for its invalidity, for then hardly
any tax, for instance, sales tax and excise tax, can escape such a
charge.
[Twyford Tea Co. Ltd. v. State of Kera/a(')].
Definition of taxation imply that a legislature can impose a
tax for public purpose only. A tax for purposes other than public
purposes would constitute taking of property without due process
of law within the meaning of the Fourteenth Amendment in the
United States. It would be objectionable in this country by
reason of Art. 31 (I ) of the Constitution ( •). Taxation,
however, is, nonetheless, for public purpose even if particular persons
receive more benefit from the use of the tax proceeds than
others(").
A perusal of the provisions of the Act makes it clear-that its
objects were : ( 1) to preserve the residential and tenanted buildings existing at the date of it~ enactment, (2) for that purpose, to
set up a special agency, the Bombay Buildings Repairs and Reconstruction Board, whose duties and functions. would be, (a) to
undertake and carry out structural repairs to buildings in respect
of which the impugned tax is levied, (b) to provide temporary or
alternative accommodation to occupiers of any such buildings
where any such building collapses, ( c) to undertake and carry out
tenantable repairs to buildings placed at its disposal, ( d) to move
the Government to acquire old and dilapidited buildings in respect
(I) [1963] J S.C.R. 809.
(2) Willis, Constitutional Law of the United States, 587.
(l) [1969] 3 S.C.R. 827.
(4) [1970] 3 S.C.R. 282.
(5) Cooley on Taxation (4th ed.), vol.